Cracking the Whip in Hong Kong

People in Hong Kong are restive these days, and with good reason.  The Chinese government has decided that only Beijing-selected candidates will be allowed to run for Hong Kong's chief executive job in its 2017 election.

Since the announcement, there have been demonstrations in the streets.   Great big, peaceful demonstrations.  No broken windows, no looting, no violence.  (Some Americans protest groups could learn from this example.)

Hong Kong's current chief executive sent the police to break up the demonstrations with tear gas and pepper spray.  Now the demonstrators want him to resign.  Who can blame them?

The Chinese government has blocked access to Instagram photos of the demonstrations in both China and Hong Kong.  I do not believe in the suppression of information, and so I am posting a couple Instagram pictures below, just to get them out there.

Hong Kong was ceded to China by the British in 1997, with the understanding that it would be governed separately.   It was agreed, among other particulars, that Hong Kong's citizens would have the right to demonstrate.

"One country, two systems" was the mantra at the time, but strains between two such different systems were almost certainly inevitable.

In fact, China has opened up a bit over the years, but it continues to have problems with the free speech thing.

An editorial in yesterday's Global Times, which seems to be a house organ of the Chinese Communist Party, said the following:

     "The radical activists are doomed.  Opposition groups know well it's impossible to alter
     the decision of the Standing Committee of the National People's Congress . . . ."

(Blatantly false terms like "radical activists" and "National People's Congress" always make me think of George Orwell and Newspeak.)

Anyway, the Global Times editorial acknowledged China's 1989 Tiananmen Square protests and said things are completely different now.

     "Recent years have witnessed many severe mass incidents, but none had the ability to disturb
     the thinking of society.   China has tackled these incidents smoothly."

Tear gas, pepper spray.  "The thinking of society."  "Tackled. . .  smoothly."  Hmm.

The situation now seems to be a stalemate.  The demonstrators aren't going home.  The Chinese continue to insist that they will choose Hong Kong's political candidates.  The worry is that China will send in the People's Liberation Army (more Newspeak), as was done in Tiananmen Square 25 years ago.

In reading about the Hong Kong demonstrations, I came upon an interesting group called New Tang Dynasty (NTD) that operates out of New York, covers much of the world and has an audience of more than 100 million.  It broadcasts cultural shows and children's programming as well as news reports. I hope the NTD will not object to my sharing one of its recent posts, which includes public reaction to the suppression of information about events in Hong Kong.




Note:  The Chinese government has made clear for decades that it wishes to absorb prosperous, democratic, peaceful Taiwan into China.  The people of Taiwan must look across the Formosa Strait and shudder at the thought.

California Dust Bowl

There is much talk lately about California's drought, now entering its fourth year.  Farm yields are declining, and a number of small towns that depend on well water face the possibility that their wells will run dry.

It is interesting to me that many people migrated from the Midwest  to California in the 1930s because an earlier drought had ravaged Iowa, Nebraska, Missouri, Arkansas, Oklahoma and Texas.  

That drought began around 1930, as the Depression was developing, and continued until late in the decade in the prairies of the U.S. and Canada. 

The drought was an act of God, but the dust storms that gave the Dust Bowl its name were caused in part by farming practices.  Farmers pulled native prairie grasses to plant crops in the treeless landscape.  When no rains came, the newly planted crops -- chiefly wheat and cotton -- didn't develop the root systems needed to hold the earth in place.  The result was that any wind carried soil, sometimes across many states and as far as the East Coast. 

A dust storm approaching Stratford, Texas

On a chat board, I found one man's recollections of what his mother, a teenager in Oklahoma at the time, told him of those years.

     "The dust was so fine that it was impossible to prevent it from getting into your house.
     They would soak blankets, sheets, tablecloths, towels, and even their clothes so they could
     hang them over the windows, doors, and fill any cracks where the dust may enter the house.
     This had to be done at least once a day and sometimes the blankets and sheets covering
     the windows and doors had to be wetted and rehung twice a day or more often.

     "The dust was so fine it would get past the seals of the refrigerator doors and coat everything
     in fine dust.

     "She told me that on the days the dust storms were 'thick' you would not eat until the storm
     abated.  Sometimes the storms would last for several days.  The reason you didn't eat was that
     you could not cook because the dust would get into the food so it was like eating plain dirt."

Some people developed dust pneumonia when too much of the blowing soil found its way into their lungs.  Some people actually starved.

During and after the drought years, new farming practices were adopted in many prairie states, including the planting of trees and grasses and the rotation of crops.

A farm abandoned in Oklahoma

Migration to California

The lack of rainfall rendered farmers unable to feed their families.  Between 1931 and 1933, 10 percent of all Oklahoma farms were foreclosed, a process that continued through the decade. Thousands of farms were abandoned, and by 1940 an estimated 400,000 people had left, mostly for California, vastly accelerating a westward migration that had begun 20 years earlier.

Between 1930 and 1940, the populations of Kansas and Nebraska actually declined, an unheard-of circumstance in a country that had done nothing but grow as immigrants arrived and children were born into the traditionally larger families of that period.  The population of the Oklahoma and Texas panhandle regions dropped by an estimated 25 percent.

Unfortunately, California offered little hope.  Los Angeles unemployment ranged above 30 percent in the 1930s.  Indigent immigrants, dubbed "Okies," were scorned.  Those with skills were seen as threats to local workers.  Those who sought farm work competed with Mexican laborers and drove down wages; in addition, large farm operators feared the anglo Okies would organize labor unions and raise production costs.

For a period in 1936, the Los Angeles police department established a "bum blockade" to turn back poor immigrants at entry points on California's borders with Oregon, Arizona and Nevada.  The California legislature passed a law in 1939 banning the bringing of indigent people into the state.  The law, clearly unconstitutional, was struck down two years later by the U.S. Supreme Court.

By that time, the tensions had ameliorated.  In preparation for war, the U.S. government had invested in munitions factories, shipbuilding and the manufacture of planes and tanks.  Jobs became more plentiful. The worst was over.

The Dust Bowl and Art in California

The photograph at the right is one of the most famous in American history.  Titled "Destitute Pea Pickers in California," it was shot in 1936 by Dorothea Lange, who was hired by the U.S. Farm Security Administration to take pictures of farm workers in the Depression.  The woman in the picture, 32 years old and the mother of seven, had come with her family from the Midwest to California during the Dust Bowl period.

Another work is The Grapes of Wrath by John Steinbeck, who drew on his California newspaper reporting to write his novel about an Oklahoma family, broke and hungry, who journeyed to California in a frustrating and often unsuccessful search for work to support themselves.  The book showed America an unflattering picture of its treatment of poor white people and over the generations led to the recognition of rural poverty among all groups.


Future Drought

The current California drought does not seem likely to end soon.  It probably will not destroy as many lives or lead to family relocations as desperate as those of the Depression.  But it should challenge the state and the country to think about water and to plan for droughts, including droughts that could last for years at a time.  We should remember the pain of the Dust Bowl to be sure that it will not be repeated.

The Recycling Future

We're recyclers at our house.  All the newspapers, all the plastic and glass and cans, all the fish and meat trays from the supermarket, all the boxes and junk mail -- all of it -- goes into the big bin with a triangle on it for pickup every Monday.  The recycling bin is always more full than the garbage can.

I thought I was doing a pretty good job with this until a few weeks ago when I visited a friend in San Anselmo, CA.

We were talking in the kitchen as she cut up vegetables for (a very tasty) dinner, and I observed that she was wrapping up the ends and peels in a piece of newspaper.

"Insinkerator on the blink?" I asked.

"We're not supposed to use the disposal any more," she said.

"No disposal?"

"We compost now," she said.

(See, I had heard about this composting thing and even considered doing it at my house.  When I learned that a compost heap almost certainly would attract rodents and bugs, I decided against it.   We have enough uninvited animals around the place as it is.)

Then my friend took her wrapped pile of vegetable detritus and dumped it into one of three garbage cans around the corner from her kitchen.

"Paper," she said, pointing at the left container. "Glass and plastic in the middle, compost on the right."

"Where do you put your actual garbage?" I asked.

"Under the sink," she said.  "There's not enough room down there for this stuff."

Then we walked outside, and she showed me her garbage bins.

The green one on the left is for leaves, branches and compostable kitchen waste.  In the center is a fancy double-sided model -- paper goes to the left; glass, plastic and cans to the right.  On the right, and emptiest by far, was the actual garbage can.

This, simply, is the recycling future.  It's not a matter of whether this will be coming to your neighborhood, but when.

My friend referred me to the local garbage collection website, and boy, was it detailed.

I learned several things.

First, recyclable material is valuable.  You can actually be arrested if you pick up somebody's leftover paper and bottles instead of leaving them at the curb for pickup.

Second, deciding what goes where is complicated.  

     -- Regular light bulbs go in the garbage, but fluorescent ones must be delivered to the hazardous waste management facility.

     -- Empty spray cans may be put in with the recycling, but full ones must be delivered to the hazardous waste facility.

     -- Tea bags, meat, bones and waxed paper can go in the food recycling, but compostable cups and dishes belong with the garbage.

     -- Milk cartons and plastic bags, even the ones with little triangles on them, are not recyclable.  Into the garbage can they must go.

Third, the next time I remodel a kitchen (which, if I am lucky, will be never) I am going to have to include a lot more room for recycling containers.  Also, if I get a disposal, I will order one with a removable gasket.  (A disposal gasket is pictured in the center of chrome ring below.)  This is because the rubber gasket on an unused disposal can collect smells over time, and it's nice to be able to take it out and run it through the dishwasher. 

Fourth, there are rules about how to put out the garbage and recycling.   The cans must be placed at least two feet apart.  

In addition,  the lids on the cans must be closed.  What, I wonder, would you do if you had a big party or a bunch of guests and there was more recycling than usual? Would you have to buy a fourth garbage can?  If you had a lot of seasonal cleanup each year, would you need a second yard waste can? Where would you put the cars?

When Do You Leave?

One of the important decisions for anyone in any job is when to go.  Almost nobody can predict his potential trajectory in an organization or, for that matter, the prospects for the organization itself.  These decisions are hard, very hard.  Many people look back with regret.

It is interesting to watch how prominent people decide when to go.  In the last couple weeks, we have seen a couple of them, and their stories deserve a look.



Derek Jeter

After 20 years as shortstop for the New York Yankees, Derek Jeter played his final game the other day.  He is 40 years old and past his prime playing years, but his decision to quit was his alone.

No one knows whether his focus, balance and modesty were inborn or taught him by his parents, but they informed his career.  Along with the Yankees' similarly minded reliever Mariano Rivera and catcher Jorge Posada, he led the team to five World Series championships.  No drama, just steady solid performance.

The last Yankees' championship was in 2009, and the team will be in a rebuilding mode for at least several years.  Jeter, a natural leader respected by his teammates, could have been valuable as new players joined the Yankee system.

He declined.  He said he'd played enough and was ready to quit.  He meant it.

I am not a Yankees fan, or even a baseball fan, but it is impossible not to admire the guy.

In his last game in New York, Jeter hit a single in the bottom of the ninth that drove home the winning run.   A nice way to finish.





Bill Gross

In 1971, Bill Gross cofounded Pacific Investment Management Co. (Pimco) a bond investment company that had a remarkably successful run, outperforming its rivals year after year after year.

Currently Pimco has almost $2 billion under management, but performance of its Total Investment Return Fund, the world's biggest bond fund at $2.3 billion and managed by Gross, has fallen off in recent years.

Gross, Pimco's chief investment officer, had smart, successful strategies over many years, but he was believed to have lost some mojo in recent years as bond yields have held very low and the U.S. Federal Reserve has flooded the economy with cash to maintain low rates in a period of low growth.

As the Total Investment Return Fund's performance declined, Gross' personality, difficult even in the good times, grew to be more of an issue within the firm.  Pimco employees are generally regarded as hard-working and talented, but they often have been said to find the firm an unpleasant place to work.

(I just looked Pimco up on an employee-evaluation site.  One comment earlier this month came from an employee who said, "very political in ways -- must be part of the group mentality -- some ways like cliques in HS or college."  Only 34 percent of the Pimco employees said they would recommend the firm to a friend.  Overall rating was 2.1 on a five-point scale.)

In-house drama has increased this year, with Gross' hand-picked successor, CEO Mohamed A. El-Erian, leaving Pimco after public arguments with Gross.

In addition, investors had been pulling money out of Pimco's Total Investment Return Fund for the last 16 months, including $25 billion in 2014 alone.

Later in the summer, it was revealed that a group of Pimco fund managers had threatened to quit if Gross did not leave.

For Gross, 70 years old and worth an estimated $2 billion, the decision came down to this:  Wait to be shoved out, jump or retire.

He chose to jump, joining Janus Capital to run its new, tiny,  Global Unconstrained Bond Fund, where his position at the helm is expected to draw many more investors.  Janus stock rose 48 percent on the day of the Gross announcement.  Allianz A.G., a 70 percent owner of Pimco, saw its stock drop.

Finance isn't like professional sports -- there isn't necessarily an inevitable age-related decline in skills.  But maybe sometimes there is, and maybe this is what has happened to Bill Gross.  He shows no inclination to leave the field.  He's got something to prove, and he means to prove it.

We'll see.



Below is a video of one of Derek Jeter's most famous plays.  It's called the Flip.

Grandma's Celebrity Gossip -- The Bonnie Franklin Incident

In yesterday's post, Grandma referred to an encounter with television star Bonnie Franklin.  This pre-Idiosyncratist post from 2005 describes the situation in greater detail.

Grandma

I went with Adele's Hadassah group to a matinee of "Cats," at the Civic Arts Center in Thousand Oaks.  For years my kids have been trying to get me to see this musical, but I figure something I wouldn't have in my house what with the shedding and hairballs, I certainly wouldn't pay good money to see on the stage.

The show had actors as big cats, crawling across the stage and licking themselves, singing songs I never heard before except for "Memories," but not the Barbra Streisand one; that was "The Way We Were."

Luckily Adele and I sat on the aisle, so when they had the special extended intermission for us seniors, we made a beeline for the ladies' room, which was already crowded.  As soon as I got in a stall, the toilet flushed itself like it had a mind of its own.  I got so fartoost I could barely do my business.

Then the worst happened.  I got up, and the toilet wouldn't flush again.  There's no handle because it's automatic.  So I bounced around a little, hoping it would get the idea.  Nothing.  So I backed over it and swung from side to side.  Still nothing.

Now I was in such a panic.  I couldn't very well leave and let the next person see my business in there, so I paced back and forth, hoping all of a sudden an idea would hit me.

There was a rap at the door and an "Are you all right in there?"  I opened it to see none other than the TV star Bonnie Franklin, of "One Time or Another," the show with the two wisecracking daughters and the schnorrer handyman.  For her age she looks good, though she's still cross-eyed, and from the facelifts, bug-eyed like the meshuga runaway bride, but she's very nice.  We left the stall, then marched right back in, and miracle of miracles, the toilet flushed.

For this I have to thank Bonnie Franklin.  

Grandma's Celebrity Gossip

The latest report from our guest columnist.

Grandma

Lauren Bacall died.  She was famous in movies with husband Humphrey Bogart and for saying: "Put your lips together and blow."  When Bogie died from the throat cancer, she married actor Jason Robards, a shmendrick and shikker who drank himself to death.

Her I saw in the show "Applause" before it hit Broadway.  Sid and I went to Boston to visit his cousin Bernie, who owned a dry cleaner that was burned to the ground by the Chinese Mafia -- the Yahtzees, or whatever they were calling themselves, but nobody could prove a thing.  The show, based on the movie, "All About Eve," was having its previews.

Lauren Bacall was playing the Bette Davis part and a pisherkeh was playing Eve.  This new kid was a regular little mazik: singing, dancing and "Yett-tet-tet, yett-tet-tetting," like a Proctor Silex percolator -- even more annoying than Betsy Drake, who was married to Cary Grant until she fed him LSD and he divorced her.  So perky was the gal playing Eve that Sid said at intermission he wanted to go home, write "Goodbye, Cruel World" with refrigerator magnets and stick his head in the oven.  Of course, he was joking because we were staying at Bernie and Elaine's and I didn't see any magnets.  Maybe they hid them.

Anyway, this new girl stole the show.  So good she was that Bacall had them give her the kibosh before the show went to Broadway.   It didn't matter though, because later she made it big as the star of her own TV show called "One Damn Thing After Another," or something like that ("One Day at a Time".)  And that girl was Bonnie Franklin.

A couple years ago, she helped me in the ladies room when I couldn't figure out how to work the farchadat toilet.  She was a real mensh, but cross-eyed.  I should have told her then how much I enjoyed her in "Applause," despite her disability and all, but I didn't think of it, and now she's dead too.

I've said enough already.

Bikes in Central Park

Above is a view of the Conservatory Garden, a six-acre formal garden that is part of New York's Central Park.

Central Park is enormous, 843 acres, and a huge asset to a city composed mostly of buildings and streets.  It fosters many species of migratory birds as seasons change.  It has 21 playgrounds, two ice skating rinks, many sports fields, an enormous reservoir, a lake, a zoo and miles of paths for walking, running and bicycling.

September, one of the most pleasant weather months in New York, is high season for park usage.  Its paths are thronged with walkers, runners, bicyclists, skateboarders, inline skaters and baby strollers.

Lately, the bicycles have drawn a great deal of attention.

Two Pedestrians Killed

About 10 days ago, a racing cyclist, said to be traveling at very high speeds, hit a woman at 4:30 p.m. as she stepped off a curb.  Brain dead, she was rushed to a hospital, where she died a few days later.

Much was made of the cyclist's bicycle, said to be a brakeless, high-performance model valued at $4,000, and of his weaving among the bicycle path, the pedestrian walkway and the street so as not to have to stop or slow down to cede the right of way.  The cyclist, who did not leave the scene, admitted he had been traveling in the wrong lane.

This is the sort of story that is loved by the New York Post, an engaging tabloid in the city.  A Post reporter found a pedestrian witness who said, "He was yelling for her to get out of the way, but I don't think she heard him."

Later the the Post found a man who claimed the same bicycler nearly hit him in June.  "He kept yelling really loud, 'Get out of the way!" . . . I had to jump backwards.  He missed me by like two inches.  You could see the arrogance on this guy."

In the June incident, the Post's witness estimated the bicycler was traveling 35 miles an hour.  After the accident two weeks ago, the bicycler said he was moving at eight or nine miles an hour.  Later he released a statement calling the collision an "unavoidable accident" and expressing sorrow for the family's loss.

In August, there had been another bicycle-pedestrian collision.  A 17-year-old on a bike swerved onto a pedestrian path to avoid a pedicab.  He hit a 75-year-old jogger, a high school physics teacher who was training for the New York Marathon later this year.  After a couple days in the hospital, the jogger died.

Bikes in the Park

The Central Park Conservancy, which co-manages the park with the city and provides much of its maintenance funding, keeps track of park usage and historical information on park visits over the years.  In 1972, it reported there were 12.8 million park visits.  In recent years, the total has been more than 35 million visits.

In 1982, observers began to note increasing numbers of park visits for "active recreation" like running and bicycling.  The park's bicycle path, 6.2 miles long, is now used by bicyclers training for long-distance races.  They claim there is nowhere else in the city to do such training.

The more people who use the park, I suppose, the more likely it becomes that people will run into each other.

Perhaps unfortunately, traffic laws are regarded as optional in New York.  There are reports of bicyclers running red lights all over town, just as pedestrians commonly ignore WAIT signals when cross traffic is clear.  Earlier this year, a girl crossing a Manhattan street with her father with the WALK signal was killed by a taxi driver making a turn.

One result of the most recent bicycle collision death has been deployment of police to the park to write flurries of tickets (expensive ones, $270 or more) for bicyclists who run red lights.

This has happened before, including in 2011, when police took up positions in the park and wrote tickets for bikes running red lights or at high speeds captured by radar guns.  At least one cyclist responded on his blog with the kind of in-your-face pushback that we all have come to love in New Yorkers.

"Why has the NYPD suddenly decided that the Central Park (bicycle) loop's 20-some traffic lights must be obeyed -- by cyclists only -- when there are no cars in the park?  They were not ticketing jaywalkers or, so far as I know, skateboarders or wheelchair operators."

He added, "If you have to stop at every red light, you really can't ride in the park."

To be fair, the bicyclist conceded that "The problem is when people try to train when they shouldn't, like at one in the afternoon on a Saturday in May."

Or at 4:30 in the afternoon on a mild day in September.

Busy Day

A task this morning took well longer than it should have, and I had no time left to think up something to write.  (Every time I hear someone say that writing is difficult, I think to myself, this is a person who doesn't do many home maintenance projects.)

In lieu of a thoughtful post, I pass along a piece of an old George Carlin performance.  I like the way he makes people laugh at words and phrases that make no sense.

Lately I have been hearing and seeing a lot of one silly phrase.  It is "lag behind," as in "The economy is lagging behind expectations."

Is there any other way to lag?  You certainly can't "lag forward."  But the second word, "behind," seems to have attached itself permanently to "lag," which would stand just as well on its own.

Go figure.

Inequality Around the World

We talk about income and wealth inequality in the United States, but compared with some of the world's totalitarian countries, the U.S. is a bastion of equality and opportunity.

Last year, it was reported that just 110 Russians owned 35 percent of the country's total net worth.  Meanwhile, 93.7 percent of Russian citizens had less than $10,000 to their names.  (The figures came from a Credit Suisse report on global wealth distribution.)

But, increasingly, wealthy oligarchs find themselves attracted to investments and lives in places other than those where they acquired their fortunes.

In 2011, New York's tabloids had a lot of fun reporting that that a Russian oligarch had paid the highest price ever -- $88 million -- for a Manhattan apartment for his daughter, a college student in the city.  She had been born in Russia but raised in Switzerland, France, Monaco and the United States.

And why not?  The guy was worth $9 billion.  If you had that kind of money, would you want to raise your kid in Russia?

If you were a Chinese princeling, would you want to live in the foul air of Beijing?

Me neither.

 Roger Cohen explained how this works in an op-ed piece in the Aug. 16 edition of the New York Times.

     "Having made it big in autocratic countries with parlous legal systems (if that), a cowed press
       and rampant corruption -- say Russia and China -- oligarchs and crony capitalists wake up one            day and find that, gosh, they like nothing as much as democratic systems under the rule of law            held accountable by an independent press.  Having trashed the West, they trust the West with
       their money.

      "This then is the way the world works:  Autocratic hypercapitalism without Western checks
        and balances produces new elites whose dream is an American or British lifestyle and
        education for their children, and whose other goal, knowing how their own capricious
        systems really function, is to buy into the rule of law, acquiring real estate, driving up
        prices in prime markets to the point where the middle classes of those countries, with
        incomes often stagnant or falling, are pushed aside."

You really should go to the Times website and read the whole thing.

My only quibble is that what Cohen calls "hypercapitalism" is just plain old crony capitalism -- those on good terms with Putin in Russia and with connections to high Communist Party leaders in China get to "earn" huge fortunes.   Everyday schmucks don't have much of a chance, Jack Ma excepted.

Obviously, it's not just the Russians and Chinese.  Third-world kleptocrats for generations have skimmed proceeds from natural resource extraction and aid money intended to help their impoverished populations and parked it in safer, democratic countries.

The Real Estate Effect

One follow-on effect in world-prominent cities -- New York, London, Hong Kong -- is that very rich people from elsewhere have been buying pieds a terre and in the process bidding up property values to such an extent that normal people, even conventionally prosperous ones, cannot afford to live in the cities where they work.

On Manhattan's Upper West Side, 45 apartments sold for more than $10 million in the second quarter, up from 25 such sales in the second quarter of 2013.  Two new towers overlooking Central Park from 57th Street are commanding condominium prices of $90 million or more.

This phenomenon has been under way for at least the last 20 years in London, another international city, with billionaires and even humble multimillionaires snapping up desirable properties.  A building called One Hyde Park, which opened opened in 2007, recorded 76 units sold at prices ranging up to $214 million by 2013.  According to a Vanity Fair article, many of the buyers made their purchases in the names of corporations based in offshore tax havens.  Most evenings, the building's huge windows are dark, suggesting that the owners spend most of their time elsewhere.

Even if they aren't ready to move permanently, it appears the new class of very wealthy people want to park some of their money in real estate that cannot be seized by capricious governments and where they can live if things get really bad in their home countries.

Earlier this year, Bloomberg quoted a retired London planning officer who spoke of the situation more generally.  "They're buying those apartments, furnishing them, locking the door and leaving them empty," he said. "Large parts of London are becoming ghost towns and a lot of young people who come to work here can't find anywhere to live."

Chihuahuas: Out of Fashion

As fashions in animals go, Chihuahuas had a pretty good run.  But now, at least six years after their popularity crested, there seem to be many more of the dogs available for adoption than people who want a Chihuahua for a house pet.

Chihuahuas, the smallest of dogs, trace their heritage to the Mexican state for which they are named.  They are said to be very loyal and surprisingly fierce given their size, typically about five pounds.  Some of them yap and are irritating.  On the plus side, they are good at ridding infested areas of rats.

Their recent popularity may have started in late 1997, when a Chihuahua was the spokesdog for a Mexican food chain -- "You quiero Taco Bell" -- in an advertising campaign that cost $500 million and continued until the middle of 2000.  The company stopped the advertisements and fired its ad agency abruptly after an unprecedented six percent quarterly drop in same-store sales.

Then there were the movies:  A Chihuahua named Bruiser starred with Reese Witherspoon in "Legally Blonde" in 2001 and its 2003 sequel. "Beverly Hills Chihuahua" made a profit in 2008 and was followed by two sequels that went straight to video.

Many celebrities were photographed with Chihuahuas during this period:  Paris Hilton, Jennifer Love Hewitt, Hillary Duff, Anne Heche, Sharon Osborne, Britney Spears, Madonna, Rosie O'Donnell and  Mickey Rourke, along with lesser luminaries.

Then the trend was over.

Between 2008 and 2009, shelters in Los Angeles County took in 4,741 Chihuahuas, 25 percent more than the previous year.  By the end of 2009, animal shelters in Oakland were getting 10 Chihuahuas daily, and Chihuahuas made up 30 percent of the dog population at animal shelters statewide.

The overpopulation of Chihuahuas seemed most acute in the American Southwest, and airlifts of the dogs were undertaken to other areas -- Idaho, New York, Pennsylvania and Canada among them.

But soon even New York City began to report it had more than enough of the small dogs.  Shortly after 2010, Chihuahuas had replaced pit bulls as the dogs most often left with the city's animal control agency.   Between 2010 and 2012, the Chihuahua intake was 2,276; only 1,549 were adopted. The others presumably were euthanized.

In 2013, the two largest Phoenix shelters took in 10,535 Chihuahuas and euthanized 2,100 of them. In 2012, one of the two shelters euthanized 2,476 of the dogs.

 Last year, the Phoenix neighborhood of Maryvale logged 6,000 complaints about Chihuahuas, many feral and said to be roaming in packs, sometimes with larger dogs.  They were chasing children in the streets as they walked to school.

According to Zillow, the Maryvale population is low-income with many foreign-speaking residents.  By May, officials were considering placing ads on Spanish-language radio stations to urge dog owners to have their pets neutered and spayed as part of responsible pet ownership.  It couldn't hurt.

What seems to have happened, in the years when Chihuahuas were popular, was overbreeding to satisfy the new demand for diminutive pets that could be carried in handbags.  Now demand has dropped, and overpopulation is leading to increases in euthanization.

In 2012, the NBC affiliate in Seattle quoted a local Humane Society official saying this:  "At one time it was Dalmatians, at another it was Rottweilers.  There are trends in animal ownership.  And we definitely see it at the shelter."

Fashion is fun and applies to many aspects of life, but it's a little creepy when animals become fashion accessories for a limited period and then are abandoned and killed after their popularity fades.

Hard Luck Young People III

Yesterday I spoke of youth unemployment rates at 50 per cent or more through much of Europe.

This is bad, but apparently in the MENA (Middle East/North Africa) region, the situation is even worse.  Many young people from this area are getting onto boats to cross the Mediterranean Sea because they think their prospects are better in Europe.

An English newspaper, The Guardian, reported last week that a ship carrying 500 people from Egypt and bound for Malta was "apparently rammed and deliberately sunk by people traffickers."

On July 15, the UN High Commission on Refugees reported that 29 people apparently had died from asphyxiation in the hold of a fishing boat.  Italian authorities arrested five men on suspicion of murdering and throwing overboard more than 100 migrants on the same boat;  all the dead were attempting to cross from Africa to Europe.

A day earlier, Italian authorities rescued 12 people from a dinghy off the coast of Libya.  It originally had gone to sea with 121 aboard; when the boat began to deflate and then capsized, there was panic and the other 109 passengers drowned.

By July of this year, news reports said, 2,900 people had died attempting to cross the Mediterranean in 2014.  "Only" 700 died -- drowned -- in all of 2013.

Obviously, only desperate people will undertake such risky escapes from their homelands.

Why They Leave

There are many reasons why the MENA region is not an ideal place to launch an adult life.

     -- War has uprooted many families.  Between 2012 and 2013, the war in Syria alone displaced more than 6 million people.  At that point, 40 percent of the population (half of them children) had either left the country or moved from their homes to other, presumably safer, parts of the country.  This year's incursion by ISIS militants no doubt has increased the dislocation in Syria as well as much of Iraq.
        By May of this year, Libya was engulfed in a civil war involving various militias.  Islamists had taken over Tripoli and Benghazi, the Tripoli airport had been demolished and as many as 1 million refugees had left the country for Tunisia.

     -- Most refugees from various Middle East countries end up in developing countries.  Here is the breakdown at the end of last year.
                              Pakistan -- 1,616,500 refugees
                               Iran -- 857,400 refugees
                               Lebanon -- 856,500 refugees
                               Jordan -- 641,900 refugees
                              Turkey -- 609,500 refugees
          It's not easy to get a good education or to launch a career from a refugee camp.  Families in these camps are said to be marrying off their underage daughters to protect them from predators.

     --- There are not enough jobs.  The Brookings Institution reported in 2012 that youth labor force participation was low in North African countries: 28 percent in Algeria, 34 percent in Egypt, 33 percent in Tunisia and 35 percent in Morocco.
           Another report found that youth unemployment perversely had increased after the Arab spring, with Egyptian unemployment among young adults increasing from 26.3 percent to 38 percent.  In Tunisia, the results had been worse, with unemployment increasing from 29.4 percent to 42.4 percent.
            It is likely that seeming disparities in these numbers reflect whether surveys count or do not count workers in the underground economy.
          In Lebanon, the National Council for Economic Research held an interesting conference last year.  Participants noted that youth unemployment in the country was 35 percent and that inadequate infrastructure like affordable electricity frustrated efforts for economic growth and was contributing to a "brain drain" of the country's best educated young people.  One expert told the group that Lebanon imported $19 billion in products, presumably in 2012, but exported only $4 billion in products.
           Jordan also has reported a mismatch between the skills of young workers and the jobs in that country.
            In all MENA countries, young women were much more likely to be unemployed than young men.

     -- Politics intervenes.  The Egyptian spring several years ago ousted a strong-man ruler who was replaced in an election by a hard-line government more interested in Islamic initiatives than economic improvement.  When it became clear that the new government was writing the new Egyptian constitution to suit religious hard-liners' preferences and had greatly increased shipments of concrete and weapons to Hamas in Gaza, a military coup in Egypt replaced the government with another strong man.
         In Gaza, where sentiment against Israel is no doubt keen, it is impossible to guess how the Palestinian population regards its elected Hamas government, which diverted financial resources away from schools and economic development and into tunnels into Israel to kill and kidnap Israelis. Hamas, seeking public-relations points for dead civilians,  encouraged Gazans not to flee when Israel warned in advance of missile strikes against weapons placed in civilian neighborhoods, hospitals and schools.  Hamas also killed, without trial, young Gazan men suspected of cooperating with the Israelis.  Under the circumstances -- with much of Gaza destroyed by Israeli attacks and Hamas prepared to kill any who disagreed --  economic development that might lead to jobs appears to be, at best, a secondary goal.  Disagreeing with Hamas looks dangerous, and prospects for jobs and a functional economic system look bleak.

      -- There are many people.  Reports vary, but the general theme is that MENA countries experienced major population growth in the last century.   In one report I found, the population was said to have increased from 68 million in 1914 to 340 million in 1994.  In another,  the population was said to have grown from 127 million in 1970 to 305 million in 2005.
          Population growth has slowed across the region in recent years, but there is still a bulging cohort of young adults with not much to do.

Conclusion
       
 I don't know how to reconcile the numbers I have given here, although all were pulled from reputable sources.  My guess is that keeping careful statistics is not a top priority for countries afflicted with poverty, chaos, political instability and outright war.

The World Bank reported a 0.1 percent contraction in MENA economies in 2013 and predicted economic growth this year, but with this ominous caveat:

           "This modest upturn, however, remains fragile and well below the region's potential
           as structural reforms  needed to spur growth, lower unemployment and alleviate poverty
           remain unaddressed."

 This may be why frustrated young people take up arms in a search for meaning -- any meaning -- in their difficult lives.

Hard Luck Young People II

Here is an interesting graphic put out in July 2013 by a group called One Society Democracy Europe.

Its basic points are pretty distressing.  Youth unemployment was over 40 percent in Spain and Greece, and between 30 and 40 percent in most other countries.

Overall, young adult unemployment increased from 15.7 percent in 2007 to 23.5 percent in 2013.  Almost half the young adults who had jobs were working part-time or on temporary contracts.

Early in 2013, European Leaders committed 6 billion euros (more than $7.7 billion at current rates) for a Youth Employment Initiative.  It seems to have had a slowish rollout.

2014 -- Even Worse

By the middle of this year, youth unemployment rates were as follows:

Greece  58.3%

Spain 55.5%

Croatia 49.7%

Italy 46.0%, and over 60% in the south of the country

Cyprus 38.9%

Portugal 37.7%

Slovakia 33.7 %

Youth unemployment in Ireland declined, from 26.6% in July 2013 to 23.2% in July 2014.  The trend line is good, but it must be hard for young people to celebrate a 23.2% unemployment even so.

The only countries with unemployment rates under 10 percent for young adults were Germany (7.9%) and Austria (9.2%.)


Social Consequences

Unemployment at these levels obviously affects young people's decisions.  Unable to move out of their parents' homes, they delay marriage and family formation.

Suicides rates are up, and birth rates are down.  Students with college, and even advanced degrees, find there is no work for them.  Some emigrate to other countries, and it is likely that more would be willing to do so.  But there are few countries in need of young workers.

Greece has been working to reduce public employment, a part cause of its unpayable national debt, but the effect is fewer opportunities for any workers, especially young adults.  Italy, where the rise in youth unemployment has been particularly sharp this year, is considering policies like quantitative easing in the United States.

All of Europe is concerned and eager to make new jobs for young people.

Unfortunately, no secret sauce has been found that will solve the problem.

On the Up Side

Things could be worse.  These hard luck young people could be living in North Africa.

More on that tomorrow.

Hard Luck Young People

This is not an easy time to be a young adult in the United States.  While the Great Recession ended in mid 2009, the economy has not grown fast enough since then to generate jobs, particularly good jobs, for all the people who want to work. 

A Marist Poll in summer 2011 found a troubling reversal of traditional American optimism about future generations' prospects.  Sixty-one percent of adults said they believed the generations to come would be worse off financially; a scant 16 percent believed things would be better.

In February of this year, a McClatchey-Marist Poll found continued pessimism.  Seventy-eight percent of respondents said it was going to be more difficult to get ahead in the future.  Sixty-eight percent said people who worked hard today were having a difficult time maintaining their standard of living.

Recently, the Economic Policy Institute, the Bureau of Labor Statistics, the U.S. Department of Education and the Federal Reserve Bank of New York have released statistics that quantify the situation of young adults. 

Here it is, by the numbers: 

Employment

     -- In May, the unemployment rate for workers under 25 was 14.5 percent.  If the million "missing" workers (not working, not in school) were added to the figure, the unemployment rate would be 18.1 percent.  In 2007, before the Great Recession, the rate was 10.5 percent. 

     -- Among young college graduates, 18.5 percent were unemployed, and of those with jobs, 16.8 percent were underemployed, or working at jobs that did not require a college degree.

     -- The situation was worse for high school graduates; 22.9 percent of them were unemployed, and 41.5 percent of those with jobs were considered underemployed.

     -- The percentage of high school graduates who were not enrolled in postsecondary school or working in jobs was 17.7 percent this spring, up from 13.7 percent in 2007.

     -- Between 2000 and 2014, real hourly wages dropped 10 percent for young workers with high school diplomas.  For those with college degrees, the drop in real wages was 7.7 percent.

School Costs

     -- State appropriations for public colleges and universities dropped 27.7 percent between 2008 and 2013.  Public universities enroll approximately 70 percent of all post-secondary students.

     -- Between 2004 and 2012, the number of students borrowing money for college increased by 70 percent.  The average debt per student also increased by 70 percent.

     -- The amount of money owed for college loans increased from $250 billion in 2003 to more than $1 trillion in 2013.

     -- More than 30 percent of federal education loans at that time were delinquent, i.e., more than 30 days behind in payments.  More than one in eight loans were in default, or nine months behind.  More than 20 percent were a year or more behind.

The Up Side

While young Americans have good reasons to worry about their futures, things could be much worse. -- they could live in the south of Europe.

More about that tomorrow.

Sovaldi and the Cost of Pharmaceuticals

Since its approval last year by the Food and Drug Administration (FDA), Sovaldi has become a game changer in the treatment of hepatitis C, a nasty virus that over time destroys the liver.

Hepatitis C arose around 1989, and there are an estimated160 million people worldwide who are afflicted.  The virus is spread by blood-to-blood contact.  Most people get hepatitis C by sharing tainted intravenous needles, engaging in risky sex acts or having tattoos done by workers who use unsterilized needles, sometimes in prisons.  Others contracted the disease from blood transfusions before 1992, as did a few health-care workers from needle pricks.

Before Sovaldi, the best available treatment was a six-month combination of retroviral medicines, which cured the disease in only 50 to 60 percent of cases.  There were serious side effects, including persistent flu-like symptoms and, for one-third of patients, significant mood alterations.

Sovaldi cures hepatitis C, permanently, in more than 90 percent of cases, usually in 12 weeks and without side effects. 

Sovaldi also is very expensive, $1,000 per daily pill and $84,000 for a full course of treatment.  

People are furious about this.  There are Congressional hearings.  There are condemnations of corporate greed.  There are reasonable claims that Sovaldi alone could increase overall health spending, especially for those on Medicaid or in prison, who are more likely to have hep-C than the general public.  

And yet there are several reasons why the pricing is what it is.

First is that developing and getting FDA approval for Sovaldi cost billions of dollars.  As it was being developed, other billions were spent on promising research that did not prove out. The few successful drugs have to be priced to pay for the many others that are not successful.  

(I know, I know, drug companies spend lots of money on advertising. So far I haven't seen any TV commercials for Sovaldi, and my guess is that pharmaceutical advertising is done only when it increases drug sales by more than the advertising costs.)

Second is that the number of people needing treatment is small.  An estimated 3.2 million Americans are believed to have hepatitis C, but most are unaware of this because they are still asymptomatic.   If the research costs could be spread over a current patient base that was 10 times as large, the individual cost for treatment would be much lower.

Third is that this price will hold only for a short period.  At least two other pharmaceutical firms are said to be close to releasing Sovaldi-like treatments for hep-C, which will introduce price competition and lower the cost.  

Fourth is that while Sovaldi is expensive, it saves more money than it costs over the long term.  People get sicker over time with hepatitis C and require progressively more health care.  The disease leads to cirrhosis, liver failure and liver cancer.  Hep-C patients receive most of the liver transplants in the country today.  Each transplant costs more $500,000, and most transplanted livers, 80 to 90 percent by some estimates, ultimately fail again.  

A Fair Complaint

Gilead Sciences, the company that manufactures Sovaldi, says it has adopted an "ability to pay" model.  In countries like India and Egypt, where hepatitis C is more common, the cost is only one percent of the U.S. price.  Personally I'm fine with this.  Those countries are poor.

What does bug me is that Gilead does not charge other First World countries the same price it charges here.  Here are some examples:

                        Country                      12-Week Sovaldi Cost

                         United States                   $84,000

                         Canada                            $50,050 US ($55,000 Canadian dollars)

                         France                             $57,000 

                         Germany                          $64,000

                         Britain                              $59,000

This disparity does not apply only to Sovaldi.  For many years, other wealthy countries have demanded discounts for patented drugs, and drug manufacturers have acceded to them.  

My impression is that these countries say, nah, we're not going to pay that much, and then the drug companies shrug, take the offered price and shift costs to the United States market.  

As far as I know, no pharmaceutical company, anywhere, has refused to accept a European price for any drug.  It would be interesting to see one try.

In fact, Sovaldi has given substantial discounts to the Veteran Administration and Pennsylvania's Medicaid agency, and other price cuts are likely to follow.  

What to Do

Meanwhile, I think a few things can be done to mitigate cost impacts like that of Solvadi.

  

First, insurers can approve Sovaldi only for hep-C patients with advanced liver disease and let the early-stage patients wait until new medicines and competition push the market price down.  This may sound harsh, but it also would spread the cost of treating people over a longer period and diminish the near-term shocks to our healthcare budgets.  Several states now have adopted such protocols.

Second, U.S. healthcare programs like Medicare and Medicaid could refuse to pay more than the European price for any new drugs.  (If this required enabling legislation, why not try it?)  This might stiffen the spines of drug manufacturers, who need to demand that other First World countries pay their fair share for a change. 

Third, the FDA could extend further the fast-track policies that were adopted during the AIDS epidemic. 

The Significance

We seem to have lost track in all the debate of the importance of a drug like Sovaldi.

Many hep-C patients dreaded the previous treatments -- their side effects, the many shots -- so much that they avoided any treatment at all.  Now a couple pills taken each day, and they are rid of a miserable, often deadly disease within three months.

In arguing for the Sovaldi price, the head of Gilead Sciences suggested that the apt comparison was the relative price per cure.  Before Sovaldi, when it typically took two rounds of treatments, each a miserable six months long, to get the same result, he estimated the medical cost was $150,000 to $200,000.  

This may be a self-serving view on his part, but our current medical system is larded with rent-seekers -- million-dollar oncologists, cost-shifting hospitals, artificial drug prices, rampant Medicare and Medicaid fraud and a Veterans Administration bureaucracy that seems to put veterans' needs last.  It goes on and on.

I don't know what to do about all this, but I am glad at least that there is finally a cure for hepatitis C.

Scottish Independence?

The people of Scotland, now a part of the United Kingdom, will decide in two days whether to divorce themselves from England.  Scots have a long history of resentment and justifiable anger toward the English, and Scots also have long memories.

Lately the "Yes" sentiment, favoring separation, has pulled ahead in the polls.  The Scots are said to favor Labor governments more than Conservative ones and to yearn for a Scandinavian-style democracy.

As is the case in most developed countries, Scotland's industrial economy has all but disappeared.  Its biggest economic claim is North Sea oil, which has made Aberdeen, in the northeast of Scotland, very rich over the last 30 years.  It is widely believed, though, that most of the oil has been pulled up and that future revenues will be much lower.

On the other hand, a petroleum geologist (and Yes supporter) at the University of Aberdeen claims that other, yet-unexplored drilling opportunities and more efficient technology applied to current fields will keep the oil money flowing at least until 2050.

Other than oil, Scotland's economy seems to depend on salmon, scotch whiskey and tourism.  And, given the Scottish climate, that last is always an iffy proposition.

Grandfather

Much of what I know about Scots I learned from my grandfather, who immigrated to the United States as a wee lad with his parents.

Grandfather had the engineering gene that seems to run in the water in Scotland.  He also was proud, stubborn as a coot and very careful with his money.

He worked as a welder, then as a welding inspector and then as a supervisor of welding inspectors.  He and his fellows were able to organize a welding union in San Francisco in the teeth of the Depression because they were that good at what they did.

Many years later, he drove me around the Bay Area and pointed out major construction projects where he had worked -- the Golden Gate Bridge, the Bay Bridge, the Bank of America headquarters and others.

When we passed the BofA building, he pointed out a big, geometric, shiny black sculpture near the entrance.  "We call that the banker's heart," he said.

As to negotiating for his union, he told me, "I never cared about entry-level pay.  I only worked for top scale."

Another point he made, about union decision-making, was this:  "If you want people to vote the way you expect them to vote, you call for a show of hands.  But if you want to know what they really think, you have a secret ballot."

Daniel Kahneman

I don't believe Prof. Kahneman is Scottish, but he wrote a pretty great book, Thinking, Fast and Slow,  published in 2011, that reprised the lessons he had gained from a career in behavioral economics.  If you haven't read it yet, I recommend it.

One of Kahneman's major points was risk aversion.  In experiment after experiment, he found that people were cautious.  When making bets, they placed much more value on not losing something small than on a chance to win something big.

Scotland Votes

The English have been appealing to the Scots to vote against separation.  They rely on arguments that boil down to, oh, please stay, we really really like being part of the same country with Scotland.

But the real arguments are probably economic.  What will Scotland use for currency if it strikes out on its own?  What will happen if Scotland's banks relocate to London?   Will enough taxes be collected to cover Scotland's currently generous level of public employment?  And what will happen if no more offshore oilfields prove out?

It may be that the Scots will vote to separate.  I haven't been in Scotland lately, and I am not in touch with people there.  And, as I have mentioned, they are a stubborn bunch and have mixed views toward the English even in the best of times.

But if I were a betting person -- and, given my grandfather, I certainly am not -- I would bet that the Scots will vote No and stay in the UK.  That they will be more worried about bad economic consequences than trusting in forecasts of oil revenues to come.

Plus this:  The vote will not be conducted by a show of hands, but by a secret ballet.

How Much Do Americans Read?

The Pew Research Center released survey results in January of this year about Americans and how many books they are reading.  The numbers were rather encouraging.

Here, for example, is the breakdown of the number of books read by men and women in 2013:
                       
                                                           Mean                       Median

Total for all adults over 18                    12                                 5
Men                                                       10                                 4
Women                                                  14                                 6                  

Older adults read more than younger adults.  People with more years of schooling read more than those with fewer.  People with higher incomes read more than people with lower incomes.  No surprises in any of that.

Pew generated this information by conducting phone surveys -- landline and cell -- of Americans.

Here is my problem.  I don't think the numbers add up.

I think when the phone survey people called Americans and asked how many books they had read, a lot of people thought to themselves, "Gee, I'll sound foolish if I say how little reading I do, so I'll just estimate on the high side."

Yes, I'm a cynic.  But I found another study of American reading from 2002, and its results seem to back up what I'm saying.


Reading at Risk

This 2002 study by the National Endowment for the Arts compared reading trends for the previous 20 years.  Here are some of the results.


                                                                        1982                                             2002

Read any book in that year                             60.9%                                           56.2%

Read a literary book that year                         54.9%                                           46.6%

The NEA found a 10 percent decline in literary reading (novels, poems, plays), a drop of 20 million readers over the 20-year period.  Among young adults aged 18 to 24, the drop was 28 percent. For adults aged 25-34, the drop was 23 percent.

If only 56 percent of adults read even one book in 2002, I don't see how you come up with a median (half read more, half fewer) reading rate of five books per person 11 years later as book-reading was continuing its decline.

Please note that I'm not saying people are reading nothing  -- just a few weeks ago I noted that BuzzFeed attracts 150 million page views per month -- but that book reading is on the decline.

Another finding from the 2002 survey suggested a correlation between literary reading and civic participation, as well as involvement in other arts, in that year.

                                                                        Literary Readers             Non-literary Readers

Volunteer/charity Work                                      43.0%                                   17.0%

Visit Art Museums                                             44.0%                                   12.0%

Attend Performing Art Events                            49.0%                                   17.0%

Attend Sporting Events                                       46.0%                                   27.0%


Conclusion:

It is not for me to say what people should do, and I know for a fact that a great many books being published these days are just plain dreadful.  But the practice of reading and thinking about what you have read is helpful when you go to vote or when you are deciding which car to buy or which bank account works for you.  Careful thinking is a skill like any other, improved with practice.  For me, that has involved reading.  Maybe there are other ways to get there; I hope people are finding them.

Collusion in the eBook World

Now $6.99 at iBooks

You probably received word recently that you may be eligible for part of a big settlement Apple has agreed to pay for colluding with book publishers to increase the price of digital books.

Don't get too excited.  If the ruling stands, you may get a buck or two.  The total payout is $450 million, but the aggrieved class is very large and the lawyers' cut is $50 million.

Still, it's an interesting case.

The background is that Amazon was selling just-released books for $9.99 on its Kindle platform.  Publishers believed that ebooks should cost more, especially the newest ones, and feared that Amazon would gut the profitability of their business with its single, lower, flat-rate price.

Leaders of four of the five biggest publishing houses (Random House, the largest, was the exception) met several times to work out a plan to force higher prices.  They found a sympathetic ear in Steve Jobs at Apple.

After more meetings, Apple and publishers agreed to establish an "agency model" that guaranteed guaranteed Apple 30 percent of the price of any book sold on iTunes.  In return, Apple would let publishers set book prices.  The publishers wanted ebooks to cost $12.99 or $14.99.

Steve Jobs, then the head of Apple, apparently was in the middle of the whole business.  The court complaint cited this email that he sent to a publisher:

     "As I see it, [conspiring publisher] has the following choices:
     1.  Throw in with Apple and see if we can all make a go of this to create a real
     mainstream ebooks market at $12.99 and $14.99.
     2.  Keep going with Amazon at $9.99.  You will make a bit more money in the
     short term, but in the medium term Amazon will tell you they will be paying
     70% of $9.99.  They have shareholders too.
     3. Hold back your books from Amazon.  Without a way for customers to buy
     your ebooks, they will steal them.  This will be the start of piracy and once
     started, there will be no stopping it.  Trust me, I've seen this happen with my
     own eyes.
     Maybe I'm missing something, but I don't see any other alternatives.  Do you?"

The court filing also referenced Walter Isaacson's biography, Steve Jobs, with Jobs saying this:

     "So we told the publishers, 'We'll go to the agency model, where you set the price,
     and we get our 30 % and yes, the customer pays a little more, but that's what you
     want anyway.'"

The publishers began to pressure other publishers and Barnes & Noble to adopt the agency model.  There was a lot of back-and-forth, and ultimately the whole business was exposed in a lawsuit.

Now Apple is paying damages instead of trying to defend anti-competitive practices in a courtroom and risking a much more expensive result.  Apple and publishers have agreed that ebook prices will be set by retailers, not publishers.  The agency model is dead.

Or is it? Ebook prices are now higher pretty much across the board.  I just looked up the prices for digital copies of Henry Kissinger's new book.  Here is what I found:

Amazon:  $18.99

Barnes & Noble:  $18.99

iTunes:  $19.99

The hardcover version of the above book -- which had to be typeset, printed, bound and shipped to warehouses and bookstores -- only fetches about three dollars more, $21.60 on Amazon and $22.03 at Barnes & Noble.