Do you treat your charitable giving more like shopping or investing?

A question that too few people ask (Freakonomics):

We also sometimes give because our neighbor, friend, or work colleague pressured us to give. And so we did, to make them happy, or to win a favor from them in the future.

Either way, this means we are giving not due to altruism, but for ourselves.

If we think of ourselves as savvy investors in humanity, looking for the highest return on our charitable “investment” — that is, the most help for the best charities — where should we put our money?

San Francisco housing costs vs. the laws of supply and demand

Attempts to repeal the laws of supply and demand fail (SFGate):

With the economy showing no signs of slowing, and with more and more people moving to San Francisco, Mayor Ed Lee is finding himself walking a housing tightrope that is getting higher and higher every day.

"It's no longer about the teacher who can't afford to live in the city. It's about the associate at a law firm who makes over $100,000 a year not being able to stay here," said political consultant Eric Jaye.

Betting that things will get better

A nice big picture respite from the plethora of bad news (theSpeculist via Instapundit):

Nobody wants wages to go down, but if costs fall even more sharply, our relative economic health can remain the same or even improve. This is why everybody has a better TV even though wages have been flat for some time. The potentially bigger problem is all of those people being out of work. Even if costs go down, having a roof over your head, an internet connection, electricity, and feedstock to put into your 3D printer are all going to have some price associated with them. On the other hand, while the workforce is the smallest it’s been in 30 years, quality of life has over that time improved distinctly by many measures. The smart money says it’s going to continue to improve. Substantially.

France's clumsy attempt at preventing consumers (riders) from getting what they want

From Techcrunch: "urban transportation services like Uber and LeCab will now have to wait 15 minutes in France before letting a customer in the car."

Techcrunch also clumsily attempts to provide justification for why but instead perversely confuses cause and effect: "In France, you have to pay a hefty price to get your taxi license. As a payback, the taxi industry is very regulated in this country, and drivers can expect to get a healthy influx of clients." The French have no one to blame but themselves for their economic misery.

American Endangered Species Act turns 40 with limited results and substantial costs

From the WSJ:

Forty years ago, on Dec. 28, 1973, the Endangered Species Act became law. If you want to celebrate, you'll need to close your eyes to hard truths.

A law intended to conserve species and habitat has brought about the recovery of only a fraction—less than 2%—of the approximately 2,100 species listed as endangered or threatened since 1973. Meanwhile, the law has endangered the economic health of many communities—while creating a cottage industry of litigation that does more to enrich environmental activist groups than benefit the environment.

How did things get so turned around? Blame the bureaucrats of the Endangered Species Act. They have administered the law poorly and flouted provisions designed to promote good science and good sense.

A destructive milestone came in the late 1970s, when officials erased the practical distinction between different levels of endangered-species listings. Originally, it was only when an animal or plant was labeled "endangered"—on the verge of disappearing—that landowners were hit with heavy regulations, such as prohibitions on activities that could even indirectly "harm" or "harass" the species. But the Carter administration extended these restrictions to species that are "threatened"—in trouble but not facing extinction.

The chilling effect on property owners and economic activity has been profound. Discovering a listed species on your property is no longer cause for pride in the land's environmental richness and your chance to exercise responsible stewardship. It's a liability that is to be avoided at all costs.

Price caps: Rio hotels edition - the Olympics vs World Cup

Who knew that the laws of supply and demand don't get repealed - even for the Olympics. Compare and contrast hotel prices at World Cup to the Olympics in Rio (Time):

That’s because FIFA’s official accommodations agency isn’t capping the maximum room rate, unlike Olympic officials.

Industry studies show that hotel rates in Rio offered by FIFA agency MATCH Services will cost on average $150 more than those offered by hotels contracted directly through the local Olympic organizing committee for the 2016 Games.

While the price caps during the Olympics help keep costs down, analysts also say it has to do with simple supply and demand. Less people are expected in Rio during the Olympics and there will be more hotel rooms available because of ongoing construction.

Rio will benefit far more economically from the World Cup - for good reason.

China's regulatory environment shipping jobs back to the US?

Ironic (WSJ):

A major saving will come from what the firm pays for cotton. China runs a national cotton stockpile which in 2011 started aggressively buying up domestically grown cotton in an effort to boost the income of local farmers, pushing up prices. To stop local yarn-spinning firms from abandoning Chinese-grown cotton in favor of the foreign kind, Beijing imposes tariffs that can run as high on 40% on imports. Imports are also limited by quotas. That’s resulted in cotton selling at higher prices in China than the rest of the world.

[...] Mr. Zhu said that labor costs in the U.S. still outstrip what it currently costs him to hire workers in Zhejiang. He estimates that costs for one South Carolina worker are about six times more than one in China, but that the difference could shrink to three times by 2015.

A major saving will come from what the firm pays for cotton. China runs a national cotton stockpile which in 2011 started aggressively buying up domestically grown cotton in an effort to boost the income of local farmers, pushing up prices. To stop local yarn-spinning firms from abandoning Chinese-grown cotton in favor of the foreign kind, Beijing imposes tariffs that can run as high on 40% on imports. Imports are also limited by quotas. That’s resulted in cotton selling at higher prices in China than the rest of the world.

Using prizes to drive science

One of the many derivatives of the XPrize that continue to pay off (NYTimes via Instapundit):

An international competition to pave the way for a new generation of rescue robots was dominated by a team of Japanese roboticists who were students in the laboratory of a pioneer in the design of intelligent humanoid machines.

What's astounding is that the actual prizes aren't large compared to the innovation that is unleashed or the budgets at any state or province. What I'd love to see is a province or state that slowly reduces its grants in favor of tangible high profile scientific advances (it's an intervention that least disrupts private innovation).

A better approach to corporate Christmas giving

While it's sometimes funny how out of touch managers seem around Christmas... this is probably the best approach to take - even if your budget isn't zero (WSJ):

Oh, and don't complain to them that you're not getting anything either. You're making enough to live on. They have three roommates, one bathroom and nothing but beer, Chinese takeout and half a jar of capers in the fridge.

So what can you do if your budget is zero?

Unless you're the CEO, spring for some nice blank cards and write a personal note of appreciation to your employees. I said personal. To each of them.

Yeah, it'll take more than 10 minutes. But recognizing something they've accomplished will be appreciated more than you know.

Don't even think about getting your assistant to do it for you. They know your handwriting.

More on the future of work... "don't learn to code"

Not sure I agree with this entirely as learning to code is also developing a framework for problem solving, but I can't fault their approach (99u via Lifehacker):

If becoming a programmer is appealing to you, great. But seeking employment based on any one "hard skill" is an outdated way of thinking. The rapid evolution of technology forces us to constantly reconsider which hard skills are in demand. (And we should). Staying on top of the hard skills needed is a necessity in the short term, but one of the best ways to position yourself for success in the long term is to focus on the soft skills needed no matter what technology you are working with.

Where people are moving

And the growth of supercities - it's interesting that the only country in a developed country is London at #10 (Quartz via Chris Blattman).

It's measured by the largest migrations where at least 20% of a city's population is from elsewhere - which raises interesting questions as to whether or not the growth is sustainable. Migrants will often bring differing values, ideas and depend on how migrants integrate into their new destinations.

Increasing willpower and self control

Bakadesuyo has a great list of five research-based ideas on how to improve your willpower and self-control including "telling yourself “Not now, but later” is far more powerful than “No, you can’t have that.”"

The future of jobs and the end of "average"

HBR interviews Tyler Cowen, author of Average is Over and co-author of Marginal Revolution:

Workers more and more will come to be classified into two categories. The key questions will be: Are you good at working with intelligent machines or not? Are your skills a complement to the skills of the computer, or is the computer doing better without you? … If you and your skills are a complement to the computer, your wage and labor market prospects are likely to be cheery. If your skills do not complement the computer, you may want to address that mismatch. Ever more people are starting to fall on one side of the divide or the other. That’s why average is over.

One thing the book suggests is that only being technically skilled may not be that useful, because those jobs can be outsourced or even turned over to smart machines. But people who can bridge that gap between technical skills and knowing some sector in a way that’s more creative or more intuitive, that’s where the large payoffs will come.

A classic example is Mark Zuckerberg with Facebook. Obviously a great programmer, but had he just gone out to be paid as a programmer he wouldn’t be that well off. He was a psychology major — he understood how to appeal to users, to get them to come back to the site. So he had that integrative knowledge.

For people who are not technically skilled, marketing, persuasion, cooperation, management, and setting expectations are all things that computers are very far from being good at. It comes down to just communicating with other human beings.

Most important habit of sucessful entrepreneurs?

Apparently it's punctuality (Entrepreneur). It's difficult to argue with its importance but I don't know I've ever thought of it as the most important habit. From Entrepreneur:

being punctual gives you the right—the positioning—to expect and demand that others treat your time with the utmost respect. You cannot reasonably hope to have others treat your time with respect if you show little or no respect for theirs. So if you're not punctual, you have no leverage, no moral authority. But the punctual person gains that advantage over staff, associates, vendors, clients, everybody.

Development's public enemy number 1?

Apparently it's corruption but like one comment at Chris Blattman's blog notes, it's a bit more complicated than that. Bad governance enables corruption and ideology provides cover for regulations that enable corruption while ignoring the need for property rights for all that would enable everyone including the poor...

Greed, envy and Pope Francis

Bloomberg via Glenn Reynolds:

By dwelling on inequality, the pope is promoting envy. The Catholic Church, I had always understood, disapproves of envy, deeming it one of the seven deadly sins. . . . Jesus, when asked to remedy inequality, turned the focus back on envy and greed.

Reynolds goes onto note: "Charity is good for the soul. Exercise is good for the body. Forced redistribution is not charity, and will do no more for your soul than making someone else lift weights at gunpoint will do for your biceps."

Venture capital, not aid?

This is exciting: Unitus is raising $3.3 million to fund for-profit firms to fund startups that will fight poverty in India - but I'd worry about reduced expectations in managing and measuring portfolio firms (TechCrunch).

When inequality is a problem

When it's caused by cronyism (WashingtonExaminer via Instapundit):

In other words, is it a bad thing for a country to have some really rich people? Again, it depends on how they got rich.

Sutirtha Bagchi of the University of Michigan’s business school and Jan Svejnar of Columbia’s School of International and Public Affairs studied how inequality correlates with economic growth. In general, more inequality meant slower growth, and less inequality meant faster growth.

But in many countries, over various time periods, growing inequality had no effect on economic growth. The new study suggests that an increase in inequality hurt the economy when the rich were getting rich through political connections.

That is, inequality hurts the economy when “a large share of the national wealth is held by a small number of politically connected families,” as the authors put it. . . . When a country’s wealthiest people got their wealth as Pangestu and Fridman did, inequality places a drag on the economy. When a country’s wealthiest got wealthy through market means, the resulting inequality has no negative effect on economic growth.

This jibes with what we know about free markets. If people can get rich by providing valuable things at good prices, then society will get more valuable things at good prices—and people across the income spectrum benefit. But if people get rich by pocketing subsidies and using the state to crush competitors, then they gained their wealth at the expense of everyone else.

Why the future of automaking belongs to the upstart

Updates on the Progressive Auto X-Prize and some wider implications (Wired via Instapundit):

You might argue that Edison2 and Illuminati Motor Works are small outfits with no hope of ever putting their cars into production. But to me, their smallness is exactly the point. They didn’t have armies of engineers and designers and coders and marketers. They didn’t know any billionaires. They were working in the depths of a severe economic recession, maxing out credit cards. Yet they solved a hard and important problem. These mere mortals had three years to reach 100 miles per gallon and 200 grams of carbon dioxide per mile. That was their race. And they won it. They prove that we can do better.

Magazine editor turned manufacturer of UAVs

Pretty cool and instructive story of the three trends of Desktop Fabrication, the Power of Code and Cloud-based Services that have allowed the former editor-in-chief to become the co-founder of a manufacturer of Unmanned Aerial Vehicles (UAVs) (Popular Science).

Illustrating the difficulties in making a broken IP system perform better

Richard Epstein is critical of new patent reform project (Forbes) while Fred Wilson has a considerably different view (AVC).

Encouraging signs in China's domestic markets

As much as China has on the surface appeared to embrace capitalistic reforms, the cronyism and concentration of power amongst state owned firms suggests otherwise. Things may be changing according to a survey of China's top brands (WSJ):

Support for private enterprise is also gaining momentum, Ms. Wang said. The majority of new entrants in the study—which was expanded to 100 brands from 50 in previous years—were from market-driven companies. They accounted for 34 new entrants to the list, compared with 16 new state-owned entrants, the study said.

To be sure, state-owned companies still dominate the country’s top brands, accounting for eight of the top 10.

Aside from propelling private enterprise, other government initiatives appear to be reflected in the brand rankings, Ms. Wang said. Alcohol brands’ value has fallen amid an austerity effort, curbing lavish bureaucratic banquets and the consumption of pricey spirits. White-spirit brand Moutai’s value dropped 19% on-year, while alcohol company Wu Liang Ye dropped 66%.

Want to help the poor?

According to John Stossel, the best answer to help the poor is build a business. I think he's generally right.

More on that humble shipping container

An innovation that many of us overlook (theAtlantic). More here.

Freedom zones to save Detroit?

A proposal from Rand Paul (WashingtonExaminer).
Update: More here (DailyCaller)
Update: the DetroitNews likes the ideas, thinks it might create some unintended consequences but notes the real problem is (in)action. (DetroitNews)

The problem with welfare systems

John C. Goodman on the War on the Poor (PsychologyToday):

One of the biggest differences in how the left and the right view the world concerns the welfare state. Currently, the federal government spends about $1 trillion a year on 126 means tested welfare programs. That amounts to almost $22,000 for every poor person in America, or $88,000 for a family of four.

What difference does all this spending make?

Among people on the right, there is little doubt. These programs are destroying the culture of the recipient communities. They are replacing a culture of self-reliance and self-help with a culture of dependency. Amazingly, a record 91.5 million people of working age—almost one third of the entire population—are not working and not even looking for a job.

A video to replace your snooze button

I don't use a snooze button... it was pointed out to me (Workability.net) that an act of procrastination is probably not the most ideal way to start your day. But this is motivating (h/t Facebook):