398 (4 December 2019)

Welcome!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription. 

(29 November 2019)Climate Change Adds Wrinkle to Art Collectors’ ConcernsThe New York Times

——–“If being a collector [of art] is imbued with the romance of money and taste, then keeping track of all the pieces in a collection is its opposite.  Verifying the purchase price and date, the artist’s information, the history of a work is about as romantic as accounting.  But this drudgery is increasingly becoming necessary for high-end collections as climate change makes severe weather worse in the coastal areas where the affluent tend to live.”  Lisa Lindsay, of the Private Risk Management Association, notes: “As we go into 2020, the days are gone when homeowners needed to just put an insurance policy in place to protect themselves but could then move on . . . People [now] need to work with someone who can put together a comprehensive plan.”

The stakes are high, as “the worldwide art collection in private hands is estimated to be worth more than $1.7 trillion.  But individual owners have been slower than institutions and companies to catalog what they have.”

********Businesses like Artwork Archive, Art Galleria, Artlogic, and Veevart have emerged “to help owners and artists catalog their works.  According to Ms. Lindsay, climate change has been the main factor in driving these changes.  She comments, “Climate change is a reality . . . These sever weather events are going to continue and maybe increase.  We need people to understand there’ plenty that can be done” to address the risks.

            It occurred to me while reading this that there climate change is a great disruptor of markets, just like digital technology.  Consequently, climate change presents many opportunities for entrepreneurial gain.  Along those lines, the article “Weather is turning into big business.  And that could be trouble for the publicThe Washington Post is worth perusing. 

            Not all entrepreneurs are successful, of course, and that underlies an intriguing article in The Wall Street Journal [SR]Why Entrepreneurs Don’t Learn From Their Mistakes.”  As the article notes, “Part of the folklore about successful entrepreneurs is that they succeeded because they first failed. . . . But this is a myth.  While second-chance stories are comforting, . . . research shows that entrepreneurs don’t learn from their mistakes.  In fact, it’s the opposite: Fail once and you’re most likely to fail again.”  Although there “are many reasons why this is so, . . . the most important is [that] . . . Learning is a complex process that usually doesn’t proceed as simply and obviously as we hope.  We struggle to take away lessons about what went wrong and then apply those insights to new situations.  Or we simplify our experiences and leave out key details that would help us get a complete picture of why things went wrong.”  For a lengthy academic paper on the subject, for the link to the ZEW Discussion Paper here.

(29 November 2019)We need a major redesign of lifeThe Washington Pos

——–“It’s time to get serious about a major redesign of life.  Thirty years were added to average life expectancy in the 20th century, and rather than imagine the scores of ways we could use these years to improve quality of life, we tacked them all on at the end.  Only old age got longer.  As a result, most people are anxious about the prospect of living for a century.”  But “Long lives are not the problem.  The problem is living in cultures designed for lives half as long as the ones we have.”  The Stanford Center on Longevity is working to create “The New Map of Life” while asking “How do traditional models of education, work, lifestyles, social relationships, financial planning, health care, early childhood and intergenerational compacts need to change to support long lives?”

********This is certainly a problem that engages all of the invisible forces—hand (economic), foot (legal and political), and handshake (social and historical).  This all seems obvious, though.  If one had an additional 20 years, say, to distribute over one’s life course, would you really put all of them in retirement? 

            You can learn more about the Stanford Center on Longevity and “The New Life Map” here.  On that same page, you can download a nine-page white paper on the Map.

(2 December 2019) [SR]The Water Wars that Defined the American West Are Heading EastThe Wall Street Journal

——–“Water stress, a hallmark of the American West, is spreading east. . . . Increasing competition for water is playing out across the Eastern U.S., a region more commonly associated with floods and hurricanes and one that was mostly a stranger, until recently, to the type of bitter interstate water dispute long seen in the West.  Eastern farmers’ rising thirst for water, together with urban growth and climate change, now is taxing water supplies and fueling legal fights that pit states against each other.  The shift has exposed the region to changes in water supply occurring globally as swelling populations, surging industrial demand and warmer temperatures turn a resource seen as a natural right into a contested one.”

********The article focuses on water conflicts between Florida and Georgia over the “Apalachicola-Chattahoochee-Flint River basin.”  In this case, the conflict pits Georgia farmers, who are using water for irrigation, against Florida oysterman, who need fresh water for oysters.  The more water used in Georgia, the less there is for Florida.  According to some water experts,  eastern states are “unprepared for scarcity, armed with a patchwork of regulations and laws that assume water will remain plentiful.  Unlike in the West, where most major river basins are governed by interstate compacts, only a few such agreements exist in the East.”

(3 December 2019)Exposé of data gender bias wins FT/McKinsey book prizeThe Financial Times

——–“Caroline Criado Perez has won the 2019 Financial Times and McKinsey Business Book of the Year Award for Invisible Women, her examination of how designers and developers have perpetuated bias toward men in the data they use.  In an earlier FT review of the book, it was noted: “Criado Perez comprehensively makes the case that seemingly objective data can actually be highly male-biased, and that public spending, health, education, the workplace and society in general are worse off as a result.”

********The full title of Criado Perez’s book is Invisible Women: Data Bias in a World Designed for Men.  Bias is a very general idea and is likely to be prevalent in most empirical studies.  One can easily imagine a host of books entitled Invisible X: Data Bias in a World Designed for Y.  In the rush to establish the relevance of a piece of research, it is all too easy to ignore of conveniently forget about the data (and the assumptions) made to arrive at one’s results.

            An article that points out the consequences of a different kind of data ignorance is “When a Disappointment Helped Lead to a Nobel PrizeThe New York Times.  Earlier in his career, Michael Kremer conducted a study on school children in western Kenya, expecting to find that the provision of textbooks would improve student performance.  But the preliminary results indicated that such provision did not improve student performance, which “shocked” Kremer.  Reflecting on his results led Kremer “to think harder about the schooling system in Kenya.  He said he began to realize that one problem was an excessive focus on top students, and he went on to design and test other measures that would help a broader range of people.”  Ultimately, it seems, as the textbooks were designed for the top students, students who were not-so-capable struggled to use them.  The author of this article, Seema Jayachandran, was a student of all three winners of this year’s Nobel Prize in Economics.

            Six books were in contention for the 2019 Award.  You can the short list here.

(3 December 2019)Hemp Industry Is Cleared to Do Business With BanksThe New York Times

——–“The number of banks in the United States willing to lend to hemp producers can be counted on one hand.  That is about to change.  Federal and state bank regulators announced Tuesday that they were scrapping a burdensome requirement that banks said kept them away from the hemp business.  Banks will no longer have to treat their hemp customers as suspicious and file reams of paperwork to anti-money-laundering authorities for each interaction.  The change could provide a major boost to a niche product that began its own legalization process last year.”

********As noted in the article, the inability to access the banking system has been one of the factors holding back the expansion of hemp in many quarters.  The actions of federal and state regulators, which “does not affect the legal marijuana businesses dealing with the same problems,” is a step forward to allowing banks to “dive into a lucrative new industry that has been plagued by security concerns and is desperate for even the most basic services, like checking accounts and credit card processing.”

May you have a good week!  

Bruce

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