225 (12 August 2015)

Welcome to week 225!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(6 August 2015): “Moving Into a Shipping Container, but Staying Put” (http://www.nytimes.com/2015/08/06/business/smallbusiness/recycling-shipping-containers-into-homes.html)

——–Montainer is a Missoula, Montana company that takes used shipping containers and turns them into living spaces, both rooms and tiny houses.  The shipping containers are 8 feet wide, 9.5 feet tall, and either 20 feet or 40 feet long.  Currently, “The most common order is the one-module home.  Most of Montainer’s clients are on the West Coast, in markets where housing is very expensive, like in Seattle and the Bay Area.”  Unlike houses on wheels, Montainer’s houses are installed on a foundation and must meet local building code and permitting requirements.”  Because the permitting process can be difficult, the company handles the permitting process for customers.  Financing also presents challenges: “traditional bank loans generally aren’t available for tiny houses because of their size and the newness of the market.”

********Affordable housing is in the news across the U.S. and especially in Asheville, North Carolina.  This week Mountain Xpress published “Little Big City Blues: Asheville’s growing housing crisis” (https://mountainx.com/news/little-big-city-blues-ashevilles-growing-housing-crisis/).  I suspect that the products of Montainer would have a difficult time being sited locally.

(6 August 2015): “Making Water More Liquid” (http://www.bloomberg.com/news/articles/2015-08-06/to-ease-california-s-drought-make-water-easier-to-trade)

——–[The Opening Remark, i.e., an editorial.]  “The water wells in the rich farmland of California’s Central Valley keep getting deeper, and the pumps keep getting more powerful.  Farmers have agreed to reduce their usage of surface water, but nothing stops them from looking for water beneath their properties.  So, in the fourth year of a devastating drought, down they go, pursuing a water table that keeps receding. . . . What’s going on in the Central Valley is a tragedy of the commons.  As with overfishing or overgrazing, the drilling farmers overexploited a free, shared resource even before the drought struck.  Individually their logic is impeccable.  Collectively, it could be disastrous.”

********The article goes on to discuss the role of property rights and markets in the provision of water.  It seems clear that legal and regulatory framework that currently gives rise to tragedies of the commons might be modified to eliminate or reduce such tragedies.  You can learn more about the tragedy of the commons at: https://en.wikipedia.org/wiki/Tragedy_of_the_commons.  Garrett Hardin, a biologist, originated the term and published a good deal.  I recently stumbled upon his 1985 book Filters Against Folly: How to Survive Despite Economists, Ecologists, and the Merely Eloquent, which has limited availability.  You can read a review of it at: http://www.thesocialcontract.com/pdf/fourteen-two/xiv-2-152.pdf.

(6 August 2015): “More College Students Selling Stock—in Themselves” (http://www.wsj.com/articles/more-college-students-selling-stockin-themselves-1438791977)

——–“Elida Gonzalez feared drowning in college debt on her road to a middle-class job, so instead she sold investors a piece of her future.  The daughter of a farmworker from Santa Maria, Calif., signed up with 13th Avenue Funding, borrowing $15,000 to complete her bachelor’s degree at the University of California, Santa Cruz.  The Sacramento-based nonprofit group agreed to fund her college expenses in exchange for a share of her future earnings in an arrangement called an income-share agreement. . . . Payments don’t kick in until she makes at least $18,000 a year. . . . The idea has been around since the 1950s, but it wasn’t until student debt began to explode that entrepreneurs began to experiment with the model.”

********This is just one of the new college funding alternatives being considered in light of the increasing challenges students are facing in financing their college education.  Perhaps we will hear more about such matters in the run up to the next presidential election.

(6 August 2015): “Egypt Prepares to Inaugurate Expanded Suez Canal” (http://www.wsj.com/articles/egypt-prepares-to-inaugurate-expanded-suez-canal-1438767185)

——–Egypt just completed an $8.5 billion expansion of the Suez Canal in less than one year.  It adds a second channel allowing “two-way traffic for the first time” that cuts “waiting time by as much as eight hours.”  The Egyptian government has promoted it as the “rebirth of Egypt.”  The project “has stirred patriotic fervor . . . and salved a national psyche bruised by simmering political divisions and an increasingly sophisticated Islamist insurgency.”  According to authorities, “By 2023 . . . the number of ships transiting the canal daily will increase to 97 from its current level of 47, and revenue from the waterway will jump to $13.2 billion from $5.3 billion.”  Egypt’s president, Abdell Fattah Al Sisi, hopes that the canal “will rally and unify Egyptians behind his government to overcome deep divisions.”

********The article clearly shows the many ends the project seeks to attain.

(7 August 2015): “The Seven Books You Must Read If You Want to Understand Oil” (http://www.bloomberg.com/news/articles/2015-08-07/the-seven-books-you-must-read-if-you-want-to-understand-oil)

********An interesting selection of books, three of which are by Daniel Yergin, who first burst on the scene with his classic The Prize: The Epic Quest for Oil, Money & Power, now in a new edition.  Ida Tarbell’s The History of the Standard Oil Company (1904) is recognized as a path-breaking book.  You can find a nice brief biography of her at: http://www.pbs.org/wgbh/americanexperience/features/biography/rockefellers-tarbell/.  It provides a clear look at one source of intellectual effort and inspiration.  You might also want to take a look at: https://en.wikipedia.org/wiki/Ida_Tarbell.

********Ida Tarbell was the “sole woman” to graduate from Allegheny College “in the class of 1880.”  This seems like a good place, then, to notice an interesting article in JSTOR Daily on “Women’s Groups and the Rise of the Book Club” (http://daily.jstor.org/feature-book-club/).  The “women’s clubs of the late-19th century” . . . emerged out of the era’s progressive movements, but instead of social reform, the women met to discuss literature, history, and the fine arts.  One of the first such societies, Sorosis, was founded in 1868, when several female columnists were barred from a New York Press Club event honoring Charles Dickens.”  Women had few educational opportunities at the time and the book club was one way that self education with like-minded people could take place.  Much additional information about Sorosis can be found at: http://asteria.fivecolleges.edu/findaids/sophiasmith/mnsss336.html.

(7 August 2015): “Coffee Disconnect Is Brewing” [SR](http://www.wsj.com/articles/coffee-disconnect-is-brewing-1438907318)

——–“Consumer demand for better-tasting coffee is splitting the coffee market in two.  A growing number of coffee roasters that deal in small farm-produced and best-flavored coffees are leaving the traditional, and more volatile, futures market, which they say has become so disconnected from their business models that it is no longer useful to manage risk.”  As a result, “producers are choosing to invest directly with farmers and take the investment risk alone rather than experience the sharp price volatility in the futures markets—traditionally used as a hedging tool against price fluctuations.”

********Certainly an interesting development.  I would presume that what is now a commodity, like coffee, started out with beans that were quite varied and that over time they became standardized, in part due to blending.  Presumably that is what consumers wanted.  Now, because consumer wants have changed, i.e., a growing appreciation or wish for connoisseurship in most things, including coffee, the standardized product is not as widely desired.  No doubt this is a general phenomenon.

(8 August 2015): “Intellectual property: A question of utility” (http://www.economist.com/node/21660559)

——Patents and the patent system have long been seen as “a tool with which to ‘promote the progress of science and useful arts’, as the American constitution puts it.  The public-good position on patents is simple enough: in return for registering and publishing your idea, which must be new, useful and non-obvious, you get a temporary monopoly—nowadays usually 20 years—on using it.  This provides an incentive to innovate because it assures the innovator of some material gain if the innovation finds favour.  It also provides the tools whereby others can innovate, because the publication of good ideas increases the speed of technological advance as one innovation builds upon another.  This sounds plausible.  But is it true?  There is much room for doubt.  A growing amount of research in recent years . . . suggests that, with a few exceptions such as medicines, society as a whole might even be better off with no patents than with the mess that is today’s system.”

********The article is especially interesting as it provides a very long term perspective on views expressed by The Economist since its inception in 1843.  That view is brought up to date in the leader that accompanies the article noted above.  You can read it at: http://www.economist.com/news/leaders/21660522-ideas-fuel-economy-todays-patent-systems-are-rotten-way-rewarding-them-time-fix.  You can find public goods defined and exemplified at: https://en.wikipedia.org/wiki/Public_good.

(9 August 2015): “Andrew Zirm: An Astrophysicist With a Down-to-Earth Calling” (http://www.nytimes.com/2015/08/09/jobs/andrew-zirm-an-astrophysicist-with-a-down-to-earth-calling.html)

********A brief interview with a Ph.D. astrophysicist who moved from academia to business.  A good example of the transferability of skills from one content area to another.

(10 August 2015): “To Feed Billions, Farms Are About Data as Much as Dirt” [SR](http://www.wsj.com/articles/to-feed-billions-farms-are-about-data-as-much-as-dirt-1439160264)

——–“Mark Bryant is a farmer in Ohio with 12,000 acres, on which he raises corn, soybeans and soft red winter wheat.  He is rarely on a tractor, because that isn’t how farms work anymore.  Instead, Mr. Bryant’s days are spent surveying dashboards full of data gathered from the 20 or so iPhones and five iPads he has supplied to his employees, on which they report on his acreage in real time, thanks to a Google-funded startup called Granular.  Data gathered from aircraft, self-driving tractors and other forms of automated and remote sensors—for yield, moisture and soil quality—are also essential to how he does his work.”  Mr. Bryant’s approach to farm isn’t atypical and will likely become even more common since “We live on a planet of 7 billion people that is projected to have more than 2 billion more mouths to feed by the middle of the century.  Another billion or so people will enter the middle class in that time, radically accelerating demand for calories in the form of meat and other energy-dense foods.”

********Autonomous vehicles will increasingly play a role in large-scale farm production.  Already, “The world’s largest producer of autonomous four-wheeled vehicles isn’t Tesla or Google, it’s John Deere.  And the cab of one of these self-driving tractors is now so full of screens and tablets that it has come to resemble the cockpit of a passenger jet.”  These tractors often work in tight formations, not unlike an Air Force air show.  Autonomous vehicles are increasingly playing a role on the highways, as is developed in “Truckers Gain an Automated Assist” [SR](http://www.wsj.com/articles/truckers-gain-an-automated-assist-1438939801).

(11 August 2015): “Strapped States Farm Out Upkeep of Parks” [SR](http://www.wsj.com/articles/states-farm-out-park-maintenance-1439235766)

——–“California’s cash-strapped parks system has a $1.2 billion maintenance backlog.  But many of its 279 parks are getting spruced up anyway thanks to a secret weapon: conservation groups that have stepped in to rebuild trails, renovate restrooms and even buy more land.”  Public-private partnerships “have formed in Florida, Pennsylvania and elsewhere” as states haves struggled to maintain parks and forests in light of funding that “was slashed during the recession and never fully restored.”  Nonprofits, in particular, have stepped in to fill the gap between what is needed and what is funded.

********The United States is unusual in that many of its goods and services are produced and provided privately (profit and nonprofit) and publicly.  The reduction in the provision of them by public entities, therefore, means that more of them—very likely not enough to make up the difference—will be provided by private entities, in this case by nonprofits (including volunteers).  Presumably volunteers are likely to be people who place great value on the goods and services they are providing.

(12 August 2015): “Belt Railway Clears Track for More Efficiency” (http://www.wsj.com/articles/belt-railway-clears-track-for-more-efficiency-1439335347)

——–“Though little-known, Belt Railway Co. oversees a critical junction for the North American railroad industry where the six largest railroads in the U.S. and Canada converge.  Those railroads exchange cars with each other here in the Belt’s sprawling Clearing yard just outside of Chicago, enabling freight to move across the U.S. by collecting cars headed to  the same destinations and assembling them into new trains.  The yard’s 265 miles of tracks and switches handle more than a million railcars a year, making it the largest facility of its kind in North America.  When it works, the Belt is a model of cooperation between fiercely competitive railroads.”

********A remarkable example of the logistical systems that are known to almost no one but are so important to the timely movement of goods.  Belt Railway has been in business for 133 years.  You can learn more about it at: http://www2.beltrailway.com/.

May you have a good week!

Bruce

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s