New Development Blog: Why Nations Fail

Looks pretty promising by academic powerhouses Daron Acemoglu and James Robinson promoting their book: Why Nations Book (though I hope they keep their blog running for more than just their book's sake).

Happy Valentine's Day, The Economics Edition

Economics geekery from Elisabeth Fosslien as posted at the Freakonomics blog - a sample (with lots more at the link):

Quote of the day: An Ounce of Action

via the Swissmiss, from Ralph Waldo Emerson:

An ounce of action is worth a ton of theory. Don’t be too timid and squeamish about your actions.

Kauffman Foundation: "Will it be you?"

I love inspiring ads like this (and this) - airing at the Superbowl (via Paul Kedrosky):

NPR: "The Secret Document That Transformed China"

Fascinating and inspired look by NPR at how markets were unleashed from the ground up in rural China - but also speaks to how frightening, brave but also desperate these villagers were (via HN):

Despite the risks, they decided they had to try this experiment — and to write it down as a formal contract, so everyone would be bound to it. By the light of an oil lamp, Yen Hongchang wrote out the contract.

The farmers agreed to divide up the land among the families. Each family agreed to turn over some of what they grew to the government, and to the collective. And, crucially, the farmers agreed that families that grew enough food would get to keep some for themselves.

The contract also recognized the risks the farmers were taking. If any of the farmers were sent to prison or executed, it said, the others in the group would care for their children until age 18. [...]

It was the same land, the same tools and the same people. Yet just by changing the economic rules — by saying, you get to keep some of what you grow — everything changed.

At the end of the season, they had an enormous harvest: more, Yen Hongchang says, than in the previous five years combined.

Every presentation, ever.

via swissmiss - it's funny if you don't burst out weeping if you attend or do a lot of presentations:

A few tips on making commitments, and keeping them

I don't do New Year's resolutions but I've found that this time of the year is useful in looking back at priorities and reassessing. Two recent articles bring up similar ideas on how to make sure you keep your New Year's resolutions, if you do them or any resolutions for that matter. First a look at why we fail from John Tierney (NYT):

They’ll fail because they’ll eventually run out of willpower, which social scientists no longer regard as simply a metaphor. They’ve recently reported that willpower is a real form of mental energy, powered by glucose in the bloodstream, which is used up as you exert self-control.

One solution? Use your willpower less often:

The study, led by Wilhelm Hofmann of the University of Chicago, showed that the people with the best self-control, paradoxically, are the ones who use their willpower less often. Instead of fending off one urge after another, these people set up their lives to minimize temptations. They play offense, not defense, using their willpower in advance so that they avoid crises, conserve their energy and outsource as much self-control as they can.

More at Wired.

Smile. You'll be happy you did.

The Gap Between Productivity and Failure

Why productivity enhancements don't work (Seth Godin) -

Until you quiet the resistance and commit to actually shipping things that matter, all the productivity tips in the world aren't going to make a real difference. And, it turns out, once you do make the commitment, the productivity tips aren't that needed.

You don't need a new plan for next year. You need a commitment.

You know that things are bad with the Euro when...

A country like Iceland wants to adopt the Canadian dollar?  (CNBC)  In other related news, the President of discount airline Ryan Air slams the EU at an "innovation" summit:

Transcript available at the Spectator.org.

From the Mouths of... Rockers?

A refreshingly grounded view from KISS er, singer Gene Simmons (sfgate):

The mess is our fault – corporations have no responsibility. Capitalism is the best thing that ever happened to human beings. The welfare state sounds wonderful but it doesn’t work. Governments hand out more money than they have to support welfare and they land in debt. Then they have to borrow money… that’s bad business. 

“When I was growing up, my mother went to work. There was no welfare. If you worked, you made money. If you didn’t work, you had to figure it out – you’d go and wash dishes.”

The problem with anarchists...

via Matt L:

Western Decadence at its...

most bizarre?

Charity meets um Reality? The Blasphemous Edition

Milton Friedman on Liberty and Equality, a Reminder

Has Halloween become Overcommercialized?

A few years old but for a bit of levity on a Monday afternoon (theOnion):

 

In The Know: Has Halloween Become Overcommercialized?

This seems terribly unwise...

On how the credit default swaps for Greece may not pay out despite well, defaulting (WSJ):

If insurance written by market participants for market participants is invalidated by sovereigns, what is the value of insurance contracts being offered by the sovereigns themselves? 

Here I’m referring to the European Financial Stability Facility, which is now being touted as a super insurer of European sovereign debt (albeit maybe only the first 20%). Once again, Buiter makes a critical point: not allowing existing CDS to trigger reduces the credibility of the EFSF protection. 

I’d go even further. The whole euro exercise has raised serious credibility issues. Governments used all sorts of accounting fudges, off-balance-sheet accounting and derivatives to meet single-currency membership criteria that had already been stretched to breaking point. Greece consistently misled on the state of its finances. 

France and Germany broke the Maastricht treaty obligation to keep their budget deficits below 3% of GDP even before the 2008 financial crisis. 

The latest maneuverings just confirm that Eurocrats make used-car salesmen look like the apotheosis of probity, prudence and honesty.

Expect there to be "unanticipated consequences" like higher interest rates, and the fact market participants will generally be wary of buying an insurance product that doesn't actually insure against anything.  More here on the short cuts, half measures and games European politicians and finance ministers are playing to forestall what seems increasingly inevitable - and how in doing so, may "unintentionally" be making things worse (Telegraph.co.uk).

More on Income Inequality

Warren Meyer via theThinker:

If the very rich got that way through special access to government power, then why is the solution to tax them more, and not just to reduce government power? 

And if the very rich got that way through hard work and innovation, then why the hell are we proposing to take resources out of these people’s hands?

The Kind of Re-thinking That's Needed in Aid

From a paper by David Booth (via FindWhatWorks):

If the international community is really interested in contributing to country ownership of development efforts, there should be much more discussion of how to promote a more sophisticated approach to such issues. For the aid business, this would mean first taking a more active stance on non-aid issues in development and next a different concept of what development cooperation is about, implying the acquisition of new skills. But the agencies that we support as taxpayers are not going to be able to transform themselves in the suggested way if there is not a new climate of opinion in donor countries about how development happens and how, at the margin, aid may help.

NGOs and public intellectuals who over the past period have helped to create the public assumption that development and poverty reduction are fundamentally about resource transfers from rich people to poor people have a particular obligation to help build a new consensus about the fundamental role of institutions and leadership in successful development. That the most promising kind of external contribution to development which outsiders can make is skill- and knowledge-intensive engagement with the collective-action problems at the heart of countries’ political systems is a hard message to get across. We need to find ways of doing this.

Richard Epstein on PBS: Why income inequality is a good thing in free markets

Absolutely decimating a few of the myths on inequality in free markets - 9 minutes well spent. The key I think a lot of people miss is that inequality today in free markets is much different, looks and feels much different than what it's been like historically because the inequality isn't structural.

 The perverse effect of pursuing equality in free markets, is that it not only makes everyone poorer, but it entrenches the elites in that society. (Coalitionofthewilling.net via Instapundit.com):

Watch Does U.S. Economic Inequality Have a Good Side? on PBS. See more from PBS NewsHour.