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Willem Buiter, Iceland’s bank defaults: lessons of a death foretold:

“Early in 2008, Anne Sibert and I were asked by the Icelandic bank Landsbanki (now in receivership) to write a paper on the causes of the financial problems faced by Iceland and its banks, and on the available policy options. We sent the paper to the bank towards the end of April 2008. On July 11, 2008, we presented a slightly updated version of the paper in Reykjavik in front of an audience of economists from the central bank, the ministry of finance the private sector the academic community. A link to that paper can be found here.

Because our Icelandic interlocutors considered the paper to be too market sensitive, we agreed not to put it in the public domain. Now that all three formerly internationally active Icelandic banks – Glitnir, Landsbanki and Kaupthing – have gone into receivership, there is no reason not to circulate the paper more widely, as some of its lessons have wider relevance.”

Freakonomics: Sudhir Venkatesh, The Price of Advice: Chronicles of a Young Philanthropist, Part III:

“The year-long process taught me a lot about the civic sensibility of the modern American elite. Perhaps most illuminating: the donors had very rigid ideas concerning the capacity of poor people to change their behavior. When they met poor families (in Chicago and New York), they expected that their money would have magical powers. I exaggerate only slightly.

They believed that poverty was largely a result of resource deficiencies and organizational inefficiencies: if the poor had more money and their service providers could simply manage their giving more efficiently, change would happen. None placed much emphasis on feelings of self worth, the long-term nature of behavioral change or, most important, that staying above water is itself an accomplishment for a poor household. Everyone modeled their expectations after their family business or other corporate workplaces where they saw the “bottom line” motivate people to meet certain standards of achievement.”

Update. Meer problemen met de rijken: Age Of Riches. Challenges of $600-a-Session Patients.

“I short-sold more stock of the companies that brought us the housing and credit crises.” Jeff, 28, Scientist. Seattle, Washington

How I Spend my Stimulus:

“In January, Congress approved $152 billion in economic stimulus checks for millions of American households, intended to boost the economy and avert a recession. Just how this money will be spent remains to be seen. We hope this website helps shed some light on where the stimulus money is going.”

Via Cynical-C Blog. Zie ook Freakonomics, Likely Effects of the Tax Rebate Checks en What’s the Smartest Way to Spend Your Rebate?

Bessemer Venture Partners, AntiPortfolio:

“Bessemer Venture Partners is perhaps the nation’s oldest venture capital firm, carrying on an unbroken practice of venture capital investing that stretches back to 1911. This long and storied history has afforded our firm an unparalleled number of opportunities to completely screw up.

Over the course of our history, we did invest in a wig company, a french-fry company, and the Lahaina, Ka’anapali & Pacific Railroad. However, we chose to decline these investments, each of which we had the opportunity to invest in, and each of which later blossomed into a tremendously successful company. “

Apple, Intel, FedEx, Ebay, Google… Via Freakonomics, Misadventures in Venture Capitalism.

Chris Anderson, Free! Why $0.00 Is the Future of Business:

“Enabled by the miracle of abundance, digital economics has turned traditional economics upside down. Read your college textbook and it’s likely to define economics as “the social science of choice under scarcity.” The entire field is built on studying trade-offs and how they’re made. Milton Friedman himself reminded us time and time again that “there’s no such thing as a free lunch.

But Friedman was wrong in two ways. First, a free lunch doesn’t necessarily mean the food is being given away or that you’ll pay for it later — it could just mean someone else is picking up the tab. Second, in the digital realm, as we’ve seen, the main feedstocks of the information economy — storage, processing power, and bandwidth — are getting cheaper by the day. Two of the main scarcity functions of traditional economics — the marginal costs of manufacturing and distribution — are rushing headlong to zip. It’s as if the restaurant suddenly didn’t have to pay any food or labor costs for that lunch.

Surely economics has something to say about that?”

Trouw, Hoezo sparen? Kasmoni!:

“Aandelen zijn uit. Sparen is weer in. De onrust op de effectenbeurzen en de stijgende rente hebben de op zeker spelende Nederlanders naar hun oude, vertrouwde spaarrekening gedreven. Gezamenlijk hebben Nederlanders nu 246 miljard euro op zo’n rekening weggezet. Dat is 16 miljard meer dan vorig jaar, een stijging van zo’n 1000 euro per inwoner.

Toch zijn er vele groepen, vooral allochtonen, die dit ’sparen op de bank’ te formeel vinden. Je moet allerlei papieren overleggen en contracten sluiten. Toch moeten ook zij af en toe een grote uitgave doen. Daarvoor vallen ze terug op een informeel banksysteem dat in de eigen cultuur vaak al eeuwenlang goed heeft gewerkt. Die systemen zijn bij de deelnemers bekend onder exotisch klinkende namen als sam (Antillianen), susu (Ghanezen) en nouba (Marokkanen). Kasmoni, het systeem van Creoolse Surinamers, is wel het bekendst.”

Kevin Kelly, The Technium:

“When copies are free, you need to sell things which can not be copied.”

Financial Times, Lone trader seeks minute of fame:

“An independent trader apparently intent on securing his place in market history was responsible for oil prices briefly touching the unprecedented level of $100 a barrel – on the back of a single tiny trade, writes Javier Blas.

Some observers questioned the validity of the price mark when it emerged that the peak was the result of a trader – one of the “locals” who trade on their own money – buying from a colleague just 1,000 barrels of crude, the minimum allowed, industry insiders said. He sold them back a short while later for a small loss. The deal on the floor of the New York Mercantile Exchange was at a hefty premium to prevailing prices.

Stephen Schork, a former Nymex floor trader and editor of the oil-market Schork Report, said the price jump was due to a trader seeking his one minute of fame.

“A local trader just spent about $600 in a trading loss to buy the right to tell his grandchildren he was the one who did it,” Mr Schork said. “Probably he is framing right now the print reflecting the trade.”"

Benjamin N. Friedman, Industrial Evolution:

“(…) Why do some countries have an economically helpful culture while others don’t? And, since no society got very far in economic terms before the Industrial Revolution, what caused the culture of the recently successful ones to change?

In “A Farewell to Alms,” Gregory Clark, an economic historian at the University of California, Davis, suggests an intriguing, even startling answer: natural selection. Focusing on England, where the Industrial Revolution began, Clark argues that persistently different rates of childbearing and survival, across differently situated families, changed human nature in ways that finally allowed human beings to escape from the Malthusian trap in which they had been locked since the dawn of settled agriculture, 10,000 years before. Specifically, the families that propagated themselves were the rich, while those that died out were the poor. Over time, the “survival of the richest” propagated within the population the traits that had allowed these people to be more economically successful in the first place: rational thought, frugality, a capacity for hard work — in short the familiar list of Calvinist, bourgeois virtues. The greater prevalence of those traits in turn made possible the Industrial Revolution and all that it has brought.”

The New York review of Books, The Wrecking Ball of Innovation:

“Supercapitalism is Robert Reich’s account of the way we live now. Its story is familiar, its diagnosis superficial. But there are two reasons for paying attention to it. The author was President Clinton’s first secretary of labor. Reich emphasizes this connection, adding that “the Clinton administration—of which I am proud to have been a part—was one of the most pro-business administrations in American history.” Indeed, this is a decidedly “Clintonesque” book, its shortcomings perhaps a foretaste of what to expect (and not expect) from another Clinton presidency. And Reich’s subject—economic life in today’s advanced capitalist economy and the price we are paying for it in the political and civic health of democracies—is important and even urgent, though the “fixes” that he proposes are unconvincing.”

Freakonomics, Bruce Schneier Blazes Through Your Questions:

“Last week, we solicited your questions for Internet security guru Bruce Shneier. He responded in force, taking on nearly every question, and his answers are extraordinarily interesting, providing mandatory reading for anyone who uses a computer. He also plainly thinks like an economist: search below for “crime pays” to see his sober assessment of why it’s better to earn a living as a security expert than as a computer criminal”

Ben Wallace-Wells, How America Lost the War on Drugs:

“The drug war, in the end, has been undone in no small part by the sweeping and inflexible nature of its own metaphor. At the beginning, in the days of Escobar, the campaign was a war as seen from the situation room, a complicated assault that spanned multiple fronts, but one which had identifiable enemies and a goal. Today, the government’s anti-drug effort resembles a war as seen from the trenches, an eternal slog, where victory seems not only unattainable but somehow beside the point. For the drug agents and veterans who busted Escobar, the last decade and a half have been a slow, agonizing history of defeat after defeat, the enemy shifting but never retreating. “You get frustrated,” Joe Toft, a former DEA country attache in Colombia, tells me. “We’ve never had a true effort where the U.S. as a whole says, ‘We’re never going to crack this problem without a real demand-reduction program.’ That’s something that’s just never happened.”"

Zie ook: Smartest Drug Story of the Year

NRC, 900 euro per maand (bruto). Debat over kunstsubsidie het inkomen van de kunstenaar.

“In 2002 schreef Abbing het boek Why are Artists Poor?, over de complexe relatie tussen kunst en geld. „Overal om mij heen zag ik kunstenaars die het niet bepaald breed hadden”, vertelt hij. „Het gemiddelde inkomen van de Nederlandse kunstenaar is al lange tijd heel laag.

Ruim tachtig procent kan niet rondkomen. Dat betekent dat minder dan twintig procent genoeg verdient om gewoon te kunnen leven. Je kunt dus stellen dat dit bijna de situatie is van de amateur. Maar toch hebben we het hier over professionele kunstenaars.”

Abbing is voor het afschaffen van individuele subsidies en verwoordde die mening ook in een essay in Second Opinion. „Het subsidiestelsel kan een aanzuigende werking hebben”, zegt hij. „En er zijn in Nederland al zoveel kunstenaars.

Je geeft door al die subsidies een gekleurd beeld aan kunststudenten: dat het in de beeldende kunst heel erg vetpot is. Wat ik verkeerd vind aan het Nederlandse systeem is dat het uitgaat van een beloning achteraf. Een beurs is een soort ereprijs voor de dingen die je gedaan hebt.

Je stuurt wat dia’s op en op basis daarvan word je beoordeeld. Je dient wel iets van verantwoording af te leggen voor wat je met het geld gedaan hebt, maar dat is meer voor de vorm. Het is volgens mij nog nooit gebeurd dat het Fonds zei: betaal het maar terug.””

Heleen Mees, De verzorgingsstaat verstikt migranten:

“Precies zoals White het meer dan een halve eeuw geleden voorspelde, vind je op steenworp afstand van mijn huis in New York een deli, een stomerij, een bakker, een Starbucks, een kledingmaker, een nagelstudio, een slijterij, een bloemenstalletje en een parkeerservice. De winkels zijn de hele week tot negen uur ’s avonds open en de deli zelfs dag en nacht. Nannies zorgen voor de kinderen in de buurt en dogwalkers laten de honden uit. Koeriersdiensten en taxi’s rijden af en aan. Volgens White is er in New York om de paar blokken wel een Main Street, een dorpsstraat. De straat waar ik woon heet toevallig ook echt Main Street.”

(…)

“Als ik in Amsterdam ben valt het me telkens opnieuw op wat voor gesegregeerde samenleving het is. Terwijl ik in New York voortdurend in aanraking kom met mensen in allerlei soorten, kleuren en maten, heb ik in Amsterdam hoofdzakelijk van doen met mensen die net als ik blank en hoogopgeleid zijn. Alleen bij de Albert Heijn en C1000 krijg ik soms de kans om een paar woorden te wisselen met meisjes met hoofddoekjes die achter de kassa zitten.”

(…)

“In Nederland is er als gevolg van de verzorgingsstaat een overschot aan laagopgeleiden. Of, zoals Hannah Arendt het zou zeggen, „er is te weinig arbeid om ze tevreden te stellen”. In een verzorgingsstaat worden laagopgeleiden gedwongen tot inactiviteit. Ze krijgen daardoor niet de kans om hun eigen individualiteit tegenover andere mensen kenbaar te maken. Of om het iets minder deftig te zeggen: laagopgeleiden wordt in Nederland de mogelijkheid ontnomen om zichzelf te verwezenlijken.”

Wikipedia:

“The setup involves an auctioneer who volunteers to auction off a dollar bill with the following rule: the dollar goes to the highest bidder, who pays the amount he bids. The second-highest bidder also must pay the highest amount that he bid, but gets nothing in return.”

Naar aanleiding van Lessons on the surge from economics 101.

Slate: “Let’s do the math: (…)”

NY Magazine: “The wild risks, unexpected niches, and day-in-day-out grind behind making a dollar in New York…for everyone from a drug dealer to Goldman Sachs.”

Keuringsdienst van Waarde: “Het gerechtshof in Amsterdam heeft vandaag besloten dat twee jonge ex-slaven uit Burkina Faso gehoord moeten worden in de zaak tegen chocoladecrimineel Teun van de Keuken.”