People say doing a startup is like a marathon. It’s actually a roadtrip at night with no headlights. You think you’re going to Toledo but you’re actually going to Miami and you might not have enough gas so you might need to buy gas from someone who might take you out if you aren’t driving well.
Thursday, May 16, 2013
Wednesday, May 15, 2013
Tuesday, May 14, 2013
This idea of giving your money out was not created by Gates and Buffett. It was created by the Communist Party in the 1950s!"while it's a bit sensationalist of a quote, I can't say I disagree with the thought. I've never been comfortable with the term "giving back". It's giving. Period. It's noble and good but Gates and Buffett will have done far more in building their wealth than giving it away.
A somewhat bleak view of jobs... but if history is any guide this just moves us further into more jobs that can't be automated, that require creativity and thought (WalterRussellMead via Instapundit):
Essentially, the problem is this: automation and IT are moving routine processing, whether what’s being processed is information or matter, out of the realm of human work and into the realm of machines. Factory floors are increasingly automated places where fewer and fewer human beings are needed to transform raw materials into finished products; clerical work and many forms of mass employment in business, government and management are also increasingly performed more economically by computers than by trained human beings.
The transformation is only beginning to kick in. Self driving cars and trucks may reduce the need for human beings in the transportation and freight industries. Information processing is beginning to change the nature of the legal profession and even as law school applications fall by almost 50 percent there is much more change to come. Computer assisted diagnosis is making itself felt in health care. MOOCs are likely to change the way much of higher ed works.
It is impossible to say now how far and how fast this process will move, but more and more Americans are experiencing the kind of upheaval that blue collar workers in manufacturing began to experience in the last generation and white collar workers and journalists have felt more recently. We are seeing the greatest wave of economic transition since the mechanization of agriculture reduced the percentage of the labor force engaged in farming from more than half the American labor force in 1890 to less than two percent today.
The old engines of job growth, especially in manufacturing, aren’t working, and the competition for good jobs keeps getting tighter. With the entry of billions of Asians and others beyond the old industrial economies of North America, Europe and Japan into the modern economy, the competition is global. And if low wage workers can’t do the job cheaper than you, computers and, increasingly, robots mean that you can still lose your job.
There are few better examples of "regulatory capture" illustrating how larger incumbents will use regulation to shut out competitors, as the US "Affordable Care Act" (better known as Obamacare). This is, of course, to say nothing of the irony that the Act is supposed to break the cost curve on healthcare (WSJ):
The Affordable Care Act aimed to end a boom in doctor-owned hospitals, a highly profitable niche known for its luxury facilities. Instead, many of the hospitals are wiggling around the federal health-care law's growth caps and even thriving.[...]So despite being described in even the Wall Street Journal as being "luxury facilities", these facilities are being highlighted by Medicare for being more cost efficient and having more satisfied patients than their competitors.
The curbs are expected to get fresh attention this week. On Tuesday, about 50 physician owners, represented by the Physician Hospitals of America lobby, plan to descend on Congress. Republican Rep. Sam Johnson of Texas, whose state has about 90 doctor-owned hospitals, expects to introduce a bill to loosen limits on expansions that weren't ready before 2011.[...]
The doctor-owned hospitals seeking to loosen hospital-expansion limits have some favorable statistics to cite as they go into battle: new Medicare measurements showing that doctor-owned hospitals represent about half of the top 100 facilities whose performance will merit bonus Medicare reimbursements because of their cost efficiency and patient satisfaction.
But any effort to undo the expansion limits faces an uphill battle with Democrats, because the restrictions were a deal-breaker for hospitals when the White House sought their support for the law in 2009, industry lobbyists say.
It seems insane that any government would attempt to limit what amounts to real cost savings and an improvement in service for patients. A possible clue as to why?
But according to the American Hospital Directory, a private firm that provides data about some 6,000 U.S. hospitals, many physician-owned hospitals have enjoyed 20% to 35% profit margins in recent years. U.S. community hospitals' profits hovered around 7% in 2010, according to the American Hospital Association, an industry trade group.
In 2011, the first year of the law's restrictions, more than half of the 30 largest doctor-owned hospitals showed operating margins that either matched or surpassed their 2010 figures, and some had operating margins of more than 40%. Only a handful showed drops of more than a few percentage points that year, according to American Hospital Directory data.
Robert Kocher, a former National Economic Council health adviser who helped get the provision into the federal health-care law, said he was disappointed such facilities had found ways to grow. "It was not how we saw this playing out, but they are resourceful," he said.
Sunday, May 12, 2013
It makes sense... given that those at the periphery of being able to afford housing should potentially be most mobile in their careers. It's also potentially yet another unintended consequence of government policy that encourages homeownership by making it cheaper than it should be (WSJ):
Dartmouth College’s David Blanchflower (best known for being the Bank of England member who first pressed for interest rate cuts after the onset of the financial crisis) and Andrew Oswald of the University of Warwick find that a doubling of the rate of home ownership in any U.S. state is followed in the longer run by more than a doubling of the unemployment rate.Related: Declining American mobility an ongoing mystery (Slate via Instapundit)
The authors stress that they are not arguing that the owners themselves are disproportionately unemployed. They suggest that lower levels of labor mobility, greater commuting times and fewer new businesses all combine to hurt the labor market.
Update: "Homeownership Reduces Your Chances Of Becoming An Entrepreneur, Report Says" (HuffingtonPost):
The study's authors write that homeowners "typically have to overinvest in housing" at the expense of entrepreneurship. This is particularly true for homeowners with a mortgage.
The study found that homeownership reduces "genuine entrepreneurship" in particular: that is, entrepreneurship that is in professional work or involves hiring other employees. That is an important point to distinguish, since the vast majority of U.S. businesses have no employees, according to the Census. Among those 21 million nonemployer businesses, millions of people have been forced to do odd jobs since they cannot find work.
Many U.S. government policies, including the mortgage tax deduction, create incentives to buy a home. Homeownership advocates argue that the incentives are good for everyone because homeowners are more invested in their communities.
This summer the crew has been aboard ship engaging in what is surely the most substantial ocean restoration project in history. In a large ocean eddy west of Haida Gwaii the project has replenished vital ocean mineral micronutrients, with the expectation and hope it would restore ten thousand square kilometers of ocean pasture to health. Indeed this has occurred and the waters of the Haida eddy have turned from clear blue and sparse of life into a verdant emerald sea lush with the growth of a hundred million tonnes of plankton and the entire food chain it supports. The growth of those tonnes of plankton derives from vast amounts of CO2 now diverted from becoming deadly ocean acid and instead made that same CO2 become ocean life itself. For weeks the men and women, on this village team toiled in stormy overcast weather and fog without a hint of blue sky. In mid-August the skies cleared and revealed the wonder of the mission on which they have laboured. Satellites focused on ocean health that monitor and measure plankton blooms sent back stunning images. Far offshore in these Haida salmon pastures a vast plankton bloom is revealed matching the health and vibrancy of blooms seen in rich coastal waters. The return of such blooms is “the stuff dreams are made of” for all ocean life.
Saturday, May 11, 2013
Back in the day, long before the stock market boom began, the IRS decided that pension funds were a problem, taxwise. As I understand it, this problem was mostly in small professional practices like doctors and lawyers offices. The doctors and lawyers would employ one or two other people, most of them transient single women who could be expected to leave to get married long before their pension vested. So you’d set up a “pension plan” in which, realistically, you were going to be the beneficiary. Then you’d stuff it full of money, far more than you needed to pay out your pension. It was a pretty nice tax shelter.
So the IRS got very strict about pension overfunding: they didn’t allow it. Or rather, they allowed it, but they wouldn’t let you deduct any payments into an already overfunded plan. Farewell, tax shelter.
This was fine in the 1970s, when the market just sort of lay there like a dying fish, occasionally flopping around, but mostly just gasping for air. However, by the late 1990s, a whole lot of pension plans were overfunded. Which created something of a problem. In popular legend, all these pension fund managers were total idiots who didn’t understand that the market was in a bubble, dammit. Undoubtedly, in some cases, this legend is even true. But in most cases, it wasn’t. The pension consultants and money managers who were responsible for calculating the required contributions were well aware that the rocket-fuelled 1990s price increases were not likely to continue forever. They even understood that prices were likely to fall, leaving the funds not-so-funded. They wanted to keep pouring contributions into the funds in order to protect against the inevitable decline. But the IRS wouldn’t let them.
The assumed benefit of a Costco ring is that even at $40,000, you’re getting a higher-quality diamond than you’d be able to afford at a more prestigious store. As with any other name-brand product, Tiffany’s reputation (not to mention the classy Audrey Hepburn endorsement) raises the price of its jewelry.
Meanwhile, that Costco diamond might actually be worth more than its price tag. In 2005, Good Morning America appraised both a Tiffany diamond and a Coscto diamond. As it turned out, the $16,600 Tiffany cut was 58 percent more expensive than its $10,500 value, while the $6,600 Costco version was actually 17 percent under its appraised value of $8,000. On the WeddingBee.com blog, several women admitted to having Costco rings and said that when they had them appraised, every single ring was worth more than they paid, sometimes by thousands of dollars.
Tiffany offers more services than Costco. Its expert jewelers teach customers about the different cuts and qualities of diamonds. And once a ring is purchased, it can be returned for cleaning or resizing at any time.
Costco doesn’t resize rings. But it does sell six-pound packages of cheese.
If you have any interest whatsoever in education and learning this is a must watch. Inspirational and exciting TED talk by Sugata Mitra on what the future of learning could look like - but even more than that, how education can turned into an equalizing force (TED via FredWilson):
Friday, May 10, 2013
China may not overtake America this century according to Ambrose Evans-Pritchard. Not surprisingly, its biggest obstacle is political (Telegraph):
China's ageing crisis is tracking Japan's tale with a 20-year delay. China can expect to see the same decline in "marginal productivity" that has afflicted every other facing a rise in the old-age dependency ratio.
The authorities can of course keep the game going if they wish with another burst of credit, but risks are rising and the potency of debt is wearing off. The extra output created by each yuan of lending has halved in four years. Mr Li knows the game is turning dangerous.
A 2010 book by People's Army Colonel Liu Mingfu - "China Dream: Great Power Thinking and Strategic Posture in the Post-American Era" - is still selling like hot cakes in China. Yet it already has a dated feel, a throwback to peak hubris. China has everything to play for. With skill and a blast of freedom, it can take its rightful place at the forefront of world affairs. But nothing is foreordained.
An ominous regulatory announcement from the EPA came in 2007: “Starting with containers manufactured in 2009… it is expected that the new cans will be built with a simple and inexpensive permeation barrier and new spouts that close automatically.”
The government never said “no vents.” It abolished them de facto with new standards that every state had to adopt by 2009. So for the last three years, you have not been able to buy gas cans that work properly. They are not permitted to have a separate vent. The top has to close automatically. There are other silly things now, too, but the biggest problem is that they do not do well what cans are supposed to do.
And don’t tell me about spillage. It is far more likely to spill when the gas is gurgling out in various uneven ways, when one spout has to both pour and suck in air. That’s when the lawn mower tank becomes suddenly full without warning, when you are shifting the can this way and that just to get the stuff out.
There’s also the problem of the exploding can. On hot days, the plastic models to which this regulation applies can blow up like balloons. When you release the top, gas flies everywhere, including possibly on a hot engine. Then the trouble really begins. [...]
Soap doesn’t work. Toilets don’t flush. Clothes washers don’t clean. Light bulbs don’t illuminate. Refrigerators break too soon. Paint discolors. Lawnmowers have to be hacked. It’s all caused by idiotic government regulations that are wrecking our lives one consumer product at a time, all in ways we hardly notice.
It’s like the barbarian invasions that wrecked Rome, taking away the gains we’ve made in bettering our lives. It’s the bureaucrats’ way of reminding market producers and consumers who is in charge.
Thursday, May 09, 2013
Interesting post - with references to China, and China's reluctance to allow for unfettered urbanization (WSJ):
Chinese leaders since Mao Zedong have been wary of letting China’s largest cities reach megacity proportion. The usual reason cited is the fear of turning Beijing, Shanghai and other such cities into Latin American-style slums.
But Ohio State University political scientist Jeremy Wallace says there may be another reason: regime survival. In a study of authoritarian regimes between 1946 and 2004 (pdf), he finds that “regimes with capital cities that dominate the urban landscape fail nearly four years sooner and face 60% greater death rates.”
Specifically, for 237 nondemocratic regimes he studied with densely packed cities, the average duration was 8.6 years and the annual regime “death rate” was 9.2%. The 198 authoritarian regimes with low levels of urban concentration lasted, on average, 12.4 years and had an average annual death rate of 5.6%.
I’m reading K. Eric Drexler’s new book Radical Abundance, which explores the impact of atomically precise manufacturing (APM). Drexler predicts that APM will be with us soon and that it will transform the global economy in ways that can be compared to the industrial revolution of the 18th century or the advent of agriculture some 10,000 years ago. That is to say, he predicts it will be among the biggest shifts that have ever occurred.
Drexler compares the introduction of APM with the digital revolution of the past few decades, asserting that APM will essentially turn the production of physical goods into a form of information technology. Just as digital technologies made it possible to produce unlimited copies of information products (books, recorded movies, music) at essentially zero cost, APM will enable the production of physical goods at a tiny fraction of the cost of producing them today — enabling a world of radical abundance per the book’s title. This transition will not come without problems, however. Imagine the kind of disruption which has occurred in the music business over the past decade and a half applied to manufacturing, agriculture, and energy production. The elimination of infrastructure, businesses, and employment will be staggering. Drexler warns that with the introduction of APM we may face a period of “catastrophic success.”
That’s an interesting turn of phrase. We’re all familiar with the concept of “creative destruction,” wherein a new technology or set of technologies come along and supplant the old order — taking businesses and livelihoods with them, but producing far more opportunity than they eliminated. Catastrophic success, it would seem, is an advanced form of creative destruction.
Cheaper meat, that's presumably healthier for you and that actually tastes like meat. Instead of building technology that makes designs tangibly worse for the sake of arbitrary constraints, this is how innovation is supposed to work (TechCrunch). Prizes like this (PETA) should help.
Tuesday, May 07, 2013
Steve Blank, a professor at Stanford and entrepreneur himself has been one of the principal developers of the Lean Startup movement - a movement that fundamentally changes the static business plan that assumes we know far more about the future and market reactions than we do, and instead focus on the validation of a given business model.
From Wikipedia: "The Lean Startup approach relies on validated learning, scientific experimentation, and iterative product releases to shorten product development cycles, measure progress, and gain valuable customer feedback."
Pretty much invaluable to anyone interested in starting a business, new product or service, I'd highly recommend taking his free online course on Udacity, and reading up on the idea here (HBR) and here (SteveBlank) with the Harvard Business Review now offering free reprints of their May 2013 cover article.
Update: Great infographic of the process (SachaChua)
There are a number of social problems that don't lend themselves easily to being solved by markets... so the solution that some have proposed? Create artificial markets, bounties and contests to solve them - identifying new solutions and experiments that pay only if they produce the objective outcomes desired. The Canadian government just announced its support for social impact bonds (GlobeandMail via Brian H on FB):
The Conservative government is throwing its support behind social-impact bonds – an experiment that rewards private investors for putting cash toward social causes.This is an idea that's also being explored in the US (NationalPost):
The government on Monday released a list of projects that could be financed in this way, such as programs to build housing for people with disabilities, reduce recidivism among young offenders or encourage more young aboriginals to learn a skilled trade. Ottawa said it will work with interested groups toward launching projects.
The arrangement is not a bond in the traditional sense. An investor pays a group such as a non-profit to deliver a social service and is rewarded with an agreed upon sum from the government if the non-profit achieves a measurable goal. The financial risk falls on the investor. If the goal is not met, no government money is spent and the investor is out of pocket.
In August, New York Mayor Michael Bloomberg announced the country’s first concrete program, which is aimed at reducing the rate at which young offenders return to crime after their release.
“Currently, nearly 50 percent of adolescents who leave the New York City Department of Correction return within one year,” according to the press release unveiling the plan. “The new program announced today, ABLE, aims to reduce the likelihood of reincarceration by providing education, training and counseling to improve personal responsibility skills, including decision-making and problem-solving.”
Goldman Sachs will finance the plan for four years, which will be operated by MDRC, a non-partisan New York non-profit organization. The loan will be partly guaranteed by a grant from Bloomberg Philanthropies, the mayor’s family foundation. To be judged a success, the program will have to reduce the number of youths returning to jail by 10%, as measured by an independent third party organization. If it works, the city will repay Goldman, plus a profit; if not, the city pays nothing.
Massachusetts is seeking proposals on a similar initiative, and a second program intended to provide stable housing for the chronically homeless. Both homelessness and recidivism are high-cost items for government; if the programs succeed, the public savings would be well worth the profit paid to the backers.
As per usual, regulation is used most often to protect well connected, better financed incumbents (Reason via Instapundit):
In Snob Zones, journalist Lisa Prevost describes the heights of entitlement to which property owners ascend when faced with the prospect of new development, especially multi-family dwellings in neighborhoods dominated by single-family homes. Prevost tours New England and finds an aging, declining populace bent on excluding outsiders. In town after town, affluent and working-class alike, residents line up to shout down new development no matter how modest.
In Darien, the need for the proposed project was clear; the town's senior housing center had a long wait list, as did the last condo development built in the area (in 1994). Still, many townsfolk, expecting the project to open the floodgates to more high-density projects in the resolutely low-density burgh, were incensed.
Incumbent homeowners have a powerful weapon for vetoing change: zoning. In Darien and other exclusive zip codes, mandated minimum lot sizes kneecap developers who want to build something other than super-sized homes. In the process, they put entire towns out of reach for all but the wealthy. In hardscrabble Ossippee, New Hampshire, where it's not uncommon for the working poor to live in tents during the summer months to save on rent, the zoning code flatly prohibits new apartment buildings.
Monday, May 06, 2013
I tend to agree - but it's more than about being a copycat. It's about the "why" of what is being built - what drives you - is a business about doing great things or making money? Everlane CEO Michael Preysman on Copycats: (TechCrunch via Swiss-miss):
The problem with copycats is that honestly, they have no soul. It sounds silly to say that, but when you don’t have soul and you don’t have a reason for why you’re doing the things you’re doing, you’re always one step behind, and you never really connect with the consumer.
At any rate, the latest data indicate that start-ups are becoming rarer, not more common. A new report from JPMorgan economist Mike Feroli indicates that employment in start-ups is plunging. New jobs in the economy tend to come from new businesses, but we're getting fewer new businesses. That doesn't bode well.
In fact, it is yet another sign of a United States that is looking more like Europe: A society in which big businesses have cozy relationships with big government, while unemployment remains comparatively high. If you're fortunate enough to have a job at one of those government-connected businesses, GE, for example, your situation is pretty good. If you're a recent college graduate looking for work, your situation is not so great. If you're a low-skilled worker, your situation is dreadful.
Good talk by Peter Thiel at SXSW on "luck" and how it shapes our world view and how any given society's prevailing view of luck changes how we approach and solve problems (UStream via HN) - it's about an hour long:
Video streaming by Ustream
The talk tracks a class lecture he at Stanford in case you'd prefer to read it (BlakeMasters)
Sunday, May 05, 2013
The idea of giving money to the poor without asking for anything in return startled some. “They told us the men would use the money to get drunk, and the women to buy jewellery and saris,” said Dewala. “But it’s a middle-class prejudice that the poor don’t know how to use money sensibly. The study showed that a regular income allows people to act responsibly. They know their priorities. When something is rare, people measure its value. (Anyway, in tribal villages, people distil their own liquor.) The main advantage is regularity. It makes it possible to organise, save and borrow. The principle is that a small amount of money generates a great deal of energy in a village.”
In the village of Malibadodiya, a few tens of kilometres from Panthbadodyia, Sewa has been helping women for a decade. At a meeting of the women’s savings group, the members mixed freely, though they were from different castes and backgrounds. In a cheerful atmosphere, they discussed collective projects such as the building of a roof for the temple, and public toilets. Dewala joked: “Own up, how many of you have used the money to buy jewellery?” In response, one showed the sewing machine she had saved for over a year to buy, another proudly announced she had nearly finished paying for her family’s television set, and another held up a 300-rupee blanket for the winter, of far better quality than the one it replaced. Everyone laughed as Mangu, related the adventures of a group of women who had gone to a nearby town on a tractor, to demonstrate against the high cost of living, defying warnings from their menfolk and threats from the police.
“Women are no longer afraid. They are becoming independent, managing money, making plans. In several villages, they have forced the landlord to raise their wages,” said Rashmani. She worked in a bidi cigarette factory for 20 years before becoming a Sewa activist, and now works with more 300 villages. Some union representatives lead district communities with as many as 75,000 members. “We want to show that, if a union manages the money, it will be better shared out, and that if you take care of people, you can succeed.” Dewala added: “The key point we want to make is that the presence of a civil society body makes all the difference.”
A friend had this on his Facebook wall leaving me a bit conflicted:
What should the role of government be in basic research? On one hand I'm not sure it should be zero, but given limited resources, what's the limit?
I have had this conversation almost word-for-word with a historian friend before.
I would also respond by saying that we have no clue where curiosity driven research will lead us. A lot of cures and medical breakthroughs (X-Rays, fMRI, penicillin) came from research that seemed esoteric and silly to outsiders.
I also made the mistake of assuming that business doesn't do basic research because of its intangible benefits and large costs - but that's not quite true (Cato):
When University of Pennsylvania economist Edwin Mansfield studied the 1960-70 behavior of 16 major American oil and chemical companies, he found that all 16 invested in pure science. The more a firm invested in basic science, the more its productivity grew.There's also another pretty comprehensive argument at the Cobden Centre.
Zvi Griliches of Harvard University, in a study of 911 large American companies, discovered that the companies that engaged in basic research consistently outperformed those that neglected it.
Most of the benefits of a company’s basic science are indeed “captured” by competitors. When Hiroyuki Odagiri and Naoki Murakimi studied the 10 largest Japanese pharmaceutical companies, which collectively enjoyed $13 billion sales in 1981, they found that on average each company had an annual return of 19 percent on its own investment in research and development. But each company obtained the equivalent of a 33 percent annual return on the R&D done by the other nine companies. Each company was, therefore, apparently free riding on the other nine.
But there is no such thing as a free ride in R&D. Only highly skilled research scientists can capture other people’s science. And since the best scientists are those who are actually doing research, to retain their services, companies have to fund them with considerable generosity and considerable freedom.
Thus we see that “capture” is the solution to, not the problem of, the industrial exploitation of pure research. Basic science is so vast, worldwide, and so unpredictable that no individual company can hope to cover its own needs. So companies have to fund scientists’ in-house pure research to retain their services as agents of capture.
Depending on who you ask, in the case of the Large Hadron Collider that led to the discovery of the Higgs Boson particle, the cost was as much as $14 billion dollars (StackExchange). It's clearly a discovery that few if any private firms could have undertaken on their own - but that also presumes that the funds were spent efficiently.
On the other hand, we've also seen interesting discoveries/innovation as a result of the X-prizes - but these are defined outcomes when some important discoveries, as noted above, have happened by accident (not that this precludes other unintended discoveries from happening). On the privatize everything side of the argument, it's unclear that these discoveries wouldn't have been achieved in the private sector - and if governments weren't involved, maybe they would have happened earlier (or the counter argument might be given the state of intellectual property rights, some patent troll may have sat on these much needed innovations and/or prevented their development - but that's more a call for a rethink of how property rights are rewarded in the first place).
There are a number of private foundations that aim to fund breakthrough research like Peter Thiel's Breakout Labs that gives grants for early-stage scientific research that is too speculative or long-term to interest the for-profit sector (Wikipedia). I also don't think that scientists are immune to waste and the creation of costly bureaucracies. Further, whenever government is a funder, it tends to crowd out other funds - whether it be in competing for researchers or picking favorites. So what's the balance to strike and are governments currently striking that balance?
Update: Is the LHC a worthwhile project? (Debate.org)
Saturday, May 04, 2013
If you want to introduce someone to libertarian thinking, encourage them to try this experiment. Spend a few days reading nothing but technology news. Then spend a few days reading nothing but political news. For the first few days they’ll see an exciting world of innovation and creativity where everything is getting better all the time. In the second period they’ll see a miserable world of cynicism and treachery where everything is falling apart. Then ask them to explain the difference.
That could cynically cover a lot of projects that are intended to help the poor I suppose but it requires a special level of cynicism to support US Food Aid which is designed specifically to help well connected, wealth American farmers (TheEconomist via Instapundit):
It is the sad fate of American overseas food aid to occupy a policy “sweet spot”, says Chris Barrett, an expert in the subject at Cornell University. Its budget, the largest of any country’s, is big enough to attract rapacious special interests, but still sufficiently small and complex that its scandalous inefficiencies rarely make headlines.
Scandalous barely covers it. Since America began donating surplus wheat, corn meal, vegetable oil and other farm commodities to the world’s hungry six decades ago, the programme has been captured by an “iron triangle” of farm interests, shippers and voluntary organisations, with plenty of help from Congress. Rules state that most food aid must be bought from American farmers and processed in America. At least half must then be carried on American-flag ships. With competition severely curbed, ocean shipping eats up 16% of the budget for the largest food-aid programme, Food for Peace.
In a related scandal called “monetisation”, involving non-emergency aid (which represents about 30% of Food for Peace), charities and non-governmental outfits receive American produce, sell it on local markets abroad and then use the proceeds for good works. Compared to directly funding projects, “inherently inefficient” monetisation on average wastes 25% of the money sent, according to the Government Accountability Office. And the food supplied often floods fragile markets, hurting local farmers.
Friday, May 03, 2013
I get that there are many in the media - and NBC specifically, who have an ideological bias - but to so blatantly overlook the brutal totalitarian past that May 1 celebrates is bizarre (Wikipedia) especially as they seem to go out of their way to look for bigotry (ESPN). There are few words... (Mediaite):
While covering a May Day rally in Manhattan’s Union Square on Wednesday, NBC New York reporter Ida Siegal was cornered and asked if her network planned to show the communist imagery the protesters were displaying. Hilarity ensued when Siegal immediately became defensive, denying she had seen any communist imagery and asking of the “Hammer-and-Sickle” flags: “What do they represent?”
“You guys are with channel 4 news,” the videographer noted while addressing Siegal and her production team. “Are you guys going to show any of the people with Hammer and Sickle flags?”
“I haven’t seen any of those flags,” Siegal replied amid the din of the ongoing protests activity. “What do they represent?”
The iOS app Mailbox has gone from zero users to over a million and managing over a hundred million emails a day in just over six weeks (Mashable). As a founder points out, this took years - a good and inspirational reminder that success is rarely a sprint, but more of a marathon (TechCrunch):
“Mailbox is really version 2 of Orchestra, a shared to-do list that we put in the app store in the fall of 2011,” Underwood told me. “Inside the company we were in an endless cycle of prototyping and releases that eventually evolved into Mailbox.”
The road to Mailbox, he said, came as the startup realized that the idea of the to-do list was fundamentally broken. Instead of helping users to organize tasks, they inevitably became a nagging reminder of things people hadn’t yet accomplished. “Everybody fills up to-do lists with things to do, and that’s a great moment because you’re getting your life organized,” he said. “The more people use them, the more they get full of stuff that never gets done.”
Thursday, May 02, 2013
Yep - "It's time for a free-market corporate social responsibility. Conservatives who rail against government hand-outs should also blast companies who seek shelter from Washington" (theAtlantic). And it's been happening (FT, Bloomberg).
Tuesday, April 30, 2013
Interesting question. I'd suggest that the answer is yes, but it would take time - given that the best people would move to places that offered the greatest economic opportunity, creating a positive reinforcement loop for places that offer better economic policies. To a certain extent this is already happening given the effects of pro market policies.
The problem is that you'd first have to reduce or eliminate some of the entitlements that have been strangling developed countries that were created at a time when their cost wasn't nearly as much as it is today. Eligibility for benefits would need to be reexamined to make an open immigration policy more feasible. The article in the Atlantic also brings up another issue - "if you're coming from a place that has a problem, you are probably part of the problem, and if you move to a new place you might bring the problem with you."
This isn't academic given how there has been significant migration from "blue" states to "red" states which are seen as more business friendly in the US. Glenn Reynolds at Instapundit argues that "someone needs to set up a “welcome wagon” to explain to new immigrants why the states they’re moving to shouldn’t become more like the states they left". Further, Mickey Kaus notes that overly generous welfare systems can reduce the need for social integration breeding resentment and may even be a cause for terrorism (Slate via Instapundit).
More here (TheAtlantic via HN):
If wealthy nations open their borders, won't native workers lose their jobs or see their pay shrink? Not so, according to Clemens. He and his co-authors, through study of all the available economic literature, have found that decades of immigration of tens of millions of people to the United States has reduced real wages for the average American worker by fractions of a percent, if at all. Meanwhile, immigrants to the U.S. from developing countries can increase their income by 100 percent, or 1,000 percent. "Immigration is very, very far from being a zero-sum game of 'their poverty or ours,'" Clemens wrote in 2010. "Within ranges that even slightly resemble current migration levels, it is rather simply 'their poverty or their prosperity,' while we remain prosperous."
Clemens's research also challenges the notion that immigrants take away jobs from Americans. In agriculture, for example, he has estimated that for every three seasonal workers who are brought in, one American job is created across all sectors. Directly, workers need managers, and more often than not those managers are Americans. Indirectly, workers buy things, which means more Americans are needed to sell and produce those things. And yet, Clemens told me, "when a bus of 60 Mexicans is coming up from the border, nobody looks at it and says 'Ah, there's 20 American jobs.'"
But some immigration restrictionists have far bigger worries than workers losing small percentages of their salaries. There are many possible negative consequences of open borders. Naik points out that "political externalities" may be a major drawback of allowing anyone who wants to move to stable, wealthy nations to do so. Gallup polls have found that 700 million people would like to permanently move to another country, many of them from developing nations with failed political systems. If the U.S. or another wealthy nation were to see a sudden large increase in immigrants from these countries, it's possible that the new populace will vote for bad policies in their new home. As Naik puts it, some people believe that "if you're coming from a place that has a problem, you are probably part of the problem, and if you move to a new place you might bring the problem with you."
Monday, April 29, 2013
Colour me skeptical but hopeful - that it happens before it bankrupts us (WashingtonPost via Instapundit):
Bill Clinton has a pithier formulation: “If you work hard and play by the rules, you’ll have the freedom and opportunity to pursue your own dreams.” That’s entitlement. “Responsible” Americans should be able to attain realistic ambitions.
No more. Millions of Americans who have “played by the rules” are in distress or fear that they might be. In a new Allstate-National Journal survey, 65 percent of respondents said today’s middle class has less “job and financial security” than their parents’ generation; 52 percent asserted there is less “opportunity to get ahead.” The middle class is “more anxious than aspirational,” concluded the poll’s sponsors. Similarly, the Employee Benefit Research Institute found that only 51 percent of workers are confident they’ll have enough money to retire comfortably, down from 70 percent in 2007.
Popular national goals remain elusive. Poverty is stubborn. Many schools seem inadequate. The “safety net,” private and public, is besieged.
This is pretty remarkable - especially given market concerns over the risk of student loans offered by the US government (Zerohedge). App Academy is offering education with no upfront costs that gets paid after students get jobs (Yahoo via Instapundit):
Here’s how the tuition scheme works: Students study free-of-charge during the course’s duration. Upon gaining employment after graduation, alumni forward 15 percent of their annual base salary to App Academy, but not all at once. Instead, that sum -- typically around $12,000 for the average graduate -- is deducted incrementally from an employed graduate’s bi-weekly pay check for six months.
If a student isn’t hired within one year of completing App Academy, that student won’t be charged tuition. But that hasn’t been a problem for App Academy: Ninety-three percent of its graduates have received offers or are working in tech jobs.
According to Patel, the average App Academy graduate earns $83,000 a year – not bad for someone making a career change or who was previously unemployed. But the course is anything but easy. App Academy’s acceptance rate is less than 10 percent, and once admitted, students put in 80 to 90 hours a week in the lab.
Benjamin Franklin apparently understood the notion that input prices affect product prices, which is a problem because product demand curves are not completely inelastic. Discussing a minimum wage, he noted, “A law might be made to raise their [workers’] wages; but if our manufactures are too dear, they might not vend abroad.” This is one of the best arguments against a minimum wage: in an open economy, which the U.S. increasingly will be at least partly passed on in the form of higher product prices, which will in turn reduce product demand—and eventually employment.Particularly relevant when legally mandated wages are not a reflection of productivity.