The Pace of Technology Adoption

Columbia business professor Rita McGrath has a brief blog post at Harvard Business Review demonstrating that technological innovations are being adopted more quickly than in the past. For example, “it took decades for the telephone to reach 50% of households, beginning before 1900.  It took five years or less for cellphones to accomplish the same penetration in 1990.”

Furthermore, “it took 30 years for electricity and 25 years for telephones to reach 10% adoption but less than five years for tablet devices to achieve the 10% rate.”

 

McGrath concludes, “It’s clear that in many arenas things are indeed speeding up, with more players and fewer barriers to entry.” Just one more reason I’m optimistic about the future of living standards.

 

Scott Walker 2016?

2013-11-26 Scott Walker

I know it’s silly, but my favorite candidate for 2016 is still Mitt Romney. Third time’s the charm, eh? But, since that’s not likely, I’m kind of desperate to find anyone who isn’t either Cruz or McCain. I feel like they represent the polar disparities of the GOP.

So the natural person to look to is Chris Christie, but some of what I’ve learned has made me wary of his campaign, including the difficulty the Romney campaign had in vetting him in 2012. Marc Thiessen at the WaPo makes the case that Scott Walker, current governor of Wisconsin and the only governor in US history to survive a recall,  should be on the radar:

Walker survived the 2012 recall by mobilizing his conservative base with his courageous, unflinching stand — and appealing to persuadable, reform-minded, results-oriented independents, who provided the critical margin of victory. That is precisely what Republicans need to do nationally if they want to win back the presidency in 2016.

A staunch, full-spectrum conservative who is reasonable and appeals to moderates? Yes, please. I thought this quote was funny as well:

Walker delivers everything Christie does it terms of appealing to the center — but without the ideological compromise. And he delivers everything Ted Cruz does in terms of taking the fight to the left — but without the losing.

Without the losing, in particular, would be nice.

Monday Morning Mormonism: Religious and Secular Authority

2013-11-25 peter_walking_on_water

This morning’s regularly scheduled Times And Seasons post is up. In this post, I talk about the benefits of an atheological religion, and the danger of replacing the missing religious authority with a secular one: academia. (I also make some comments about the importance of failure, hence the image of Peter sinking into the stormy waves.)

Dishonesty and Government Job Selection

“College students in India who cheated during an experiment were more likely to want to get a government job after graduating,” writes Business Insider. “Additionally, cheating in the experiment was predictive of actual corruption from government workers, showing that this sort of dishonesty could be linked to later corruption…”

The new NBER study could shed light on the source of government corruption: self-selection. Check it out.

Cheaper, Better, and More Efficient

That’s how economist Mark J. Perry–drawing on the Association of Home Appliance Manufacturers–describes today’s home appliances. The following chart goes nicely with my last post about the “magic washing machine“:

As Perry concludes,

Today’s modern household appliances are not only cheaper than ever before, they are the most energy-efficient appliances in history, resulting in additional savings for consumers through lower operating costs. The average dishwasher today is not only more than twice as energy-efficient as a comparable 1981 model, but its real cost today is only about 50% of the price of the 1981 dishwasher, measured in hours worked at the average hourly wage. Put those two factors together, and the average American’s dishwasher today is about six times superior to the dishwasher of thirty years ago…Put it all together and American consumers have never been better off when it comes to the standard home appliances that we all own and take for granted.

We could all practice a little gratitude and have some perspective.

Monday Mormon Mormonism: Business Theology

2013-11-18 The Marriage of Heaven and HellInspired by the work of DR’s own Walker Wright and his co-author Allen Hansen, my post for Times And Seasons this morning delves into the fruitful nexus of business and theology, especially in light of Peter Drucker’s body of work. Allen suggested the post title, and I liked it. Why stop at chasing the bankers out of the temple when you can carry the offensive forward and bring the temple into the bank?

Pentagon Misplaces Billions Of Americans’ Dollars Anually, Won’t Be Held Accountable

saupload_money_fireReuters is reporting that, in an accounting fiasco of truly comical proportion, the Pentagon has lost billions of dollars in taxpayer money with no record of where or how the money disappeared. The grand injustice is that had such a debacle occurred in a private corporation it would result in prison sentences. The difference being, of course, that in the case of a corporation the money being flushed into the nether ostensibly belongs to the government, whereas in this case, no big deal, the money belongs to the American people.

When there is a question about why a large segment of the population wants a smaller government, it’s stories like this that support their arguments. Is this an inevitable result of big government, or is this a systemic issue of the particular type of government currently occupying Washington? Where is the responsibility? Where is the accountability?

The Department of Defense accounts for more than half of yearly government spending, and they can’t balance their books without pulling numbers from thin air. Is it any wonder so many are objecting to concentrating further enormous financial outlays into the hands of that same government body in the form of health care?

Because of its persistent inability to tally its accounts, the Pentagon is the only federal agency that has not complied with a law that requires annual audits of all government departments. That means that the $8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996, the first year it was supposed to be audited, has never been accounted for. That sum exceeds the value of China’s economic output last year.

The numbers are easy to write down but they’re almost beyond my comprehension. Aside from the obvious question about how much defense spending is too much, how much of that 8.5 trillion dollars has been lost? How much of it came out of your pocket, or your friends’ or your parents’, and how much of it will never be recovered?

Congress in 2009 passed a law requiring that the Defense Department be audit-ready by 2017. Then-Defense Secretary Leon Panetta in 2011 tightened the screws when ordered that the department make a key part of its books audit-ready in 2014.

Reuters has found that the Pentagon probably won’t meet its deadlines. The main reason is rooted in the Pentagon’s continuing reliance on a tangle of thousands of disparate, obsolete, largely incompatible accounting and business-management systems. Many of these systems were built in the 1970s and use outmoded computer languages such as COBOL on old mainframes. They use antiquated file systems that make it difficult or impossible to search for data. Much of their data is corrupted and erroneous.

Why does this happen? Why is it allowed to happen? The only answer that makes any sense to me is because there’s no impetus for change because there is no penalty for screwing up. You lose a few million bucks in a year in your department to “accounting errors” and the like at any company in the country and you’ll be on the street in an instant. In the government, this kind of failure is allowed to go on for years without much more than empty threats from largely-disinterested politicians on Capitol Hill. Deadlines and restrictions are frequently imposed and inevitably ignored, both out of conflicting goals of necessity, incompetence, and good old fashioned corruption.

The Defense Department’s arguments in their own defense ring hollow, with excuses that attempt to mask the amount of money lost by pointing to purposely-excessive number fudging that function as IOUs and are, usually, accounted for in time. This does nothing to explain why such number fudging should be necessary in the first place, nor is there convincing proof that this is true since much of the money is still unaccounted for after years and years with no prospects of recovery.

In the end, we are the victims, working every day to put thousands of dollars each year into a nightmare machine from which we will never see any return.

I Cried Over A Washing Machine

Economist Steve Horwitz has a great post at Bleeding-Heart Libertarians on statistician Hans Rosling’s (if you haven’t seen his site Gapminder, you should) TED talk “The Magic Washing Machine.” Horwitz says, “A number of my male libertarian economist friends have, independently, told me that there is a video that brings them to tears when they watch it, and especially when they show it to student groups.  I have had that reaction to the video as well…Yes, those heartless libertarian male economists report getting choked up and teary-eyed when they show this video to students.” These “9 minutes, and especially the last 90 seconds or so,” had me in tears as well.

I cried over a washing machine.

Why is this? Horwitz captures it beautifully:

What gets me about that video is the way Rosling captures an abstract intellectual argument about the power of markets and industrialization to improve people’s lives.  He uses a very concrete, emotionally rich example that combines our wanting to root for an underdog with a clear example of how markets have liberated both immigrants and women to live more flourishing lives.  We talk a lot about GDP per capita and human capital accumulation and women’s labor force participation rates.  But it is the idea that industrialization and capitalism made it possible for women to be freed from drudgery and to have the time to read and learn a new language and everything else that has characterized the dramatic improvement in women’s lives in the last century or more that really matters. Critics of markets sometimes say “you can’t eat GDP.” What they miss is that you can’t eat, or learn to read, or go to school, or leave a bad marriage, or do pretty much any of the basics that we might see as required for a flourishing life without the wealth and time created by the market economy.

New Brookings Paper on “Downward Mobility”

A new paper by Richard Reeves and Kimberly Howard at the Brookings Institution investigates the possibility of a “glass floor” when it comes to those born into affluent families. The main findings were as follows:

1. Skills, as measured in adolescence by the Armed Forces Qualifying Test (AFQT) and coding speed, strongly predict the chances of being in a higher-income household as an adult.

2. A sizable proportion (43%) of those who remain in a higher-income household are of modest skill, and would be expected on the basis of skill to fall.

3. Getting a college degree is associated with a 23% greater chance of an adolescent of modest skills—i.e., predicted to fall—remaining in a higher-income household as an adult.

4. Lower-income adolescents with the smarts and drive to get into the higher-income bracket have a 42% greater chance of making it if they have a college degree.

Brookings also provides some helpful interactive graphs regarding mobility between quintiles, the use of cognitive and non-cognitive skills, and the importance of a college degree (check out Nathaniel’s post about college tuition).

One thing that stood out to me was that 60% of those born into the bottom quintile move into a higher one by the time they are adults (with virtually the same percentage of those born at the top moving down).

Definitely worth checking out.

China to Ease One-Child Policy

It was announced that China will relax its one-child policy in an effort to improve human rights. “The policy will be slightly relaxed,” CNN reports, “so that couples will be allowed to have two children if one of the parents was an only child…Currently, both parents must be sole children to be eligible for a second child. The one-child policy, though applauded by many for slowing down China’s population growth, has been widely criticized for resulting in forced abortions and hefty fines that are sometimes used to enforce it.”

Not exactly a giant leap forward, but a definitely a step. What is ironic is that groups that are often considered feminist due to their pro-choice position (e.g. Planned Parenthood) applauded these coercive policies; policies that led to sex-selective abortions, resulting in the termination of millions of unborn girls. As The Wall Street Journal reported a couple years ago,

In nature, 105 boys are born for every 100 girls. This ratio is biologically ironclad. Between 104 and 106 is the normal range, and that’s as far as the natural window goes. Any other number is the result of unnatural events.

Yet today in India there are 112 boys born for every 100 girls. In China, the number is 121—though plenty of Chinese towns are over the 150 mark. China’s and India’s populations are mammoth enough that their outlying sex ratios have skewed the global average to a biologically impossible 107.

…What is causing the skewed ratio: abortion. If the male number in the sex ratio is above 106, it means that couples are having abortions when they find out the mother is carrying a girl…[T]here have been so many sex-selective abortions in the past three decades that 163 million girls, who by biological averages should have been born, are missing from the world. Moral horror aside, this is likely to be of very large consequence.