Government – Page 55 – artdiamondblog.com

China’s State-Owned Enterprises Lose Money and Slow Growth

Source of book image: http://s.wsj.net/public/resources/images/OB-UU147_mcgreg_DV_20121001022644.jpg

In the passages quoted below “SOE” means “state-owned enterprise.”

(p. B1) If the U.S. needs another wake-up call, it will get one this week with the publication of a bracing account of the danger that China’s state capitalism poses to global business–and to China itself. James McGregor’s new book, “No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism,” dissects the complex policies and state structures that produced China’s novel system. And it describes the limited recourse the U.S. and other nations have. (Full disclosure: Mr. McGregor is a friend and former colleague at the Journal.)

“The Communist Party of China has two unwavering objectives: Make China rich and powerful and guarantee the Party’s political monopoly,” Mr. McGregor writes. “At the center of this are behemoth state-owned enterprises that dominate all key sectors and have been instrumental to the country’s current success.
“As China’s global reach expands, this one-of-a-kind system is challenging the rules and organizations that govern global trade as well as the business plans and strategies of multinationals around the globe. At the same time, the limits of authoritarian capital-(p.B2)ism are increasingly evident at home, where corruption is endemic, the SOEs are consuming the fruits of reform, and the economic engine is running out of gas.”
Born in the 1950s when 10,000 Soviet advisers helped China organize central planning, the state-owned enterprises quickly became bloated extensions of the Party’s patronage and power.
. . .
The enterprises themselves, meanwhile, crowded out private competition. SOEs account for about 96% of China’s telecom industry, 92% of power and 74% of autos. The combined profit of China Petroleum & Chemical and China Mobile in 2009 alone was greater than all the profit of China’s 500 largest private firms, Mr. McGregor writes.
An independent Chinese study, he adds, says that if you subtract government subsidies from the biggest SOEs they actually lose money.
Mr. McGregor believes pressures are building within China for change–the result of SOEs that don’t innovate enough, slowing growth, an angry private sector, and a pending leadership change, among other factors. Even some top leaders say reform is needed.

For the full commentary, see:
JOHN BUSSEY. “THE BUSINESS; Tackling the Many Dangers of China’s State Capitalism.” The New York Times (Fri., September 28, 2012): B1 & B2.
(Note: ellipsis added.)
(Note: the online version of the article has the date September 27, 2012.)

Book under discussion:
McGregor, James. No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism. Westport, CT: Prospecta Press, 2012.

Instead of Fixing “Inadequate Schools,” Adderall Is Prescribed to “Struggling” Students

“Amanda Rocafort and her son Quintn in Woodstock, Ga. Quintn takes the medication Risperdal.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) CANTON, Ga. — When Dr. Michael Anderson hears about his low-income patients struggling in elementary school, he usually gives them a taste of some powerful medicine: Adderall.

The pills boost focus and impulse control in children with attention deficit hyperactivity disorder. Although A.D.H.D is the diagnosis Dr. Anderson makes, he calls the disorder “made up” and “an excuse” to prescribe the pills to treat what he considers the children’s true ill — poor academic performance in inadequate schools.

For the full story, see:
ALAN SCHWARZ. “Attention Disorder or Not, Pills to Help in School.” The New York Times (Tues., October 9, 2012): A1 & A18.

Government Disaster Relief Crowds Out Private Self-Protection

(p. 242) This paper has investigated the role of natural disaster shocks in determining gross migration flows, controlling for other place-based features. Using two micro datasets, we documented that in the 1920s and 1930s population was repelled from tornado-prone areas, with a larger effect on potential in-migrants than on existing residents, while flood events were associated with net inmigration. The differential migration responses by disaster type raises the question of whether public efforts at disaster mitigation counteract individual migration decisions. The nascent investment in rebuilding and protecting flood-prone areas could provide one example of public investment crowding out private self-protection (i.e., migration).
(p. 243) In future work, we plan to explore the role of New Deal disaster management more directly by exploiting variation across SEAs in federal expenditures and representation on key congressional committees. We predict that residents of areas that received federal largesse after a disaster in the 1930s will be less likely to move out and that new arrivals may be more likely to move in, while residents of areas that benefited less from New Deal spending will continue to use migration as a means of self-protection.

For the full article, from which the above conclusion is quoted, see:
Boustan, Leah Platt, Matthew E. Kahn, and Paul W. Rhode. “Moving to Higher Ground: Migration Response to Natural Disasters in the Early Twentieth Century.” American Economic Review 102, no. 3 (May 2012): 238-44.

Chamber Blitz Clip for Tort Reform

“Blitz gasoline cans, at Ace Hardware in Miami, Okla., will soon disappear from stores. The company closed because of the costs of lawsuits contending that the cans were unsafe.” Source of caption and photo: online version of the NYT article quoted and cited below.

The “Mr. Flick” quoted below is Rocky Flick, the former CEO of Blitz.

(p. B1) Crusading against what it considers frivolous lawsuits, the United States Chamber of Commerce has had no shortage of cases to highlight, like the man suing a cruise line after burning his feet on a sunny deck or the mother claiming hearing loss from the screaming at a Justin Bieber concert.

Now, the lobbying group’s Institute for Legal Reform is showing a 30-second commercial that uses Blitz USA, a bankrupt Oklahoma gasoline can manufacturer, to illustrate the consequences of abusive lawsuits. The ad shows tearful workers losing their jobs and the lights going out at the 46-year-old company as a result of steep legal costs from lawsuits targeting the red plastic containers, according to the company and the institute.
The closing of the 117-employee operation this summer became a rallying point for proponents of tort reform. . . .
. . .
(p. B2) Blitz executives note that the company, which was the nation’s leading gas can producer, sold more than 14 million cans a year over the last decade, with fewer than two reported incidents per million cans sold. The company said the most serious incidents usually involved obvious misuse of the cans, like pouring gasoline on an open fire.
. . .
A decade ago, Mr. Flick said, the company would face one or two lawsuits a year. The number grew to six or seven a year, and finally to 25 or so last year when Blitz filed for bankruptcy.

For the full story, see:
CLIFFORD KRAUSS. “Two Sides of Product Liability: A Factory’s Closing Focuses Attention on Tort Reform.” The New York Times (Fri., October 4, 2012): B1.
(Note: ellipses added.)
(Note: the online version of the article is dated October 5, 2012 and has the shorter title “A Factory’s Closing Focuses Attention on Tort Reform.”)

View the Chamber video clip on the Blitz example:

“Rocky Flick, Blitz’s former chief executive.” Source of caption and photo: online version of the NYT article quoted and cited above.

Romney Praises Dan Senor Book on Israeli Entrepreneurship

“Dan Senor, left, a leading campaign adviser, at a briefing on Saturday for the Romney campaign on the plane en route to Israel.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A10) WASHINGTON — Moments after making remarks in Jerusalem about Middle East culture that enraged Palestinians and undermined the public relations value of his trip to Israel, Mitt Romney looked around the room for Dan Senor, one of his campaign’s top foreign policy advisers.

It was Mr. Senor’s book about entrepreneurs in Israel that informed his comments, Mr. Romney explained to the group of Jewish-American donors he had assembled at the King David hotel. The book, “Start-up Nation,” is among Mr. Senor’s writings that Mr. Romney frequently cites in public.

For the full story, see:
MICHAEL D. SHEAR. “Adviser Draws Attention to Romney Mideast Policy.” The New York Times (Thurs., August 2, 2012): A10.
(Note: the online version of the article is dated August 1, 2012.)

The Senor book is:
Senor, Dan, and Saul Singer. Start-up Nation: The Story of Israel’s Economic Miracle. hb ed. New York: Twelve, 2009.

“L. Paul Bremer III, left, in 2004 when he was the top United States envoy in Iraq, with Mr. Senor, who was his spokesman.” Source of caption and photo: online version of the NYT article quoted and cited above.

Garfield’s Doctors “Basically Tortured Him to Death”

Source of book image: http://rsirving.files.wordpress.com/2012/04/destinyrepublic.jpeg

(p. 15) Had Garfield been left where he lay, he might well have survived; the bullet failed to hit his spine or penetrate any vital organs. Instead, he was given over to the care of doctors, who basically tortured him to death over the next 11 weeks. Two of them repeatedly probed his wound with their unsterilized fingers and instruments before having him carted back to the White House on a hay-and-horsehair mattress.

There, control of the president was seized by a quack with the incredible name of Dr. Doctor Willard Bliss. Dr. Doctor Bliss insisted on stuffing Garfield with heavy meals and alcohol, which brought on protracted waves of vomiting. He and his assistants went on probing the wound several times a day, causing infections that burrowed enormous tunnels of pus throughout the president’s body.
Garfield’s medical “care” is one of the most fascinating, if appalling, parts of Millard’s narrative. Joseph Lister had been demonstrating for years how his theories on the prevention of infection could save lives and limbs, but American doctors largely ignored his advice, not wanting to “go to all the trouble” of washing hands and instruments, Millard writes, enamored of the macho trappings of their profession, the pus and blood and what they referred to fondly as the “good old surgical stink” of the operating room.
Further undermining the president’s recovery was his sickroom in the White House — then a rotting, vermin-ridden structure with broken sewage pipes. Outside, Washington was a pestilential stink hole; besides the first lady, four White House servants and Guiteau himself had contracted malaria. Hoping to save Garfield from the same, Bliss fed him large doses of quinine, causing more intestinal cramping.
The people rallied around their president even as his doctors failed him. The great Western explorer and geologist John Wesley Powell helped design America’s first air-conditioning system to relieve Garfield’s agony. Alexander Graham Bell worked tirelessly to invent a device that could locate the bullet. (It failed when Dr. Bliss insisted he search only the wrong side of Garfield’s torso.) Two thousand people worked overnight to lay 3,200 feet of railroad track, so the president might be taken to a cottage on the Jersey Shore. When the engine couldn’t make the grade, hundreds of men stepped forward to push his train up the final hill.
The president endured everything with amazing fortitude and patience, even remarking near the end, when he learned a fund was being taken up for his family: “How kind and thoughtful! What a generous people!”
“General Garfield died from malpractice,” Guiteau claimed, defending himself at his spectacle of a trial. This was true, but not enough to save Guiteau from the gallows.

For the full review, see:
KEVIN BAKER. “Death of a President.” The New York Times Book Review (Sun., October 2, 2011): 14-15.
(Note: the online version of the review has the date September 30, 2011, and has the title “The Doctors Who Killed a President.”)

The full reference for the book under review, is:
Millard, Candice. Destiny of the Republic: A Tale of Madness, Medicine and the Murder of a President. New York: Doubleday, 2011.

The Precautionary Principle Would Have Blocked Many Great Innovations

(p. 351) The intense aversion to trading increased risk for some other advantage plays out on a grand scale in the laws and regulations governing risk. This trend is especially strong in Europe where the precautionary principle, which prohibits any action that might cause harm, is a widely accepted doctrine. In the regulatory context, the precautionary principle imposes the entire burden of proving safety on anyone who undertakes actions that might harm people or the environment. Multiple international bodies have specified that the absence of scientific evidence of potential damage is not sufficient justification for taking risks. As the jurist Cass Sunstein points out, the precautionary principle is costly, and when interpreted strictly it can be paralyzing. He mentions an impressive list of innovations that would not have passed the test, including “airplanes, air conditioning, antibiotics, automobiles, chlorine, the measles vaccine, open-heart surgery, radio, refrigeration, smallpox vaccine, and X-rays.” The strong version of the precautionary principle is obviously untenable. But enhanced loss aversion is embedded in a strong and widely shared moral intuition; it originates in System 1. The dilemma between intensely loss-averse moral attitudes and efficient risk management does not have a simple and compelling solution.

Source:
Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.
(Note: italics in original.)

“Education Bubble”: “A Spurious Inflation of the Credentials Required for Many Jobs”

Source of book image: http://2.bp.blogspot.com/-N1hV093ckVc/T8YmCXE2sQI/AAAAAAAAAYc/1B5hWDeXbzQ/s1600/basement.jpg

(p. 17) In June 2008, The Atlantic published an essay by an adjunct instructor of English, identified only as “Professor X,” whose job filled him with despair. Although the courses he taught were introductory, success was beyond many of his students, who, he wrote, were “in some cases barely literate.” X found giving F’s to be excruciating — “I am the man who has to lower the hammer,” he lamented — in part because he identified with his older students, who seemed to have lost their way in their careers much as X himself had.
. . .
. . . X’s function, in the ecology of the colleges where he teaches, is gatekeeper — most students who fail his classes will drop out — and he articulates the ethical challenge before him this way: “What grade does one give a college student who progresses from a 6th- to a 10th-grade level of achievement?” X gives F’s.
. . .
X and his wife got snookered in the housing bubble, and he wonders if the misery in his classroom might result from a similar education bubble. In 1940, there were 1.5 million college students in America; in 2006, there were 20.5 million. In X’s opinion, a glut of degrees has led to a spurious inflation of the credentials required for many jobs. Tuitions are rising, and two-thirds of college graduates now leave school with debt, owing on average about $24,000. A four-year degree is said to increase wages about $450,000 over the course of a lifetime, but X doubts the real value of degrees further down on the hierarchy of prestige. To him, the human cost is more conspicuous.
. . .
Professor X can be caustic about the euphemism and somewhat willed optimism that sometimes befog discussion of how to teach unprepared students. To relieve his and his students’ unhappiness, he proposes that employers stop demanding unnecessary degrees: a laudable suggestion, unlikely to be realized until the degree glut has dried up.

For the full review, see:
CALEB CRAIN. “Lost in the Meritocracy.” The New York Times Book Review (Sun., May 1, 2011): 17.
(Note: ellipses added.)
(Note: the online version of the review has the date April 29, 2011.)

The full reference for the book under review, is:
X, Professor. In the Basement of the Ivory Tower: Confessions of an Accidental Academic. New York: Viking, 2011.

The Mockingjay as Symbol and Reality

A burning Mockingjay symbol appears on this movie poster for “The Hunger Games.” Source of poster: online version of the NYT article quoted and cited below.

(p. D4) “They’re funny birds and something of a slap in the face to the Capitol,” Katniss explains in the first book. And the nature of that slap in face is a new twist on the great fear about genetic engineering, that modified organisms or their genes will escape into the wild and wreak havoc. The mockingjay is just such an unintended consequence, resulting from a failed creation of the government, what Katniss means when she refers to “the Capitol.” But rather than being a disaster, the bird is a much-loved reminder of the limits of totalitarian control.
. . .
I asked Joan Slonczewski, a microbiologist and science fiction writer at Kenyon College in Ohio, about her take on the mockingjay. Dr. Slonczewski, whose recent books include a text and a novel, “The Highest Frontier,” teaches a course called “Biology in Science Fiction.” The tools needed to modify organisms are already widely dispersed in industry and beyond. “Now anybody can do a start-up,” she said.
That’s no exaggeration. Do-it-yourself biology is growing. The technology to copy pieces of DNA can be bought on eBay for a few hundred dollars, as Carl Zimmer reported in The New York Times in March. As to where D.I.Y. biology may lead, Freeman Dyson, a thinker at the Institute for Advanced Study known for his provocative ideas, presented one view in 2007 in The New York Review of Books. He envisioned the tools of biotechnology spreading to everyone, including pet breeders and children, and leading to “an explosion of diversity of new living creatures.”
Eventually, he wrote, the mixing of genes by humans will initiate a new stage in evolution. Along the way, if he is right, the world may have more than its share of do-it-yourself mockingjays.

For the full story, see:
JAMES GORMAN. “SIDE EFFECTS; D.I.Y. Biology, on the Wings of the Mockingjay.” The New York Times (Tues., May 15, 2012): D4.
(Note: ellipsis added.)
(Note: the online version of the article has the date May 10, 2012.)

Ice Melts too Slowly for Obama Backed Arctic Oil Project

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

(p. B1) Royal Dutch Shell . . . is spending billions of dollars to drill the first oil wells in U.S. Arctic waters in 20 years, backed by an Obama administration eager to show it wasn’t opposed to offshore exploration.

But the closely watched project isn’t going the way the company or the government hoped–illustrating the continuing challenge of plumbing for natural riches in one of the world’s most unforgiving locations.
Sea ice in the Chukchi and Beaufort seas off the northern Alaska coast was slow to break up this year, leaving the drilling areas inaccessible much later than anticipated.

For the full story, see:
TOM FOWLER. “Shell Races the Ice in Alaska; Delays Put $4.5 Billion Arctic Drilling Plan in Danger of Missing Window Before Next Freeze.” The Wall Street Journal (Mon., August 20, 2012): B1-B2.
(Note: ellipsis added.)
(Note: the online version of the article has the date August 19, 2012.)