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Sunday, February 29, 2004
SCRAPPING ABOUT SCRAP
A story in The Wall Street Journal (2/23) mentions a group of businesses which is considering petitioning the government to restrict exports of a particular commodity.
Big deal, you say, happens all the time...and anyhow, don't you mean "restrict imports?" Must be another one of those Photon Courier typos.
Nope. They actually are talking about restricting exports. The commodity in question is steel scrap.
Steel prices have been soaring, paced by heavy demands from China. Hot-rolled steel now has a spot price of $500/ton, which is a 30-50% increase from only a month ago. These increases, of course, find their way into end products.
Scrap is the "raw material" for one of the two major processes for making steel (it is melted in "minimills," which are mini only by comparison with the gargantuan plants of the more traditional process, which uses iron ore as its input)--and scrap prices have doubled over the past year. It's a function of supply and demand--for one thing, exports of scrap to China are up 25% on a year-over-year basis.
Hence the idea of restricting exports. At least superficially, a good case can be made for it. Instead of loading our scrap into ships and sending it to China, keep it here where it can be fed into the electric arc furnaces of the minimills--and then become steel, which in turn feeds a variety of uses in manufacturing and construction. This could allow us as a nation to capture a larger component of the value chain, as compared with sending it off and letting someone else do the higher-level stuff. And it would certainly be good for the minimills and the large-scale users of steel, as well as (at least in the short term) buyers of many if not most products made using steel.
But.
What would be the impact on other industries? I'd be particularly concerned about the large integrated steel producers, the ones who make steel from iron ore rather than scrap. Many, perhaps most, of these facilities have been at death's door until very recently; some of them have just been bought out of bankruptcy. And these are often plants which provide the major employment for a whole community. It seems that governmental action to drive scrap prices down would shift the relative cost efficiency point between these companies and the scrap-based minimills, to the distinct detriment of the former.
And what about scrapyards? No one subsidized these businesses when scrap prices were relatively low; is it fair to remove part of their demand when prices are high? And there are probably several other industries that would be impacted negatively.
That's one of the problems with this kind of mercantilist intervention in the economy. You can't change just one thing. Try to help an industry (or group of industries) that are having problems, and you may hurt perfectly sound industries, as well as other troubled ones. There is also an issue as to what this would do to our national credibiity as a trading partner.
The other problem with this kind of thing is the degree to which it politicizes the economy. Whether or not scrap exports wind up being restricted will probably be a function of how good the lobbyists for the minimlls and the steel users are (and it must feel very odd to them to be on the same side for once), as compared to the lobbyists for the scrapyards and the integrated steel producers. To the extent that government intervention in the economy is desirable, it is usually best achieved through policies which are of a generalized nature, rather than those which attempt to micromanage a particular situation. It's very difficult for executives to manage or plan intelligently when the major single factor in their business becomes the unpredictable actions of politicians. (See the Warren Buffett's proposal here for an example of an approach which--whether right or wrong--represents an attempt to think out a generalizable solution rather than dealing with problems on a case-by-case basis.) Although governmental case-by-case actions will sometimes be necessary, they should be minimzed.
A whole collection of articles on the steel price crisis here.
The Emergency Steel Scrap Coalition is here.
5:51 PM
Wednesday, February 25, 2004
MORE JOB OPENINGS!
A week or so ago, I wrote about the large number of job openings at the Union Pacific Railroad. Now, here are some upcoming job opportunities that, unlike the majority of the UPRR jobs, don't require working outdoors in all weathers:
Business Week (3/1) reports that 500 jobs for doctorate-holding business-school faculty went vacant in 2003, for lack of qualified candidates. The B-school "PhD faculty gap" is projected to reach 1000 by 2006, and 1700 by 2010. Seems that 40% newly-minted business PhDs head directly for the corporate world--and there aren't all that many of them to start with. In 2002, only 1095 people earned the degree--compared with 6600 in the social sciences and 5300 in the humanities.
Universities are filling the gap to some extent by increased use of former and practicing executives. "Some educators say that quality will suffer if schools lean too heavily on "clinical" faculty; the practicing managers who give lectures to MBA students and undergraduates but generally offer little in the way of academic rigor...the practice could dilute the value of a business degree, essentially creating two classes of faculty--those who research and those who teach. Ultimately, it could attract the ire of Corporate America."
I can picture it now:
HR Director: Fred, can I talk to you right now?
CEO: Is it really critical, Lynn? The new product roll-out has problems, we're about to be the target of a hostile acquisition, and we just lost one of our largest distributors.
HR Director: Yes--very critical.
CEO: Okay (sets down document he is reading). What's going on?
HR Director: It's about the MBA program.
CEO: What did the little weasels do this time?
HR Director: No, it's not that--we've found out that the universities are sending us people who've been taught mainly by practical businesspeople without PhDs!
CEO: Oh, NO! (pauses) Listen, I want to give this top priority. What do we pay taxes for if things like this are going to happen? Get in touch with Government Relations--I want a major lobbying campaign to turn this around as far as the public universities go. And for the private schools--Lynn, you personally have to take charge--get them to see that they just can't do that to the businessses in this country. I'll make myself available as needed.
Yeah, right.
I don't mean to in any way devalue the contributions of those B-school professors who do research and who develop new theoretical paradigms--some of this work has been very valuable to the practitioner. But isn't it also valuable for students to be taught by those presently have, or have had, successful business careers of their own? To a very substantial extent, business success is based on "tacit knowledge" that you gain from experience--or, failing that, from exposure to those who have had the experience. Indeed, isn't real-world business activity just as much "research" as, say, a quantitative survey of factors affecting company performance in a given industry? (Though more comparable perhaps to humanities research than to social science research because of its nonreplicability) And I don't think that consulting work, which many business profs do on a regular basis, is fully equivalent (from an experience point of view) to actually running a company, a business unit, or a major function within a company. (There are of course business profs who have done such things in addition to gaining a business PhD, but the practicalities of career management tend to make it difficult to do both.)
And those who are thinking about getting a doctorate in the social science or the humanities may want to think about the business path instead.
But not all 11,900 per year, please.
4:44 PM
BACKFIRE
All the proof state Board of Education member Roberta Schaefer needed to OK controversial new charter schools were the letters before her from public school students.
Schaefer ridiculed the letters against a proposed school in Marlboro for their missing punctuation and sloppy spelling - including a misspelling of the word "school'' in one missive.
"If I didn't think a charter school was necessary, these letters have convinced me the high school was not doing an adequate job in teaching English language arts,'' Schaefer said. (Boston Herald)
Schaefer said that the letter-writing campaign was orchestrated by school officials. (Well, I doubt that the kids thought it up on their own.) Notwithstanding the campaign--and maybe partly because of it--new charter schools in Marlboro, Lynn, and Barnstable were approved.
Those opposed to charter schools aren't giving up, though. They are backing a bill that would impose a three-year moratorium on new charter schools.
4:36 PM
Monday, February 23, 2004
LATEST TERRORIST ATROCITY
Well, it happened again. On Sunday, a Palestinian suicide bomber killed 8 people in Jerusalem and wounded another 60. "People were screaming 'mommy, daddy,' said medic Reuven Pohl. "There were body parts everywhere including some hands and feet scattered outside the bus." The bomb had been packed with metal shards to make it more deadly.
Meanwhile, back in the U.S., look what is going on at Pace University in New York. The meeting (Tuesday, 2/24) "will address the national and international implications of Israel's separation wall--and give voice to the ongoing hardships, as well as human rights violations currently being experienced by Palestinian civilians." Wonder if they'll talk much about the "hardships" of those who are blown to pieces in these terror attacks? I would guess not--according to an e-mail received by Judith Weiss, "There are no pro-Israel speakers. When a Jewish professor on our campus suggested one, she was refused."
And the Pace event sounds mild indeed compared to some of the attacks on Israel that take place under the auspices of American universities. For example, read this.
UPDATE: You must read this incredible statement (and I don't mean that in a good way) from the World Council of Churches. (link via Midwest Conservative Journal)
ANOTHER UPDATE: The American Jewish Committee is concerned about the possible "tone" of the Pace University event (today, 4-7 PM). Their press release states that "a request to include a speaker expressing the Israeli perspective was denied," consistent with the statement made by Judith's correspondent (above). Note that this event is sponsored in part by Pace's Office of Multicultural Affairs.
9:27 PM
Sunday, February 22, 2004
AND NOW...."NEARSHORING"
Business Week (3/1) reports that European companies are tending to outsource software development not to India, but rather to Romania, Bulgaria, and other Eastern European countries. The large German enterprise software company SAP, for example, has a research lab in Sofia (Bulgaria) with 180 software developers...and there are hundreds of small companies in Bulgaria doing contract software development. The attraction of these locales? In addition to being relatively low-cost, they are geographically close to European headquarters operations. There are cultural, linguistic, and ethnic connections as well. "French companies are drawn to Romania, whose Latinate language and historic links make it an appealing alternative to Anglophone locales. German companies are likewise lured by the many German speakers in Hungary and the Czech republic."
The geographical factor, it seems to me, is particularly important in the time-critical development of new software products. When things are moving at a fast pace, it is often very valuable to get people together in one room to hammer out issues--the availability of Internet-based and telephone communications notwithstanding. When low cost and high skill levels can be combined with geographical proximity, it can be a powerful combination.
There's also a larger point here. Americans can choose, as a matter of policy, to restrict offshoring by American companies, but we have no way to restrict "nearshoring" by European companies. So, if the German company SAP moves to take advantage in a big way of the lower costs in Eastern Europe--and if at the same time its American competitors (PeopleSoft, as an example), are barred from using offshore resources--what happens to the competitive position of the American companies? And what happens to the people they employ in the United States? Would the next step in protection of American jobs be to bar the imports of software from European companies that use substantial elements of labor from low-cost countries? If this were done, what would happen to the ability of American companies to sell software into the European markets? And wouldn't such an action be widely perceived as a hostile act by a rich country, or a group of rich countries, against the not-so-rich countries, having the effect of locking them perpetually into a certain stage of development?
These are highly complex and interconnected issues that need rational discussion--which is not being helped by the demagogy now running rampant among the Democratic candidates.
7:37 AM
Saturday, February 21, 2004
WATCH THIS PROGRAM
Just finished watching Stalin: Man of Steel on The History Channel. It's really about much more than Stalin; it's about the Soviet Union during the Stalin regime, using the man himself as a centerpiece. An incredible program, vivid and gripping--much excellent historical footage, combined with present-day interviews of survivors of that era (many of whom look incredibly young given what they have been through.) Far better than most History Channel stuff, in my opinion. Painful to watch, but you should watch it anyway. Americans need to know more about this history.
You may be able to catch a rerun (one is scheduled for midnight-2AM Sunday, at least in the Eastern time zone), and it's also available on videotape from the History Channel web site.
7:17 PM
COMPARATIVE WORKS OF ART, c2004 AD
I've kind of had a policy against posting images on this weblog...mainly because I don't want to slow down page loading for those with narrowband connections (and also because I was too lazy to figure out how to do it in Blogger)..but in this case I'm going to make an exception.
This sculpture was created by an Iraqi sculptor named Kalat. Under the former regime, he was forced to create many statues of Saddam Hussein. After the regime's fall, he melted down some of these works and used the bronze to create the sculpture shown above. The work portrays a soldier who is mourning lost friends, while being comforted by an Iraqi girl. It will eventually become part of a memorial at the 4th Infantry Division in Fort Hood. (Info here.)
And meanwhile, what is a certain kind of "artist" up to in Norway? I don't want this image on my blog, so you can click here to find out.
9:48 AM
Thursday, February 19, 2004
BRINGING THE MARKET INSIDE
Strategy and Business (Winter 2003 issue) tells of an agribusiness company that was having scheduling problems. The company owns both farms and milling facilities. Any field ready for harvest had a peak yield window of only about 15 days--yet the available milling capacity was, of course, finite. So each of the farm managers would be lobbying for his preferred milling slot, while an analyst at headquarters was trying to figure out the "optimal solution" for the whole company, based on historical data (and on the frantic phone calls from the farm managers).
As a result of a consulting engagement, a new system was put in place. Farm managers could now bid for use of the mill on particular dates. As the authors put it, "If a manager saw that his highest-yielding acreage was ready to harvest and couldn't wait because rain was predicted, he could bid for more mill time...Market-based pricing of mill time would allocate scarce resources better than a central planner could. And with this new system, decisions would reflect the real-time knowledge of the farmer in the field observing the sky, testing the ripeness of the crop, hour by hour, acre by acre." No comparative data is presented, but it sounds like the system has been successful.
A similar approach, in a very different industry, has been used for the scheduling of shift work for nurses in a hospital. Using a E-Bay-like interface on the Internet, nurses bid for shifts, specifying how much they would charge to work particular time slots. Nurses now have a quantitative way of expressing their shift preferences, and the hospital is saving money that it was previously spending on agency fees to hire outside temporary employees.
I expect that we will see the emergence of a lot more internal auction systems such as these.
(The article is The Four Bases of Organizational DNA; reading requires registration.)
3:01 PM
Wednesday, February 18, 2004
DOG LANGUAGE AND POLITICAL LANGUAGE
When you talk to a dog, you don't have to worry a lot about using syllogisms, complete sentences, good analogies, or crisply-argued chains of logic. What he's looking for is keywords...particular words and short phrases...like "nice doggie" or "here" or, especially, "dinner."
It strikes me that, increasingly, the way in which politicians address the American people is very similar. It's enough to say the words that are supposed to elicit the conditioned responses..."jobs" or "health care" or "education." There is increasingly litle effort to specifcy exactly what cause-and-effect relationship will cause these good things to come to pass, and why one approach might be better than alternative approaches. This behavior is most noticeable among Democrats, but is by no means totally absent among Republicans.
3:05 PM
SNARKY BUT GOOD
The American Enterprise has a good interview with Dana Gioia, Chairman of the National Endowment for the Arts. Samples:
Bureaucracies are inherently ill-suited to make aesthetic judgments. History has demonstrated that evil tyrants, corrupt popes, warior-kings, and vicious industrial magnates often have brilliant artistic judgment. Committees of experts do not.
and
...Most American poets are now government employees. They work in state universities and other educational institutions, but they want to maintain the illusion that they are bohemians unconcerned with matters of money or security. That is largely posturing. (Although American universities, in their recent treatment of adjunct faculty, have done their best to reduce American poets back to poverty.)
The article doesn't seem to be online, but the TAE web site is here...very worthwhile magazine, by the way.
I've written about Gioia's work at the NEA before.
8:43 AM
Monday, February 16, 2004
HAS ANYONE ELSE NOTICED?
...that throughout the blogosphere there seems to be a slight dimunition in the amount of attention paid to the issues of war and terrorism (especially in comments)...but at the same time, there seems to be a sharp increase of interest (and emotion) concerning issues of outsourcing/offshoring?
3:36 PM
Sunday, February 15, 2004
WORKIN' ON THE RAILROAD
Given the all the concerns about slow job growth, it's interesting to see a company that is urgently trying to hire large numbers of people.
Union Pacific Railroad has been hit with employee shortages to the level at which operations are being impacted. The railroad has been hiring aggressively, and is looking for about 3200 new people in 2004. This is on top of the 2400 hired during 2003.
Trains Magazine reports that the staffing shortages have been caused by a combination of increased retirements and increased traffic. The traffic increases are due to (a) the economic upswing, (b) increased intermodal traffic, resulting at least in part from the tougher hours-of-service regulations recently imposed on truckers, (c) imports, particularly from China--this traffic mostly enters the U.S. at the West Coast ports and is carried by rail to inland destinations, and (d) increased grain traffic.
A snapshot of the current UP open positions can be found here. The railroad says that new employees can earn up to about $40,000 the first year and $75,000 in future years. For entry-level positions, no industry experience is required but the applicant must pass a reading comprehension test and also a "physical agility test." The latter is important since the job may involve coupling and uncoupling cars, getting on and off slow-moving trains, etc. Most of the jobs involve working outdoors, in all kinds of weathers; they also require being on-call at all times.
In addition to these unionized craft jobs, there are a number of "management" positions (in the company's terminology--not all of these jobs actually involve managing people.) These include account representatives (to sell transportation services), terminal managers, and information technology people (including people to work on business-to-business electronic commerce applications).
I write about this kind of thing because, amid all the abstract discussion about the economy, I find it useful to look at the actual specifics within particular industries.
It's interesting...some of the jobs lost to offshore manufacturing are coming back to the U.S., in the form of railroad jobs to move the products which are now being made overseas.
9:22 AM
Saturday, February 14, 2004
PROF BRANDON'S RESPONSE
Prof Richard Brandon of Duke has responded to some of the feedback he has received concerning his remarks about conseratives. There are also some interesting comments and will probably be more.
I wrote about this matter here.
10:11 AM
Friday, February 13, 2004
ATTACK OF THE INARTICULATE WORD PEOPLE
A few days ago, I wrote about the Word People and a particular subset thereof--those who use their skill at the manipulation of verbal symbols as an excuse to demean and disrespect those whose skills lie primarily in other areas. I should have pointed out that many of these individiuals really aren't all that good even in their own area of supposed expertise.
I was reminded of this point by the following comments from a reader at Erin O'Connor's site (excerpted here):
This puts me in mind of a hilarious (to me and those of the math dept) panel discussion...the beautiful part was the audience participation. I went with a bunch of math students...The audience was mainly faculty and students, from all research departments. The language used by different groups was quite the study in contrasts.
When someone from the hard sciences spoke, they used plain English and would illustrate their points with concrete examples...When the humanities majors decided to take the floor, well, it was painful. I actually fell out of my chair laughing at the inarticulateness of one particular grad student. He was so earnest, and so desirous of having the proper opinions, but for the life of me, I could not tell what he was saying. I believe the grammar didn't work, much less the vocabulary, a welling of the modern inkhorn. He wasn't the only one, but as we of the math department didn't care about our collegiality with those of the Social Sciences, we laughed at every dribble of gooble-de-gook.
So what is going on here? Why would people whose primary skill set involves the use of language be so bad at it, to the point where people whose primary skill set lies in other areas can speak more clearly and can make more effective arguments? (The cited case is by no means an unusual one, as can be seen by scanning many vast wastelands of academic prose.)
I am by no means asserting that all or even most of those who earn their living by the use of langauge are bad at it--clearly, this is not the case. But a substantial fraction of them do appear to be. It's interesting to speculate about why.
3:17 PM
AGAIN, ANTI-SEMITISM
Rockwell Schnabel, the United States ambassador to the European Union, said on Thursday that anti-Semitism in Europe was nearly as bad as it was in the 1930s.
Speaking at a dinner given by the American Jewish Committee in Brussels, he said, "there is one issue that we [Europe and the US] can work on together. It is to overcome the issue of anti-Semitism which... is indeed - as I understand it and read - getting to a point where it is as bad as it was in the 30s."
(hat tip: Common Sense and Wonder)
3:09 PM
Wednesday, February 11, 2004
MICROMANAGING EDUCATION
R M Isaac, a teacher in Queens, says he was doing a good job of getting his students (who were "among the least academically-oriented in the Western world") interested in learning college-level words. A visiting superintendent from the Education Department recognized this accomplishment, but still said that the lesson was fatally flawed, as Isaac puts it. Why? Because vocabulary words were written in chalk on a traditional blackboard!
Isaac says that the Education Department is micromanaging teachers, to the point of forcing them to march in "lockstep." And the actions required of teachers will strike many people as simply bizarre:
Teachers are warned not to correct errors with red ink because that color is "aggressive." Grammar is not taught because it is "dull." Children are encouraged to invent their own spelling so that they can discover the delights of creativity. Dictionaries are frowned on. They have been replaced by mandatory word walls where random but relevant-sounding terms are taped...In some schools, teachers' desks are removed because they are symbols of authority. Other teachers receive unsatisfactory job ratings simply because their bulletin boards are not showpieces for visitors...Educrats tour the building, consulting their checklists and looking for a host of missing items. Among these are rugs, rocking chairs and "mission statements."
People who impose things like this on teachers are not people who have a genuine love for and appreciation of learning--or they would focus on matters of educational content rather than on this kind of trivia. And can anyone really believe that teachers with spirit will be eager to work in a system that controls their professional lives at this level of detail?
Note: It's very important to distinguish learning standards (criteria as to what must be taught, together with testing to measure the success of same) from this kind of meddling. Both may be top-down, but the first deals with what must be accomplished, whereas the second deals with how to accomplish it. As any executive familiar with the concept of management by objectives will testify, there is a world of difference between these things.
7:11 PM
Tuesday, February 10, 2004
ATTACK OF THE WORD PEOPLE
One continually hears the allegation that President Bush is "stupid." Usually, it seems that this allegation comes from people who earn their own livings throughs the manipulation of words. Jane Galt comments:
Verbal fluency is a good measure of how verbally fluent you are, not how smart or competent, or how well you make decisions. It is the conceit of academics and journalists that the one talent they all have in spades is the one that is absolutely necessary for any important job.
There are millions of "word people" in American society--journalists, writers, lawyers, humanities professors, critics and "analysts" of various kinds. Never before in history have so many people been able to support themselves economically entirely through the manipulation of verbal symbols.
It is indeed a valuable skill. But it's only a small part of the entire universe of human intelligence and human capability.
There is, for instance, the ability to manipulate nonverbal symbols--mathematical formulae, computer code. There is the ability to assess situations based on incomplete data, using both inductive and deductive reasoning. There is the ability to deal with physical objects such as tools, and there is the ability to perform spatial reasoning. There is social intelligence. There is the ability to make decisions, and the ability to change course when necessary. There is the ability to think under conditions of stress and danger.
No doubt, many of the "word people" possess some of these other skills. But for many of them, it seems that the ability to manipulate verbal symbols is "the one talent they have in spades," to use Jane's formulation. And the problem is that so many of them live in a hothouse environment in which they have come to believe that their talent is the only one that matters--indeed, I suspect that many of them have given little or no thought to the existence of these other forms of intelligence and capability.
It's perhaps in the academic world that we see this phenomenon in its purest state. Consider this, from The Chronicle Online at Duke University.
"We try to hire the best, smartest people available," Brandon said of his philosophy hires (Brandon is chair of the philosophy department at Duke--ed). "If, as John Stuart Mill said, stupid people are generally conservative, then there are lots of conservatives we will never hire.
"Mill's analysis may go some way towards explaining the power of the Republican party in our society and the relative scarcity of Republicans in academia. Players in the NBA tend to be taller than average. There is a good reason for this. Members of academia tend to be a bit smarter than average. There is a good reason for this too."
Burness also noted that the humanities may be particularly oriented toward Democratic minds (Burness is Sr VP for Public Affairs at Duke--ed). "If you were to look at most business schools, you might find more people that were Republican than Democratic," he said. "If you look at the humanities in general, there's a great deal of creativity that goes on. In a sense it's innovation, and a perfectly logical criticism of the current society, in one form or another, that plays itself out in some of these disciplines. It doesn't surprise me that you might find people in humanities are more liberal than conservative."
(hat tip: Tightly Wound)
7:35 PM
GOOD DISCUSSION
There's a good discussion about the value of a college education (or lack thereof) going on over at Dean's World.
4:04 PM
Monday, February 09, 2004
OFFSHORING FINANCIAL JOURNALISM
Reuters is hiring 6 people in Bangalore (India) to provide what it calls "basic financial reporting" on about 3,000 small and mid-sized American companies. These people will focus on extracting financial information from news releases and quarterly reports. Tasks like interviewing company officers will be done by more experienced journalists back in the U.S.
My first reacion is that if there are 3,000 companies being covered by 6 people, the coverage is going to be very basic indeed. But Reuters refers to this as a pilot project, and I would guess that more people will be hired (assuming the pilot is successful) and a higher level of coverage provided for some subset of the total 3,000 companies.
If you're an investor, this is good new...you've probably noticed how difficult it is to get good analysis for companies below the top tiers (in size)--the use of offshore staffing opens up the possibility of a significantly better coverage universe. But if you're a journalist or a financial analyst, you may look at it a bit differently.
(link via Daniel Drezner)
1:50 PM
Sunday, February 08, 2004
STABILITY UBER ALLES
Ever since the invasion of Iraq, George Bush has been attacked on the grounds that the invasion has "destabilized" that country. A particularly egregious example of this can be found in a letter to the editor of The Washington Post (2/7). Excerpt:
After thousands of Iraqis and more than 500 Americans have died, Iraq is much more unstable now than when President Bush came into office. It will probably remain an unstable place for years.
Given what was happening to the Iraqi people under Saddam Hussein, I submit that this is obscene. "Stability" is not a god that should be worshipped in all circumstances. Germany in 1940 was probably more "stable" than Germany in 1946. And it is certain that Paris under German occupation was far more "stable" than Paris in the immediate aftermath of the Liberation.
And here's something interesting. While I don't know the general political beliefs of this particular letter-writer, people who make the "stability" argument are usually liberals or leftists. Aren't these supposed to be, by definition, people who welcome change?
Not in the Middle East, obviously (and not in America's educational system, either).
UPDATE: Here's an article on the downside of stability by the brilliant soldier-writer Ralph Peters. Thanks to Mark at Kaedrin Weblog for reminding me of this piece.
8:50 AM
Friday, February 06, 2004
IMPORTANT READING
You've probably heard of the concept of "orientalism" (as publicized by Edward Said). Now comes "occidentalism," as in the forthcoming book by Ian Buruma and Avishai Margalit: Occidentalism: The West in the Eyes of its Enemies. There's a summary up at Chronicle of Higher Education. Samples:
What, then, is the Occidentalist idea of the West?
That is the problem that vexed a group of prominent Japanese intellectuals who gathered for a conference in Kyoto in 1942. The attack on Pearl Harbor was not the ostensible reason for the conference, but the underlying idea was to find an ideological justification for Japan's mission to smash, and in effect replace, the Western empires in Asia. The topic of discussion was "how to overcome the modern." Modernity was associated with the West, and particularly with Western imperialism.
Westernization, one of the scholars said, was like a disease that had infected the Japanese spirit. The "modern thing," said another, was a "European thing." Others believed that "Americanism" was the enemy, and that Japan should make common cause with the Europeans to defend old civilizations against the New World (there would certainly have been takers in Europe). There was much talk about unhealthy specialization in knowledge, which had fragmented the wholeness of Oriental spiritual culture. Science was to blame. So were capitalism, the absorption into Japanese society of modern technology, and notions of individual freedom and democracy. These had to be "overcome."
All agreed that culture -- that is, traditional Japanese culture -- was spiritual and profound, whereas modern Western civilization was shallow, rootless, and destructive of creative power. The West, particularly the United States, was coldly mechanical, a machine civilization without spirit or soul, a place where people mixed to produce mongrel races. A holistic, traditional Orient united under divine Japanese imperial rule would restore the warm organic Asian community to spiritual health. As one of the participants put it, the struggle was between Japanese blood and Western intellect.
Precisely the same terms had been used by others, in other places, at other times. Blood, soil, and the spirit of the Volk were what German romantics in the late 18th and early 19th centuries invoked against the universalist claims of the French Enlightenment, the French Revolution, and Napoleon's invading armies. This notion of national soul was taken over by the Slavophiles in 19th-century Russia, who used it to attack the "Westernizers," that is, Russian advocates of liberal reforms. It came up again and again, in the 1930s, when European fascists and National Socialists sought to smash "Americanism," Anglo-Saxon liberalism, and "rootless cosmopolitanism" (meaning Jews).
and also
Not all dreams of local authenticity and cultural uniqueness are noxious, or even wrong. As Isaiah Berlin also pointed out, the crooked timber of humanity cannot be forcibly straightened along universal standards with impunity. The experiments on the human soul by Communism showed how bloody universalist dreams can be. And the poetic romanticism of 19th-century German idealists was often a welcome antidote to the dogmatic rationalism that came with the Enlightenment.
It is when purity or authenticity, of faith or race, leads to purges of the supposedly inauthentic, of the allegedly impure, that mass murder begins. The fact that anti-Americanism, anti-Zionism, anti-Semitism, and a general hostility to the West often overlap is surely no coincidence. Even in Japan, where Jews play no part in national life, one of the participants at the 1942 Kyoto conference suggested that the war against the West was a war against the "poisonous materialist civilization" built on Jewish financial capitalist power. At the same time, European anti-Semites, not only in Nazi Germany, were blaming the Jews for Bolshevism.
I don't agree with everything the author has to say, but this is a very important contribution to understanding the current conflict. Read it here.
Thanks to Emily for the link: she also has some remarks about this at her blog.
3:20 PM
Thursday, February 05, 2004
BUFFETT ON OFFSHORING
Back in November, Warren Buffett wrote a fairly long Fortune piece on international trade issues. I expected it to set off a major national debate, but it stirred up remarkably little notice.
Now that the issues surrounding offshoring are attracting so much political attention, Buffett's comments are of particular relevance. In a nutshell, Buffett argues (a) that the trade deficit indeed matters, (b) that we are in effect trading our assets for current consumption, and (c) that this is harmful in the long term to the interests of the U.S. He then goes on to propose a possible solution, as follows;
The government would issue Import Certificates (ICs) to all U.S. exporters in an amount equal to the dollar value of their exports. If there are $80 billion in U.S. exports in a given month, there would be $80 billion in ICs issued. The holders of the ICs (exporters) then turn around and sell the certificates to those who want to bring goods into the U.S.--either a foreign company wanting to export to us, or a U.S. company wanting to import goods.
Buffett argues that this mechanism would automatically force trade balance, since you can't import without an IC, and you can't get an IC unless someone exports something. He also argues that his approach would incentivize U.S. exports, since (a) successful U.S. exporters will be able to sell their ICs at a profit, and (b) trading partners will know that they won't be able to export to us unless we are being successful at exporting to them and to other countries.
Opponents of Buffett's approach would probably argue that: (a) The plan would increase costs to consumers by constraining low-cost imports, (b) There would be danger of setting off a trade war, with devastating consequences for the global economy, and (c) The plan is unjustifiable from a natural rights viewpoint since it interferes with the free choice of willing participants to a trade. All of these points deserve consideration.
I would also have some questions about the specific mechanism that Buffett proposes, namely: (a) Is this applicable to services, or only to tangible goods, and (b) How does this work in the case of intracompany transactions (ie, company makes product in its own overseas plant for sale in the U.S.)
But Warren Buffett has earned the credibility to have his views on this matter listened to attentively. If you're a Fortune subscriber, you can read the whole article here.
2:25 PM
OUTSOURCING AND OFFSHORING
Daniel Drezner and Chuck Simmins write about the importance of distinguishing between outsourcing and offshoring. It's indeed an important distinction, and I like to use the terms this way:
Outsourcing occurs when a corporation takes a function which it has traditionally done internally and contracts it out to another firm--usually one specializing in this function. This has always been done to some extent (viz building maintenance, ad agency services), but has been expanding to included more functions: customer service call centers, for example. And in manufacturing, a form of "outsourcing" has always taken place whenever a company elects to purchase a component instead of making it itself--and there has been a long-term trend away from vertical integration and toward more use of purchased items. But recently, companies have shown more tendency to contract out even their final assembly operations (especially in electronics, wherein a whole industry of contract manufacturing operations has sprung up in recent years).
Offshoring occurs when a corporation takes a function previously done domestically and has it done in another country. Note that this can be done by the company's own people (putting a plant or a call center in the country where the work is to be done), or by contracting the work out to a company who already has operations in that country (offshoring combined with outsourcing). Offshoring of manufacturing operations has, of course, been going on for some time; improved communications have tended to further accelerate the trend (viz, the ability to rapidly transmit orders and design documentation over thousands of miles). But it is in the offshoring of services that improved communications has had its greatest impact. Who would have imagined, ten years ago, that comm costs would have fallen to a level at which garden-variety customer service calls would be switched to India as a matter of course?
So, for a given business function, all four combinations of outsourcing and offshoring are possible:
1)Do it yourself and do it here
2)Have it done here by a specialist company
3)Do it yourself and do it "overseas"
4)Have it done "overseas" by a specialist company
9:10 AM
Wednesday, February 04, 2004
WORTHWHILE BLOG
From the educational front lines comes A Schoolyard Blog.
4:49 PM
Tuesday, February 03, 2004
JOE LIEBERMAN
As you know by now, Joe Lieberman has dropped out of the race for the Democratic nomination. In his graceful statement, he called on Americans to pull together, and pointed out that we continue to face enemies who hate us more than they love life.
But he also said he would support the Democratic nominee. Isn't it clear that none of the remaining Democratic candidates really understand (or want to face) the point that Lieberman was making about the nature of the terrorist threat?
I hope that Lieberman will reconsider his pledge to support the Democratic nominee. The issues involved in the terrorist attack on civilization are so overwhelming that they trump many other considerations.
7:09 PM
THE MIND OF THE TERRORIST
Dr Helen Smith (also known as the wife of the Instapundit) has an essay up that was inspired by the new David Frum / Richard Perle book An End to Evil: How to Win the War on Terror. Dr Smith is a forensic psychologist, and in her private practice she has accumulated considerable experience in working with violent individuals. She believes that many of the insights she has gained in this work are also applicable to the national issues involved in dealing with terrorists.
Read it here.
6:52 PM
KEEPING OUT THE TALENT
Here's another story on how the educational establishment keeps many talented individuals from teaching. In today's Wall Street Journal, a university professor writes of his desire to teach in a public school. He has bachelor's degrees in chemistry and zoology, a Ph.D. in microbiology, and has been a college biology professor for 23 years. But the public schools view him as unqualified.
I can already hear the responses from many teachers (and teachers' union officials)--"The fact that someone has professional knowledge and can teach college students isn't enough. There are special skills involved in teaching children."
Well, it appears that this individual has these special skills. He has been a guest speaker in local high-school science classes, and served as adviser and mentor to students pursuing careers in high school science education. "I know how to read the eyes of a student for glimpses of understanding and how to break down difficult subject matter into understandable language," he says. "I have experienced the joy of coaching youth baseball for 18 years, working with both wonderful and difficult parents along the way. And my wife and I have also raised four fine sons who are happy productive members of society." (This latter point is rarely considered by the educational establishment to represent any kind of relevant experience).
Suppose that the U.S. suffered from terrible food shortages--and that there were many hard-working and qualified people eager to become farmers. And suppose that there were a farmers' union, which pushed through legislation preventing people from farming unless they had "appropriate" professional training (very little of which had much to do with the practicalities of actually running a farm). Wouldn't that be a direct analogue to the current situation?
(WSJ link is here: subscriptionr required)
3:34 PM
WELCOME!
Welcome to readers from Belgium, and thanks to Brussels Blog for the link.
3:28 PM
ELECTRONIC PAPER UPDATE
A while back, I wrote about the emergence of electronic paper technology, which allows information to be displayed on thin materials. Now The Washington Post reports that Royal Philips Electronics has a product in initial production, at the rate of 100 units/week--and they believe that a production level of 1 million/year may be reached by the end of next year.
The Philips display measures 5 inches diagonally and is just three times the thickness of a sheet of paper--so thin and so flexible that you can roll it up into a tube without damaging it. It only weighs about as much 1 1/2 pennies, and if you drop it, it flutters to the ground. Other companies, such as E-Ink and Plastic Logic, are also developing products in this space.
If this technology is indeed successfully commercialized, the implications are likely to be pretty significant. The first application that everyone thinks about is electronic books, and Sony is indeed working on such a product (using Philips and E-Ink technology). But I think that periodicals will represent an equally attractive application...think how nice to download your daily reading so that you can read it over breakfast, on the couch, or outdoors on the porch (these devices are said to be easily readable in bright sunlight.) Indeed, documents of any significant length will likely be much more pleasant to read on a flexible screen than a conventional computer. (Of course, the user interface will have to be very well thought out in order to make these products a true success).
(The Post article also mentions applications in the clothing field--people could have a news crawl across their chest, or an animated political slogan--yuck.)
(Disclosure: I'm an investor in Royal Philips Electronics.)
10:50 AM
Monday, February 02, 2004
BOGIE AT NINE O'CLOCK
Seems like almost every car has one or more blind spots. And side-to-side collisions, while not usually as catastrophic as head-on or broadside collisions, cause about 300 deaths a year and over a million injuries, together with more than $300 billion in damage.
A joint venture of Raytheon (best known for the Patriot missile) and Valeo (auto parts manufacturer) aims to use phased-array radar for detecting cars in the blind spot and displaying a warning to the driver. Unlike conventional radar, phased array systems do not use a rotating antenna--the scanning is accomplished via totally electronic means. (The technology was originally developed for military purposes.) Since the range of the system need not be very long, power levels can be quite low.
Valeo Raytheon expects the system to retail for about $500.
(from The New York Times)
6:57 PM
Sunday, February 01, 2004
COOKIE MONSTER
It's commonplace for leftists and Democrats to moan about how little money is spent on education, particularly by comparison with the Pentagon budget. A striking example of this can be found in this Flash animation, featuring Ben of Ben & Jerry's. Using cookies to represent $10 billion each, he shows stacks of cookies demonstrating that "we" spend only $35 billion on K-12 education, as opposed to $400 billion in defense spending.
In actuality, we, the United States, spend almost $500 billion in government money on K-12 education annually--more than we do for defense. And if you count higher education, vocational training, etc, the U.S. spends twice as much on education as it does on defense.
The $35 billion number used by Ben actually looks about right--for Federal government spending only. (And, to be fair, Ben uses the phrase "Federal budget" somewhere in his presentation). But the manner in which these numbers are presented--in the form of a single bar graph--implies that the $35B for education is directly comparable to the $400B for defense. This is complete nonsense, inasmuch as most educational funding in the U.S. occurs at the state, municipal, and county government levels. To portray the data in this way is like arguing that since county governments have no defense budget, the U.S. isn't spending anything on defense.
Many Americans, I suspect, have more or less bought into this idea that education is chronically impoverished, and would be truly shocked to learn just how much money is being spent on these institutions--particularly in the context of their lack of performance and accountabiity.
(Link via David Janes)
UPDATE: Also see here and here for more on education.
7:29 PM
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