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Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, attribution theory, availability heuristic, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, en.wikipedia.org, endowment effect, experimental subject, framing effect, full employment, hindsight bias, If something cannot go on forever, it will stop, income inequality, invisible hand, labor-force participation, labour mobility, lake wobegon effect, loss aversion, minimum wage unemployment, Network effects, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, side project, sovereign wealth fund, Steve Jobs, The Wealth of Nations by Adam Smith, Tim Cook: Apple, ultimatum game, Vincenzo Peruggia: Mona Lisa, winner-take-all economy
Because processes like these gather steam over time, it’s easy for those who favor change to lose hope. But just as hopelessness makes it more difficult to surmount obstacles along individual paths to success, it also inhibits social change. So it’s important for advocates of change not to lose hope, provided any reasonable grounds for hope remain. As President Nixon’s chief economist Herb Stein once famously remarked, “If something cannot go on forever, it will stop.”20 But what, exactly, could stop a process that grows steadily more powerful over time? The answer is an opposing process that also grows steadily more powerful over time. Those lobbying for lower taxes and less stringent regulation are unlikely to change their behavior in response to appeals on behalf of society as a whole. Most of them no doubt sincerely believe that their own interests coincide with society’s.
bank run, banking crisis, Ben Bernanke: helicopter money, Berlin Wall, Bernie Madoff, Bretton Woods, British Empire, Buckminster Fuller, California gold rush, currency manipulation / currency intervention, Deng Xiaoping, diversified portfolio, Elliott wave, fiat currency, fixed income, Fractional reserve banking, housing crisis, If something cannot go on forever, it will stop, index fund, Lao Tzu, margin call, market bubble, McMansion, money: store of value / unit of account / medium of exchange, mortgage debt, oil shock, peak oil, pushing on a string, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Saturday Night Live, short selling, Silicon Valley, transaction costs
Deserving Mention The four Elements ETNs Linked to Rogers International Commodity Index Total Return: RJI, linked to the performance of the entire basket of thirty six weighted commodities; RJA, linked to the twenty commodities of the RICI agriculture subsector ETN; RJN, an ETN linked to the performance of the RICI subindex of six energy commodity futures contracts; RJZ, an ETN linked to the ten-metal commodity subindex of the RICI. CHAPTER FIFTEEN Bonds A Crash Course If something cannot go on forever it will stop. —Herbert Stein Every valley shall be filled, and every mountain and hill shall be brought low. —Luke 3:5 A Family Affair Beginning with gold and silver coins, to our recommendations in oil, agriculture, and other natural resources, everything recommended to this point has been something tangible or a means of investing in the producers and the prices of something tangible.
The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse by Mohamed A. El-Erian
Airbnb, balance sheet recession, bank run, barriers to entry, Bretton Woods, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, collapse of Lehman Brothers, corporate governance, currency peg, Erik Brynjolfsson, eurozone crisis, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, Flash crash, forward guidance, friendly fire, full employment, future of work, Hyman Minsky, If something cannot go on forever, it will stop, income inequality, inflation targeting, Jeff Bezos, Kenneth Rogoff, Khan Academy, liquidity trap, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, oil shale / tar sands, price stability, principal–agent problem, quantitative easing, risk tolerance, risk-adjusted returns, risk/return, Second Machine Age, secular stagnation, sharing economy, sovereign wealth fund, The Great Moderation, The Wisdom of Crowds, too big to fail, University of East Anglia, yield curve
In the run-up to the crisis, banking became about banks and not businesses; transactions not relations; counterparties not clients. New instruments originally designed to meet the credit and hedging needs of businesses quickly morphed into ways to amplify bets on financial outcomes.”7 It became a matter of time until all this illustrated Herbert Stein’s famously simple yet elegant formulation about the unsustainable: “If something cannot go on forever, it will stop.” And when it stopped, it did so in an abrupt and incredibly damaging manner. CHAPTER 6 CASCADING FAILURES “Everyone has a plan until they get punched in the mouth.” —MIKE TYSON “These are days when the improbable can become the inevitable.” —JIM DWYER Rather than mark a decisive victory over the vagaries of the business cycle, the golden age of central banking ended up underpinning an historic period of excessive and irresponsible risk taking.
accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, disintermediation, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, Hyman Minsky, If something cannot go on forever, it will stop, illegal immigration, income inequality, income per capita, invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey
Governments can’t possibly honor the much greater burden of future pension and social entitlements implied by today’s systems, if they were to carry forward into the future. What does this mean? How will the dual debt crisis unfold? WHAT WILL GOVERNMENTS DO? The debt time bomb is metaphorical—and metaphorical devices never explode because unsustainable trends are not sustained. (This is a version of Herbert Stein’s Law, which he expressed as: “If something cannot go on forever, it will stop.”) The accumulation of debt, a massive obligation we have imposed on people in the future, will therefore lead to certain more or less inevitable changes. There are a limited number of ways this can work out, and the less unpalatable routes will require an explicit acknowledgement that present choices are required by future obligations. What are the possibilities? The debts incurred by rich Western countries represent a transfer of resources from the future to the past, and also from future citizens of other countries, to the extent that foreigners are buying the government bonds being issued to raise the money.
The Impulse Society: America in the Age of Instant Gratification by Paul Roberts
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, accounting loophole / creative accounting, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, corporate governance, corporate social responsibility, crony capitalism, David Brooks, delayed gratification, double helix, factory automation, financial deregulation, financial innovation, full employment, game design, greed is good, If something cannot go on forever, it will stop, impulse control, income inequality, inflation targeting, invisible hand, job automation, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, new economy, Nicholas Carr, obamacare, Occupy movement, oil shale / tar sands, performance metric, postindustrial economy, profit maximization, Report Card for America’s Infrastructure, reshoring, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, shareholder value, Silicon Valley, speech recognition, Steve Jobs, technoutopianism, the built environment, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, Walter Mischel, winner-take-all economy
But just as consumers had been enabled by innovation to pursue their interests independently from the larger society, companies, too, had discovered how to use innovation to separate their own fortunes from those of their workers. Whatever sense of common purpose or social duty corporate America had espoused in the postwar period was now largely gone. From here on out, the corporation would use its massive efficiencies and innovative power solely for its own narrow self-interest. As the economist Herb Stein once argued, “If something cannot go on forever, it will stop,” and although Stein was talking about the U.S. trade deficit, one could just as well apply that statement to today’s approach to innovation. Sooner or later, markets correct themselves. Companies that spend too little on real innovation, for example, will run out of things to sell. Companies that demoralize their workforces will see performance lag. Companies that rely too heavily on the cheapness of foreign labor eventually get pushback over quality problems.
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Airbnb, American Society of Civil Engineers: Report Card, asset-backed security, Bakken shale, banking crisis, BRICs, British Empire, business process, business process outsourcing, call centre, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, demand response, Donald Trump, Frederick Winslow Taylor, high net worth, housing crisis, hydraulic fracturing, If something cannot go on forever, it will stop, illegal immigration, index fund, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low skilled workers, Mark Zuckerberg, Martin Wolf, Maui Hawaii, McMansion, mortgage debt, Network effects, new economy, obamacare, oil shale / tar sands, oil shock, peak oil, Plutocrats, plutocrats, price stability, quantitative easing, race to the bottom, reserve currency, reshoring, Richard Florida, rising living standards, risk tolerance, risk/return, Silicon Valley, Silicon Valley startup, six sigma, Skype, sovereign wealth fund, Steve Jobs, superstar cities, the High Line, transit-oriented development, Wall-E, Yogi Berra, Zipcar
Taking these items into consideration, BCG declared in Made in America in August 2011, “Within five years, the total cost of production for many products will be only about 10 to 15 percent less in Chinese coastal cities than in some parts of the U.S. where factories are likely to be built,” like South Carolina, Alabama, and Tennessee. The economist Herbert Stein is remembered for coining the maxim “If something cannot go on forever, it will stop.” That applies equally to foreign countries and the United States. In the coming years “a surprising amount of work that rushed to China over the past decade could soon start to come back—and the economic impact could be significant,” said Harold L. Sirkin, a BCG senior partner and the coauthor of Made in America. As soon as 2015 the changing calculus “should prompt companies to rethink where they produce certain goods meant for sale in North America.”
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
affirmative action, Albert Einstein, anti-communist, Ayatollah Khomeini, barriers to entry, Bonfire of the Vanities, Brownian motion, capital asset pricing model, card file, centralized clearinghouse, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, desegregation, Donald Trump, Eugene Fama: efficient market hypothesis, global village, Golden Gate Park, Haight Ashbury, haute cuisine, Honoré de Balzac, If something cannot go on forever, it will stop, In Cold Blood by Truman Capote, index fund, indoor plumbing, interest rate swap, invisible hand, Isaac Newton, Jeff Bezos, joint-stock company, joint-stock limited liability company, Long Term Capital Management, Louis Bachelier, margin call, market bubble, Marshall McLuhan, medical malpractice, merger arbitrage, Mikhail Gorbachev, moral hazard, NetJets, new economy, New Journalism, North Sea oil, paper trading, passive investing, pets.com, Plutocrats, plutocrats, Ponzi scheme, Ralph Nader, random walk, Ronald Reagan, Scientific racism, shareholder value, short selling, side project, Silicon Valley, Steve Ballmer, Steve Jobs, supply-chain management, telemarketer, The Predators' Ball, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transcontinental railway, Upton Sinclair, War on Poverty, Works Progress Administration, Y2K, zero-coupon bond
One of Buffett’s main points was that companies—many of which had been taking gains from surpluses out of their pension plans—were irresponsibly using unrealistic rates of return assumptions and would have to adjust these to reality, which would show the plans to be less well funded or even underfunded. 18. Herbert Stein was an American Enterprise Institute fellow and former chairman of the Council of Economic Advisors under Richard Nixon, a member of the board of contributors of the Wall Street Journal, and an economics professor at University of Virginia. He is known for the quote “If something cannot go on forever, it will stop,” and was father to financial writer and actor Ben Stein. 19. As quoted in “Buffett Warns Sun Valley Against Internet Stocks,” Bloomberg, July 13, 2001. 20. Vicente Fox worked for Coca-Cola for fifteen years, starting as a route supervisor in 1964, then being promoted ten years later to president of its Mexican, and ultimately its Latin American, operations. 21. Interview with Midge Patzer. 22.