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Nick Leiber
Nick Leiber is a journalist.

‘Either Addicted, or in Prison Because of Their Addiction’

Photo by bradadozier

Heroin use and related overdoses have been increasing in nearly every demographic group in the U.S., a Centers for Disease Control and Prevention report posted earlier this month shows. In obituaries, “a growing number of families are dropping the euphemisms,” instead describing the painful realities of addiction. David Amsden’s April 2014 Rolling Stone story, “The New Face of Heroin,” examined the drug’s connection with pharmaceutical painkillers, and its spread into Vermont and other seemingly unlikely parts of the country:

The portrait of the governor’s native state that emerged was severe, conjuring up images more commonly associated with blighted inner cities than a state with the nation’s fifth-lowest unemployment rate and a populace that is 95 percent white. Since 2000, Shumlin noted, Vermont has seen an eightfold increase in those seeking treatment for opiate use, with an almost 40 percent spike in the past year for heroin alone, and every day hundreds are languishing on waiting lists for understaffed clinics. Deaths from overdoses in 2013 had nearly doubled from 2012; property crimes and home invasions were on the rise; and close to 80 percent of the state’s inmates “are either addicted or in prison because of their addiction.” The same major highways where tourists routinely pull over to take photos of rustic vistas had, in the governor’s description, become pipelines of heroin distribution, with organized gangs setting up outposts across the state, where a six-dollar bag of heroin in their home cities can fetch as much as $30. As a result, an estimated $2 million worth of opiates were now being trafficked into Vermont each week – a staggering amount for a state that, with only 626,000 residents, is the second-least-populated in the country, after Wyoming.

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The Latest Human Rights Crackdown in Uncle Xi’s China

Chinese authorities have recently detained or questioned more than 150 human rights lawyers and activists in an unprecedented nationwide crackdown. Some detainees are missing, and a petition is calling on the U.S. to cancel the Chinese president’s upcoming state visit. In his April New Yorker story “Born Red,” Evan Osnos profiled Big Uncle Xi (the state news agency’s nickname for the president), “China’s most authoritarian leader since Mao”:

Before Xi took power, he was described, in China and abroad, as an unremarkable provincial administrator, a fan of American pop culture (“The Godfather,” “Saving Private Ryan”) who cared more about business than about politics, and was selected mainly because he had alienated fewer peers than his competitors. It was an incomplete portrait. He had spent more than three decades in public life, but Chinese politics had exposed him to limited scrutiny. At a press conference, a local reporter once asked Xi to rate his performance: “Would you give yourself a score of a hundred—or a score of ninety?” (Neither, Xi said; a high number would look “boastful,” and a low number would reflect “low self-esteem.”)

But, a quarter of the way through his ten-year term, he has emerged as the most authoritarian leader since Chairman Mao. In the name of protection and purity, he has investigated tens of thousands of his countrymen, on charges ranging from corruption to leaking state secrets and inciting the overthrow of the state. He has acquired or created ten titles for himself, including not only head of state and head of the military but also leader of the Party’s most powerful committees—on foreign policy, Taiwan, and the economy. He has installed himself as the head of new bodies overseeing the Internet, government restructuring, national security, and military reform, and he has effectively taken over the courts, the police, and the secret police. “He’s at the center of everything,” Gary Locke, the former American Ambassador to Beijing, told me.

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In Xi’s early months, supporters in the West speculated that he wanted to silence hard-line critics, and would open up later, perhaps in his second term, which begins in 2017. That view has largely disappeared. Henry Paulson, the former Treasury Secretary, whose upcoming book, “Dealing with China,” describes a decade of contact with Xi, told me, “He has been very forthright and candid—privately and publicly—about the fact that the Chinese are rejecting Western values and multiparty democracy.” He added, “To Westerners, it seems very incongruous to be, on the one hand, so committed to fostering more competition and market-driven flexibility in the economy and, on the other hand, to be seeking more control in the political sphere, the media, and the Internet. But that’s the key: he sees a strong Party as essential to stability, and the only institution that’s strong enough to help him accomplish his other goals.”

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How Should Nuclear Inspections Work in Iran?

A historic Iran nuclear accord has been reached, promising to lift sanctions in exchange for the country reducing its nuclear ability. The agreement is expected to be published in the next few days and include the crucial mechanics related to nuclear inspectors’ access to sites. Scott Ritter, a former intelligence officer with the United States Marine Corps and Chief Inspector for the United Nations in Iraq from 1991 to 1998, argued against “no notice” inspections in Iran in his recent London Review of Books essay:

My first experience as a weapons inspector was in implementing the Intermediate-Range Nuclear Forces Treaty between the US and the former Soviet Union, and I’m a firm believer that on-site inspections should be part of any arms control agreement. As a United Nations weapons inspector in Iraq, I worked closely with the IAEA to investigate Iraq’s past nuclear weapons programme, and I have confidence in the IAEA’s ability to implement the Nuclear Non-Proliferation Treaty. The provisions of the NPT are at the heart of the framework agreement with Iran, and the measures contained in it – which include sophisticated remote monitoring, and environmental sampling at undeclared facilities – should be more than adequate to establish whether or not it has diverted any nuclear material to a weapons programme. The framework agreement also calls for a range of verification measures beyond those required by the NPT. These cover centrifuge production and aspects of the uranium fuel cycle such as mining and processing, and are needed to verify that Iran isn’t engaged in covert uranium enrichment using a secret cache of centrifuges and unaccounted-for stocks of uranium ore. No notice inspections to investigate ‘possible military dimensions’, however, go far beyond anything required by the NPT. The question is whether such an intrusive measure is warranted or whether, as Iran argues, the inspections would infringe its legitimate security interests.

The facts appear to support Iran’s position. Countries subjected to intrusive no notice inspections have to be confident that the process isn’t actually an intelligence-led operation aimed at undermining their legitimate interests. The nuclear framework agreement with Iran doesn’t require the IAEA to accept anything Iran declares at face value, but none of its protocols justifies no notice inspections of military sites. Iran signed the Joint Plan of Action in 2013, and has abided by the verification conditions it required without incident. This track record should count in its favour, especially when you consider the dubious results of no notice inspections since they were first carried out in 1991.

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The history of no notice inspections in Iraq does not bode well for their use in Iran. Such inspections are intelligence-based exercises. The bulk of the intelligence underpinning the US concerns over ‘possible military dimensions’ comes from the ‘alleged studies’ documents – a series of files the IAEA obtained in 2008 which appear to show that Iran had conducted some nuclear weapons development in 2002 and 2003. Their credibility has often been called into question and the Iranians declare they are fake. There’s good cause, too, to believe that much of the remaining intelligence buttressing the CIA’s case against Iran is flawed. The strange tale of the Iranian physicist Shahram Amiri, whose defection the CIA facilitated in the spring of 2009, serves as a case in point. Amiri was for several years before his defection an American agent-in-place whose reporting was used by the CIA in formulating its assessments on Iran. But his re-defection to Iran in 2010 suggests that he may have been a double agent, calling into question all his reporting to the CIA, before and after his defection. Operation Merlin, in which the CIA attempted to pass on to Iran flawed designs for a nuclear weapon, further undermines the CIA’s credibility as a source of information about an alleged Iranian nuclear weapons programme.

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The World’s Most Notorious Drug Trafficker Breaks Out of Prison (Again)

Photo via Day Donaldson

Drug kingpin Joaquín Guzmán Loera, known as “El Chapo,” escaped from a maximum-security prison in Mexico this weekend. It’s his second prison escape. “Anyone who makes a mile-long tunnel from his cell and escapes on a motorcycle is necessarily in collusion with the government,” a government official told Patrick Radden Keefe in his New Yorker post about the news. Last year Radden Keefe described for the magazine how Chapo, whose Sinaloa cartel has long used tunnels to evade law enforcement, was captured after more than a decade on the run:

In the early days of Guzmán’s career, before his time at Puente Grande, he distinguished himself as a trafficker who brought an unusual sense of imagination and play to the trade. Today, tunnels that traverse the U.S.-Mexico border are a mainstay of drug smuggling: up to a mile long, they often feature air-conditioning, electricity, sophisticated drainage systems, and tracks, so that heavy loads of contraband can be transported on carts. Guzmán invented the border tunnel. A quarter of a century ago, he commissioned an architect, Felipe de Jesús Corona-Verbera, to design a grocery store that served as a front company, and a private zoo in Guadalajara for his collection of tigers, crocodiles, and bears. By this point, Guzmán was making so much money that he needed secure locations in which to hide it, along with his drugs and his weapons. So he had Corona-Verbera devise a series of clavos, or stashes—secret compartments under the beds in his homes. Inevitably, a bolder idea presented itself: if you could dig a clavo beneath a house near the U.S. border, why not continue digging and come out on the other side? Guzmán ordered Corona-Verbera to design a tunnel that ran from a residence in Agua Prieta, immediately south of the border, to a cartel-owned warehouse in Douglas, Arizona. The result delighted him. “Corona made a fucking cool tunnel,” he said. Since then, U.S. intelligence has attributed no fewer than ninety border tunnels to the Sinaloa cartel.

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The Man Behind Moore’s Law

Gordon Moore in 2008. Photo by OnInnovation, Flickr

IBM has announced that it has made the world’s most powerful computer chip. The breakthrough “could lead to a 50% performance and power boost over chips that are on the market today, effectively keeping Moore’s Law more or less intact for the time being,” Quartz reported. This Scientific American excerpt of the biography Moore’s Law: The Life of Gordon Moore, Silicon Valley’s Quiet Revolutionary, by Arnold Thackray, David C. Brock and Rachel Jones, reveals the 86-year-old billionaire who made the observation 50 years ago, and went on to change the world:

He is one of the world’s most exceptional achievers, yet he has consistently avoided opportunities to raise his profile. When Intel was named Electronics Company of the Year, his right-hand man, Andy Grove, beamed straight into the photographer’s lens at the awards presentation. Moore— Intel’s CEO—was mostly out of the frame, doing “something inscrutable in the margins.” Internally driven and governed by the ticking of his watch, Moore believed his vision had global consequence yet worked quietly, within miles of where he was born and raised, eschewing the trappings of wealth and fame. His pursuit of revolutionary electronics brought extraordinary change, even as—with remarkable focus—he stuck to his knitting, doing one single important thing to the best of his ability. The logo “Intel Inside” speaks both of transistors and of Gordon Moore.

Whereas Larry Ellison, Andy Grove, Steve Jobs, Mark Zuckerberg, and a host of other immigrants to Silicon Valley command media attention, Moore has chosen to stay low-key. He has always known who he was, understood what he needed to do, and stayed on task. As far back as the mid-1970s, he was pointing to silicon electronics as “a major revolution in the history of mankind, as important as the Industrial Revolution.” With his immediate colleagues, he was at its leading edge and foresaw how the transistor would leverage the power of human intellect. With a modesty that belied his passion, tenacity, and clarity of vision, Gordon Moore built one of the world’s most successful companies, demonstrated the power of silicon technology, and established the relentless cadence of Moore’s Law.

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Michael Paterniti on Eating at the World’s Most Influential Restaurant

Juli Soler, the Spanish restaurateur who helped turn El Bulli into the most influential restaurant of its time, died on July 6 at age 66. “Without Juli, El Bulli wouldn’t have existed,” its famous chef, Ferran Adrià, told the Spanish newspaper El País. The restaurant closed in 2011. Michael Paterniti’s 2001 Esquire story captures what it was like to eat there:

In Ferran Adrià’s restaurant, nothing is for certain once his food crosses the Maginot Line of your mouth. He feeds you things you never thought existed, let alone things you’d think to eat: a gelatin with rare mollusks trapped inside (it was so odd, the cool, sweet jelly parting for salty pieces of the sea, that it tasted primordial and transcendent at once), tagliatelle carbonara (chicken consommé solidified and cut into thin, coppery, pastalike strands that, once glimmering on the tongue, dissolved back into consommé that poured down the throat), cuttlefish ravioli (the cuttlefish sliced with a microtome, then injected with coconut milk, another sweet explosion that seemed to wrap the fish in a new sea), rosemary lamb (we were told to raise sprigs of rosemary to our noses as we munched on the lamb, both of us now with rosemary mustaches, the smell of rosemary becoming the lamb as if the two were the same) … and it went on like this.

I will tell you: We were happy. We were served an eighty-year-old vinegar pooled in an apple gelatin with ginger, and vinegar has never tasted so gentle, so perfectly between sweet and sour, with a trace of gin, so unlike vinegar that it redefined vinegar. I would drink that vinegar every day, if I could, to start every day with a little pucker and smile. There was dessert, too … a first dessert and a second dessert and then more snacks. At the end, when we went to him, Ferran waved us off, saying, “Today you eat, tomorrow we’ll think.”

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The Roots of the Greek Debt Crisis

The crisis in Greece is getting worse. Its people on July 5 voted against the terms of the most recent bailout deal in a referendum, rejecting austerity. If a new deal isn’t reached soon, its government won’t be able to pay its debts and will run out of euros, which many expect it will mean exiting the euro zone. This 2010 Michael Lewis classic for Vanity Fair, “Beware of Greeks Bearing Bonds,” helps explain the current situation:

For most of the 1980s and 1990s, Greek interest rates had run a full 10 percent higher than German ones, as Greeks were regarded as far less likely to repay a loan. There was no consumer credit in Greece: Greeks didn’t have credit cards. Greeks didn’t usually have mortgage loans either. Of course, Greece wanted to be treated, by the financial markets, like a properly functioning Northern European country. In the late 1990s they saw their chance: get rid of their own currency and adopt the euro. To do this they needed to meet certain national targets, to prove that they were capable of good European citizenship—that they would not, in the end, run up debts that other countries in the euro area would be forced to repay. In particular they needed to show budget deficits under 3 percent of their gross domestic product, and inflation running at roughly German levels. In 2000, after a flurry of statistical manipulation, Greece hit the targets. To lower the budget deficit the Greek government moved all sorts of expenses (pensions, defense expenditures) off the books. To lower Greek inflation the government did things like freeze prices for electricity and water and other government-supplied goods, and cut taxes on gas, alcohol, and tobacco. Greek-government statisticians did things like remove (high-priced) tomatoes from the consumer price index on the day inflation was measured. “We went to see the guy who created all these numbers,” a former Wall Street analyst of European economies told me. “We could not stop laughing. He explained how he took out the lemons and put in the oranges. There was a lot of massaging of the index.”

Which is to say that even at the time, some observers noted that Greek numbers never seemed to add up. A former I.M.F. official turned economic adviser to former Greek prime minister Konstantinos Mitsotakis turned Salomon Brothers analyst named Miranda Xafa pointed out in 1998 that if you added up all the Greek budget deficits over the previous 15 years they amounted to only half the Greek debt. That is, the amount of money the Greek government had borrowed to fund its operations was twice its declared shortfalls. “At Salomon we used to call [the head of the Greek National Statistical Service] ‘the Magician,’ ” says Xafa, “because of his ability to magically make inflation, the deficit, and the debt disappear.”

In 2001, Greece entered the European Monetary Union, swapped the drachma for the euro, and acquired for its debt an implicit European (read German) guarantee. Greeks could now borrow long-term funds at roughly the same rate as Germans—not 18 percent but 5 percent. To remain in the euro zone, they were meant, in theory, to maintain budget deficits below 3 percent of G.D.P.; in practice, all they had to do was cook the books to show that they were hitting the targets. Here, in 2001, entered Goldman Sachs, which engaged in a series of apparently legal but nonetheless repellent deals designed to hide the Greek government’s true level of indebtedness. For these trades Goldman Sachs—which, in effect, handed Greece a $1 billion loan—carved out a reported $300 million in fees. The machine that enabled Greece to borrow and spend at will was analogous to the machine created to launder the credit of the American subprime borrower—and the role of the American investment banker in the machine was the same. The investment bankers also taught the Greek-government officials how to securitize future receipts from the national lottery, highway tolls, airport landing fees, and even funds granted to the country by the European Union. Any future stream of income that could be identified was sold for cash up front, and spent. As anyone with a brain must have known, the Greeks would be able to disguise their true financial state for only as long as (a) lenders assumed that a loan to Greece was as good as guaranteed by the European Union (read Germany), and (b) no one outside of Greece paid very much attention. Inside Greece there was no market for whistle-blowing, as basically everyone was in on the racket.

And in this essay published in mid-June, Wall Street Journal correspondent Matina Stevis shares her feeling of impotence as she watches her country struggle.

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The Art of Paint-and-Sip Franchising

The paint-and-sip industry is a little more than a decade old. People show up to drink while an instructor slowly guides them, step-by-step, through the creation of a prechosen design. The idea was pioneered by Painting With a Twist, which two women in New Orleans started while looking for a reason to gather after Hurricane Katrina; it now has 200-plus locations, more than a third of which opened last year. Based on growth, it was rated the No. 1 franchise in Entrepreneur magazine’s Franchise 500 list.

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A typical Paint Nite teacher is a young, full-time artist or an older art teacher. Many, like Boston’s Callie Hastings, who is now on staff at the company, once taught preschool. She says teaching 4-year-olds how to paint isn’t all that different from teaching drunk people: “They have short attention spans. So you have to talk in short sentences.” She was surprised to find that people didn’t choose classes based on date or location, but on the painting itself. They will drive an extra 45 minutes, past two other Paint Nite locations, to execute the pastoral landscape that will go perfectly in their dining room. To avoid copyright issues, all the paintings have been created by Paint Nite artists, and there’s a huge selection. One of Paint Nite’s first crises came when artists got mad that other people were using their works in classes. Now instructors give $10 per session to the creator of the work.

Choosing the painting that brings in a crowd is an art in itself: The work can’t look so challenging that you’d have trouble reproducing it drunk; it should involve nature and have enough contrast to look good on social media; and, if possible, it should knock off a famous impressionist. Most artists learn this the hard way, despite the advice in Paint Nite’s starter kit. “A lot of them pick paintings based on what they like,” McGrail says. “One artist, Raisin—that was his first and last name—had a giraffe coming out of an elephant penis. Not surprisingly, it didn’t sell that well.” After years of pushing artists to hire a nude male model—Hermann and McGrail wanted to call it Asstastic night—without anyone taking them up on it, they recently got an instructor to do it in Boston in June. Demand was so high they had to rent out a theater.

—Joel Stein, in Bloomberg Businessweekprofiles a franchise with a $39 million valuation called Paint Nite, which arranges painting classes led by artists at bars. Participants pledge not to use the words “mine sucks.”

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The Benefits of Being No. 2 in Business

Back in the early 1960s, also-ran Avis — a smaller, less successful business than Hertz — decided to run a new advertising campaign, one that embraced its market position rather than trying to change it. “When you’re only No. 2, you try harder. Or else,” the company’s advertisements read. Avis’s initial business insight was to locate its cars at airports, not in downtowns, but its most ingenious one was to play up its inferior position. It focused on its newer fleet and better customer service, promising, “We’re always emptying ashtrays,” and “Since we’re not the big fish, you won’t feel like a sardine when you come to our counter.” The strategy worked: The company moved from the red to the black and expanded its market share — even, within a few years, coming close to beating Hertz.

It makes sense: Differentiate in order to compete. Upscale or downscale. Don’t go head to head. And so Lyft is driving away from it again — or, rather, doubling down on what made it different in the first place. “We’ve gotten to or are getting to scale in all our cities,” Zimmer told me. “What’s the next experiential push that helps us realize the broader vision?”

—What’s next for ridesharing’s biggest underdog? Annie Lowrey takes a look in “Can Lyft Pull an Avis?” in New York magazine.

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The Battery Breakthrough That Could Juice U.S. Manufacturing

In a new report, McKinsey describes a broad new age of manufacturing that it calls Industry 4.0. The consulting firm says the changes under way are affecting most businesses. They are probably not “another industrial revolution,” it says, but together, there is “strong potential to change the way factories work.”

For decades, the US has watched its bedrock manufacturing industries wither away, as they’ve instead grown thick in Japan, in South Korea, in China, Taiwan and elsewhere in Asia. According to the Economic Policy Institute, the US lost about 5 million manufacturing jobs just from 1997 to 2014. This includes the production of lithium-ion batteries, which, though invented by Americans, were commercialized in Japan and later South Korea and China.

So Chiang’s innovation could be a poster-child for a new strain of thinking in the US. This says that, while such industries are not likely to return from Asia, the US can possibly reinvent how they manufacture. The country wouldn’t take back nearly as many jobs as it has lost. But there could be large profits, as the country once again moves a step ahead in crucial areas of technology.

To be clear, this is not Chiang’s goal. He is a professed universalist, divorced from scientific realpolitik. But should he succeed, as he plans to, then in addition to helping to decode the perplexing problem of batteries, he might contribute to continuing America’s political and economic dominance.

—Steve LeVine, Washington correspondent for Quartz and author of The Powerhouse: Inside the Invention of a Battery to Save the Worldexplains how Yet-Ming Chiang’s startup 24M is reinventing lithium-ion battery manufacturing, potentially making the devices able to compete on cost with gasoline.

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