California Dreamin’ By Holly A. Bell A recent blog post by Michael provided 55 Reasons Why California Is The Worst State In America. Nonsense. California should be the model for the rest of the United States. Here are some reasons why: 1) The adoption of Proposition 30 gave California the highest marginal state income tax …
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QE Infinity: Unintended Consequences (via Market Shadows) QE Infinity: Unintended Consequences There is an intense debate going on in the first-class cabin of Economics Airlines about the direction in which our plane should be pointed. And while those of us back in the cheap seats don’t get to help decide, knowing where we will land …
We Need to Teach Collaboration for an Office-Less World By Holly A. Bell Cheating vs. Collaboration Earlier this month we heard about a cheating scandal at Harvard University in which students worked together on a take-home exam they were expected to complete independently. As a professor I have a couple of concerns with this. First, …
Are You Seeing What I’m Seeing? (via Market Shadows) Courtesy of Jim Quinn of The Burning Platform Is it just me, or are the signs of consumer collapse as clear as a Lowes parking lot on a Saturday afternoon? Sometimes I wonder if I’m just seeing the world through my pessimistic lens, skewing my point of …
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Redefining Defined Benefit Pensions By Holly A. Bell For most people in the private sector, defined benefit pensions have become a distant memory. Something their grandfather talks about over Thanksgiving dinner while reminiscing about his days at “the plant”. These plans, which guaranteed a certain percentage of a worker’s wages or salary in retirement, have …
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The Fed as Central Planner By Holly A. Bell In an article in the Wall Street Journal (available here), John H. Cochrane of The University of Chicago accuses the Federal Reserve of moving from a central bank to a central planner by engaging in fiscal policy and determining the allocation of credit. I must say …
Is the Power to Implement Fiscal Policy Being Transferred to The Fed? Read More »
When Good Incentives Lead to Bad Decisions (via http://mortgagespectator.com) Among the culprits contributing to the recent financial crisis were bank loan officers who approved mortgage loans that were doomed to fail. Many of these frontline workers were motivated by bonuses and other incentives to approve quantity over quality. Critics decried their voracity. But new …
Feeding the Beast (8/26) (via Market Shadows) Here’s this week’s MarketShadows August 26 2012: Feeding the Beast Excerpt: The rally on Friday was triggered by a letter released by Ben Bernanke to US Rep. Darrell Issa, which was also leaked to the WSJ: “Federal Reserve Chairman Ben Bernanke, in a letter responding to questions posed by …
Is the Fed the Only Thing Driving U.S. Financial Markets? Read More »
Market Shadows Newsletter: It’s my party, and I’ll leave if I want to (via Market Shadows) Read the latest MarketShadows August 12 2012 Excerpt: Trading volume this week dried up. Retail investors are realizing that the markets are manipulated and retail traders are learning that it’s difficult to compete against the High Frequency Trading Machines. Zero …
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Decision-makers perform worse as financial incentives increase Research by behavioral economist Dan Ariely (see video below) found that high financial incentives actually make individuals perform worse than when given low to moderate financial incentives. These results were most dramatic when the tasks involve cognitive elements as opposed to mechanical elements. The reason is that loss …
Do High Salaries & Bonuses Make CEOs Poor Decision-Makers? Read More »
