Month: August 2014

John Jacob Astor on Why His Son Gave More to Charity

John Jacob Astor . . . enjoyed making fun of his own foibles, including his carefully restrained charitable instincts. One day when a man dropped by his office to solicit a contribution to some worthy cause, Astor grumpily wrote out a check. Looking at the paltry amount from the richest man in the country in some dismay, the man said that Astor’s son, William, had already given twice as much.
“Ah, well,” replied Astor, “but then William has a rich man for a father.”

Source:
Klepper, Michael, and Robert Gunther. “The American Heritage 40.” American Heritage 49, no. 6 (Oct. 1998): 56-66.
(Note: ellipsis added.)

Rollin King Found Legal Way to Avoid Fed’s Regulations

(p. 25) Rollin W. King, a co-founder of Southwest Airlines, the low-cost carrier that helped to change the way Americans travel, died Thursday [June 26, 2014] in Dallas. He was 83.
. . .
The concept for Southwest came to Mr. King when he noticed that businessmen in Texas were willing to charter planes instead of paying the high fares of the domestic airlines.
At the time that Mr. King first proposed the idea to Mr. Kelleher over drinks, the federal government regulated the fares, schedules and routes of interstate airlines, and the mandated prices were high.
Competitors like Texas International Airlines, Braniff International Airways and Continental Airlines waged a protracted legal battle before Southwest could make its first flight. By not flying across state borders, Southwest was able to get around prices set by the Civil Aeronautics Board.

For the full obituary, see:
MICHAEL CORKERY. “Rollin King, 83, Pilot Who Helped Start Southwest Airlines.” The New York Times, First Section (Sun., June 29, 2014): 25.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the obituary has the date June 28, 2014, and has the title “Rollin King, Texas Pilot Who Helped Start Southwest, Dies at 83.”)

Notaries Were Useful in a Contractual Society

(p. 111) Notaries were not figures of great dignity, but in a contractual and intensely litigious culture, they were legion. The Florentine notary Lapo Mazzei describes six or seven hundred of them crowded into (p. 112) the town hall, carrying under their arms bundles of documents, ” each folder thick as half a bible.” Their knowledge of the law enabled them to draw up local regulations, arrange village elections, compose letters of complaint. Town officials who were meant to administer justice often had no clue how to proceed; the notaries would whisper in their ears what they were meant to say and would write the necessary documents. They were useful people to have around.

Source:
Greenblatt, Stephen. The Swerve: How the World Became Modern. New York: W. W. Norton & Company, 2011.

“A Few Really Good Artisanal Cheese Shops Is No Substitute for a Strong School System”

(p. 836) Moretti’s writing on the “creative class” takes issue with policies associated with Richard Florida, who has exerted a considerable influence on local policymakers worldwide. Moretti uses the example of Berlin, which is a cool place full of creative types but still isn’t much of an economic powerhouse, to make the case against Florida’s recommendations.
. . .
A problem exists if city governments start thinking that their main job is to be hip rather than competent. Having a few really good artisanal cheese shops is no substitute for a strong school system. Local leaders would do well to remember that an externality-creating skilled resident is as likely to be a forty-two-year-old mother who works in (p. 837) a lab as a twenty-five-year-old looking for a good time. The forty-two-year-old’s tastes in local amenities are likely to be quite different from those of the twenty-five-year-old. If Moretti’s caution against creative class policies achieves that end, then it will have done something quite positive.

For the full review, see:
Glaeser, Edward. “A Review of Enrico Moretti’s the New Geography of Jobs.” Journal of Economic Literature 51, no. 3 (Sept. 2013): 825-37.
(Note: ellipsis added.)

The book under review is:
Moretti, Enrico. The New Geography of Jobs. New York: Houghton Mifflin Harcourt Publishing Co., 2012.

Big Increase in Costs of Adhering to Moore’s Law

(p. 219) Harald Bauer, Jan Veira, and Florian Weig consider “Moore’s Law: Repeal or Renewal?” “Moore’s law states that the number of transistors on integrated circuits doubles every two years, and for the past four decades it has set the pace for progress in the semiconductor industry. . . . Adherence to Moore’s law has led to continuously falling semiconductor prices. Per-bit prices of dynamic random-access memory chips, for example, have fallen by as much as 30 to 35 percent a year for several decades. . . . Some estimates ascribe up to 40 percent of the global productivity growth achieved during the last two decades to the expansion of information and communication technologies made possible by semiconductor performance and cost improvements.” But this continued technological progress comes at an ever-higher price. “A McKinsey analysis shows that moving from 32nm (p. 220) to 22nm nodes on 300-millimeter (mm) wafers causes typical fabrication costs to grow by roughly 40 percent. It also boosts the costs associated with process development by about 45 percent and with chip design by up to 50 percent. These dramatic increases will lead to process-development costs that exceed $1 billion for nodes below 20nm. In addition, the state-of-the art fabs needed to produce them will likely cost $10 billion or more. As a result, the number of companies capable of financing next-generation nodes and fabs will likely dwindle.” McKinsey Global Institute, December 2013, http://www.mckinsey.com/insights/high_tech_telecoms_internet/moores_law_repeal_or_renewal.

Source:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 28, no. 2 (Spring 2014): 213-20.
(Note: ellipses in original.)

Butter Is Back

(p. B1) Changing views of nutrition are turning butter into one of the great comeback stories in U.S. food history.
. . .
The revival flows in part from new legions of home gourmets inspired by celebrity chefs and cooking shows with butter-rich recipes. Butter makers have encouraged the trend, using food channels and websites to promote what they say is their products’ natural simplicity.
Butter’s shifting fortunes also reflect the vicissitudes of thinking on healthy eating that rattle the national diet. Families for decades opted for vegetable spreads because of concerns about butter’s high concentration of saturated fat, only to be told more recently that the trans fats traditionally contained in margarine are just as unhealthy. Many Americans also have altered their thinking on how important reducing all fat is for controlling weight.

For the full story, see:
KELSEY GEE. “Butter Makes Comeback as Margarine Loses Favor.” The Wall Street Journal (Thurs., June 26, 2014): B1-B2.
(Note: ellipsis added.)
(Note: the last quoted sentence was in the online, but not the print, version.)
(Note: the online version of the review has the date June 25, 2014, and has the title “Butter Makes Comeback as Margarine Loses Favor.”)

Human Freedom and Dignity Lived in Florence

(p. 125) Ancona was, like Florence, an independent commune, and Salutati was urging its citizens to revolt against the papal government that had been imposed upon them: ” Will you always stand in the darkness of slavery? Do you not consider, O best of men, how sweet liberty is? Our ancestors, indeed the whole Italian race, fought for five hundred years . . . so that liberty would not be lost .” The revolt he was trying to incite was, of course, in Florence’s strategic interest, but in attempting to arouse a spirit of liberty, Salutati was not being merely cynical. He seems genuinely to have believed that Florence was the heir to the republicanism on which ancient Roman greatness had been founded. That greatness, the proud claim of human freedom and dignity, had all but vanished from the broken, dirty streets of Rome, the debased staging ground of sordid clerical intrigues, but it lived, in Salutati’s view, in Florence. And he was its principal voice.

Source:
Greenblatt, Stephen. The Swerve: How the World Became Modern. New York: W. W. Norton & Company, 2011.
(Note: ellipsis in original.)

U.S. Constitution Reflects Lockean Natural Rights

(p. A13) Over the past three decades, Richard A. Epstein has repeatedly argued–with analytical rigor and astonishing erudition–that governments govern best when they limit their actions to protecting liberty and property. He is perhaps best known for “Takings,” his 1995 book on the losses that regulations impose on property owners. Of late, he has exposed the flaws of a government-administered health system.
In “The Classical Liberal Constitution,” Mr. Epstein takes up the political logic of our fundamental law. The Constitution, he says, reflects above all John Locke’s insistence on protecting natural rights–rights that we possess simply by virtue of our humanity. Their protection takes concrete form in the Constitution by restricting the federal government to specific, freedom-advancing and property-protecting tasks, such as establishing a procedurally fair justice system, minting money as a stable repository of value, preserving a national trade zone among the states, and, not least, guarding the rights listed in the Bill of Rights.

For the full review, see:
JOHN O. MCGINNIS. “BOOKSHELF; Book Review: ‘The Classical Liberal Constitution,’ by Richard A. Epstein; Our understanding of the Constitution lost its way when we embraced the idea that rights are created by a benevolent state.” The Wall Street Journal (Mon., March 23, 2014): A13.
(Note: the online version of the review has the date March 23, 2014, and has the title “BOOKSHELF; Book Review: ‘The Classical Liberal Constitution,’ by Richard A. Epstein; Our understanding of the Constitution lost its way when we embraced the idea that rights are created by a benevolent state.”)

The book under review is:
Epstein, Richard A. The Classical Liberal Constitution: The Uncertain Quest for Limited Government. Cambridge, MA: Harvard University Press, 2013.

The Vagueness and Regulatory Discretion of Dodd-Frank Is “a Recipe for Cronyism”

(p. 218) Aaron Steelman has an “Interview” with John Cochrane. On Dodd-Frank: “I think Dodd-Frank repeats the same things we’ve been trying over and over again that have failed, in bigger and bigger ways. . . . The deeper problem is the idea that we just need more regulation–as if regulation is something you pour into a glass like water–not smarter and better designed regulation. Dodd-Frank is pretty bad in that department. It is a long and vague law that spawns a mountain of vague rules, which give regulators huge discretion to tell banks what to do. It’s a recipe for cronyism and for banks to game the system to limit competition.” On how to stop bailing out large financial institutions: “You have to set up the system ahead of time so that you either can’t or won’t need to conduct bailouts. Ideally, both. . . . The worst possible system is one in which everyone thinks bailouts are coming, but the government in fact does not have the legal authority to bail out.” . . . Econ Focus, Federal Reserve Bank of Richmond, Third Quarter 2013, pp. 34-38. https://www.richmondfed
.org/publications/research/econ_focus/2013/q3/pdf/interview.pdf.

Source:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 28, no. 1 (Winter 2014): 235-42.
(Note: italics, and first two ellipses, are in original; the last ellipsis is added.)

The Great Lakes Return to Greatness

(p. 16) But after reaching historic lows in 2013, water levels in the Great Lakes are now abruptly on the rise, a development that has startled scientists and thrilled just about everybody with a stake in the waterfront, including owners of beach houses, retailers in tourist areas and dockmasters who run marinas on the lakeshore.
Lakes Michigan, Huron and Superior are at least a foot higher than they were a year ago, and are expected to rise three more inches over the next month. Lake Ontario and Lake Erie are seven to nine inches higher than a year ago.

For the full story, see:
JULIE BOSMAN. “Creeping Up on Unsuspecting Shores: The Great Lakes, in a Welcome Turnaround.” The New York Times, First Section (Sun., JUNE 29, 2014): 16 & 20.
(Note: the online version of the review has the date JUNE 28, 2014.)