I've been fascinated with the productivity reports ever since I was employed at Wal-Mart Stores and had the opportunity to attend a lunch with Warren Buffett. This may be anecdotal, but based on the scale, I think it's telling.

The company I work for now partners with several large hardware manufacturers to deliver IT rollouts for Wal-Mart. One of the current projects is a multi-million dollar installation of a wireless network into every store in the US for the sole purpose of making the checkout areas more efficient. If you've ever been in line and had to wait for someone to deliver change to the register, you know how much time it can take. When this project is complete, every checkout supervisor will have a PDA that will communicate directly with the register. When a cashier starts to run low on change, has to go to the bathroom or has virtually any other problem, there will be a specific code they enter that will page the PDA and tell the supervisor exactly what they need. No longer will the supervisor have to walk to the register, find out the problem and make another trip to resolve it. This may only save a few minutes at a time, but when you're talking about 100 million customers per week the productivity gains could be enormous.

As a bonus, this new system will also track each cashier, ensuring that breaks and lunches are taken at the appropriate times, going so far as to shut down a specific register if that person hasn't signed out. This could potentially help to shield the company from future labor lawsuits.

This is just one example from one company for whom I am working on multiple projects. I agree with you, though. I'm unlikely to read about this in the Post.

Keep those stories, positive and negative, coming. Thanks.

SACRAMENTO - A bill that would make homebuilders install solar energy systems on 15 percent of new homes built in California starting in 2006 narrowly passed a key committee in the Assembly on Wednesday.

With a 5-4 party-line vote that saw Democrats in support and Republicans in opposition, the Assembly Housing and Community Development Committee approved the bill that could quickly put California on par with Japan and Germany, home to thousands of new solar home systems. The bill requires that 55 percent of homes have the units by 2010.

But if it passes the full Assembly, the bill could put Gov. Arnold Schwarzenegger in a jam between two interest groups -- environmentalists and the state's large building industry -- that have claimed his allegiance. During last year's recall election, Schwarzenegger campaigned for incentives that would install solar systems on half of new homes starting in 2005.

Spokeswoman Ashley Snee said Wednesday that Schwarzenegger has no position on the bill but that he remains committed to "opportunities for solar technologies."

Opponents of the bill said the solar systems will add $20,000 to home costs and price thousands more Californians out of the housing market, which is among the nation's most expensive.

Solar systems are undoubtedly cool, but so are skylights and heated bathroom floors. That's no reason to make them mandatory. The solar-industry lobby makes arguments that would be recognized as greedy and self-serving coming from any other industry:

"Creating a minimum standard for builders is the most cost-effective way of increasing the number of solar powered homes," said Bernadette Del Chiaro, Clean Energy Advocate for Environment California. "This bill would not only reduce thousands of pounds of air pollution each year, it would also save Californian's money by preventing the need to build more natural gas power plants."

According to the California Building Industry Association, approximately 135,000 single-family homes will be built in 2006. Should California require a minimum of 15 percent of these homes be built with 2 kW solar PV systems, as called for in this bill, California's solar market would increase by approximately 40 MW, equivalent to the size of a peaking power plant.

In other words: GIVE US MORE BUSINESS.

I'm about 85 pages into William W. Lewis's excellent book, The Power of Productivity. Lewis, the founding director of the McKinsey Global Institute, draws on McKinsey & Co.'s detailed international reports on productivity in specific industries. Here's a passage that's on point:

In the 1990s, as we were finishing our productivity work on manufacturing and services, the most serious economic issue in Europe was not productivity but high and rising unemployment. Every time Europe had a business downturn, unemployment rose. Every time there was a business upturn, unemployment stayed constant. The net result was that unemployment rates in Europe were two to three times as high as in the United States. At the urging of my colleagues in Europe, we decided to see whether our industry study approach would yield new insight into the reasons for the differences in employment performance.

We quickly found that in the decade of the 1980s the United States had created far more new jobs relative to the growth of the working-age population than in Europe. The question was why. We started with the relationship that employment levels are the result of dividing the overall level of production of an economy by the productivity of the workforce.

This simple relationship has led to one of the most serious public misunderstandings about how economies work. It is tempting to conclude that if productivity increases, then employment must go down. After all, if the workforce works more efficiently, then fewer workers are needed. This line of thought stops too soon. It fails to consider what happens after productivity is improved and workers are available to be redeployed somewhere else in the economy. It assumes incorrectly that the amount of business activity in an economy is fixed. In fact, if workers are available, entrepreneurs can match them with new business ideas and investment capital and thus increase the total amount of business activity in an conomy. The production of goods and services thus increases, along with the productivity increase, and employment levels do not have to decrease....

Somehow in Europe, the efficiency of the workforce was increasing but the available labor was not being matched with new business ideas and additional equipment to create growth and employment. The natural evolution was proceeding differently in Europe than in the United States.

We looked at the structure of the European and U.S. economies and found that the employment distribution was quite different. The U.S. had far more people working in services than Europe did. In fact, the biggest differences were in residential construction and retailing. We asked why this is so. What we found is that many of the factors that distort the nature of competition and result in lower productivity also limit the production of more goods and services.

What makes the book interesting is the information it provides on just what these international differences are--how and why, for instance, residential construction is similarly productive in the U.S. and the Netherlands (and produces high employment) and far less productive in Germany and Japan.

On the structural side, the American economy has been growing fast over the past four years. The productive potential of the American economy has grown at an extremely rapid pace. But the rapid growth has not been the result of high investment (more capital). In fact, the rate of investment has been markedly slower than in the late 1990s. It has also not been the result of any action taken by the Bush Administration. Instead, the rapid growth is the result of:

(a) learning to efficiently use the information-technology capital
(b) becoming smarter about organizing production processes, and
(c) speeding up the pace of work.

This story of positive structural changes in the American economy – the very rapid growth of potential output – is the big story about the economy during the past four years. It's important both at the macro level – why is output-per-man-hour 20 percent higher than it was five years ago? – and at the micro level – how are people today doing their jobs and being 30 percent more productive than their predecessors of a decade ago? The news media aren't covering this well. Yet it's the really big story about the economy in the Twenty-First century.

In today's Boston Globe Ideas section, I look at one piece of that very big story: the spreading use of operations research techniques once confined to theory. (What's operations research? The story explains that too, or tries to without using any math, graphs, or jargon about optimizing subject to constraints or finding interior solutions. For more on the field, see the INFORMS site.)

Of course, very few general-interest publications would let a writer spend nearly 2,000 words writing about operations research--or, for that matter, rising productivity. Brad is exactly right that journalists aren't covering this story, but he doesn't offer any reasons why. As a journalist, let me suggest a few:

1) The productivity story is boring. It isn't really, but editors think it is. There's no obvious conflict, no scandal, no little guy getting hurt (unless you portray rising productivity as throwing people out of work, which is the most common angle). The improvements that drive productivity increases are incremental--hence, not dramatic--and often technical.

2) The productivity story isn't political. Neither George Bush nor Bill Clinton deserves any credit, except for not getting in the way. Not getting in the way is actually a big accomplishment, one many politicians around the world can't claim, but it's bipartisan, hence boring. (See above.)

3) The productivity story is too big. It's less a story than a beat, requiring many different stories to tell. Business beats aren't organized to tell stories like this. They're organized by industry or, occasionally, by field (e.g., marketing). The rare writers who cover economics, including me, reflect the limits of economic scholarship, which mostly deals in aggregates and tends to lag what's going on at the moment. On this score, major props go to USA Today, which recently published its fourth annual report on producivity gains at large companies, with some anecdotal info about smaller enterprises as well.

4) The productivity story is hard to report. If you really want to understand what's going on, you have to spend lots of time with mid-level managers at companies that don't want to talk about their operational secrets. You need to understand operational details that are unfamiliar to most journalists, or, for that matter, economists. Once you've invested all this time, you may or may not have a story that fits accepted journalistic formats--formats that, for all their flaws, do reflect experiential wisdom about what readers will read. As long as David Brooks can go for laughs by invoking "Six Sigma" as a mere buzzword, the productivity story will continue to strike editors as a nonstarter.

Since I am a stubborn freelancer, however, I intend to do what I can to tell this story anyway. Indeed, as many of my NYT columns illustrate, I think there's an even larger story to be told, one that includes not just the measured productivity gains of the past few years but enormous unmeasured gains in (to use the econ jargon) consumer surplus going back further.

SAN FRANCISCO, June 17, 2004—The Foundation for Individual Rights in Education (FIRE) has joined a national coalition that is urging the California Supreme Court to reverse a state appellate court decision that has profoundly chilling implications for free speech. FIRE joins concerned law professors and organizations in arguing that the decision in Lyle v. Warner Brothers Television Productions et al. (Lyle) could be used to redefine a great deal of constitutionally protected expression as unprotected "harassment." In Lyle, the California Court of Appeal held that creative discussions in which writers of the popular sitcom Friends developed ideas and created scripts could constitute sexual harassment of individuals listening to the sometimes bawdy banter of the writers. The amicus (friend-of-the-court) letter demonstrates how Lyle could have frightening consequences for free speech, especially on college and university campuses.

"This amicus letter challenges a legal decision that could destroy the free and open exchange of ideas both on and off campus," said Greg Lukianoff, FIRE’s director of legal and public advocacy. "If this decision is not overturned, it could transform ‘harassment’ into the exception that swallowed the First Amendment. This would have a particularly devastating impact at colleges and universities, where bizarre definitions of ‘harassment’ already are commonly used as an excuse for stifling the free expression of various points of view," Lukianoff added.

If sit-com writers can't tell off-color jokes, nobody is safe. Overlawyered.com includes a notice on the case in its "Fear of Flirting" archives. Over to you, Volokh Conspiracy.

Take for example, the iSpec video iPod, designed by Joe Kosinsky, director of New York design firm Kdlab.

Kosinsky's iSpec is a futuristic iPod shaped like a pair of Brad Pitt's sunglasses.

Controlled by a finger-mounted splint, video is projected onto the interior of the glass lenses. Earbuds are built-in. The iSpec features an immersive, 3-D interface reminiscent of Apple's experimental HotSauce Web interface developed in the mid-'90s.

To illustrate his ideas, Kosinsky created an impressive video of the iSpec experience as a spec project (hence the name) for his portfolio.

The video, created in Discreet's 3ds Max software, has proven a popular download -- 75,000 hits in April -- and has sparked passionate debate on the Web, to Kosinky's surprise and delight.

"A lot of people think it's real," he said. "They write to me and ask when it's going to come out.... (Others) get very angry. They think it's going in the wrong direction. They say it's a stupid idea: How can you walk and watch video at the same time? I think its great there's such emotions and passion about a fantasy product."

The reaction to Kosinky's speculative design is not limited to the iSpec; many of the concept designs elicit long strings of comments debating their pros and cons.

Leamer calculated the average P/E for homes in several California metro areas by dividing the median price for a single family home by the average annual rent for a 2,000- square-foot apartment in each region. (You can get more and better data for apartments than rental homes, and the two tend to track each other.)

His findings: In the Bay Area, the average P/E for a house shot up to 13. 8 in the first quarter of 2004, compared with 7.2 in 1999 and 2000. Today's ratio is more than a third higher than it was 1989, just before housing prices started a multi-year descent.

In Santa Clara County, the average P/E is 15.8 today, compared with 10.3 in 1989.

"We are in a situation that is more extreme than it was in 1989," says Leamer, director of the UCLA Anderson forecast.

In the Bay Area, P/E ratios are skyrocketing because rents are falling while home prices are escalating, Leamer says.

In San Francisco, the average rent has skidded to $22.01 per square foot from $31 per square foot in 2000, while the median home price has risen to $606,000 from $450,755.

In Southern California, where the economy is stronger and more diverse, rents are rising, but housing prices are rising even faster. As a result, P/Es are also rising, though not quite as far as in Northern California.

In Los Angeles, the price of a median home rose to $399,000 in the first quarter of 2004 from $215,652 in 2000. Rents rose to $19.35 per square foot from $18.07.

When the economy is booming, investors are willing to pay higher prices for stocks and houses because they think the earnings from these assets will grow faster than normal. Occasionally, they throw common sense out the window and start believing that earnings will continue upward in a never-ending spiral, untouched by forces like competition and economic equilibrium.

Our L.A. condo was recently assessed for more than twice what we paid for it, so at least on paper we're rich. (Keeping it was certainly a better investment over the past four years than selling it and putting the money in the stock market.) But we're in the market for the very long term--think retirement. If you're buying for the short term, don't.

Champagne from France. Silk sweaters from China. Winter blueberries from Chile. Video games from Japan. Beer from Ireland. Silver jewelry from India. Cellphones from South Korea. Shoes from Italy.

International trade does not just offer consumers the same goods at lower prices, which is the traditional economic story. It also brings us goods we wouldn't otherwise have access to. Trade increases the number of varieties in the marketplace. It gives consumers more choices.

"The U.S. used to import coffee from around 25 countries," says David E. Weinstein, an economist at Columbia University. "Now we import it from 52 countries. Beer we import from three times more countries than we used to."

Read the rest here.

The MIA has a great Modernism collection illustrating the many styles of 20th century design. You can explore it online here. (I've posted this link before, but it's so much fun, I'm posting it again.)

I first realized what a truly extraordinary person he was in early 1973 when I spent an unforgettable day with him barnstorming across California to promote his Proposition 1 -- an amendment to the state constitution that would set a limit to the amount the state could spend in any year. We flew in a small private plane from place to place and at each stop held a press conference. In between, Gov. Reagan talked freely about his life and views. By the time we returned to our final press interview in Los Angeles, I was able to give an enthusiastic yes to a reporter's question whether I would support Reagan for president. And, I may say, I have never been disappointed since.

As a good social scientist, Frieman also has data. It doesn't make Bush I look too good, but it does bust the myth--popular among some libertarians--that Reagan did nothing real to shrink government.

No. He is perhaps the most influential recent political figure, and his life is being justly celebrated.

No. A president's death is big news, but the coverage should be less hagiographic. Um, Iran-Contra?

 Maybe. His important life should be celebrated, though at some point enough is enough.

Yes. Give the man his due, but a 93-year-old's natural death is not big news.

Yes. He was a vacuous ideologue and his death was not unexpected. Enough already.

Guess which answer has managed to stay over 50 percent all day? The survey is unscientific, but the dominance of answer five certainly doesn't exactly make the participating journalists look, uh, fair and balanced.

Here are the results. (If you can't access the site, please let me know. I'm a MediaBistro member and can't tell whether it's using cookies to let me on.)

The current controversy adds a creepy context to this story about a non-lethal but extremely painful weapon. What could be a less destructive alternative to rubber bullets and tear gas for riot control would also make a scarily tempting torture device.

These experiences shaped my view of America. Like many other immigrants, I came to see it as a place of abundant opportunities: if my parents, who led fairly comfortable lives in their native land, were willing to assume such difficult challenges in this new country, then it must indeed hold promises for a bright future. After all, my parents' professional downgrade (from rising bankers to waiter and secretary) and the childrens' personal loss (from age 1 to 4, my sister knew nothing about her father and mother) seemed sensible only if the United States were truly special.

Yeah, right.

Those young people aren't young anymore. We're middle aged, and the world bears little resemblance to the one we grew up in. It is, despite its obvious ills, a lot better.

Whatever impressions nostalgic TV shows may leave with those too young to remember the real decade, the late 1960s and 1970s were a scary time to grow up. The world just kept getting worse and worse, and nobody seemed to know why.

The Soviets were expanding, and the Cold War seemed destined to end in defeat or destruction. When the joke issue of my college paper announced the Soviet invasion of Iran, lots of students believed it.

The Saudis could--and did--cut off the oil whenever they got mad. People in the northeast froze from lack of natural gas; my father turned our thermostats down to 65, as though it would help. (Deregulation, Reagan's first act on becoming president, helped more.)

Prices went up and up, not just on a few things but on everything. After taxes, cost-of-living raises couldn't keep up. Interest rates hit two digits. Nobody my age would ever be able to own a house.

As a teenager, I didn't worry much about crime--burglaries and petty thefts seemed as normal as political assassinations. But a lot of people did worry. They made folk heroes of movie vigilantes like Dirty Harry.

The policies Nixon and Ford tried didn't work, and Carter told us that was just the way the world was. We should get over our selfishness, our materialism, and make do with less. The problems of the world were our fault, a sign of our fallen nature, as individuals and a nation. Oh yes, and while we were addressing our crisis of meaning, we needed oil import quotas and a SynFuels Corporation.

No wonder Reagan attracted the young.

Amazingly, his prescriptions worked. The economy got worse at first--much, much worse, so bad Reagan himself called it a depression. But he stayed the course, and helped Paul Volcker stay it. The economy got better, and stayed better--mostly good and sometimes even great, except for a few short bumps--for decades.

Most miraculously, the Cold War ended without a nuclear war. And the president took a bullet and lived and told jokes on the way to the hospital.

In some ways, surviving that assassination attempt in good health was the most important thing Reagan did. It robbed history of its inevitable tragic ending. (Remember, too, that the pope similarly survived a bullet, and Margaret Thatcher made it through an IRA bombing.) Reagan became living proof that things do not have to end badly.

Many of his conservative allies, taught by the terrors of the 20th century, firmly believed that history is a tragedy, that the best we can do is to fight a long, twilight struggle. They believed that evil is as strong as, perhaps stronger, than good, and that tyranny is more powerful than freedom. At the time, I believed them too.

Reagan believed in the triumph of good and the strength of freedom. He acted on those convictions, and he was right.

In retrospect, Reagan’s point that the Soviet economy was on life support seems obvious to the point of banality. In fact, that’s one of the arguments his critics use against him: that the Soviet economy would have imploded anyway, even without Reagan’s defense buildup. But that’s not the way foreign policy intellectuals saw it in 1982.

"It is a vulgar mistake to think that most people in Eastern Europe are miserable," declared economist Lester Thurow, adding that the Soviet Union was "a country whose economic achievements bear comparison with those of the United States." (I wonder if Thurow had ever flown on a Soviet airliner?) John Kenneth Galbraith went further, insisting that in many respects the Soviet economy was superior to ours: "In contrast to the Western industrial economies, it makes full use of its manpower."

Arthur Schlesinger, just back from a trip to Moscow in 1982, said Reagan was delusional. "I found more goods in the shops, more food in the markets, more cars on the street -- more of almost everything," he said, adding his contempt for "those in the U.S. who think the Soviet Union is on the verge of economic and social collapse, ready with one small push to go over the brink."

Few of Reagan's conservative allies thought the Soviet Union was in any danger either.

Like many other youngsters I sneered when he was elected to the Presidency, but gradually changed my mind, and turned around definitively after the Wall speech.

But one more testament should be added that isn't often mentioned.

He helped preside over a peaceful transition to democracy in the Philippines. His administration may have supported Marcos as a lesser evil at first. But during the crisis his government helped push out Marcos and helped to convince Marcos not to fire on the protesters. We only need to look at how horribly Tiananmen turned out to realize how fortunate it was for the Philippines that the US was there to negotiate with the Marcoses.

But as with many third world nations -- like Vietnam or Nicaragua -- the chattering classes don't care about their welfare once the US is gone. Or once ideological points have been scored. But that area of the world is safer, more peaceful and more secure for the peaceful downfall of Ferdinand Marcos.

Memeorandum has a good roundup of remembrances from blogs and other online sources.

Lou Cannon, whose biographies of Reagan are the most definitive so far, wrote an obituary for the WaPost. No Reaganite himself, Cannon has a deep knowledge of the man and his career and his obituary provides a detailed, nuanced, and fair overview.

I'll post some longer thoughts on Reagan later today.

For the full-sized version, go here.