How Uber is shining a light on the dirty politics of Toronto's cab industry

I can't help but wonder if the coverage is just a bit too optimistic... but I hope it's right (Globe and Mail):

In September 2012, one of Toronto’s taxi licenses sold for $360,000. As it turned out, this was a peak that presaged a major slide. By 2013, the average selling price of a cab plate had fallen to $153,867. In 2014, it was $118,235.

The reason behind this plunge is Uber, the online service that lets you order a ride through your smartphone. By the looks of it, Uber may drive a stake through the heart of the cab business. It’s about time.

[...] After my investigation of the industry, my name was mud among the city’s taxi plate holders, who were worried about losing their golden goose. One woman, who inherited a pair of plates from her father, called me a “communist” for recommending that the taxi plate system be abolished. “This is free enterprise,” she declared.

In fact, Toronto’s taxi plate system is anything but free enterprise. Instead, it is based on the artificial restriction of a natural market, and the granting of licences to a fixed number of participants. Even those who paid top dollar for a plate used to enjoy an annual return of more than 12 per cent. And for those who inherited plates, the return was manna from heaven.

On the other side of the coin were drivers and customers. Passengers paid too much for rides in old junkers, and drivers found themselves trapped in a system that skimmed the lion’s share of their revenues. Many have compared the Toronto cab industry to the feudal system, which is probably not far off the mark.

To understand how the taxi plate system and the interests behind it have contorted the Toronto cab industry, imagine how other businesses would work if operated the same way.

Politicians often need reminding that being pro-business and pro-markets is not the same thing.

The promise of self driving cars: less local government?

Sign me up (Reason.com):

One of the propelling concepts behind self-driving cars isn't just innovation for the sake of innovation, leading us to our sci-fi Jetsons future. If successfully implemented, it will make ground travel safer, particularly in higher population areas, increase transportation efficiency and ultimately human productivity.

But there's one little problem, noted by the government analysts of the Brooking Institution and subsequently highlighted by Wired: Local governments have become increasingly dependent on human screw-ups as a way to raise money. Speeding tickets. DUI citations. Parking violations. Those are all big money-makers for municipalities that could very well go away under a regime of self-driving cars. That's billions of dollars of revenue across the country.

Change without the Hope

Rate Of New Business Formation On Steady Decline, Even In Tech - company size growing (FuturePundit via Instapundit)

Obama, Reagan, and Blacks in America

The Obama Presidency isn't done - but I already suspect history will not be kind in remembering his impact on either race relations or advancing the economic condition of Blacks in America. Others seem to be noticing (BlackPressUSA):

Unemployment. The average Black unemployment under President Bush was 10 percent. The average under President Obama after six years is 14 percent. Black unemployment, “has always been double” [that of Whites] but it hasn’t always been 14 percent. The administration was silent when Black unemployment hit 16 percent – a 27-year high – in late 2011.

Poverty. The percentage of Blacks in poverty in 2009 was 25 percent; it is now 27 percent. The issue of poverty is rarely mentioned by the president or any members of his cabinet. Currently, more than 45 million people – 1 in 7 Americans – live below the poverty line.

The Black/White Wealth Gap. The wealth gap between Blacks and Whites in America is at a 24-year high. A December study by PEW Research Center revealed the average White household is worth $141,900, and the average Black household is worth $11,000. From 2010 to 2013, the median income for Black households plunged 9 percent.

Compare that to the Reagan Administration - who the previous author seems to hold in contempt (UTSanDiego). Somebody ought to tell her the issue isn't so much "trickle down" economics as well, economics.

What's the most racist urban area in America?

According to the Department of Housing and Urban Development (HUD)'s own criteria.... it's San Francisco (Cato).

The music at the heart of Capitalism

A profile of the head of the American Enterprise Institute that speaks a little to the culture wars being waged (and for some, it's a war that's being lost by economic conservatives):

While the mission remains unchanged, Mr. Brooks believes his obligation goes far beyond the production of academic tomes. These have their place, but if the champions of free markets hope to sell the message to those who aren’t already sold, he says they need to speak to the heart as much as to the head.

It’s what he means by “the music.” It begins by emphasizing that those who benefit most from freer markets are the have-nots: those without inherited wealth, prestigious credentials, social or class advantages—in other words, people whose only hope for a better life is a social order that will reward their hard work and enterprise.

Certainly that has been borne out by the world’s experience. In 1938 it might not have been clear that capitalism was the key to human flourishing. But no longer.

When he was a child, Mr. Brooks notes, one of four people lived on less than a dollar a day. Today, though we still have far to go, the advance of trade and a globalized economy has shrunk that figure to one of 20.

The liberation of hundreds of millions from desperate poverty ranks among the greatest success stories in history. But it’s a story that remains largely untold and mostly unheralded. In his new book, “The Conservative Heart,” Mr. Brooks puts it this way: “Capitalism has saved a couple of billion people and we have treated this miracle like a state secret.”

More here (Cato):

The canaries who were ignored in the Greek coalmine

Stories of the struggle to reform the Greek state before it ran out of other people's money (WSJ):

Their reform proposals were fought by their colleagues in parliament and savaged by the media and labor unions. They invariably found themselves sidelined.

[...] Since the eruption of Greece’s debt crisis in 2010, successive governments have prioritized fiscal austerity—trying to raise government revenue and cut expenditure—instead of tackling deeper reforms of the system head on.

Many foreign officials involved in Greece’s ill-starred bailout efforts over the past five years say they have learned what Greece’s past would-be reformist politicians always knew: In Greece, hurting vested interests is harder than taxing citizens to death.

[...] Today, more so than in their times in government, these three politicians and a few others are coming to be seen as among the minority of officials who spotted and attempted to change early on some of the core problems that have led to Greece’s almost intractable crisis today.

“They called me ‘the Cassandra’” said Mr. Giannitsis of the headlines during his unpopular push for reforming the pension system.

Cassandra, in the Greek myth, was a clairvoyant doomed to always be right, but never believed. She went crazy.

Licensing and crony capitalism

Great (and old) news from Texas (The American Interest via Instapundit):

In a victory against crony capitalism in Texas, the state’s Supreme Court recently struck down a licensing requirement. [...]

Here’s Eugene Volokh at The Washington Post explaining the case: Here’s what happened in this case: The plaintiffs practice “eyebrow threading,” which is apparently a technique for shaping eyebrows and removing eyebrow hair using a cotton thread. Since 2011, Texas has required them to get a cosmetology license, just as it requires for other cosmetologists; and that requires 750 hours of training, of which at least 320 hours — by the state’s own concession — “are not related to activities threaders actually perform.”

In a 5-4 ruling, the court ruled against the cosmetology license requirement for eyebrow threaders on the grounds that it “is not just unreasonable or harsh, but it is so oppressive that it violates” the Texas State Constitution. [...]

Too often, licensing rules are nothing more than a mechanism for the dominant players in an industry to shield themselves from competition—suppressing jobs (especially for the poor or undercapitalized), raising prices, and stifling creativity along the way. We are glad to see this Texas regulation come down, and hope that others will follow.

Stem cell dental implants and using lasers to burn away mental illness

Scientists are commercializing a way to use stem cell dental implants to grow new teeth directly in your mouth (PopSci via Instapundit) while others are proposing to use lasers to burn away some mental illnesses (Wired) - as others have pointed out with the latter, what could possibly go wrong?

On Greece

Pretty much... after all, people - even kids, respond to incentives (Instapundit):

Yep–this is what happens when you let progressives run a country. They spend like drunken sailors, then demand a bailout from others, accusing them of bigotry and hatred if they don’t acquiesce. Most families have at least one of these types. They have the emotional and financial maturity of a two year-old (sorry, two year-old readers out there). By repeatedly caving into these childish demands, the EU acts like parents who enable their children’s prodigal habits. It never turns out well.

More here (Bloomberg): "Germany deserved debt relief, Greece doesn't"

Experiments in poverty

Evidence based interventions in poverty - randomized control trials (WSJ):

World-wide, in 1981, 2.6 billion people subsisted on less than $2 a day; in 2011, 2.2 billion did. Most of that progress came in China, while poverty has barely budged in large swaths of sub-Saharan Africa, South Asia and Latin America.

Is it time for a new approach? Many experts who study poverty think so. They see great promise in a new generation of experimental programs focusing not on large-scale social support and development but on helping the poor and indebted to save more, live better and scramble up in their own way.

Not surprisingly, those who have been on the edge of the status quo of the interventions and the billions of dollars spent that have done little to nothing, are skeptical:

Prof. Sachs says that “many, almost surely most, of the cutting-edge breakthroughs in actual development in recent years did not result from [randomized controlled trials].” He believes that tackling problems at the level of communities or entire societies, rather than just households, is likely to be more effective—though, he adds, randomized controlled trials should be “a part of a diverse arsenal of analytical and policy tools.”

Government interventions that can radically reduce poverty

...while reducing the amount of harm to the economy - though entrenched interests will be the primary casualty (ASI): deregulating childcare and healthcare, reduce payroll taxes on low income earners and well, just giving money to them through a basic income or negative income tax.

The coming tech in food production

A trend to watch: food tech used to be about scale - the next wave is about both scale and improving quality (MITTechReview):

For years, the most important food technologies were all about scale. How could we feed a fast-growing population at less expense? By doing everything bigger: food grown on bigger farms was sold by ever-merging global food giants to grocery chains of superstore proportions.

Many of today’s food technologies seem to be moving in the opposite direction, toward methods and products that are economical for small farms as well as large corporate ones. This does not mean an end to big food: with the planet’s population projected to reach 9.6 billion by 2050, agriculture and food production will still have to achieve a massive scale, with help from technology and innovative research. Still, evolving technologies, including inexpensive sensors, mobile devices, and data analysis, have helped an increasing variety of food companies, retailers, and producers lower their costs and compete in many specialty markets.

This could be the start of a new food economy—one that reflects more competition and more innovation, provides opportunity for a broader group of investors, and is more dynamic and responsive than the industrial model that has dominated for decades.

More here (MITTechReview): Robots Start to Grasp Food Processing

Driving down the cost of American healthcare

May start with radically reforming the FDA (Reason).

More on how Obamacare may be inadvertently driving a consumer-driven healthcare revolution

"The law is driving people into high-deductible plans" (WSJ):

The widespread adoption of high-deductible plans does, however, face two major challenges.

First, advocates of consumer-directed health care suggest that much of the money saved in premiums—high deductible plans can be thousands of dollars less expensive than comprehensive plans—be put into health-savings accounts to help pay for routine care. Over time, that savings can grow into a large nest egg.

But without that backstop, Americans will face the worst of both worlds: no coverage for everyday care and no dedicated financial resources to offset new expenses. Hence, critics cry that high-deductible plans leave patients “underinsured”—and that they will avoid or delay needed care as a result. The evidence is mixed. But it seems to be a problem particularly among those who enroll in high-deductible plans on the ObamaCare exchanges; few appear to be establishing health-savings accounts. One problem is that the exchanges make it very difficult to identify HSA-eligible plans.

Second, consumer-directed health care works because it encourages competition. Unfortunately, competition in medicine seems to be falling as hospitals and insurers merge, potentially leading to higher and more opaque prices.

I think even the WSJ is underestimating the potential for concierge care.

Crowdsourcing for better government

Challenge.gov is a fascinating experiment under the Obama Administration in its own right but more interesting is how it has been evolving... but also making government more accessible (reason.com):

Others, however, are essentially using the website as a new form of procurement. In some instances, the goods or services they seek are fairly general. The National Institute on Drug Abuse is now offering $100,000 for "bold new ideas" on how to manage and improve the clinical quality of addiction treatment. Others are far more specific. NASA recently solicited designs for a 3D printable handrail clamp assembly for the International Space Station. [...]

And it's not just that these kinds of platforms only reward positive outcomes. Typically, they also end up leveraging the incentive money they offer several times over. In the case of the NASA handrail clamp assembly challenge, the total prize money offered was just $2,000. But it attracted 474 entries. Had NASA been paying market rates to even just the top 10 percent of these entrants for the time they spent designing their submissions, its costs would have been far higher.

In general, crowdsourcing platforms inspire innovation by putting problems in front of more eyes. And Challenge.gov is already working in this fashion. Aaron Foss, who won a 2012 Federal Trade Commission challenge that sought new methods of helping consumers block telemarketing robocalls, told Forbes that he "never would have worked on the robocall problem if not for the challenge." Similarly, a NASA survey of approximately 3,000 challenge participants found that 81 percent had never previously responded to government requests for proposals.

What makes someone become an Islamic extremist?

Great video from Prager University and upending the deep seeded elitist idea that poverty breeds extremism, but rather, it's the other way around:

Even if manufacturing returns to the US, the jobs won't

This probably isn't what the "Out of a job yet? Keep buying foreign!" crowd had in mind (WSJ):

As robots become less costly and more accessible, they should help smaller manufacturers go toe to toe with giants. By reducing labor costs, they also may allow the U.S. and other high-wage countries to get back into some of the processes that have been ceded to China, Mexico and other countries with vast armies of lower-paid workers.

Some of the latest robots are designed specifically for the tricky job of assembling consumer-electronics items, now mostly done by hand in Asia. At least one company promises its robots eventually will be sewing garments in the U.S., taking over one of the ultimate sweatshop tasks.

Of course, this isn't to say all jobs are going away. They are changing though. A potential source of American jobs? China (WSJ):

China’s middle class continues to grow, reaching an estimated 630 million people by 2022. Those consumers want better health care, world-class education and a cleaner environment. China itself will eventually be able to provide those services, but meanwhile, the Internet makes it possible for China to create and sustain American jobs.

Take health care. In 1994, a Chinese university student named Zhu Ling became mysteriously ill. Other students posted her medical details on the Internet, allowing Western doctors to help diagnose her with thallium poisoning and to save her life. It was a famous early instance of effective telemedicine.

U.S. health-care professionals could provide China with a range of services. China had just one general practitioner for every 10,000 people in 2013, according to state media, and many Chinese are dissatisfied with the quality of the care. “China has very few doctors that can gain trust,” said Feng Xue, executive president of Tianjin Telemedicine Association, a nonprofit organization to promote telemedicine. “The U.S. has a strong brand.”

Are wage increases a lagging indicator?

There's been a lot of handwringing over stagnant wages, but economist James Bessen tries to put it in historical context and makes the argument that the cause isn't technology (Vox):

There's been a lot of worry that increasingly sophisticated computers would replace more and more jobs, which could lead to a future where many low-skilled workers are unable to find a job at all.

But Bessen argues that this is a misunderstanding of recent economic trends. "I just don't see evidence of it," he says. "There are very few occupations where everything has been automated."

Bessen points to bank tellers as an example. During the 1990s and 2000s, banks installed thousands of automated teller machines. Yet surprisingly, the number of human tellers actually grew slightly during the same period

A similar interpretation from Ray Dalio at Bridgewater.

Mexican proverb

Great quote: "They tried to bury us. They didn’t know we were seeds." h/t Tim Ferriss

Daimler introduces the world's first self driving semi-truck

Demand isn't slowing down for logistics, but the ability to recruit drivers is. Makes sense and it's already legal in Nevada (wired):

The truck in question is the Freightliner Inspiration, a teched-up version of the Daimler 18-wheeler sold around the world. And according to Daimler, which owns Mercedes-Benz, it will make long-haul road transportation safer, cheaper, and better for the planet.

The Freightliner Inspiration offers a rather limited version of autonomy: It will take control only on the highway, maintaining a safe distance from other vehicles and staying in its lane. It won’t pass slower vehicles on its own. If the truck encounters a situation it can’t confidently handle, like heavy snow that covers lane lines, it will alert the human that it’s time for him to take over, via beeps and icons in the dashboard. If the driver doesn’t respond within about five seconds, the truck will slow down gradually, then stop.

In hardware terms, the truck isn’t much different from the latest trucks and passenger cars Daimler is putting on the road. A stereoscopic camera reads lane lines. Short and long range radar scan the road up to 800 feet ahead for obstacles. No sensors face backward, because they’re not needed. There’s no vehicle-to-vehicle communication, no LIDaR. The software algorithms are adjusted versions of those developed for use in Mercedes-Benz’s autonomous vehicles.

Oddsmakers win in UK election upset

Markets again trump pollsters and pundits (TheConversation):

Interestingly, those who invested their own money in forecasting the outcome performed a lot better in predicting what would happen than did the pollsters. The betting markets had the Conservatives well ahead in the number of seats they would win right through the campaign and were unmoved in this belief throughout. Polls went up, polls went down, but the betting markets had made their mind up. The Tories, they were convinced, were going to win significantly more seats than Labour.

I have interrogated huge data sets of polls and betting markets over many, many elections stretching back years and this is part of a well-established pattern. Basically, when the polls tell you one thing, and the betting markets tell you another, follow the money. Even if the markets do not get it spot on every time, they will usually get it a lot closer than the polls.

Efficient markets require security and stability

Ergo, to improve the economic prospect of a city, start with policing argues the NationalReview.

Related: How Colombian President Álvaro Uribe saved Columbia (WSJ).

"Do Strong Religious Beliefs Stifle Innovation?"

According to one paper, yes (WSJ). I'd be curious to see if the particular religion plays a role:

The relationship is apparent when plotting the percent of the population that describes itself as religious against a population-controlled measure of patent applications filed by a country’s residents.

The relationship broadly holds up when the authors make adjustments for differences in gross domestic product, rates of higher education, population and other variables. So it’s not simply a matter of more religious countries being poorer or having fewer resources, Mr. Bénabou said in an interview.

“We’re not making strong claims as to what is causing what,” he said. “The pattern is there and people can offer their own explanation to the pattern.”

Twelve economic concepts every graduate should know

Short and sweet (BusinessInsider). From the speech given by Nobel economist Thomas Sargent to graduates of Cal-Berkeley in 2007.

As Moore's Law turns 50, the revolution is only beginning...

WSJ via Instapundit:

Moore’s Law is creative destruction on steroids. It regularly fosters the next wave of entrepreneurial opportunities made possible by the latest jump in chip performance. It can be blamed for much of the 90% mortality rate of electronics startups.

But because the usual graphic presentation of the law is tamed by the format into a nice shallow line, we don’t get to see the awesome power of the raw curve—which, like all exponential lines stays shallow seemingly for a long time, then suddenly curves almost straight upward in a vertiginous climb. It is the curve of a rocket’s acceleration, of a pandemic, of the cells born from a fertilized egg.

The great turning took place a decade ago, while we were all distracted by social networking, smartphones and the emerging banking crisis. Its breathtaking climb since tells us that everything of the previous 40 years—that is, the multi-trillion-dollar revolution in semiconductors, computers, communications and the Internet—was likely nothing but a prelude, a warm-up, for what is to come. It will be upon this wall that millennials will climb their careers against almost-unimaginably quick, complex and ever-changing competition.

Crowd-sharing, crowdfunding, bitcoin, micro-venture funding, cloud computing, Big Data—all have been early attempts, of varying success, to cope with the next phase of Moore’s Law. Expect many more to come. Meanwhile, as always, this new pace will become the metronome of the larger culture.

Moore’s Law has always induced de-massification: giant mainframe computers become smartwatches, giant vertically-integrated organizations are defeated by what Instapundit’s Glenn Reynolds has dubbed an “Army of Davids.”

Rigid command-and-control structures in every walk of life, from corporations to governments to education, become vulnerable to competition by adaptive and short-lived alliances and confederacies. Now that process is going to attack every corner of society.

Arbitrageurs, meet the disintermediation of tech

The fact that it's taken this long is the only real surprising aspect of this story - that Wall Street is under threat by the rise of info tech (wired):

These so-called “fintech” upstarts are calling attention to the many shortcomings of the gatekeepers who have traditionally controlled lending, paying, and investing. When these incumbents were the only option, they could rest easy assuming annoyed consumers had no other options. Now they do, and a nervous Wall Street, Dimon included, is realizing it has to play along in order to fight back. Amid fears of a growing threat to their market share, Wall Street is now playing catch-up. Banks are launching competitive products (or slapdash imitations, depending on where you sit) to startups’ innovations. They’re financing partnerships. And in some cases, they’re just trying to acquire away threats to their businesses.

More: Inc. profiles a few companies that are making it easier for startups to find money.

The death of "cleantech"? Or the perversions of "free" money?

TechCrunch notes that "old" cleantech was overhyped and is now nearly unfundable but there's an emergence of more sustainable and profitable tech: "They’re looking to be downstream, close to those juicy, fast-growth markets, with new channels and new marketplaces. Even in hardware, they’ve moved to distributed, smaller, modular, automated and intelligent hardware."

Doesn't this just highlight problems with governments trying to choose winners - when it comes to either technologies to pursue or even more insidiously, companies that try to develop those technologies? Could these companies like Nest have gotten there faster if it weren't for all the carrots being dangled to pursue those "overhyped" technologies? And was losing all this money and time really such a "noble way to lose money?"

Why is US entrepreneurship declining precisely when entrepreneurship is getting easier?

This should be alarming for policymakers (Inc):

The Kauffman Foundation, citing its own research and drawing on U.S. Census data, concluded that the number of companies less than a year old had declined as a share of all businesses by nearly 44 percent between 1978 and 2012. And those declines swept across industries, including tech. Meanwhile, the Brookings Institution, also using Census data, established that the number of new businesses is down across the country and that more businesses are dying than are being born. All this at a time when entrepreneurship had reached its cultural apex and was widely viewed as the sole sizzling ember in an otherwise cooling economy. The business and academic worlds were left slack-jawed: How could this be?

The implications are huge. “New businesses are disproportionately responsible for the innovation that drives productivity and economic growth, and they account for virtually all net new job creation,” says John Dearie, executive vice president for policy at the Financial Services Forum. “I would say, as a policy person, this is nothing short of a national emergency.”

I'm not convinced by Inc's theories. Generational? Markets have actually increased with access to more markets globally - and I'd argue risks have actually declined with the costs of starting a business falling.

Big companies? Big companies and the lure of a secure job seem to have been even greater in the past. Funding? Again, I'd suggest it's easier today than ever before. Possibly related, TheSignal has a fairly aggressive column making the argument that the decline in jobs (making the fall in entrepreneurship even more alarming) is the result of government and regulation that's currently sucking the oxygen out of the job market. Maybe it's also true for US entrepreneurship? (And on a related note, maybe it's the dramatic rise in student debt?)

Betting on farming

According to the WSJ, venture capitalists are placing bets on ideas to improve food production and food itself:

The money involved in U.S. food startups is still small compared with Internet companies. But venture-capital investment in agriculture and food soared 54% to $486 million last year, according to Dow Jones VentureSource.

Big agribusinesses have launched their own VC initiatives, and investment managers have raised funds dedicated to food and agriculture technology. New York-based private-equity firm Paine & Partners, for instance, raised $893 million in January for investments in boosting productivity in areas like protein production and food safety, according to its president, Kevin Schwartz.

Driving the investments are a combination of cheap wireless technology, improved tools for collecting data and monitoring crops, and budding entrepreneurs looking to address new market demands and feed a growing global population. Increasingly health-conscious consumers also are scrutinizing what is in their food, pushing vendors to boost the transparency of their supply chains.

Is modern healthcare killing us?

Provocative question from Freakonomics. What I think is entirely clear is that the system in the US is broken. I'm more skeptical of claims that the problems are the result of profit seeking rather than warped incentives:

In our system, we have an asymmetry in price. So we pay a whole lot of money if you cut, scan, and hospitalize patients. If they have procedures, if they go through machines, we pay an enormous amount of money for those things. If you talk to a patient, you actually lose money in many instances. So when a cardiologist walks in the room and talks to your family member, that’s actually a loss leader. That doctor is losing money every moment they stay in a room with your family member. The way they make money is by getting you out of that room and back into the scanner that they’re leasing in the back of the office. That’s not their fault. That’s the fault of how we’ve structured the incentives in the system.

Where's the top programming talent in the world?

Hint: surprisingly, not California (venturebeat). This is just snapshot data, but I'd be curious if there have been any trends here.

How to solve California's water crisis

Not bandaids, but markets (Reason)

How much does the minimum wage help the poor?

Not very much (JStor via MarginalRevolution):

About 35 percent of the total increase in after-tax benefits goes to families with income less than two times the poverty threshold, a common definition of the working poor or near-poor; nearly 13 percent goes to families principally supported by low-wage workers defined as earning wages at or below 117 percent…of the new 1996 minimum wage; and only about 14 percent goes to families with children on welfare.

Unlike most public income support programs, increased earnings from the minimum wage are taxable. Over 25 percent of the increased earnings are collected back as income and payroll taxes…Even after taxes, 27.6 percent of increased earnings go to families in the top 40 percent of the income distribution.

How fracking is changing geo politics

And yet some politicos would rather increase the barriers to fracking rather than drop them. How fracking is reshaping global power (WSJ):

Fracking overnight has relieved Saudi Arabia of its swing-producer dominance. Fracking overnight has relegated the Middle East to a sideshow, albeit a still-important sideshow, in the world economy.

Things change fast and could change back. A sizable share of the world’s oil still flows from the Persian Gulf and so far production has not been disrupted. Prices would shoot up—they’re already creeping up. But a weight on U.S. fracking would also be lifted. At prices below $50, much fracking becomes long-term unprofitable. But then there’s the flip-side: the flexibility exhibited by the U.S. wildcat sector, allowing drilling to ramp up quickly in response to higher prices, helping to counteract any damage to global growth.

American regulation drives innovation north...

You can't stop the signal... or the drones apparently (TechCrunch)

It’s happening here, and not 2,000 ft to the south, because the U.S. Federal Aviation Authority, has been dragging its heels on green lighting testing in Washington on existing Amazon company property. Last week, the FAA did finally relent and approve experimental testing for Amazon, but the company responded (with no small amount of evident pique) by noting that the actual drone approved from testing was a prototype that has since become obsolete thanks to more recent technical advances.

In Canada, by contrast, Amazon endured only a single three-week licensing undertaking, after which it has received what the Guardian says is essentially “carte blanche” permissions regarding its full fleet of drones for testing. Of course, one could argue that given Canada’s much, much lower population density and less charged political climate, comparing the FAA’s responsibilities with those of its equivalent body in Transport Canada from the neighbor to the north is essentially comparing apples to oranges.

Still, Canada’s openness to work with drone companies on early testing might usher in a small industry boom – already in 2014, Transport Canada has approved 1,672 companies for commercial drone use, compared to just 48 total for the FAA, the Guardian notes. Canada offers some big benefits to companies hoping to eventually serve the U.S., too, including general geographic and climatological similarity with its southern companion.

Drone companies, especially those focused on solving the hard problems surrounding machine learning and autonomy, are already springing up like weeds in Canadian innovation hubs like Waterloo and Toronto, so the FAA’s sluggishness may prove vitalizing to Canada’s emerging flying robot industry.

"The higher the minimum wage..."

"the faster the Age Of Machines is born." (Instapundit)

Earth Hour

A yearly reminder that some environmentalists would prefer that we return to the dark ages.

Resilience, Grit and Learning

A somewhat related and hopeful, if tangential, article to the discussion of "safe zones" sheltering students from ideas (or White people) at institutions of learning (NationalPost) - resilience can be learned (WSJ):

He and Mr. Charney came up with 10 traits of people who survived war, assault and disasters, as well as less traumatic events, and ultimately thrived. These people tend to be optimistic—thinking things will work out—and are able to accept what can’t be changed and focus on what can be, he says. They recognize that even though they didn’t have a choice in their loss, they are responsible for their own happiness.

Although genetics plays a role in being resilient, it isn’t a huge one. Resilience can be learned and enhanced, he says. For example, people can develop a more optimistic view by cultivating friendships with positive people and challenging negative thoughts.

“When you change the way you are viewing things, it has a pretty big impact on all sorts of things,” Mr. Southwick says. It isn’t easy to do, he acknowledges.

Harvard researcher Angela Duckworth defines grit as being "the ability to persist and passionately pursue your goal of winning, whatever it takes." According to Ducksworth, when it comes to success, grit is more important than talent. (99u)

Tech to watch: DNA nanobots to cure cancer

This is amazing (nextbigfuture):

In a brief talk, Bachelet said DNA nanobots will soon be tried in a critically ill leukemia patient. The patient, who has been given roughly six months to live, will receive an injection of DNA nanobots designed to interact with and destroy leukemia cells—while causing virtually zero collateral damage in healthy tissue.

According to Bachelet, his team have successfully tested their method in cell cultures and animals and written two papers on the subject, one in Science and one in Nature.

How high taxes drive away innovators

People respond to incentives. Even inventors (via ASI):

This paper studies the effect of top tax rates on inventors’ mobility since 1977. We put special emphasis on “superstar” inventors, those with the most and most valuable patents. We use panel data on inventors from the United States and European Patent Offices to track inventors’ locations over time and combine it with international effective top tax rate data. We construct a detailed set of proxies for inventors’ counterfactual incomes in each possible destination country including, among others, measures of patent quality and technological fit with each potential destination. We find that superstar top 1% inventors are significantly affected by top tax rates when deciding where to locate.

The elasticity of the number of domestic inventors to the net-of-tax rate is relatively small, between 0.04 and 0.06, while the elasticity of the number of foreign inventors is much larger, around 1.3. The elasticities to top net-of-tax rates decline as one moves down the quality distribution of inventors. Inventors who work in multinational companies are more likely to take advantage of tax differentials. On the other hand, if the company of an inventor has a higher share of its research activity in a given country, the inventor is less sensitive to the tax rate in that country.

The effects of the minimum wage hike in Seattle

More unintended consequences (Shiftwa)? Pretending that effects like these are accidents is either political malpractice or simple idiocy at this point...
Related: "The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers" (Cato)

Falling commodity prices

Trying to predict commodity prices isn't dissimilar to trying to catch a falling knife - but it shouldn't surprise anyone how quickly neo malthusians were once again proven wrong (Reason):

Plunging oil prices have been big news over the past year. Since mid-summer 2014, the price for benchmark West Texas Intermediate (WTI) crude has fallen from $105 to $48 per barrel. But it's not just the price of petroleum that has plummeted. The prices of lots of other industrially important commodities have also been dropping.

Erten and Ocampo also point out, "The magnitude of cumulative decline during the downward trend is 47 percent for the non-fuel commodity prices, with recent increases of around 8 percent far from compensating for this long-term cumulative deterioration." The recent upswing phase of the current super-cycle did not boost commodity prices to nearly what they were a few cycles back.

However, Erten and Ocampo report that metals have been an exception—the mean of the last cycle was higher than the preceding one. Still, they note, "The contraction phase of this cycle has not even begun yet, which can lower the mean of the whole cycle in the upcoming years." It now appears that commodity prices were just reaching their pinnacles when Erten and Ocampo were writing up their results back in 2011. Instead of peak resource production we are most likely now past peak commodity prices—and heading lower for at least for the next ten to fifteen years.

Bridge International Academies: privatized mass education in developing countries

Developing countries need more entrepreneurs and business selling solutions that people want and need vs bureaucrats forcing interventions down their throats 'for their own good.' This is exciting. From the WSJ - "For-profit Bridge International Academies is challenging the assumption that governments and charities should lead education programs in impoverished countries":

Bridge’s founders are challenging the long-held assumption that governments rather than companies should lead mass education programs. The company’s goal is to eventually educate 10 million children and make money by expanding its standardized, Internet-based education model across Africa and Asia.

The Internet and Barnes & Noble Inc. Nook tablets are used to deliver lesson plans, which are then used by teachers. The tablets also are used to collect test results from students scattered across hundreds of towns and villages and serve as a means of monitoring their progress.

“It’s like running Starbucks,” said Greg Mauro, a partner at California-based venture-capital firm Learn Capital LLC, the largest shareholder in Bridge with a 15% stake, likening it to the coffee chain with standardized systems and procedures that can be replicated across new locations. If all goes to plan, the American-run, Nairobi-based education startup will seek a stock-market listing in New York in 2017, according to Mr. Mauro.

The endgame of Chinese communist rule?

Cautiously optimistic... an even bigger question is what comes after (WSJ):

The endgame of Chinese communist rule has now begun, I believe, and it has progressed further than many think. We don’t know what the pathway from now until the end will look like, of course. It will probably be highly unstable and unsettled. But until the system begins to unravel in some obvious way, those inside of it will play along—thus contributing to the facade of stability.

Communist rule in China is unlikely to end quietly. A single event is unlikely to trigger a peaceful implosion of the regime. Its demise is likely to be protracted, messy and violent. I wouldn’t rule out the possibility that Mr. Xi will be deposed in a power struggle or coup d’état. With his aggressive anticorruption campaign—a focus of this week’s National People’s Congress—he is overplaying a weak hand and deeply aggravating key party, state, military and commercial constituencies.

Piketty: About that inequality? Nevermind.

Piketty's correction (WSJ):

Though his formula helps explain extreme and persistent wealth inequality before World War I, Mr. Piketty maintains, it doesn’t say much about the past 100 years. “I do not view r>g as the only or even the primary tool for considering changes in income and wealth in the 20th century,” he writes, “or for forecasting the path of inequality in the 21st century.”

Instead, Mr. Piketty argues in his new paper that political shocks, institutional changes and economic development played a major role in inequality in the past and will likely do so in the future.

When he narrows his focus to what he calls “labor income inequality”—the difference in compensation between front-line workers and CEOs—Mr. Piketty consigns his famous formula to irrelevance. “In addition, I certainly do not believe that r>g is a useful tool for the discussion of rising inequality of labor income: other mechanisms and policies are much more relevant here, e.g. supply and demand of skills and education.” He correctly distinguishes between income and wealth, and he takes a long historic perspective: “Wealth inequality is currently much less extreme than a century ago.”

More here (WSJ): "Why Thomas Piketty’s Revisions Don’t Fix His Book."

How automation will wipe out (private sector) unions...

It's pretty basic economics (Reason):

Forecasts differ on the specifics, but they generally point to automation being disruptive as far as traditional workplace roles are concerned. A recent Oxford University study put nearly half (47 percent) of all jobs at risk of replacement by automation in two decades. A Wired article puts the number at 70 percent by the end of this century.

Computers are getting smarter and stronger while employees, with their health insurance, pensions, and vacation time are becoming increasingly expensive. The writing is on the wall; plenty of jobs, at least as performed by humans, aren't long for this world.

I think the more interesting question will be how long we will tolerate the public sector unions who earn far more than their private sector peers and the politicians who have been beholden to them.

Turning beehives into honey on tap

This is cool (wired):

Beekeepers Cedar Anderson and his father Stuart have, essentially, hacked the honeycomb—a nearly flawless geometric and structural achievements—to make it more mechanically efficient. In a nutshell, Flow frames have a partially formed honeycomb matrix within a transparent frame. Bees complete the comb, fill the cells with honey and cap them. To harvest the honey, the beekeeper inserts a tool into the top of each frame and twists, a move that splits each cell in the honeycomb vertically, allowing the honey to flow freely. It is collected at the bottom through a tube. Presto! Honey on tap. [...]

“There’s more to bees than harvesting honey. Over one third of the food we eat is dependent on bees for pollination,” Cedar says. Without the help of bees, our crops would suffer devastating consequences, and with available areas for natural bee habitats disappearing each year, systems that make it easier for humans to look after bees are crucial.

Crossfit is great for entrepreneurs...

6 reasons why, according to Entrepreneur. I confess I require a bit of the external motivation that Crossfit provides (that is when I drag myself out of bed at 440am...).

Responding to hypothetical crises: "what happened to the rare earths crisis?"

Instapundit appropriately and sarcastically responds: "shockingly, markets." From MIT's Tech Review:

Demand appears to have fallen mainly because companies stockpiled these materials in anticipation of shortages, says Hatch. As it turned out, China’s lower export quotas—which were deemed unfair by the World Trade Organization—didn’t constrain the world’s supply, and China recently stopped imposing those limits on rare earths. Hatch notes that while the prices for some rare earth materials remain above 2010 levels and could go up again, a price spike like the one seen in 2011 is unlikely.

As it turns out, net neutrality is another hypothetical crisis that American politicians have decided to take a different approach on: regulation. I predict the phrase "unintended consequences" is going to be used - that were very much and vocally predicted before hand (Reason).

How landlocked Botswana found economic growth

Through 'economic liberty'. Remarkable for a country once the third poorest in the world (dailysignal):

Whither the Greeks...

The entire Greek situation is bizarre... but in the midst of the Greek government demanding that they receive new loans, an oddly lucid piece of journalism (NYT - yes, oddly, the NYT):

Businesses are still stymied by labor rules and tax policies that under the previous government often changed week to week — 2,200 new tax regulations in the last two years alone.

Firms like Mr. Stamatiou’s, as well as investors and start-ups, face high administrative costs and bureaucratic inefficiency that Greek business associations say jeopardize jobs and leach about €14 billion a year from the economy. Corruption remains widespread, and vested interests have fought against opening swaths of the economy to competition.

“The removal of austerity is all fine and well,” said Constantine Mihalos, president of the Athens Chamber of Commerce. “But it will only be the right solution if it is followed by the necessary structural reforms in the public and private sector creating conditions for growth.”

Et tu, Stimulus?

Any excuse to spend money? Even better when you get to spend gobs of it? Nevermind, of course, the consequences (Boston Review via Instapundit)

Before the recession, the Congressional Budget Office (CBO) projected we would have 5 million more jobs at the end of 2014 than we actually do. It also projected that the GDP would be more than 11 percent higher in 2014 than it is now. This translates into a difference in annual output of roughly $2 trillion or more than $6,000 per person. They predicted that wage and salary income would be roughly 20 percent higher than it is today. Many economists had similar projections.

What about "national socialist" suggests the Nazis were 'right-wingers'?

It's kind of still befuddling why socialism is still considered socially acceptable when Nazis are not...

Related: Well annotated rant on the issue (monsterhunternation).

Where have the entrepreneurs gone?

Not America (LATimes) - "Countries such as Hungary, Denmark, Finland, New Zealand, Sweden, Israel and Italy all have higher startup rates than America does." (Investors.com)

Related: According to Popular Mechanics (via Instapundit), these are the 14 top startup cities, none of which are in Silicon Valley.

Kinda like Rock & Roll and the fall of the USSR?

From Reason.tv: Bollywood vs. Bin Laden (YouTube): Why radical Islam fears pop culture

When it comes to the oil, why it's not the 80s anymore

The Saudis are betting against American innovation - which generally isn't a good bet to make. From the WSJ:

Today, the discovery and development of oil from shale rocks means that oil output is faster paced and near at hand—in Texas and North Dakota, Colorado, Oklahoma, Wyoming, even Ohio. Drilling and hydraulically fracturing a well takes weeks, not years. An expensive well costs $10 million, compared with the billions needed to drill offshore wells and build associated infrastructure. Moreover, expenditure of both time and money are falling fast.

The oil field investment cycle has shortened. Wildcatters in Texas discovered the Eagle Ford Shale in 2008. Within five years, it was pumping a million barrels a day—thanks to an influx of capital that paid for drilling thousands of new wells. Each well roars into life and then drops off fast. Without constantly drilling new wells, these oil fields will peter out. [...]

Companies like EOG Resources Inc. are drilling better wells faster. EOG said recently it takes 4.3 days to drill its average well in the Eagle Ford Shale in South Texas, down from 14.2 days in 2012. What’s more, as it drills more of them, it has figured out how to locate wells to get the highest oil output.

Combining lowering costs and increasing output means that EOG says it can drill wells at $40 per barrel in North Dakota, South Texas and West Texas, while still earning a 10% return. We “pride ourselves on being a very efficient operator,” Billy Helms, EOG’s head of exploration, said at a recent industry conference.

Since oil prices began to fall, many companies have cut their capital spending plan for 2015 and the number of drilling rigs in the U.S. has fallen. But output has continued to increase.

Quote of the day

Michael Cannon at Cato: "People who pay for their own consumption don’t have the luxury of being able to pretend that tradeoffs don’t exist."

'Je suis Charlie'

I think this response from the New Yorker framed it remarkably well:

But the murders in Paris were so specific and so brazen as to make their meaning quite clear. The cartoonists died for an idea. The killers are soldiers in a war against freedom of thought and speech, against tolerance, pluralism, and the right to offend—against everything decent in a democratic society. So we must all try to be Charlie, not just today but every day.

A note of optimism...

If it bleeds, it leads... and probably why this kind of stuff doesn't often reach our monitors - with much of this good news directly as a result of the proliferation and hard won gains of markets and capitalism (Cato): 26 charts and maps that show the world is getting much, much better (Vox)

Missing in the US: young entrepreneurs

The irony is that I would have thought the opposite especially with the emergence of the young tech companies... but the trend is even more troubling as there hasn't even been a shift in increasing entrepreneurship amongst older Americans - this despite the fact that technology makes it easier than ever to start a business (WSJ):

The decline in young entrepreneurs is part of a broader drop in private business ownership over the past 25 years. Between 2000 and 2012, new business formation slowed even in such high-growth sectors as technology, according to economists John Haltiwanger and Ryan Decker of the University of Maryland and Javier Miranda of the Census Bureau.

Slowing U.S. population growth since the early 1980s has reduced the supply of potential entrepreneurs of all ages, and lessened demand for new goods and services, said Mr. Litan of the Brookings Institution. Meanwhile, business consolidation has led to more formidable competition for startups, making it harder for new entrants to gain a spot in the market, he said.

Overall, the U.S. “startup rate”—new firms as a portion of all firms—fell by nearly half between 1978 and 2011, according to an analysis by Mr. Litan and his research partner, economist Ian Hathaway.

Building a sustainable business model for primary healthcare

With the turbulence in the US healthcare system while Canada's healthcare system frays at the seams, keeping up with the Qliance model for affordable concierge medicine is fascinating (Time):

Since then, they’ve signed up previously undreamed-of populations: big private employers like Expedia and Comcast, public and industry employee unions like the one for Seattle firefighters and–most radical of all–at least 15,000 Medicaid patients.

The private company’s results so far suggest that the model is scaling up nicely. Qliance now serves some 35,000 patients; the cost of about half of them is paid by the government through traditional and expanded Medicaid programs. Treating a wide variety of patients–young and old, healthy and chronically sick, well-off and poor–Qliance claims to be saving approximately 20% on the average cost of care compared with traditional fee-for-service providers. The company’s staff has tripled over the past year, and Qliance is looking to expand beyond Washington.

SpaceX: A launch towards affordable space travel to watch for January 6th

This is pretty exciting... SpaceX will attempt to land a rocket after launch (PopSci):

Landing on such a small platform that isn’t completely stationary won’t be easy, and Musk estimates a 50 percent chance of success on January 6. Plus, the landing will occur after the first stage separates from the second stage -- the part of the rocket that will take the cargo capsule the rest of the way to the ISS. That means not all of the rocket will be saved, as the second stage will never be recovered. (However, Musk plans to recover the second stage in future launches.)

Still, the fact that SpaceX is attempting such an endeavor instills hope for a cheaper commercial spaceflight industry. According to Quartz, the cost to build a Falcon 9 rocket is $54 million, but the cost of its fuel is only $200,000. If launching a rocket in the future only required refueling and other servicing costs on the ground, that could bring down the price of going to space by millions of dollars.

George Deeks; "In order not to be reduced to sorrow and bitterness, we must look forward."

I found this speech remarkable in a number of ways. While probably an oversimplification, I think that it encapsulates a fundamental difference in approaches one can take to, and ultimately overcome, adversity/tragedy: look forward, and "secure the future" instead of dwelling on the past. George Deeks is a Christian Arab and Israel's Deputy Consul to Norway:

Office politics are unavoidable

...it's all in how you manage them and prevent them from becoming toxic (HBR):

The best managers recognize the psychological underpinnings of office politics and do two things in response: they manage the way they themselves behave, and they are careful about how they motivate others. People who are perceived as apolitical display high levels of congruence between what they say and what they do, and they are also good at rewarding others for what they were required to do, while holding them accountable for what they fail to deliver.

As such, good leaders focus on the bright-side personality characteristics associated with their ability to navigate office politics: social skills, emotional intelligence, and intuition. They recognize that the more secretive, selfish, hypocritical, hierarchical, and incompetent they appear in the eyes of employees, the more political the organization will become. So they are driven to come across as competent, transparent, approachable and altruistic.

And in motivating their employees to try harder, they avoid pitting employees against one another and instead focus on out-performing common adversaries: the company’s competitors. They do this through articulating a meaningful mission — a vision that resonates and motivates people to achieve a collective goal. This keeps the team focused on beating their competitors, rather than each other.

"The final nail in the Keynesian coffin?"

I'll say no. Have politicians ever let evidence stand in their way of consolidating power and increasing spending? Cato's Dan Mitchell is also skeptical but points to one academic - Professor John Cochrane of the University of Chicago:

The tide also changed in economic ideas. The brief resurgence of traditional Keynesian ideas is washing away from the world of economic policy. …Why? In part, because even in economics, you can’t be wrong too many times in a row. …Our first big stimulus fell flat, leaving Keynesians to argue that the recession would have been worse otherwise. George Washington’s doctors probably argued that if they hadn’t bled him, he would have died faster. With the 2013 sequester, Keynesians warned that reduced spending and the end of 99-week unemployment benefits would drive the economy back to recession. Instead, unemployment came down faster than expected, and growth returned, albeit modestly. The story is similar in the U.K.

I'm betting on technology, American entrepreneurs and human ingenuity

I suspect that the WSJ article even underestimates the value of technology here that will keep driving costs of production lower. If I'm right, the world of hurt couldn't be happening to nicer people... (WSJ)

Saudi Arabia is taking a risk by letting oil prices plunge, said Arab, American and European officials. Saudi officials have said their economy can survive at least two years with low prices, thanks partly to the kingdom’s $750 billion foreign-exchange reserves. Arab officials believe many less-efficient producers will be driven out of the market.

Still, some oil-industry executives said, Riyadh and Mr. Naimi may underestimate how technology and the shale-oil boom have fundamentally altered energy markets. Many U.S. companies, they said, can make money or break even with oil below $40.

Not so shocking: trade leads to development

Again reinforcing that what's needed for economic development is trade, not aid - when a random group of small rug producers was given the opportunity to export handmade carpets to high-income markets (study by Atkin, Khandelwal and Osman, via Chris Blattman):

Treatment firms report 15-25 percent higher profits and exhibit large improvements in quality alongside reductions in output per hour relative to control firms.

These findings do not simply reflect firms being offered higher margins to manufacture high-quality products that take longer to produce. Instead, we find evidence of learning-by-exporting whereby exporting improves technical efficiency.

First, treatment firms have higher productivity and quality after accounting for rug specifications. Second, when asked to produce an identical domestic rug using the same inputs, treatment firms receive higher quality assessments despite no difference in production time. Third, treatment firms exhibit learning curves over time.

Finally, we document knowledge transfers with quality increasing most along the specific dimensions that the knowledge pertained to.

New Orleans: A successful experiment in school choice and the unintended consequences of regulation

The Japanese economic recovery that wasn't

Inspired by the acolytes of Keynesian economics, Abenomics doesn't appear to be working out so well (Cato):

The government spending of tens of billions of dollars into public works projects — “investments,” as President Obama calls them–caused the Japanese debt burden to catapult from 19 percent of GDP, among the lowest in the industrialized world, to over 142 percent, among the highest.

Meanwhile Japan keeps printing money, as if it can devalue its way out of the crisis. From the late 1980s through 2000, the central bank’s balance sheet more than doubled — a precursor to the “quantitative easing” carried out by the U.S. Federal Reserve. And since 2000, the balance sheet has doubled once again.

But where is the promised recovery?

The expected Keynesian “multiplier effect” from spending and a flood of yen into the market never arrived.

Housing starts in Japan are still lower than the level nearly 25 years ago. Unemployment is still low by international standards, but wages have been flat.

It’s all a tragic story of economic playmaking that has gone all wrong. But don’t tell that to Paul Krugman of the New York Times, who predicted Japan “may end up showing the rest of us the way out” of stagnation.

Joseph Stiglitz, a fellow Nobel laureate of the Keynesian variety, advised American politicians to use the same strategy: “What we really need in the U.S. is expansionary policies that Abenomics is bringing into Japan.”

Differentiating between democracy and freedom

A useful quote (FoxNews):

Real freedom means doing what you choose as an individual, not waiting for the rest of society to vote on whether you can.

What comparing the growth of students from India and China says about their respective development

From WSJ:

China’s rise to the top—it had 200,000 more students last year to the U.S. than it did just eight years earlier—reflects the growing incomes and increasing globalization of the country’s citizens, analysts say.

Chinese students were much more likely to go to the states for undergraduate studies than Indian students. Only around 12% of Indians that study in the U.S. were there for undergraduate studies during the past school year, compared to 40% of Chinese students, the IIE study showed.

It makes sense, said Akhil Daswani, chief operating officer of OnCourse Vantage, an education consulting company in India, an undergraduate degree is a luxury few Indians can afford.

“If you are going to spend $250,000 over four years you have to have a considerable amount of disposable income,” Mr. Daswani said. “Undergraduate schools are marketing heavily (in China). It is the first place they want to go because they are getting so much business.”

When they go for an international degree, Indians prefer to get more bang for their rupee, they tend to go for two-year graduate courses that lead to high-paying jobs.

Estonia's e-residency: the end of the nation state?

Estonia's new e-residency (Australian broadcasting corporation):

For 50 euro - about $70 - you can apply for the digital ID card with a couple of PIN codes that will make you an e-resident of the country.

With a population of just 1.3 million people, they're looking at allowing up to 10 million 'e-Estonians'. An experiment to watch. Compare and contrast (Reuters).

Introverts and Extroverts

Apparently one is better than the other (Time).  Not terribly surprising - though that's speaking as an introvert who sometimes tries to emulate extroverts.

"The White Savior Industrial Complex"

For the record, despite a history of failures, I don't think the problem is "trying to save the world" (New Republic via Alan L. on FB). It's the arrogance and preconceptions but also the ignorance of how to make small innovations scale:

This isn’t a criticism of the projects themselves. This is how social policy works, in baby steps and trial-and-error and tweaks, not in game changers. Leave the leaps and bounds to computing power. If a 49-cent deworming treatment really does produce a $30 increase in wages for some of the poorest people on Earth, we are assholes for not spending it.

And this is where I landed after a year of absorbing dozens of books and articles and speeches about international development: The arguments against it are myriad, and mostly logistical and technical. The argument for it is singular, moral, and, to me anyway, utterly convincing: We have so much, they have so little.

If we really want to fix development, we need to stop chasing after ideas the way we go on fad diets. Successful programs should be allowed to expand by degrees, not digits (direct cash payments, which have shown impressive results in Kenya and Uganda, are a great candidate for the kind of deliberate expansion I’m talking about). NGOs need to be free to invest in the kinds of systems and processes we’re always telling developing countries to put in place. And rich countries need to spend less time debating how to divide up the tiny sliver of our GDP we spend on development and more time figuring out how to leverage our vast economic and political power to let it happen on its own.

Hitting the point a bit more aggressively - a hilarious parody (mic.com):

From outcast to CEO: Gabriel Bristow, Intelicare Direct

A remarkable story (inc):

It was 1989. He was 19, freezing on the streets of Lansing, Michigan, giving blood for money. A runaway. Homeless.

[...] "Throw the faggot in the river!" shouted one boy. Several other kids chimed in, and two boys grabbed Bristol. Before they could finish the job, he struggled free. Traumatized by the episode, Bristol stopped going to school shortly thereafter. Following a particularly bad fight with his parents, he got on a Greyhound bus to the first big city he could think of: Lansing.

[...] In 2012, he replied to a listing for a call center manager job at Instant Checkmate, a background-check website that, for a monthly subscription fee, lets users perform public records searches. The site, created by San Diego entrepreneurs Joey Rocco and Kris Kibak, already had a call center, but "it was poorly managed," says Kibak. "The quality control was not there."

Bristol came into the interview and promised to fix those problems. "He was very much a salesman," says Rocco. "I remember smirking in the interview, like, wow, he's good." They all agreed that he should run the customer service department as a standalone company and bring in his own clients and revenue.

And so, for the first time, Bristol was running the show. He leased new office space in Las Vegas and built another location in San Diego. He'd build call centers the way he thought his people deserved.

Jonathan Rothberg's chip that could disrupt medical imaging

Not sure whether it's bravado and whether Rothberg can deliver, but given his track record, this is something to watch which could also significantly reduce the cost of healthcare (Wired):

Rothberg says he has raised $100 million to create a medical imaging device that’s nearly “as cheap as a stethoscope” and will “make doctors 100 times as effective.” The technology, which according to patent documents relies on a new kind of ultrasound chip, could eventually lead to new ways to destroy cancer cells with heat, or deliver information to brain cells.

[...]Rothberg says he got interested in ultrasound technology because his oldest daughter, now a college student, has tuberous sclerosis. It is a disease that causes seizures and dangerous cysts to grow in the kidneys. In 2011 he underwrote an effort in Cincinnati to test whether high-intensity ultrasound pulses could destroy the kidney tumors by heating them.

What he saw led Rothberg to conclude there was room for improvement. The setup—an MRI machine to see the tumors, and an ultrasound probe to heat them—cost millions of dollars, but wasn’t particularly fast, more like a “laser printer that takes eight days to print and looks like my kids drew it in crayon,” he says. “I set out to make a super-low-cost version of this $6 million machine, to make it 1,000 times cheaper, 1,000 times faster, and a hundred times more precise.”

The problem with central planning: "the information problem"

It doesn't really matter if it's socialism, communism or fascism... the problem is the same - but it's also why even in a perfect world, socialism can't work (reason.com):

In order for us to have cooperation on a massive scale-cooperation on a scale of millions or tens of millions-we need some sort of signal that tells us what's going on in the economy. It turns out we get that signal in market societies and it's in the form of prices. We're all making all these private decisions and it modifies prices a little bit and then we respond appropriately. We don't know what's causing scarcity. We don't know what other peoples' desires are or demands are, we can just see that the price of strawberries is cheap over here and it's expensive over here and that tells me everything I need to know as a consumer about what to do. The problem with socialism on a mass scale is that they don't have a substitute for prices.

[...] In principle, there are cases where an omni-benevolent, omniscient dictator could come in and fix the market and make it better. It's rarely going to be the case in actuality that a person knows when and how to intervene. Given the limits of human knowledge, given the limits of peoples' ability, and also just given their biases and so on and the fact that they're likely to use this power selfishly rather than for our own good, I think it's better not to empower them to do these things.

Why is New York trying to contain school choice?

In a world that's becoming increasingly global, with the persistent rhetoric on the importance of giving kids the best possible education, New York is going to close the doors to any new charter schools that parents are clamouring for, despite a few facts:

Of the city public school system’s 717 high-poverty public schools enrolling a large number of black and Hispanic students, only 3.6% of them have a proficiency rate in either math or English that is above 50% (and seven of those high achievers select their students). In contrast, fully one-third of similarly situated charter schools meet that bar, a rate almost 10 times higher.

When charter schools are compared to district schools in the three areas in which they are concentrated — Harlem, Central Brooklyn and the South Bronx — charters once again far outpace their district counterparts in both subject areas, with proficiency rates more than double in math, and in English higher by between seven and 14 points.

Some 50,000 parents applied to a charter school and did not get in because there simply aren’t enough charter-school seats. Those parents are sitting on waiting lists and too often their children are sitting in struggling public schools where their future is slowly disappearing before them.

Opponents imply that charters are selective, that they gin up their test scores by systematically cherry-picking the most motivated students and forcing out kids who don’t measure up.

That’s wrong. Not only is admission by open lottery, but over the past several years, charter schools have taken important steps to enroll populations of students that more closely reflect their neighborhoods.

The number of special-needs students and English Language Learners now attending charters has gone up. And what’s more, the results show many charter schools are having tremendous success in not just enrolling but educating them.

Is Amazon really like ISIS?

You have to hate competition a lot in order to make stupid pronouncements like this. Book agent Andrew Wylie Calls Amazon An "ISIS-Like Distribution Channel" (TechCrunch).

The fears entrepreneurs have

Yep (inc.).

What developing countries need, but the West can't give...

Economic liberty (JewishWorldReview):

Poverty is not a cause but a result of Africa's problems. What African countries need the West cannot provide. They need personal liberty. That means a political system in which there are guarantees of private property rights, free markets, honest government and the rule of law. Africa's poverty is, for the most part, self-inflicted. Some people might disagree because their college professors taught them that the legacy of colonialism explains Third World poverty. That's nonsense. Canada was a colony. So were Australia, New Zealand and Hong Kong. In fact, the richest country in the world, the United States, was once a colony. By contrast, Third World countries such as Ethiopia, Liberia, Nepal and Bhutan were never colonies, yet they are home to some of the world's poorest people.

Other than this tendency to lump all of Africa in as a group, I'd wholeheartedly agree.

A more accurate depiction of the US Commerce Department's attack on Mexican Sugar

... and American consumers in a letter to the WSJ by Don Boudreaux (Cafe Hayek). More on the flawed policy here (DailySignal).

Minimally invasive surgery through a patient's cheeks

This is amazing - using a robot to perform corrective epilepsy brain surgery in a way that takes less time, reduces risk and reduces recovery time (cnet):

The working prototype involved the development of a shape-memory alloy needle -- that is, an alloy that can remember its original shape and return to it when heated after being deformed -- that can operate along a curving path. The robot also needed to be able to operated from inside an MRI machine, which creates a strong magnetic field.

The resultant needle is created from nickel titanium, also known as nitinol, an alloy that has both shape memory and is non-ferromagnetic, making it compatible with MRI machines. The 1.14mm needle operates like a mechanical pencil, consisting of a series of concentric tubes, some of which are curved so as to allow the tip to follow a curved path to the brain.

It is inserted in tiny, millimetre steps that allow the surgeon to track its position by taking MRI scans every step of the way, and its accuracy, the team said, is better than 1.18mm.

The best day to buy airline tickets has now changed... to Sunday

Useful to know... (WSJ):

One factor behind the change: Airline executives come into work Monday looking to raise fares, not discount them with sales to fill seats. Just this week airlines put through a $2 each-way across-the-board fare hike, even though prices for oil—the largest expense for airlines—have been plunging. Prices are still going up due to increasing demand for the limited number of available seats.

The lower Sunday and Saturday prices also result from the ability social media has given airlines to throw discounts in front of consumers at any time. That turns vacation shoppers surfing the Web on weekends into ticketed passengers without discounting tickets business travelers might buy while at work. And the findings reflect the lack of corporate sales over the weekend, since business travelers typically fly on more expensive tickets than vacation buyers.

When searching for the lowest fare, don’t give up on Tuesdays. It’s the day with the most frequent price drops, leaving the door open for good deals.

Using markets to regulate scarce resources like water

Governments have a significant role to play to ensure property rights support markets and competition (WSJ):

A major overhaul of Western water law is overdue, but implementing such reform would take years. In the near term, states should authorize short-term leases of water, build basic market institutions, deploy risk-mitigation tools such as dry-year options, and implement basic controls such as regulating how much water can be pumped. The current absence of viable market opportunities and incentives is producing perverse results.

[...] Even though federal and state policy fosters the export of agricultural commodities, Western water law generally inhibits trade in the water used to grow the commodities. States should open up the market by eliminating or streamlining legal barriers that effectively block transfers of water.

A market in water would encourage efficiency by stimulating innovation, promoting specialization and allowing water to move from lower-value to higher-value uses. Farmers who have an opportunity to trade a portion of their water have an incentive to take measures, such as installing more efficient irrigation systems, to free up water for trade. It would also create opportunities to deploy market-based tools, such as dry-year options, to help mitigate water risks to farms and cities.

For example, under a dry-year option, a water user with a low tolerance for water shortages—such as an almond farmer whose trees would quickly die without water—can contract with a seasonal agricultural user, such as a broccoli grower. In dry years, the almond producer would have the right to use the broccoli grower’s water. The almond producer pays a yearly premium to guard against times when water shortages would result in the loss of his orchard. The proceeds from the option give the broccoli grower a guaranteed revenue stream and thereby provide a hedge against a drought that might destroy his annual crop—mitigating risk for both parties.

What happens when you serve McDonald's to food snobs and tell them it's organic

Heh (Slate via Instapundit). I'm not ashamed to say it's one of my favorite restaurants... I think it's objectively delicious and it's practically a comfort food for me!

Of course not, jobs are created by the job fairy...

According to Hillary Clinton, "don’t let anybody tell you it’s corporations and businesses that create jobs." (RealClearPolitics) More: from Cafe Hayek.

India: How not to revive an economy...

I suppose progress is made incrementally, but I was hoping for more with India's new PM Narendra Modi. Maybe what's sadder is that this potentially is a step forward from the previous state of these government owned factories:

At British India Corporation’s textile factory in northern India, four men sit in a control room watching computerised gauges eight hours a day. When they are done, another group takes over, and then another, for 24 hours a day - much as they might at any major industrial plant.

The problem is, nothing is produced there.

The strange tale of British India Corporation is an example of how political patronage and India’s strict labour laws keep publicly owned companies going long after they are insolvent.

Now Prime Minister Narendra Modi, who campaigned in this year’s general election on a promise of “minimum government, maximum governance”, is preparing to invest more taxpayer money in ailing state-owned factories in a bid to turn them around.

While the government has announced the closure of six publicly owned companies, Minister for Heavy Industries and Public Enterprises Anand Geete said last month that about two-thirds of 64 loss-making firms can be revived with more money.

Interview with Marc Andreessen

Interesting interview with a storied entrepreneur/venture capitalist at New York Magazine. One highlight on education:

The one other thing that people are really underestimating is the impact of entertainment-industry economics applied to education. Right now, with MOOCS,11 the production values are pretty low: You’ll film the professor in the classroom. But let’s just project forward. In ten years, what if we had Math 101 online, and what if it was well regarded and you got fully accredited and certified? What if we knew that we were going to have a million students per semester? And what if we knew that they were going to be paying $100 per student, right? What if we knew that we’d have $100 million of revenue from that course per semester? What production budget would we be willing to field in order to have that course?

Walmart: Bringing price competition to primary healthcare?

Something to watch - Walmart delivers low cost primary healthcare to the poor (WSJ):

Wal-Mart Stores Inc. pushed down prices for some generic prescription drugs to just $4 eight years ago, setting a new industry standard. Now it is trying to do the same for seeing a doctor.

Wal-Mart now operates a dozen clinics in rural Texas, South Carolina and Georgia and has increased its expectation for openings this year to 17. On Friday, a Walmart Care Clinic opened in Dalton, Ga., six months after Walmart U.S., the retailer’s biggest unit, entered the business of providing primary health care.

An office visit costs $40, which Walmart U.S. says is about half the industry standard, and just $4 for Walmart U.S. employees and family members with the company’s insurance. A pregnancy test costs just $3, and a cholesterol test $8. A typical retail clinic offers acute care only. But a Walmart Care Clinic also treats chronic conditions such as diabetes. (Walmart U.S. also leases space in its stores to 94 clinics owned by others that set their own pricing.)

“It was very important to us that we establish a retail price in the health-care industry because price leadership matters to us,” said Jennifer LaPerre, a Walmart U.S. senior director responsible for health and wellness, in an interview.

Walmart U.S. hasn’t yet decided whether to roll out the clinics nationally. It so far has limited itself to markets where people are uninsured or underinsured, have a high rate of chronic diseases or struggle to get access to medical care, as well as places where it has a large number of employees. About 40% of the patients seen at the clinics so far don’t have a primary-care provider, Ms. LaPerre said.

The unintended consequences of self driving cars?

Nah. The unintended consequences of the commons - ie subsidizing public roads. From Wired:

As driving becomes less onerous and computer-controlled systems reduce traffic, some experts worry that will eliminate a powerful incentive—commuting sucks—for living near cities, where urban density makes for more efficient sharing of resources. In other words, autonomous vehicles could lead to urban sprawl.

It’s simple, says Ken Laberteaux, a senior scientist at Toyota. If you make transportation faster, easier and perhaps cheaper, then people won’t mind commuting. “What a consumer is expected to do is see what they can gain by moving a little further from the job centers or the cultural centers,” he says. That’s bad news: Urban sprawl is linked to economic, environmental, and health hardships.

As usual though, it's elites who seem to be wringing their hands over the poor(er) improving their lives in tangible ways.

Will autonomous driving start with transport trucks?

It would make sense as a path to consumer adoption (Wired):

Autonomous driving is nothing new for trucks in agricultural and military applications, and should be available for passenger cars by 2020. But trucks that share our highways are tempting candidates for shedding their human component: Highway driving is easy for computers but dangerous for us, especially when big machines are involved. In 2012, according to NHTSA, 333,000 large trucks were in crashes in the US. Those accidents killed nearly 4,000 people, the vast majority of whom were riding in passenger vehicles. Regulators have trouble ensuring that drivers get adequate rest, and the trucking industry has fought back against regulation.

With the idea that humans who drive less cause less trouble, Mercedes equipped the Future Truck 2025 with the “Highway Pilot” automated system. “It never gets tired. It’s always 100 percent and sharp. It’s never angry; it’s never distracted,” says Dr. Wolfgang Bernhard, the Daimler board member for trucks and buses. “So this is a much safer system.”

Mark Cuban: Fix the economy by putting a $10k cap on university loan guarantees

This would accelerate some of the radical changes in education that are happening already (but given the entrenched interests I can't see it happening any time soon) - from Inc.com:

The best way to get the economy back on track, according to Cuban, involves solving the student loan bubble that has saddled millions of recent grads with loans that will take decades to pay back. One of the reasons reversing this trend is so important is that college tuition has been skyrocketing for years.

"It’s easy for the colleges to ask for more, because then the potential students just take out bigger loans," Cuban said at Inc.'s GrowCo conference, adding that rising tuition costs have resulted in more than $1 trillion in student loan debt.

"That’s the same money that, when you graduated, you used to move out of the house or you went out and spent money that improved the economy and helped companies grow. It created more revenue and spending power. Instead, it’s going to build a better fitness center at your school."

So what's Cuban's plan to stem this problem?

"If Mark Cuban is running the economy, I'd go and say, 'Sallie Mae, the maximum amount that you’re allowed to guarantee for any student in a year is $10,000, period, end of story,'" he said.

Multitasking makes your brain smaller apparently

There's a mental note that I should be making on this (Inc.com) as I post this while I play Clash of Clans on the side...

Disintermediating healthcare insurers: more on a primary care healthcare model that works

From Reason.com:

Good MD, a primary care office set up this year, charges patients a single, flat monthly fee for unlimited visits. Monthly charges are based on age, and extra services—whether stitches or strep throat tests—are provided for an additional fee, posted online and in the office. The practice doesn't accept private insurance at all. The result is a system that benefits not third-party payers, but doctors and patients, Good MD founder Dr. Thuc Huynh, told local TV station WROC. "Insurance isn't who reimburses me or dictates what we do together in terms of our treatment. So, it's a direct financial relationship."

More here.

Because entrepreneurship is one of the best paths for wealth advancement

Inc. presents the 10 wealthiest entrepreneurs in the US.

Does discrimination thrive in the absence of regulations to prevent it?

No (ASI):

It is a commonplace to the point of boringness among advocates of free markets that they make people pay to discriminate based on their tastes. A factory owner who restricts employment to whites only will face a narrower talent pool—likely paying higher wages for lower skills in total or on average. [...]

Employers cannot observe an employee’s productivity directly, at least before they employ them. But they can observe some things about them that signal productivity—using statistics. For example, if on average south Asians or Polish migrants tend to work harder than white Brits, they can use this fact about them to help make their employment decision. This isn’t racist—they don’t prefer employing south Asians, and they would be equally happy to pay a white Brit £6.50 an hour to produce £7 of stuff—it’s just that on average south Asians produce £7 of stuff an hour (say), whereas white Brits produce £6.40.

Which one is actually in place? We can test this. The answer is a resounding ‘statistical discrimination’. For example, minorities in France did worse when a large randomised study made them anonymous in job applications—so firms couldn’t see their names and thus ethnicities—implying that the reason they were called back and employed less was because their resumes/CVs were less attractive.

In Germany, job applicants with Turkish-sounding names got less callbacks than those with German-sounding names—unless both applicants had a favourable employment history reference. Then, for a given quality of reference, employers didn’t care whether they were Turkish or German. On eBay, white sellers receive lower prices selling stereotypically black products and black sellers receive lower prices selling stereotypically white products, but these differences go away when sellers build up credible reputations.

How far computer graphics has come...

Stunning (via TechCrunch):