If something cannot go on forever, it will stop - Herbert Stein's Law

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pages: 190 words: 53,409

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 - Herbert Stein's Law, income inequality, invisible hand, labor-force participation, lake wobegon effect, loss aversion, minimum wage unemployment, Network effects, Paul Samuelson, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, selection bias, 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

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.

pages: 211 words: 67,975

The Victory Machine: The Making and Unmaking of the Warriors Dynasty by Ethan Sherwood Strauss

Broken windows theory, collective bargaining, Donald Trump, hive mind, If something cannot go on forever, it will stop - Herbert Stein's Law, side project, Silicon Valley, Steve Ballmer, Steve Jobs

So we were on the climb that whole first year and, let’s face it, I jumped in when they had already been on the climb for a couple of years, but they were still on the rise and searching and it was my job to help them get better. It was pretty amazing that, as a coach that was my first year, to experience that kind of high. Even though I knew this doesn’t last and it can’t always feel like this, it did feel like it would last forever.” Nothing does. As economist Herbert Stein’s famous law dictates, “If something cannot go on forever, it will stop.” While that law is self-evident, despite our temporary illusions, rarely in the NBA does basketball nirvana die of natural causes. Egos get in the way, often before Father Time arrives on the scene. In the case of the Warriors dynasty, their central, terminal issue was simple: they got more from Kevin Durant’s presence than he was getting from them.

pages: 318 words: 77,223

The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse by Mohamed A. El-Erian

activist fund / activist shareholder / activist investor, Airbnb, balance sheet recession, bank run, barriers to entry, Bear Stearns, break the buck, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, collapse of Lehman Brothers, corporate governance, currency peg, disruptive innovation, Erik Brynjolfsson, eurozone crisis, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, fixed income, Flash crash, forward guidance, friendly fire, full employment, future of work, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, income inequality, inflation targeting, Jeff Bezos, Kenneth Rogoff, Khan Academy, liquidity trap, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, Norman Mailer, 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, zero-sum game

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.

pages: 287 words: 81,970

The Dollar Meltdown: Surviving the Coming Currency Crisis With Gold, Oil, and Other Unconventional Investments by Charles Goyette

bank run, banking crisis, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Madoff, Bretton Woods, British Empire, Buckminster Fuller, business cycle, buy and hold, 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 - Herbert Stein's Law, index fund, Lao Tzu, margin call, market bubble, McMansion, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, National Debt Clock, 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.

pages: 324 words: 92,805

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, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business cycle, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, David Brooks, delayed gratification, disruptive innovation, double helix, factory automation, financial deregulation, financial innovation, fixed income, full employment, game design, greed is good, If something cannot go on forever, it will stop - Herbert Stein's Law, impulse control, income inequality, inflation targeting, invisible hand, job automation, John Markoff, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, mass immigration, 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

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.

pages: 391 words: 97,018

Better, Stronger, Faster: The Myth of American Decline . . . And the Rise of a New Economy by Daniel Gross

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, Bear Stearns, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, creative destruction, 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 - Herbert Stein's Law, illegal immigration, index fund, intangible asset, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low skilled workers, Mark Zuckerberg, Martin Wolf, Maui Hawaii, McMansion, money market fund, 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, zero-sum game, 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.

pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

"Robert Solow", accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, 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, different worldview, disintermediation, Edward Glaeser, endogenous growth, 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, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), 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, the strength of weak ties, Tragedy of the Commons, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

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.

pages: 511 words: 151,359

The Asian Financial Crisis 1995–98: Birth of the Age of Debt by Russell Napier

Asian financial crisis, asset allocation, bank run, banking crisis, banks create money, Berlin Wall, Bretton Woods, business cycle, Buy land – they’re not making it any more, capital controls, central bank independence, colonial rule, corporate governance, Covid-19, COVID-19, creative destruction, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, debt deflation, Deng Xiaoping, desegregation, discounted cash flows, diversification, Donald Trump, financial innovation, floating exchange rates, Fractional reserve banking, full employment, hindsight bias, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, if you build it, they will come, impact investing, inflation targeting, interest rate swap, invisible hand, Jeff Bezos, Kickstarter, laissez-faire capitalism, lateral thinking, Long Term Capital Management, market bubble, mass immigration, means of production, Mexican peso crisis / tequila crisis, Money creation, moral hazard, Myron Scholes, negative equity, offshore financial centre, open borders, open economy, Pearl River Delta, price mechanism, profit motive, quantitative easing, Ralph Waldo Emerson, regulatory arbitrage, rent-seeking, reserve currency, risk free rate, risk-adjusted returns, Ronald Reagan, Savings and loan crisis, savings glut, Scramble for Africa, short selling, South China Sea, The Wealth of Nations by Adam Smith, too big to fail, yield curve

Just how strong total capital inflows remained in Indonesia was shown by the major jump in the country’s foreign reserves in the final quarter of 1996. They were to continue to rise until the end of the second quarter of 1997, when Thailand devalued the baht. The growing travails of Thailand were not yet discouraging capital inflows to the region. The economist Herbert Stein famously said: “If something cannot go on forever, it will stop.” It did stop in Asia, but even by January 1997 capital continued to pour into the region. Meat and drink 15 January 1997, Indonesia According to yesterday’s FT, a corporation associated with the First Family will be given the exclusive rights to print labels identifying food as halal.

pages: 1,336 words: 415,037

The Snowball: Warren Buffett and the Business of Life by Alice Schroeder

affirmative action, Albert Einstein, anti-communist, Ayatollah Khomeini, barriers to entry, Bear Stearns, Bob Noyce, Bonfire of the Vanities, Brownian motion, capital asset pricing model, card file, centralized clearinghouse, Charles Lindbergh, collateralized debt obligation, computerized trading, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, desegregation, Donald Trump, Eugene Fama: efficient market hypothesis, Everybody Ought to Be Rich, Garrett Hardin, global village, Golden Gate Park, Haight Ashbury, haute cuisine, Honoré de Balzac, If something cannot go on forever, it will stop - Herbert Stein's Law, In Cold Blood by Truman Capote, index fund, indoor plumbing, intangible asset, interest rate swap, invisible hand, Isaac Newton, Jeff Bezos, John Meriwether, 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, money market fund, moral hazard, NetJets, new economy, New Journalism, North Sea oil, paper trading, passive investing, Paul Samuelson, 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, Tragedy of the Commons, transcontinental railway, two and twenty, Upton Sinclair, War on Poverty, Works Progress Administration, Y2K, yellow journalism, zero-coupon bond

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.