You can be pretty certain that anyone who frets about how attack ads are nasty or that politics is divisive - at least when it comes to the American politics has little historical context or engaging in demagoguery. From Reason.com:
Argues John Cochrane, a professor of finance at the University of Chicago Booth School of Business, in the WSJ - "The Chinese government's accumulation of U.S. debt represents a tragic investment decision, not a currency-manipulation effort":
What's the right policy toward China? They put a few trillion dollars worth of stuff on boats and sent it to us in exchange for U.S. government bonds. Those bonds lost a lot of value when the dollar fell relative to the euro and other currencies. Then they put more stuff on boats and took in ever more dubious debt in exchange. We're in the process of devaluing again. The Chinese government's accumulation of U.S. debt represents a tragic investment decision, not a currency-manipulation effort. The right policy is flowers and chocolates, or at least a polite thank-you note.
Yet Mr. Geithner thinks that the Chinese somehow hurt us. There is at work here a strange marriage of Keynesianism and mercantilism—the view that U.S. consumers supported the world economy by spending beyond our means, so that other people could have the pleasure of sending things in exchange for pieces of paper.
This is all as fuzzy as it seems. Markets and exchange rates are not always right. But it is a pipe dream that busybodies at the IMF can find "imbalances," properly diagnose "overvalued" exchange rates, then "coordinate" structural, fiscal and exchange rate policies to "facilitate an orderly rebalancing of global demand," especially using "medium-term targets" rather than concrete actions. The German economics minister, Rainer Brüderle, called this "planned economy thinking." He was being generous. Planners have a clearer idea of what they are doing.
Katie Couric is quoted as calling middle America "This Great Unwashed Middle of the Country"
Jim Treacher, a conservative commentator retorts, noting her plummeting ratings (the Daily Caller), calls her the "the great unwatched".
I've never really understood California. For as much as you get the beach bum 'live and let live' type vibe when you're there and for all the technological innovation being churned out in silicon valley, the people seem to consistently elect politicians who have this affinity for unions, regulations and bigger government.
Here's how TechCrunch describes a potentially disruptive business under attack:
Last week San Francisco car matching startup UberCab was served a cease and desist order by the city of San Francisco because it did not have taxi licenses or taxi insurance and went beyond the normal scope of a limo service by picking people up right away.Michael Arrington inked an editorial that noted out "The outpouring of support from the community will be huge. And given that this model has potential to shake up the industry is all the major metropolitan areas across the country, there’s going to be a ton of interest in this case from all around. And UberCab will bathe in free publicity."
As UberCab (which has now changed its name to Uber) serves primarily tech industry elite, there is much Internet debate over whether this is another case of “Innovation vs. Establishment” or a startup just straight up breaking the law.
“Given the cease-and-desist [orders], it’s been a busy week,” laughs Kalanick. “We’ve seen waves of social media interest. We were a trending topic on Twitter. It’s business as usual at this point, but with a lot more attention and activity.”
It’s great news for a company that right now has plans to move into new markets, including New York and Los Angeles, and will undoubtedly be facing knockoffs if it doesn’t hustle.
In what Greg Mankiw calls "Austan Goolsbee deconstructed" - in case you've had doubts about how bad the Bush administration's economic policies actually were and how good the Obama administration's economic policies have been:
An employer cuts healthcare coverage for employees in anticipation of the healthcare reform act (BusinessInsider):
When they wrote this year’s legislation, policymakers had a choice: They could emphasize near-universal coverage, or they could emphasize controlling costs. They opted for near-universal coverage. As a result, business owners and higher income Americans (many of whom, like me, are one and the same) will soon pay an array of higher taxes to finance the broader coverage that President Obama and congressional Democrats mandated.Read the whole thing.
So I now find myself responsible for paying for health insurance for more than 30 million strangers. Yet the cash needs of my business, which is growing despite the difficult economy of the past few years, are not going to decline. Nor are my personal financial commitments going to decrease. The only way to make financial room for those 30 million strangers is to stop paying for insurance for the 20 people I work with every day.
Politics mandated that Obama and his fellow Democrats at least pretend that their legislation will constrain runaway spending. The new law’s very name is part of that pretense. But there is little in the actual legislation that has any real prospect of controlling spending; instead, the law attempts to control premiums by fiat through new regulations and oversight. Government may be able to prevent insurers from pricing policies in ways that make sense, but it can’t force them to operate at a loss. The other shoe, in the form of higher premium prices or a rollback of the new law’s mandates, is certain to drop. Higher prices are the more likely outcome. [...]
The law’s supporters will portray employers like me as bad guys who are using the new law as a smokescreen to make changes we wanted to make anyway. Though the accusation is false, it has a germ of truth: Runaway health insurance costs have been a burden for every business that pays them. Every sensible manager has at least considered steps to stem this financial hemorrhage. Many of us were just holding on so as not to disrupt employees’ lives while we waited for policymakers to do something.
Now they have done something, and it only made the problem worse. There is no longer any reason to wait.
Catarina Fake (Swiss Miss via Lifehacker):
Working on the right thing is probably more important than working hard.
via Instapundit quoting Milton Friedman:
People have a great misconception in this way they think the way you solve things is by electing the right people. It's nice to elect the right people but that isn't the way you solve things. The way you solve things is by making it politically profitable for the wrong people to do the right thing.
The CEO of Cisco and President of Oracle present an interesting solution developmentin a WSJ OpEd:
One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.The upside is that the investments made by these companies would almost certainly be invested more efficiently and on more sustainable businesses than the US government spends. The downside, is exposure to the demagoguery of activists who decry supposed tax breaks for the rich and corporations. More cynically, what Chambers and Katz haven't quite considered, is that if it's companies who invest and repatriate money then politicians no longer have the control - and to date, that's seemed to be an influential consideration in stimulus spending. If only we lived in a more rational world...
But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here. [...]
By permitting companies to repatriate foreign earnings at a low tax rate—say, 5%—Congress and the president could create a privately funded stimulus of up to a trillion dollars. They could also raise up to $50 billion in federal tax revenue. That's money the economy would not otherwise receive.
More on that theme that capitalism doesn't require nearly as much capital anymore. It turns out that the cost of doing biotech is falling - in some cases dramatically to the point that it's possible to do research in your bedroom/basement (naturenews):
Carlson penned essays and articles that fanned the embers of the idea. "The era of garage biology is upon us," he wrote in a 2005 article in the technology magazine Wired. "Want to participate?" The democratization of science, he reasoned, would bring in new talent to build and improve scientific instrumentation, and maybe help to uncover new industrial applications for biotechnology. Eventually, he decided to follow his own advice, setting up a garage lab in 2005. "I made the prediction," he says, "so I figured maybe I should do the experiment."Despite the discomfort of thinking that your neighbours next door could be brewing anthrax, that's always been the risk. They could be making fertilizer bombs now for all I know but the potential rewards and potential breakthroughs are substantial as more amateurs consider new ways to solve real problems - and that's the essence of markets and capitalism.
Carlson is not alone. Would-be 'biohackers' around the world are setting up labs in their garages, closets and kitchens — from professional scientists keeping a side project at home to individuals who have never used a pipette before. They buy used lab equipment online, convert webcams into US$10 microscopes and incubate tubes of genetically engineered Escherichia coli in their armpits. (It's cheaper than shelling out $100 or more on a 37 °C incubator.) Some share protocols and ideas in open forums. Others prefer to keep their labs under wraps, concerned that authorities will take one look at the gear in their garages and label them as bioterrorists. [...]
Still, five years after taking science into his garage, Carlson says he's convinced that biohacking has the potential to trigger a technological revolution. "We're going to see a lot more at the garage level that will produce a variety of products in the marketplace, one way or another," he says.
From Rich Lowry, National Review:
Texas already looms large in its own imagination. Its elevated self-image didn’t need this: More than half of the net new jobs in the U.S. during the past 12 months were created in the Lone Star State.More (10/20): Here (WILLisms) with a comparison to California.
According to the Bureau of Labor Statistics, 214,000 net new jobs were created in the United States from August 2009 to August 2010. Texas created 119,000 jobs during the same period. If every state in the country had performed as well, we’d have created about 1.5 million jobs nationally during the past year, and maybe “stimulus” wouldn’t be such a dirty word.
What does Austin know that Washington doesn’t? At its simplest: Don’t overtax and -spend, keep regulations to a minimum, avoid letting unions and trial lawyers run riot, and display an enormous neon sign saying, “Open for Business.”
From Bloomberg (via Jeffrey Ellis):
“The only way to fight poverty is with employment,” [Carlos] Slim [, the richest man in the world] said at a conference in Sydney last month. “Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything.”As previously noted, it's important to differentiate between relief and economic development - but otherwise Carlos Slim (despite how he came into wealth and has protected it) is right.
I know I haven't done as much China blogging lately. To be honest, I'm not sure what to make of things. A lot has been happening. Protectionism is creeping up which ironically has benefited us since we developed alternative manufacturing sources through Asia as a contingency plan. China continues to grow while the rest of the world stagnates - and that has created resentment - but I suspect China's growth is uncertain at best. Capital is deployed inefficiently and creating bubbles in China. From economist Andy Xie (China International Business):
Profit drives investment, which in turn powers employment, and that then grows consumption. When profit is due to asset appreciation and not sustainable, it may lead to crisis. Large bubbles often occur during prolonged prosperity, when people stop paying attention to risk and there is excessive demand for risky assets, leading to an asset bubble that prolongs prosperity beyond the normal cycle.For more thoughts, economist and outside observer Michael Pettis considers what China's alternatives are, and what will happen as the RMB is forced to revalue.
Possibly half of China's bank lending is going into property-related businesses or local governments that are pledging land as collateral. While the current boom has catapulted China ahead of Japan to become the world's second-largest economy, we must remember the excesses in this cycle and the need for an adjustment as soon as possible. Nothing reveals the vulnerabilities more than the banking system's exposure to unsustainable economic activities that are dependent on land appreciation. China should proactively bring about the needed economic adjustment.
Paulus pointed me to this vid (Thanks!). The key takeaway:
For simple straightforward tasks ... the carrot and stick approach to motivation is outstanding [...] When a task gets more complicated, requiring some conceptual, creative thinking, those types of incentives demonstrably don't work.What works? Connecting work to purpose. Organizations get in trouble when there is a disconnect between the profit motive and purpose. Definitely worth 10 minutes of your time if you spend any amount of time thinking about these things.
The Atlantic takes a look at the inventor for the Supersoaker's other development that apparently could make solar power cheap - and I'm a sucker for a good entrepreneurial story. The inventor, Lonnie Johnson, has a quote hanging above his desk attributed to Calvin Coolidge worth noting:
Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education alone will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.
It pays to hire women in countries that won't according to new research from Harvard Business School:
For multinational firms, the opportunity seems obvious: If you operate in a sexist country full of educated, experienced women with expertise on their home country, then it makes sense to hire those women into management roles. "You can tap into their underutilized talent and benefit from their insights," Siegel says.I'm pretty sure this type of thing applies to all groups that are discriminated against. Markets favor merit, create incentives and positive feedback loops. Government imposed regulations and policies? Not so much.
Brandon who linked this calls the ad "brilliant". I'd have to agree - particularly if you've watched the March of the Penguins / The Emperor's Journey (imdb):
Jeffrey Ellis at The Thinker points to Horwitz's First Law of Political Economy: "No one hates capitalism more than capitalists" but makes note of its corollary -
"No one loves capitalism more than consumers." Because consumers are the ones who benefit the most from free markets and competition.Truer words...
A few notes from the co-author of The Millionaire Next Door and author of new book Stop Acting Rich: ...And Start Living Like A Real Millionaire (Amazon.com) in the Washington Post:
From Greg Mankiw (NYTimes):
Maybe you are looking forward to a particular actor’s next movie or a particular novelist’s next book. Perhaps you wish that your favorite singer would have a concert near where you live. Or, someday, you may need treatment from a highly trained surgeon, or your child may need braces from the local orthodontist. Like me, these individuals respond to incentives. (Indeed, some studies report that high-income taxpayers are particularly responsive to taxes.) As they face higher tax rates, their services will be in shorter supply.An interesting discussion at HN that questions the validity of a few of his assumptions. There are two basic issues I have with most of the criticism - the first is this assumption that taxed revenues are being redeployed in something useful other than feeding ever larger bureaucracies that provide a net benefit to overall society and the second, if we understand high income earners (not to be confused with the wealthiest) to be the most economically productive in society, should there be any surprise if the productivity of society falls as these individuals choose not to work as much or as hard?
Reasonable people can disagree about whether and how much the government should redistribute income. And, to be sure, the looming budget deficits require hard choices about spending and taxes. But don’t let anyone fool you into thinking that when the government taxes the rich, only the rich bear the burden.
As he should be remembered (Townhall via Powerlineblog):
"When you saw the beaming look on Che's face as the victims were tied to the stake and blasted apart by the firing squad," said a former Cuban political prisoner Roberto Martin-Perez, to your humble servant here, "you saw there was something seriously, seriously wrong with Che Guevara." As commander of the La Cabana execution yard, Che often shattered the skull of the condemned man (or boy) by firing the coup de grace himself. When other duties tore him away from his beloved execution yard, he consoled himself by viewing the slaughter. Che's second-story office in Havana's La Cabana prison had a section of wall torn out so he could watch his darling firing-squads at work.Previous notes on the man here.
Even as a youth, Ernesto Guevara's writings revealed a serious mental illness. "My nostrils dilate while savoring the acrid odor of gunpowder and blood. Crazy with fury I will stain my rifle red while slaughtering any vencido that falls in my hands!" This passage is from Ernesto Guevara's famous Motorcycle Diaries, though Robert Redford somehow overlooked it while directing his heart-warming movie. ...
The one genuine accomplishment in Che Guevara's life was the mass-murder of defenseless men and boys. Under his own gun dozens died. Under his orders thousands crumpled. At everything else Che Guevara failed abysmally, even comically.
For quick pick me upppers, I saw these two commercials recently and wanted to share:
Not that I need any further disincentive to keep my desk organized. Mom, take note - quote from a short film "The Desk" posted at core77:
Einstein's desk was famously messy so he stood as an example of a person who could be extremely efficient and extremely creative but at the same time very very messy. People with messy desks tend to be more open to new experiences, and [it] reflects their mental process.
"The Desk" from Benjamin Cox on Vimeo.
From Fred Wilson, a venture capitalist:
There are takers and makers in this world. Takers make their money by taking from others. They are usually bad business people and their careers often end in failure. Makers build things. They create value for society, their employees, their shareholders, and themselves.Not entirely sure if I believe "takers" usually get their comeuppance, but I do believe that the upside in life is far greater for "makers" than "takers".
I should note that I have a friend who is an avid environmentalist and a 'warmist' who is absolutely appalled by the original video. While I'd argue it's a logical conclusion based on the arguments that many environmentalists make, this is probably the best parody of the original (Warning - it's graphic, via DailyCaller):
Tim Blair says it best. The producers’ message is: “If you aren’t a warmist, you deserve to become a warm mist.”Update Oct 6: More fantasies of people killing children (Hotair)
I saw The Social Network (imdb) with Anthony Del Col (Kill Shakespeare) on Friday. It was surprisingly entertaining, but also a bit empty. Like Anthony, I can't say I really empathized with the characters, and while I confess I felt like a bit of an underachiever afterwards, it was also quite motivating.
I don't always agree with Lawrence Lessig but he makes a useful observation on why Facebook is different than great startups of the past. It truly has never been a better time to be alive if you're an entrepreneur (The New Republic):
For comparison’s sake, consider another pair of Massachusetts entrepreneurs, Tom First and Tom Scott. After graduating from Brown in 1989, they started a delivery service to boats on Nantucket Sound. During their first winter, they invented a juice drink. People liked their juice. Slowly, it dawned on First and Scott that maybe there was a business here. Nantucket Nectars was born. The two Toms started the long slog of getting distribution. Ocean Spray bought the company. It later sold the business to Cadbury Schweppes.
At each step after the first, along the way to giving their customers what they wanted, the two Toms had to ask permission from someone. They needed permission from a manufacturer to get into his plant. Permission from a distributor to get into her network. And permission from stores to get before the customer. Each step between the idea and the customer was a slog. They made the slog, and succeeded. But many try to make that slog and fail. Sometimes for good reasons. Sometimes not.
Zuckerberg faced no such barrier. For less than $1,000, he could get his idea onto the Internet. He needed no permission from the network provider. He needed no clearance from Harvard to offer it to Harvard students. Neither with Yale, or Princeton, or Stanford. Nor with every other community he invited in. Because the platform of the Internet is open and free, or in the language of the day, because it is a “neutral network,” a billion Mark Zuckerbergs have the opportunity to invent for the platform. And though there are crucial partners who are essential to bring the product to market, the cost of proving viability on this platform has dropped dramatically. You don’t even have to possess Zuckerberg’s technical genius to develop your own idea for the Internet today. Websites across the developing world deliver high quality coding to complement the very best ideas from anywhere.
Watch this. Keep in mind it's not a parody. (Simon Jester via Instapundit)
