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The Patriots Corner ( Inequality & Other Issues to Get Your Blood Boiling):
Mega-Rich Occupy Davos as 0.01% Decry Income Gap – via Bloomberg – Ukrainian billionaire Victor Pinchuk wants to talk about income inequality. So does Irish billionaire Denis O’Brien and Indian billionaire Vikas Oberoi. “These growing inequalities are not acceptable,” said Rahul Bajaj, chairman of Bajaj Group, who valued his holdings in the Mumbai-based conglomerate at $1 billion. “The rich have done much better than the poor, and that creates problems.”
Growing wealth gap threatens globalization | Economy | News – via Financial Post – A backlash against rising inequality – evident from the Occupy movement to the Arab Spring – risks derailing the advance of globalization and represents a threat to economies worldwide, according to the World Economic Forum.
George Soros on the Coming U.S. Class War – via The Daily Beast – “I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros tells Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”
Separate, Unequal, and Ignored | Politics – via Chicago Reader – We must have fixed it—otherwise why isn’t racial segregation an issue in the mayor’s race?Try finding a mention of it on the websites of any of the candidates. Editorial boards have decreed Chicago’s most important concern to be its budget problems. Other issues winning attention have been school and ethics reform, job creation, the head tax, crime, transportation, privatization, the O’Hare airport expansion.
The iPhone Economy – Video Library – via The New York Times – Apple’s iPhone is a model of American ingenuity, but most of its components are manufactured somewhere else. The decline of manufacturing led to the loss of other kinds of jobs.
Overcoming Bias : The Future Of Inequality – via www.overcomingbias.com – So, the unequal success that comes from some moving sooner in a big transition between growth eras has declined in more recent transitions. Yet the within-era inequality at a moment in time between groups like nations, cities, and firms has increased over time. As larger groups have become feasible, with more internal correlation in their success, the high tails of very large groups has gotten thicker, until they are now Zipf distributed evenly across many size scales. And in such Zipf distributions, typical group size increases with the both minimum efficient scale and total population, both of which have been increasing.
Rational Irrationality: Mitt’s 1040s: The Real Scandal is the Tax Code : The New Yorker – via www.newyorker.com – O.K., I’m joking—not about the figures, which are accurate, but about the substance, which is perfectly legal but pretty scandalous all the same. Regardless of how this plays out in the Republican primary race, Romney has done the country a great public service by offering up his personal finances as a shining example of all that’s wrong with the tax code after thirty years of politicians fiddling with it to make it more generous to the very rich.
Overcoming Bias : The History of Inequality – via www.overcomingbias.com – Putting this all together, the number of species per genera and individuals per families has long declined with size as a tail power of two. After the farming revolution, cities and nations could have correlated internal successes and larger feasible sizes, giving a thicker tail of big items. In the industry era, firms could also get very large. Today, nations, cities, and firms are all distributed with a tail power of one, above threshold scales of (three) million, thousand, and one, thresholds that have been rising with time.
Apple’s iPad and the Human Costs for Workers in China – via NYTimes.com – However, the workers assembling iPhones, iPads and other devices often labor in harsh conditions, according to employees inside those plants, worker advocates and documents published by companies themselves. Problems are as varied as onerous work environments and serious — sometimes deadly — safety problems.
Mass Incarceration and Criminal Justice in America : The New Yorker – via www.newyorker.com – For most privileged, professional people, the experience of confinement is a mere brush, encountered after a kid’s arrest, say. For a great many poor people in America, particularly poor black men, prison is a destination that braids through an ordinary life, much as high school and college do for rich white ones. More than half of all black men without a high-school diploma go to prison at some time in their lives. Mass incarceration on a scale almost unexampled in human history is a fundamental fact of our country today—perhaps the fundamental fact, as slavery was the fundamental fact of 1850. In truth, there are more black men in the grip of the criminal-justice system—in prison, on probation, or on parole—than were in slavery then. Over all, there are now more people under “correctional supervision” in America—more than six million—than were in the Gulag Archipelago under Stalin at its height. That city of the confined and the controlled, Lockuptown, is now the second largest in the United States.
Best Reads of The Week:
The Smart List 2012: 50 people who will change the world (Wired UK) – via www.wired.co.uk – Welcome to the first Wired Smart List. We set out to discover the people who are going to make an impact on our future –by asking today’s top achievers who, emerging in their field, they’d most like to have a leisurely lunch or dinner with. So we approached some of the world’s brightest minds — from Melinda Gates to Ai Weiwei — to nominate one fresh, exciting thinker who is influencing them, someone whose ideas or experience they feel are transformative.
The Rise of the New Groupthink – via NYTimes.com – “Most inventors and engineers I’ve met are like me … they live in their heads. They’re almost like artists. In fact, the very best of them are artists. And artists work best alone …. I’m going to give you some advice that might be hard to take. That advice is: Work alone… Not on a committee. Not on a team.”
Podcast: Willpower: Self Control, Decision Fatigue, And Decision Making - via RSA – A new understanding of how people control themselves has emerged from the past decade of research studies. Self-control depends on a limited energy supply, and each person’s willpower fluctuates during the day as various events deplete and then replenish it.The latest laboratory work reveals that decision making and creative initiative also deplete the same willpower supply, while eating and sleeping can restore it – to the extent that a life-changing decision may go in different directions depending on whether it’s made before or after lunch.
Deric Bownds’ MindBlog: The psychology of perceived wealth. – via mindblog.dericbownds.net – Remarkably, the same striving for financial wealth and stability can trigger opposing behaviors: preference for greater assets in some circumstances, and for lower debt in others. Such impulses may not always be aligned with what is best financially. People who are in the red and eager to borrow will sometimes have access only to high-interest loans. And people who are eager to clear their debt will sometimes do so even when their debt (e.g., tax-incentivized mortgages) is financially beneficial. Such psychology may be of great consequence. A remarkable 25% of U.S. households had zero or negative net worth in 2009 (for Black households, the figure was about 40%. Better insight into the determinants of perceived financial wealth and financial decision making could help shape behaviorally informed policy.
The real way to build a social network – via Fortune Tech – Forget Dale Carnegie. He understood how important connections were, but missed out on the authenticity part — which, say Reid Hoffman and Ben Casnocha, authors of The Start-Up of You, is the key to building a truly helpful professional network. Here’s how to leverage that network into the career you only dreamed of.
Rick Bookstaber: The Twilight of the Leisure Class – via rick.bookstaber.com – The decline in conspicuous leisure knocks at least one leg out of the the relationship between tax breaks for the rich and job creation, because this relationship depends on the notion that if the rich, who are taken to be the job creators, are taxed more they will work less. But if status is evoked through work rather than leisure, then that relationship does not hold. I do not know of the empirical work that has established this link in the past, but even if it exists, I question its relevance today. It is hard for me to imagine a CEO walking away from his job because his $25 million salary payday just nets him $15 million rather than $18 million. Or for that matter not working as hard. But in any case, one reason to walk away, the prestige of conspicuous leisure, has disappeared with the changing ethos of our society.
Peak Attention and the Colonization of Subcultures – via www.ribbonfarm.com – The question of how such coded language emerges, spreads and evolves is a big one. I am interested in a very specific question: how do members of an emerging subculture recognize each other in public, especially on the Internet, using more specialized coded language?
Lisa Harouni: A primer on 3D printing – via Video on TED.com – 2012 may be the year of 3D printing, when this three-decade-old technology finally becomes accessible and even commonplace. Lisa Harouni gives a useful introduction to this fascinating way of making things — including intricate objects once impossible to create.
In schools, self-esteem boosting is losing favor to rigor, finer-tuned praise – via The Washington Post – Now, an increasing number of teachers are weaning themselves from what some call empty praise. Drawing on psychology and brain research, these educators aim to articulate a more precise, and scientific, vocabulary for praise that will push children to work through mistakes and take on more challenging assignments. Consider teacher Shar Hellie’s new approach in Montgomery County.
How Do We Identify Good Ideas? – via Wired.com – Here’s where things get interesting. After writing down as many ideas as they could think of, both groups were asked to choose which of their ideas were the most creative. Although there was no difference in idea generation, giving the unconscious a few minutes now proved to be a big advantage, as those who had been distracted were much better at identifying their best ideas. (An independent panel of experts scored all of the ideas.) While those in the conscious condition only picked their most innovative concepts about 20 percent of the time — they confused their genius with their mediocrity — those who had been distracted located their best ideas about 55 percent of the time. In other words, they were twice as good at figuring out which concepts deserved more attention.
Behavioral Economics, Complexity Research, Decision Making, Psychology, & Risk:
The Imagined Ideological Divide – via thesituationist.wordpress.com – Republicans and Democrats are less divided in their attitudes than popularly believed, according to new research. It is exactly those perceptions of polarization, however, that help drive political engagement, researchers say.“American polarization is largely exaggerated,” says Leaf Van Boven of the University of Colorado Boulder, especially by people who adopt strong political stances. And when people perceive a large gap between political parties, they may be more motivated to vote. That message emerges from analyses of 40 years’ worth of voter data and could help predict voting behavior for the 2012 presidential election, according to social psychologists presenting their work today at a conference in San Diego, CA.
Thrifty Brains, Better Minds – via NYTimes.com – Might the miserly use of neural resources be one of the essential keys to understanding how brains make sense of the world? Some recent work in computational and cognitive neuroscience suggests that it is indeed the frugal use of our native neural capacity (the inventive use of restricted “neural bandwidth,” if you will) that explains how brains like ours so elegantly make sense of noisy and ambiguous sensory input. That same story suggests, intriguingly, that perception, understanding and imagination, which we might intuitively consider to be three distinct chunks of our mental machinery, are inextricably tied together as simultaneous results of a single underlying strategy known as “predictive coding.” This strategy saves on bandwidth using (who would have guessed it?) one of the many technical wheezes that enable us to economically store and transmit pictures, sounds and videos using formats such as JPEG and MP3.
The Substitution Principle – via Less Wrong – The important point is to learn to recognize the situations where you’re confronting a difficult problem, and your mind gives you an answer right away. If you don’t have extensive expertise with the problem – or even if you do – it’s likely that the answer you got wasn’t actually the answer to the question you asked. So before you act, stop to consider what heuristic question your brain might actually have used, and whether it makes sense given the situation that you’re thinking about.
Being Ignored Hurts, Even by a Stranger – via Association for Psychological Science – People who had gotten eye contact from the research assistant, with or without a smile, felt less disconnected than people who had been looked at as if they weren’t there.
Group settings can diminish expressions of intelligence, especially among women – via research.vtc.vt.edu – “This study tells us the idea that IQ is something we can reliably measure in isolation without considering how it interacts with social context is essentially flawed,” said coauthor Steven Quartz, a professor of philosophy in the Social Cognitive Neuroscience Laboratory of Caltech. “Furthermore, this suggests that the idea of a division between social and cognitive processing in the brain is really pretty artificial. The two deeply interact with each other.”
What’s Wrong With The Teenage Mind? | Best of the Moment – via The Browser – Children are reaching puberty earlier and earlier in life. And yet these same children are adopting adult roles later and later. Which makes for “a good deal of teenage weirdness”. Fine essay explains what’s really going on
Joy leads to Overconfidence – and a Simple Remedy – via repub.eur.nl – This study examines the influence of joy on absolute and relative overconfidence in a decision experiment with monetary incentives. We used a general knowledge task of medium difficulty to measure overconfidence. Participants’ moods were measured at the beginning of the experiment using subscales from the Positive and Negative Affect Schedule (PANAS-X). On average, participants were in a slightly joyful mood. In the experimental treatment, we made participants aware of the irrelevant source of their joyful mood by showing them a humorous film clip and subsequently asking them about their mood again. Our results show that self-reported joy increased overconfidence in the control group, whereas the participants in the treatment group had well-calibrated judgments, on average. Our results are consistent with the mood-as-information hypothesis, which suggests that affective states with a non-salient and irrelevant cause have an informative function that can lead to overconfidence. However, if the cause of the affective state is salient and obviously irrelevant (i.e., a humorous film clip), the informative function is deactivated, leading to better judgments and decisions.
Capitalism, Business, Economics, Entrepreneurship, Finance:
Graham & Dodd and Modern Financial Analysis by Joseph Calandro, Jr. – via ValueWalk.com – I had the privilege to hear Joseph Calandro, Jr speak on value investing at a recent NYSSA event, sponsored by the Value Investing Committee (the Committee is consulting with Joe and using his ‘Suggestions for Modern Security Analysts’ paper as a blueprint when planning future events). Joe keeps a low profile, but he is the author of a fantastic book on value investing; Applied Value Investing: The Practical Application of Benjamin Graham and Warren Buffett’s Valuation Principles to Acquisitions, Catastrophe Pricing and Business Execution.
The Fast Fabulous, Fradulent Life of Mega Upload Kim Dotcom – via man – Since the shutdown of Megaupload, stories have erupted about the life and exploits of the company’s founder, a self-styled “Dr. Evil” of file sharing. Kim Dotcom’s opulent digs, high-end cars, fondness for models and other Bond-villain-esque behaviors have been splashed across websites and have confused evening newscasts for the last week.
The Price of Fish Making Sense of Real World Economics - Via FORA.tv – The Price of Fish addresses issues related to ‘real’ (as opposed to ‘transactional’) commerce: the complex ways in which people, organisations and societies communicate and deal with each other. The book argues that real commerce drives society, politics, the economy and our future, including the ways complex interactions adapt and change over time. The aim of the book is to make sense of the way the world really works beyond economics. This event is a book launch to mark the publication of The Price of Fish: A New Approach to Wicked Economics and Better Decisions.
Amazon’s Hit Man – via BusinessWeek – In November 1997, on a night of pounding rain in midtown Manhattan, Rupert Murdoch threw a party for Jane Friedman, the new chief executive officer of News Corp.’s (NWS) HarperCollins book division. The luminaries of the publishing business, such as Random House’s then-CEO Alberto Vitale and literary agent Lynn Nesbit, crowded into the Monkey Bar on 54th Street, with its red-leather booths and hand-painted murals of gamboling chimps. Trudging six blocks through the downpour from the Time & Life Building, Laurence J. Kirshbaum, then the powerful head of Time Warner Book Group, brought a guest: a young online bookseller named Jeffrey P. Bezos, whose ambitions would eventually end up affecting the lives of everybody at the party. “It was one of those moments in your life where you remember everything,” Kirshbaum says. “In fact, I think Bezos still owes me an umbrella.”
The Eclectic Mix:
Locked in the Ivory Tower: Why JSTOR Imprisons Academic Research – via Atlantic Mobile – This morning, I searched for an article about autism on JSTOR, the online database of academic journals. I have a child on the autistic spectrum, and I like to be aware of the latest research on the topic. I could not access any of the first 200 articles that contained the word “autism.” That’s because, for the most part, only individuals with a college ID card can read academic journal articles. Everyone else, including journalists, non-affiliated scholars, think tanks and curious individuals, must pay a substantial fee per article, if the articles are available at all.
How I Ended Up Non-Ambitious – via Less Wrong – The lesson I should have learned from this: you never know what you are and aren’t capable of until you try it. I tried competitive swimming, and found out I didn’t have the raw talent to go to the Olympics. Who knows if this would have been true of physics? My father tells me that in his fourth year of undergraduate studies, he took several physics courses with a level of advanced math that he found almost impossible. He had reached his brain’s natural limit in math, which he might or might not have been able to exceed with hard work and hours of study; still, it was much more advanced than the first-year calculus I took as an elective. I have no reason to think that I’m worse at math than my father, and I suspect my obsessive work ethic would help me exceed any limits I did bump up against. And why not try?
Study Hacks » Blog Archive » Closing Your Interests Opens More Interesting Opportunities: The Power of Diligence in Creating a Remarkable Life – via calnewport.com – We’ve created this fantasy world where everyone is just 30 days of courage boosting exercises and life hacks away from living an amazing life.
How Private Equity Firms Like Bain Capital Earn Profits : The New Yorker – via www.newyorker.com – Given the weak job market, it makes sense that the attacks have focussed on layoffs. But the real problem with leveraged-buyout firms isn’t their impact on jobs, which studies suggest isn’t that substantial one way or the other. A 2008 study of companies bought by private-equity firms found that their job growth was only about one per cent slower than at similar, public companies; there was more job destruction but also more job creation. And, while private-equity firms are not great employers in terms of wage growth, there’s not much evidence that they’re significantly worse than the rest of corporate America, which has been treating workers more stingily for about three decades.
Why We Can’t Bring manufacturing And Innovation Back To America – Via Reality Base -- However, the truth is that manufacturing and innovation will continue consolidating in China and other parts of Asia even if all their predatory policies are suddenly reversed. (They won’t be.)
How Much People Pay for Health Care Around the World – via Visual.ly – Every country in the world approaches health care differently, but the end goal is the same: Keep citizens as healthy as possible at the lowest cost. Some countries spend a lot on health care, but see don’t see great benefits for those expenditures among their citizens. Others, at least by the metrics, are finding ways to reach both goals.
Comparing Income, Corporate, Capital Gains Tax Rates: 1916 – via 2011 — Visualizing Economics – Due to popular demand, I have updated my 2010 graph on top marginal tax rates. In addition, during this year’s tax season, I will be selling copies of my Top Marginal Tax Rates graph as a tabloid size 11″x17″ poster.
The Google Driverless Car – via The Infographics Showcase – Now they tell us that Google has been testing vehicles equipped with driverless navigation systems, and that the cars tested have driven 1000 miles without human intervention and another 140,000 miles with a little bit of human intervention. Incidentally, 140,000 miles equates to driving around the globe 5.6 times. That’s a lot of driverless (or almost driverless) driving. Nevada is on board with this, having recently passed legislation removing legal barriers around driverless technology.