Weekly Roundup 154: A Curated Linkfest For The Smartest People On The Web!
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Handpicked to satisfy your intellectual curiosity!
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All things Inequality:
Roger Lowenstein- Occupy Wall Street: It’s Not a Hippie Thing – via BusinessWeek – As critics have noted, the protesters are not in complete agreement with each other, but the overall message is reasonably coherent. They want more and better jobs, more equal distribution of income, less profit (or no profit) for banks, lower compensation for bankers, and more strictures on banks with regard to negotiating consumer services such as mortgages and debit cards. They also want to reduce the influence that corporations—financial firms in particular—wield in politics, and they want a more populist set of government priorities: bailouts for student debtors and mortgage holders, not just for banks.
I Was Wrong, and So Are You – Magazine – via The Atlantic – A libertarian economist retracts a swipe at the left—after discovering that our political leanings leave us more biased than we think.Shouldn’t a college professor have known better? Perhaps. But adjusting for bias and groupthink is not so easy, as indicated by one of the major conclusions developed by Buturovic and sustained in our joint papers. Education had very little impact on responses, we found; survey respondents who’d gone to college did only slightly less badly than those who hadn’t. Among members of less-educated groups, brighter people tend to respond more frequently to online surveys, so it’s likely that our sample of non-college-educated respondents is more enlightened than the larger group they represent. Still, the fact that a college education showed almost no effect—at least for those inclined to take such a survey—strongly suggests that the classroom is no great corrective for myside bias. At least when it comes to public-policy issues, the corrective value of professional academic experience might be doubted as well.
How Inequality Hurts the Economy – via Businessweek – Thus the growing chasm in the U.S. between the haves and the have-nots has serious consequences. Societies that manage a narrower gap between rich and poor enjoy longer economic expansions, according to research published this year by the International Monetary Fund. Income trends in the U.S. mean that future U.S. expansions could last just one-third as long as in the late 1960s, before the income divide began widening, says economist Jonathan D. Ostry of the IMF. The average postwar economic boom lasted 4.8 years, according to the National Bureau of Economic Research. The current expansion, which is just 27 months old, may peter out within a few months. Goldman Sachs (GS) said on Oct. 3 that the U.S. would be “on the edge of recession” by early 2012. Expansions fizzle sooner in less equal societies because they are more vulnerable to both financial crises and political instability. When such countries are hit by external shocks, they often stumble into gridlock rather than agree to tough policies needed to keep growth alive. Raghuram G. Rajan, the IMF’s former chief economist, says political systems in economically divided countries become polarized and immobilized by the sort of zero-sum politics now gripping Washington. “It makes the politics more difficult, and that makes it more difficult to grow,” says Rajan, now a finance professor at the University of Chicago’s Booth School of Business. “There is no consensus on any of the solutions that are proposed.”
Wells Fargo Says 80 May Be the New 65 for Retirees – via Bloomberg – “Eighty is the new 65,” Joseph Ready, executive vice president of Wells Fargo Institutional Retirement & Trust, said in an interview at Bloomberg headquarters in New York before the survey was released today. “It’s a real sea change.” About 74 percent expect to work in retirement, according to the survey, with about 39 percent working because they’ll need to and 35 percent because they want to. And 25 percent of those surveyed said they expect they’ll need to work until at least age 80 because they don’t have sufficient savings. “People are starting to move toward understanding the different levers of what they’re going to have to do to make it in retirement,” Ready said.
The US is Now a Corporate Monarchy – via The Big Picture – I wonder: Why have the Europeans figured out they are getting screwed, and we haven’t? Why are they taking to the streets en masse, while we seem to be watching our own control over our own futures slip from our hands almost as if from afar? In America, we are too busy dropping the kids off at soccer, running around looking for sales and bargains, racing to keep our heads above water. We seem to forget to get outraged. Our control over our once Democracy — the one we had a revolution against a monarchy dictating decisions from afar — slips away from us. Not with a bang, not even with a whimper, but with a 1000s acts of gradual ceding of power to the new Monarch. We have given up hard won rights to a coordinated attack from all three branches of government; Our Congress has become the legislative branch of eBay — Congressmen are auctioned off to the highest bidder; they even have a Buy It Now button to get specific legislation passed. The executive branch has fallen under the sunk cost fallacy, afraid to prosecute banks because we spent so many billions bailing them out. It turns out that even our once venerable Supreme Court is just as corrupted, with lobbyists partying with Justices and backdooring ethics by hiring their wives.
Hey corporate America: Show us your tax returns – via The Term Sheet: Fortune’s deals blog Term Sheet – It was enough to make anyone from a big company want to crawl under his chair. Here was David Crosby of the Crosby, Stills & Nash folk rock group holding forth at a recent performance in New York City’s Beacon Theatre, not about war or poverty but about corporate power and General Electric. “Can you believe that some big corporations paid no income tax?” he declaimed. “In fact, GE paid no taxes last year.” Then Graham Nash chimed in, “Not only that, GE got a $3.5 billion giveback.” Someone from the audience, in which one-percenters were amply represented — who else could afford the tickets? — shouted out, “Play music.” The group promptly launched into its new song: “They want it all, they want it now.” You can figure out who “they” are.
The Global Sociology Blog – via The Visual Du Jour – The 1% – This awesome animation from The Guardian is an absolute must-see:
My Views on Corporations & Taxes « blog maverick – via blogmaverick.com – The reality is that most industries are a dog fight. You have competition and you crush your brain and those of everyone around you looking for ways to get an edge. If you find a way to better compete, you are going to leverage whatever resources you have available to you in order to do so. You are not going to look at your tax rate first. You are not going to avoid making a decision because your taxes are TOO DAMN HIGH. You are going to do what you can to compete. Taxes be damned. Rule #1 of business is to stay in business.
Why doesn’t Britain make things any more? | Business – via The Guardian – In the past 30 years, the UK’s manufacturing sector has shrunk by two-thirds, the greatest de-industrialisation of any major nation. It was done in the name of economic modernisation – but what has replaced it?
The Dynamics of Firm Lobbying — HBS Working Knowledge – via hbswk.hbs.edu – Lobbying is a primary avenue through which firms attempt to change policy in the United States, with total expenditures outnumbering campaign contributions by a factor of nine. While lobbying by businesses is a frequently debated issue, there has been little systematic empirical evidence on these behaviors at the firm level. This paper is one of the first to begin to fill this gap. To do so, the researchers constructed an empirical model of lobbying behavior of publicly traded, US-headquartered firms between 1998 and 2006. They also looked in depth at a specific policy shift that has been the subject of significant public debate: the dramatic decline in the limit on H-1B visas that occurred in 2004. Findings show that the decline in the limit on H-1Bs did not induce new firms to lobby that were not previously lobbying on other issues. The decline did, however, significantly shift lobbying resources towards high-skilled immigration issues amongst firms that had lobbied previously for other issues. Moreover, the manner in which this shift occurs among firms already lobbying indicates little constraint on adjustments across issues important for firms.
Technocrats: Minds like machines – via The Economist – EVEN before Plato conceived the philosopher-king, people yearned for clever, dispassionate and principled government. When the usual run of rulers proves cowardly, indecisive or discredited, turning to the wisdom and expertise of a technocrat, as both Italy and Greece have done in recent days, is particularly tempting. Part of the attraction of the term “technocrat”, however, is that the label is so stretchy. Does it mean just any expert in government, or one from outside politics? How many technocrats, and in which positions, justify a government’s “technocratic” label? Does such an administration operate within the political system, or supplant it? For how long? Can a technocrat evolve into a politician and vice versa? The answers are imprecise and shift over time.
Best Reads of The Week
The American Values Survey: What Americans Really Care About – via 2011 American Values Survey : Public Religion Research Institute – Seven-in-ten (70%) Americans favor “the Buffett rule,” a proposal to increase the tax rate on Americans earning more than $1 million per year, compared to only 27% who oppose it.
Infographic Video: Visualizing population growth (in full colour) – via plentyofcolour.com – A big story in the news this past week was global population hitting seven billion people. There have been plenty of charts and graphs created in response but I don’t think I have seen anything like this two minute coloured water approach. A great visual infographic by Adam Cole and Maggie Starbard at National Public Radio that makes it all very clear and very colourful.
The Educational Lottery – via LA Review of Books– Education is as close to a secular religion as we have in the United States. In a time when Americans have lost faith in their government and economic institutions, millions of us still believe in its saving grace. National leaders, from Benjamin Rush on, oversaw plans for extending its benefits more broadly. In the 19th century, the industrialist Andrew Carnegie famously conceived of schools as ladders on which the industrious poor would ascend to a better life, and he spent a good bit of his fortune laying the foundations for such an education society. After World War II, policy makers who believed in the education gospel grew numerous enough to fill stadiums. One by one, the G.I. Bill, the Truman Commission report, and the War on Poverty singled out education as the way of national and personal advance. “The answer to all of our national problems,” as Lyndon Johnson put it in 1965, “comes down to one single word: education.” The American education gospel is built around four core beliefs. First, it teaches that access to higher levels of education should be available to everyone, regardless of their background or previous academic performance. Every educational sinner should have a path to redemption. (Most of these paths now run through community colleges.) Second, the gospel teaches that opportunity for a better life is the goal of everyone and that education is the primary — and perhaps the only — road to opportunity. Third, it teaches that the country can solve its social problems — drugs, crime, poverty, and the rest — by providing more education to the poor. Education instills the knowledge, discipline, and the habits of life that lead to personal renewal and social mobility. And, finally, it teaches that higher levels of education for all will reduce social inequalities, as they will put everyone on a more equal footing. No wonder President Obama and Bill Gates want the country to double its college graduation rate over the next 10 years.
Infographic Video: The Story of Broke: An Animated Look at US Federal Spending and Values – via Open Culture -Back in 2008, Annie Leonard produced The Story of Stuff (see below), a 20-minute animated film that explores the way our consumerist habits take a toll on the environment and sustainability. The video racked up millions of views on YouTube, and now Leonard returns with the second video in a longer series. It’s called the The Story of Broke (see above) and it takes a shorter, animated look at U.S. government spending — at how we prioritize our spending, and what it says about our core national values.
Salman Khan: The New Andrew Carnegie? – via TIME.com – The real revolution represented by Khan Academy, however, has gone mostly unremarked upon. The new availability of sophisticated knowledge, produced by a trusted source and presented in an accessible fashion, promises to usher in a new golden age of the autodidact: the self-taught man or woman. Not just the Khan Academy, but also the nation’s top colleges and universities are giving away learning online. Khan’s alma mater, MIT, has made more than 2,000 of its courses available gratis on the Internet. Harvard, Yale, Berkeley, Johns Hopkins and Carnegie Mellon are among the other elite institutions offering such free education. When Stanford announced last August that it would be opening to the online public a course on artificial intelligence, more than 70,000 people signed up within a matter of days. The course’s two professors say they were inspired to disseminate their lessons by the example of Salman Khan. Khan Academy’s own videos now go well beyond basic algebra to teach college-level calculus, biology and chemistry.
Acknowledging mistakes is key to advancement – and not just in science – via The Guardian – If scientific evidence points in a new direction, beliefs change. Error is just part of life. But outside science, such changes in direction seem to be anathema The truth is a moving target. You can see it in the fluidity of modern news – whether it comes from newspapers or Twitter – and attest to the ever-changing narratives as you try to work out what happened, when, who caused it and, crucially, what it all means. This is another way of saying that mistakes happen all day, every day.The faster you want your information, the less you cross-reference it, and the less likely it is to be true. Journalists as much as anyone else, while looking for the truth, can be thwarted by bias, bad motives or plain ignorance on either their own part, or that of their sources.
Barry Schwartz | Decision-making and Economics – The Paradox of Choice – via The European Magazine – In the NYT magazine, scientist Roy Baumeister talks about decision fatigue: His theory is that too many decisions wear us out and negatively affect our judgement. Schwartz: It’s the phenomenon where you have to exert self-control to get yourself to do something that is unpleasant and to stay at it. And when you do that, it’s sort of like tiring your muscles. When you now have to do it again, you don’t have the resources available. Like if you’ve run 15 miles, you can’t just hop up and run another 15 miles. You are worn out. He thinks the same thing is true with whatever mechanisms enable us to exercise discipline and self-control. One study that the Times article does mention is that one way of wearing people’s self-control out is by requiring them to make a series of decisions. Just like sticking with a really unpleasant reading assignment or a set of homework problems wears out your self-discipline, so also does making choices. And I find that quite plausible. I think there’s good reason to think that if you go shopping back to school at the mall with your kids, and you are making one set of choices after another, by the end of the day, you are doing some really stupid things, just to get it over with and get out of there.
Video Ted Talk: Does democracy stifle economic growth? – via TED.com – Economist Yasheng Huang compares China to India, and asks how China’s authoritarian rule contributed to its astonishing economic growth — leading to a big question: Is democracy actually holding India back? Huang’s answer may surprise you.
How crowdsourcing is changing science – Ideas – via The Boston Globe – One reason for the sudden turn to crowd science is that it offers an imaginative answer to a central problem of 21st-century science: too much information. Oxford’s scholars had an overwhelming load of work given them, in the form of a desert trove. More often, though, scientists are themselves creating floods of data that they simply don’t have the hours to interpret. Every night, robotic telescopes relentlessly track the sky, pouring terabytes of images into hard drive farms. From biological labs come rivers of genetic code. And in many other fields — from high energy physics to environmental science — researchers are puzzling over how to handle the sudden embarrassment of riches. For now, the new citizen science has touched only the tiniest fraction of the research conducted around the world. But its early successes, which have shocked even the architects of the approach, suggest that over time pro-am collaborations hold the potential to alter the landscape of science in important ways, harnessing countless able brains to do work that was once the province of a few overwhelmed experts. And as it does, it also offers an uncomfortable insight: There are ways that the structure of modern science may actually be limiting what we can learn.
The need to redesign money to solve both financial & environmental crises – via There are Free Lunches – Why is the whole world in debt? How can we end these crises? Here is a TEDx talk on the hidden cause of the financial crisis. The real crisis is in our monetary system – the way our money is created. The solution is to redesign the way money is created. This is the underlying reform required to end the financial, environmental and social crises afflicting our societies. In this TEDx talk, Professor Jem Bendell calls on assembled broadcasters from across Europe, to expose the true nature of our current crises, and how to solve them.
Citizen Consumer – via www.bostonreview.net – Not only do consumers have clout, but traditional state and intergovernmental regulation has failed to ensure ethical manufacturing. Global production systems continue to challenge the capacities of states, international organizations such as the United Nations, and NGOs to curb labor and environmental exploitation and human rights violations. Complex cross-border transactions, rapid movement between suppliers, and limited transparency have made it virtually impossible for national governments to regulate global production. The U.S. government does not regulate the production methods of U.S. firms operating in other countries (in part because of WTO rules), and the Chinese government has shown little inclination and even less capacity to regulate companies such as Foxconn, which is now China’s largest private employer. NGOs, which are effective in advancing transparency and alerting consumers to problems in supply chains, are less able to monitor and enforce compliance with global standards and, aside from the threat of public exposure, lack mechanisms with which to incentivize supply-chain improvements. A significant portion of consumption is more or less automatic; people just buy what they have always bought. Habits, routines, social cues, and heuristics are all critical to getting us through our busy and information-overloaded days. Consumers often accept the “default” option available in their local retailer, which usually isn’t the most ethical.
Video: Ted Talk- The surprising math of cities and corporations – via TED.com – Physicist Geoffrey West has found that simple, mathematical laws govern the properties of cities — that wealth, crime rate, walking speed and many other aspects of a city can be deduced from a single number: the city’s population. In this mind-bending talk from TEDGlobal he shows how it works and how similar laws hold for organisms and corporations.
Behavioral Economics, Complexity Research, Decision Making, Psychology, & Risk
The Misunderstanding of Miranda Rights – via Psych Net – Television and other media inundate Americans with innumerable yet fragmentary examples of Miranda warnings; however, familiarity born of repeated exposures cannot be equated with accuracy or understanding. The intended purpose of these warnings is to inform and caution rather than to pacify and reassure—a purpose that cannot be realized when most custodial suspects assume that they already know everything the law insists they should be told. Painstakingly negotiated Constitutional safeguards are further imperiled when attorneys, judges, and forensic evaluators are lulled into complacency by the commonly held misconception that everyone understands their Miranda rights. This article elucidates certain false beliefs and misapprehensions regarding Miranda comprehension and identifies widespread neglect of these issues by the professional community.
Is there a proven system for making yourself happier? – via Barking up the wrong tree – The collected findings from all studies indicate that the program has a noticeable and perhaps long-lasting effect on happiness for the great majority of individuals exposed to it and that this effect is due to the content of the information, not merely the artifact of sensitization or expectations about happiness to which it was compared.
Brain areas that increase in size with social network size. – via mindblog.dericbownds.net – It has been suggested that variation in brain structure correlates with the sizes of individuals’ social networks. Whether variation in social network size causes variation in brain structure, however, is unknown. To address this question, we neuroimaged 23 monkeys that had been living in social groups set to different sizes. Subject comparison revealed that living in larger groups caused increases in gray matter in mid-superior temporal sulcus and rostral prefrontal cortex and increased coupling of activity in frontal and temporal cortex. Social network size, therefore, contributes to changes both in brain structure and function. The changes have potential implications for an animal’s success in a social context; gray matter differences in similar areas were also correlated with each animal’s dominance within its social network.
Business, Economics, Finance, Investing, Start-ups
The co-op business model: share whatever you’ve got – via Derek Sivers – I feel like I know almost nothing about business, because the only business I’ve ever done is the co-op / sharing model. It goes like this: 1. You already have something that people want. It might be something you own, something you’ve learned how to do, or access to valuable resources, space, or people. 2. Find a way to share it with everyone who needs it. Share because it’s what you do for friends, because it’s the right thing to do, because it makes the world a better place, and because it’ll make you deeply happy. Share as your contribution in return for all the things and ideas that people have shared with you.
No easy solution – via Prospect Magazine – The global financial crisis has exacted a heavy toll on public finances around the world. Deficits have rocketed and in many developed countries, government indebtedness has soared to levels not seen since 1945. Dealing with the perils of this has become one of the biggest policy issues of our time. The US economists Kenneth Rogoff and Carmen Reinhart have pointed out that high levels of public debt are associated with low growth and high inflation. Jittery bondholders might take flight if deficits in some countries are not swiftly curbed. Several eurozone countries have already been forced to seek assistance because of their inability to refinance their borrowings, and Greece now seems to be teetering on the brink of outright default.
Crushing the Cost of Predicting the Future – via NYTimes.com – ” A company called Recorded Future looks at 100,000 Web pages an hour, scanning across 50,000 sources that include everything from Securities and Exchange Commission filings to Twitter comments. The idea is to look for statements about the future, like notice of an annual meeting or predictions about when a product might be released, look at past developments and then create a “temporal index” that suggests trends.
What Is Sony Now? – via BusinessWeek – By fall, Kazuo Hirai, Sony’s executive deputy president and Stringer’s heir apparent, was speaking publicly of “a sense of crisis” at the company. Sony predicted a $1.2 billion loss for the fiscal year ending next March. Its share price recently hit a 24-year low; its $17 billion market cap is half of what it was when Stringer became CEO. There’s more to Sony’s problems than acts of God and currency traders. The maker of the Walkman and the Trinitron hasn’t driven pop culture for years. Sony thrived in an era of stand-alone electronics. When the Internet arose and digital began to mean connected, iPods became the center of people’s entertainment lives, then smartphones and tablets—which Sony was late to produce. Even the quintessential Sony product—the TV set—has become a millstone. Sony has lost nearly $8.5 billion on TVs over eight years and expects to keep losing at least into 2013. Samsung, Vizio, and other upstarts have driven prices so low that one Sony executive says the company charges less for some TVs than it cost to ship them a few years ago.
Cultural Values, CEO Risk Aversion and Corporate Takeovers by Thorsten Lehnert, Bart Frijns, Aaron Gilbert, Alireza Tourani – via Finance Professor– Another in a growing list of papers that claim to show managers’ biases influence firm decisions. In this paper the authors take a tack away from manager’s individual characteristics and focus on where they are from:
‘Big data’ the next big thing – Science – via NZ Herald News – The latest buzzword is “augmented intelligence” – the difference being that instead of leaving it up to computers to draw their own conclusions, augmented intelligence uses human analysts as well. The trend has spawned a new occupation: data scientist. The first summit for data scientists was held in Las Vegas in May and if you’re thinking of retraining, or looking for a new career, you could do a lot worse. A recent report from the McKinsey Global Institute (MGI) forecasts that by 2018 the United States alone could face a shortage of up to 190,000 data scientists and up to 1.5 million data-savvy managers and analysts.
Brian Eno Composers As Gardeners – via Edge – And I will try to explain this to people, here this is where I make a connection to the subject we’re talking about today, I would try to explain this to people in terms of talking about the difference between an architect and a gardener. An architect, at least in the traditional sense, is somebody who has an in-detail concept of the final result in their head, and their task is to control the rest of nature sufficiently to get that built. Nature being things like bricks and sites and builders and so on. Everything outside has to be subject to an effort of control.
Vide0: History of the Internet – via Visual.ly – “History of the Internet” is an animated documentary explaining the inventions from time-sharing to filesharing, from Arpanet to Internet.
Healthcare Costs Are Rising Faster Than Your Income – via Visual.ly – Healthcare costs the average family almost $15,000 a year, the price of a Ford Fiesta. Wages have stagnated over the past ten years, but healthcare costs continue to spiral out of control. Year by year, healthcare costs are eating away at our income and most people have no idea!
The State of Cloud Computing – via Visual.ly – In celebration and triumph of the power of the Internet, this three-minute animation details the “State of Cloud Computing,” highlighting the efforts of companies like project patron salesforce.com, a company which specializes in enterprise cloud computing. While the average person may not be able to clearly define cloud computing, this video helps everyday folks understand that they are actually in the cloud – whether it’s through their online email account, bank account or tending to their Farmville crops while on Facebook.