Tuesday, April 22, 2014

Krugman: free trade "very difficult concept" to sell

cuz you no want pay losers...

mit

RICARDO'S DIFFICULT IDEA
The title of this paper is a play on that of an admirable recent book by the philosopher Daniel Dennett, Darwin's Dangerous Idea: Evolution and the Meanings of Life (1995). Dennett's book is an examination of the reasons why so many intellectuals remain hostile to the idea of evolution through natural selection -- an idea that seems simple and compelling to those who understand it, but about which intelligent people somehow manage to get confused time and time again.

The idea of comparative advantage -- with its implication that trade between two nations normally raises the real incomes of both -- is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it. Yet anyone who becomes involved in discussions of international trade beyond the narrow circle of academic economists quickly realizes that it must be, in some sense, a very difficult concept indeed. I am not talking here about the problem of communicating the case for free trade to crudely anti-intellectual opponents, people who simply dislike the idea of ideas. The persistence of that sort of opposition, like the persistence of creationism, is a different sort of question, and requires a different sort of discussion. What I am concerned with here are the views of intellectuals, people who do value ideas, but somehow find this particular idea impossible to grasp.

UChi: malincentives of economists



UChi: HOW DID PAUL KRUGMAN GET IT SO WRONG?

To Krugman, economics is no longer a quest for understanding, delightful in its capacity to overturn one’s preconceptions. Economics is just a set of debating points to argue for policies that one has adopted for partisan political purposes. ‘Stimulus’ is just marketing to sell Congressmen and voters a package of government spending priorities that are wants for political reasons. It is not a proposition to be explained, understood, taken seriously to its logical limits, orreflective of market failures that should be addressed directly.Why argue for a nonsensical future for economics? Well,again, if you do not regard economics as a science; a discipline that ought to result in quantitative matches to data; a discipline that requires crystal-clear logical connections between the ‘if ’ and the ‘then’; and if the point of economics is merely to provide marketing and propaganda for politically-motivated policy, then his writing does make sense.It makes sense to appeal to some future economics – not yet worked out even verbally, let alone tested in data – to disdain quantification and comparison to data, and to appeal to the authority of ancient books while advocating that we spend a trillion dollars

Hollywood accounting: GPaltrow's goop "bleeding money" [to whom?]



jezebel

Between 2011 and 2012, Gwyneth and CEO Sebastian Bishop enjoyed a sizable increase in pay, from £102,788 to £350,000, or from less than $200,000 to almost $600,000. In 2012, Paltrow (who goes by her married last name of Martin in the papers) and Bishop also received personal interest-free loans from Goop; Paltrow's was £29,200 and Bishop's was £49,800, totaling over $100,000. Bishop paid back £13,000 of that money, while Paltrow had not.
All of this would probably be on the up-and-up, if the rest of the company hadn't been doing badly financially. In 2012 Goop made £908,378, or almost $1.5 million. But their expenses were £932,096, which meant they lost £23,715, or $39,850. That's an improvement from 2011, when they made £64,484 and spent £216,544, putting them £152,060 — that's $255,500 — in the red. Goop can credit the increase in profits to product sales, Groupons and commissions. Documents are not available for 2013, so perhaps this past year was a banner year for Goop. But the report indicates that the company owed over $1.2 million, due by the end of 2013.

banker comp: mlevine, 30-65% of revenue

think engineers get that...

bb
  from climateer
Banks typically pay their bankers some percentage of the revenue they bring in, ranging from around 32 percent at JPMorgan (a universal bank) through 37 percent at at Goldman Sachs (a full-service investment bank) to 64 percent at Moelis & Co. (an advisory boutique). I don't have PJT Capital's audited financial statements but I'm gonna guess that its comp ratio is right around 100 percent

Art Pro: "hedge fund guys are stupid enough. not to know being ripped off"

silly to confuse non-financial motivations with stupidity...   economists do that


recoder

“It’s not your typical Menlo Park evening, is it?” asked Glimcher, who sat down for a few minutes for an impromptu interview, as the party swirled around him. “Every art dealer in New York is trying to break into Silicon Valley. It’s like a thing. I just got lucky.”
Glimcher said that Arrillaga-Andreessen was one of his most significant clients — she helped arrange the show; the dealership’s lot belonged to her father, John Arrillaga, the largest landowner in Silicon Valley.
“This is the wealthiest community in America, and they’re smart and creative. And they don’t yet collect art. They’re the only community in the world like that,” Glimcher said. “In art collecting, every once in a while a new group like this comes along. There are people here who will constitute that new group of collectors.”
...

Things, though, are different in Silicon Valley. “The hedge-fund people amassed their fortunes when they were in their 40s. They had kids. They had wives. Here, they’re 25. You’re just not thinking about art yet. It’s too young, it’s too hardworking. They’re maybe too smart,” said Glimcher. “The hedge-fund guys are stupid enough — and by that I mean dumb and arrogant — not to know they were being ripped off in the beginning. They just knew they wanted to start buying art. Everyone here is too smart for that.”

Monday, April 21, 2014

HBS: "hedge fund activism [not] positive trend"

icahn doesn't dare boards to be great?

hbr



We remain unconvinced, however, that hedge fund activism is a positive trend for U.S. corporations and the economy; in fact, we find that it reinforces short-termism and excessive attention to financial metrics. But because activists—and the institutional investors who often follow their lead—are generating positive returns, there is likely to be more rather than less of it in the future. In the interest of their corporations, CEOs and boards should be preparing for activist interventions rather than complaining about them.

Pickety v Fed: K-GDP ratio busted v rock steady 1948-2012




economist
    climateer
This, after literally hundreds of pages in which Mr Piketty has walked through when and how the capital-income ratio has been pushed away from its long-run trend rate.


st louis fed: 1948-2004 data