Month: January 2016

Entrepreneurs Who Pay Taxes “Expect Services–Like Justice”

(p. B3) ATHENS — Demetri Politopoulos, the founder of a midsize beer producer in northern Greece, says he nearly fainted when he heard the news late one night in October.
The Greek Parliament was planning to pass a law that would increase the tax he paid for each hectoliter of beer he sold by 50 percent.
Just like that, the microbrewery he started 17 years ago would go under, as his new tax bill of 1.6 million euros would wipe out his expected 1.45 million euros in profit for the year.
. . .
He started his business in 1998, but even as demand for his Vergina beer grew, his share of the market stayed in the low single-digits as the market leader did all in its power to prevent shops and restaurants from selling his product.
. . .
In 2005, Mr. Politopoulos took his case to the Hellenic Republic Competition Commission, citing numerous examples of what he said were unfair business practices by Heineken, from persuading retailers to not stock Vergina to more serious examples of bullying and intimidation.
But as is often the case in Greece, his petition went nowhere.
With Greece under unremitting pressure to find new revenue sources, the idea to close the gap between the way small and large brewers are taxed may have seemed a good idea.
That is, until Mr. Politopoulos took the floor in Parliament on Nov. 2.
“We are proud to pay taxes in Greece, but this is going to put us out of business,” he said. “And when we do pay our taxes, we expect services — like justice. Without justice in a society, there is nothing.”
His 10-minute declamation hit a cord. A video of the speech went viral and parliamentary members rallied to his cause.
Indeed, concerns are growing here that in a rush to raise much-needed revenue, Greece and its creditors are placing an unfair burden on an already decimated private sector.

For the full story, see:
LANDON THOMAS Jr. “A Greek Dvid Lands Some Big Punches.” The New York Times (Sat., DEC. 12, 2015): B3.
(Note: ellipses added.)
(Note: the online version of the story has the date DEC. 11, 2015, and has the title “In Greece, Brewer’s Woes Reflect Struggle of Business Owners.”)

The Filth, Slaughter and Disease, That Was Rome

McCloskey’s “Great Fact” says that life was very bad for tens of thousands of years until the capitalist industrial revolution started to make it better. The tens of thousands of years can be thought of as a horizontal hockey stick handle, with the capitalist industrial revolution represented by a sharply ascending blade. Rome was a bump on the hockey stick handle, but as the last paragraph quoted below suggests, not too much of a bump.

(p. C4) . . . Ms. Beard is competent and charming company. In “SPQR” she pulls off the difficult feat of deliberating at length on the largest intellectual and moral issues her subject presents (liberty, beauty, citizenship, power) while maintaining an intimate tone.

“In some ways, to explore ancient Rome from the 21st century is rather like walking on a tightrope, a very careful balancing act,” she writes. “If you look down on one side, everything seems reassuringly familiar: there are conversations going on that we almost join, about the nature of freedom or the problems of sex; there are buildings and monuments we recognize and family life lived out in ways we understand, with all their troublesome adolescents; and there are jokes that we ‘get.'”
“On the other side, it seems completely alien territory. That means not just the slavery, the filth (there was hardly any such thing as refuse collection in ancient Rome), the human slaughter in the arena and the death from illnesses whose cure we now take for granted; but also the newborn babies thrown away on rubbish heaps, the child brides and the flamboyant eunuch priests.”

For the full review, see:
DWIGHT GARNER. “Early Rome: Its Warts and Wonders.” The New York Times (Weds., Nov. 18, 2015): C1 & C4.
(Note: ellipsis added.)
(Note: the online version of the review has the date Nov. 17, 2015, and has the title “Review: In ‘SPQR: A History of Ancient Rome,’ Mary Beard Tackles Myths and More.”)

The book under review, is:
Beard, Mary. SPQR: A History of Ancient Rome. New York: Liveright Publishing Corp., 2015.

On the hockey stick, see:
Diamond, Arthur M., Jr. “McCloskey’s Great Fact; Review of: McCloskey, Deirdre N. Bourgeois Dignity: Why Economics Can’t Explain the Modern World.” Journal of Entrepreneurship and Public Policy 1, no. 2 (2012): 200-05.

Behavioral Economists Ignore Biases and Irrationalities of Governments

(p. A4) . . . it is quite a leap between acknowledging markets sometimes fail and arguing they are inherently flawed. Policy makers who work from the second assumption risk overreaching, by seeing market failure where there is none and ignoring their own behavioral biases, in either case leaving people worse off, not better. Public trust in free markets hasn’t wavered notably in the U.S. or Britain from precrisis levels and even in the pope’s native Argentina, attitudes aren’t much more negative than in 2009.
. . .
. . . , consumers don’t seem irrational when they evaluate fuel economy; one study found changes in gasoline prices are closely reflected in the relative prices of less fuel-efficient used cars.
Besides, as Mr. Viscusi and Mr. Gayer note, the government has behavioral biases of its own. Courts and regulators assign more value to the potential harm of a new drug than its potential benefits. Politicians take actions out of proportion to the risks, for example by closing schools during the Ebola scare or imposing onerous airline-security checks to prevent terrorist hijackings.

For the full commentary, see:
GREG IP. “Market Critics Shouldn’t Overreach.” The Wall Street Journal (Thurs., Sept. 24, 2015): A2.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Sept. 23, 2015, and has the title “Critics of Free Market Shouldn’t Overreach.” Where there are minor differences between the print and online versions of the article, the sentences quoted above follow the online version.)

The Vicusi and Gayer paper mentioned above, is:
Viscusi, W. Kip, and Ted Gayer. “Behavioral Public Choice: The Behavioral Paradox of Government Policy.” Harvard Journal of Law & Public Policy 38, no. 3 (Summer 2015): 973-1007.

How to Monopolize a Dead Technology

(p. C3) LOS ANGELES — When Quentin Tarantino’s “The Hateful Eight” is released in a special roadshow version (with overture, intermission and additional footage) on Dec. 25, it will represent a feat worthy of the heist in the director’s “Jackie Brown.”
The film is scheduled to open on 96 screens in the United States and four in Canada, all in 70-millimeter projection, a premium format associated with extravaganzas of the 1950s and 1960s.
Yet from a theatrical standpoint, the technology is nearly obsolete. Last year, “Interstellar” opened in 70 millimeter at only 11 comparable locations. There were only 16 in 2012 for “The Master,” which renewed interested in the format. No film has opened with 100 70-millimeter prints since 1992. According to the National Association of Theater Owners, 97 percent of the 40,000 screens in the United States now use digital projection.

. . .
“We looked around for anybody who was selling them,” said Erik Lomis, Weinstein’s president of theatrical distribution and home entertainment. “We tried to keep it as quiet as possible as to why. Eventually word leaked out why we were looking for them, and then the price went up.”
. . .
“We’ve been accused of actually cornering the market on 70-millimeter projectors,” Mr. Cutler said. “It’s probably pretty true. There probably aren’t too many out there that we didn’t find.” Most of them were destroyed, he added, during the conversion to digital projection.
. . .
Ultra Panavision also produces subtle aesthetic effects, unusual even to viewers familiar with 70 millimeter. The lens “for lack of a better word is a softer lens,” Mr. Sasaki said. During a screening of test footage for the film, he pointed out the impressionistic qualities of the focus and explained how the image catered to our eyes’ natural depth cues.
With projectors found and lenses made, the next hurdle is labor: Most theaters no longer have projectionists with a working knowledge of these machines. Mr. Cutler’s company will provide training for each site. “One way or the other, we will fulfill this need,” he said. “It will be a combination of house staff that we can train, professional projectionists that we can bring in, projectionists that we can find locally, and potentially some technical staff that we’ll bring in.” Every theater showing the film will get a spare set of belts, fuses and light bulbs, and instructions. Mr. Cutler’s staff will also be standing by for calls.

For the full story, see:
BEN KENIGSBERG. “In a World Gone Digital, Room for a Lost Format.” The New York Times (Thurs., NOV. 12, 2015): C3.
(Note: ellipses added.)
(Note: the online version of the story has the date NOV. 11, 2015, and has the title “Tarantino’s ‘The Hateful Eight’ Resurrects Nearly Obsolete Technology.”)

Brits Attack Freedom, the Poor and the Environment, by Taxing Plastic Bags

(p. A4) LONDON — Some warned of “bag rage” by irate shoppers. The Daily Mail predicted, “Plastic Bags Chaos Looms.” Chloe Metzger, a 21-year-old blogger and student, wrote on Twitter: “I understand the whole #plasticbags thing but it couldn’t be more annoying.”
Nerves were rattled, jokes were made and the annoyance of it all was duly noted in Britain this week. Nevertheless, shoppers pulled off something that has also occurred in other cities, states and countries: They began weaning themselves off plastic shopping bags.
Starting this week, the government introduced a 5 pence charge for plastic bags for most groceries, clothes and other purchased items. And while it did not lead to a nationwide mutiny, as some had warned, it did create some tension in cashier lines.
. . .
The TaxPayers’ Alliance, an anti-tax group, said the new measure would burden families struggling to get by.
A 2013 study by the National Center for Policy Analysis in Washington, which champions laissez-faire economics, argued that paper and reusable bags were worse for the environment than plastic bags when it came to energy and water use, and to greenhouse gas emissions. “Every type of grocery bag incurs environmental costs,” wrote H. Sterling Burnett, the author of the study.
Whatever the arguments, the charge has inspired a mix of applause, resentment, fear and humor.
It has also inspired ingenious new ways to try to get around paying the new fee. The Daily Express, a British tabloid, noted that there was “nothing to stop Brits buying loose vegetables, being rewarded with their free plastic bag and ramming it full of the rest of the shopping.”

For the full story, see:
DAN BILEFSKY. “British Begin Attack Aimed at a Scourge of the Realm.” The New York Times (Weds., OCT. 7, 2015): A4.
(Note: ellipsis added.)
(Note: the online version of the story has the date OCT. 6, 2015, and has the title “Charge for Plastic Bags in Britain Draws Applause, Anger and Humor.”)

The 2013 bag report, referred to above, is:
Burnett, H. Sterling. “Do Bans on Plastic Grocery Bags Save Cities Money?” National Center for Policy Analysis, Policy Report # 353, Dec. 2013.

Was “the Naturally Aloof” Washington, an Introvert?

(p. C6) In “The Washingtons,” an ambitious, well-researched and highly readable dual biography, Flora Fraser has worked hard, despite the limited documentation that is available, to portray George and Martha, and their extended family, as fully rounded, flesh-and-blood people, freeing them from the heavy brocade of hagiography.
. . .
Her social graces, . . . , served the naturally aloof George well during his eight increasingly trying years as president. Martha had a way of keeping conversation flowing around her, Ms. Fraser says, while George’s “silences could unnerve the most confident.” An official dinner with the Washingtons could be an ordeal, since George was a terrible conversationalist and was known to sit silently tapping his spoon against the table, obviously impatient for the evening to end.

For the full review, see:
FERGUS M. BORDEWICH. “Domestic Tranquility; Martha kept conversation flowing at dinner; George’s silences ‘could unnerve the most confident.'” The Wall Street Journal (Sat., Nov. 14, 2015): C6.
(Note: ellipses added.)
(Note: the online version of the review has the date Nov. 13, 2015.)

The book under review, is:
Fraser, Flora. The Washingtons: George and Martha, “Join’d by Friendship, Crown’d by Love”. New York: Alfred A. Knopf, 2015.

Fewer Startups and Slower Growth Among the Fewer: Double Whammy to Economic Growth

(p. 7B) Previous studies have shown that, despite the success of firms like Facebook, the number of startups has dropped sharply, from about 13 percent of all firms in the late 1980s to about 8 percent in 2011. Now, a new study from the National Bureau of Economic Research reports that the expansion of the remaining startups — which traditionally has been much faster than the growth of existing companies — has slowed considerably. By some measures, it now barely exceeds the average of older companies.
So there’s a double whammy: fewer startups and slower growth among the survivors. This could be one reason why the recovery from the Great Recession has been so sluggish, with the economy’s growth averaging about 2 percent annually from 2010 to 2014, much slower than earlier post-World War II recoveries.

For the full commentary, see:
Robert J. Samuelson. “Our rate of startups is stalling at an inopportune time.” Omaha World-Herald (Sun., Dec. 20, 2015): 7B.

I strongly suspect, but am not sure, that the NBER working paper referred to above, is:
Decker, Ryan, John Haltiwanger, Ron Jarmin, and Javier Miranda. “Where Has All the Skewness Gone? The Decline in High-Growth (Young) Firms in the U.S.” NBER Working Paper # 21776, Dec. 2015.

“We’re from the Streets and We Want Change”

(p. A9) CARACAS, Venezuela — On a sunny afternoon, Jorge Millán, an opposition candidate for congress, walked through the narrow streets of a lower-middle-class neighborhood, pressing the flesh in what was once a no man’s land for people like him.

. . .
With the economy sinking under the weight of triple-digit inflation, a deep recession, shortages of basic goods and long lines at stores despite the nation’s vast oil reserves, the opposition has its best chance in years to win a legislative majority.
. . .
“I was a Chavista, but Chávez isn’t here anymore,” said Mr. Omaña, referring to the followers of the former president.
“It’s this guy,” he said, referring to Mr. Maduro. “It’s not the same.”
Mr. Omaña complained about having to stand in long lines to buy food and about the fast-rising prices, saying that for the first time since Mr. Chávez was elected in 1998 he would vote for an opposition candidate.
“Enough is enough,” he said. “We need something good for Venezuela.”
Venezuelan politics was dominated after 1998 by Mr. Chávez and the movement he started, which he called the Bolivarian revolution, after the country’s independence hero, Simón Bolívar. Mr. Chávez died in 2013, and his disciple, Mr. Maduro, was elected to succeed him, vowing to continue Mr. Chávez’s socialist-inspired policies.
. . .
Opposition candidates said one of the biggest surprises of the campaign has been the warm reception they have received in what were once hostile pro-government strongholds.
Carlos Mendoza, 53, a motorcycle taxi driver and former convict who works in the district where Mr. Millán is running, said that he belongs to a group, known as a colectivo, that in the past was paid by the government to help out during campaigns, attend rallies and drive voters to the polls. Such groups were also often used to intimidate opposition supporters.
“They called us again this time,” Mr. Mendoza said. “I told them, ‘No way, you’re not using me again.’ ”
“We’re from the streets,” he said, “and we want change.”

For the full story, see:
WILLIAM NEUMAN. “Venezuela’s Economic Pain Gives Opposition Lift Before Vote.” The New York Times (Sat., DEC. 5, 2015): A9.
(Note: ellipses added.)
(Note: the online version of the story has the date DEC. 4, 2015, and has the title “Venezuela’s Economic Woes Buoy Opposition Before Election.”)

Affirmative Action Reduces Number of Black Scientists

Malcolm Gladwell, in chapter three of David and Goliath, persuasively argues that science students who would thrive at a solid public university, may be at the bottom of their class at Harvard, and in discouragement switch to an easier non-science major. Gladwell’s argument has implications for affirmative action, as noted by Gail Heriot in the passages quoted below.

(p. A13) . . . , numerous studies–as I explain in a recent report for the Heritage Foundation–show that the supposed beneficiaries of affirmative action are less likely to go on to high-prestige careers than otherwise-identical students who attend schools where their entering academic credentials put them in the middle of the class or higher. In other words, encouraging black students to attend schools where their entering credentials place them near the bottom of the class has resulted in fewer black physicians, engineers, scientists, lawyers and professors than would otherwise be the case.

But university administrators don’t want to hear that their support for affirmative action has left many intended beneficiaries worse off, and they refuse to take the evidence seriously.
The mainstream media support them on this. The Washington Post, for instance, recently featured a story lamenting that black students are less likely to major in science and engineering than their Asian or white counterparts. Left unstated was why. As my report shows, while black students tend to be a little more interested in majoring in science and engineering than whites when they first enter college, they transfer into softer majors in much larger numbers and so end up with fewer science or engineering degrees.
This is not because they don’t have the right stuff. Many do–as demonstrated by the fact that students with identical entering academic credentials attending somewhat less competitive schools persevere in their quest for a science or engineering degree and ultimately succeed. Rather, for many, it is because they took on too much, too soon given their level of academic preparation.

For the full commentary, see:
GAIL HERIOT. “Why Aren’t There More Black Scientists? The evidence suggests that one reason is the perverse impact of university racial preferences.” The Wall Street Journal (Thurs., Oct. 22, 2015): A13.
(Note: ellipsis added.)
(Note: the online version of the commentary was updated on Oct. 21, 2015.)

Heriot’s report for the Heritage Foundation, is:
Heriot, Gail. “A “Dubious Expediency”: How Race-Preferential Admissions Policies on Campus Hurt Minority Students.” Heritage Foundation Special Report #167, Aug. 31, 2015.

Gladwell’s book, mentioned above, is:
Gladwell, Malcolm. David and Goliath: Underdogs, Misfits, and the Art of Battling Giants. New York, NY: Little, Brown and Company, 2013.

Key Roman Institution Was Citizenship for All

(p. C5) . . . , early in the fourth century B.C., everything changes. Somehow Rome’s wars began to escalate in scale, their victories turned into conquests, their victims into allies, and Roman expansion became a bow wave rolling across Italy. Exactly how this “great leap forward” was achieved remains unclear. There are fragments of laws, a tradition of civil conflict leading to political reform, and the tombs of the first generation of great military leaders. But, as Ms. Beard says, “the pieces in the jigsaw puzzle become hard to fit together.”
The best we can say is that, sometime in the early fourth century, consuls, senators and people emerge rapidly from the shadows, carrying all before them. By the time this was noticed by the other great powers of the day–Phoenician Carthage in what is now Tunisia and the Macedonian kings who had ruled everything east of the Adriatic since Alexander the Great–it was too late to stop Rome. Roman institutions did not drive this expansion, as Polybius had thought. In fact they played desperate catch-up for the rest of the Republic, trying to create ways of governing an empire that was not exactly accidental but certainly not planned. The one institution that Ms. Beard leaves in place as a motor of expansion rather than a response to it was Rome’s unusual capacity to absorb the defeated and redirect their arms and resources to its own ends. “SPQR” ends with the logical culmination of that process, the extension of full citizenship to almost every one of Rome’s 60 million subjects in A.D. 212.

For the full review, see:
GREG WOOLF. “Dawn of the Eternal City.” The Wall Street Journal (Sat., Nov. 14, 2015): C5-C6.
(Note: ellipsis added.)
(Note: the online version of the review has the date Nov. 13, 2015.)

The book under review, is:
Beard, Mary. SPQR: A History of Ancient Rome. New York: Liveright Publishing Corp., 2015.