scary stuff-Bronte Capital: It's about the real economy now

In the Philippines we have a chorus of companies extolling the assertion that because one call center agent position in the states pays for 5 here the downturn only means more jobs. I don’t think so. The real economy is down, and when that happens some companies do dumb things, those dumb things that companies do, they mean lost jobs for countries like the Philippines.

Wal Mart has always had a pay-check related shopping spike – with a substantial number of customers living (as I did when a student) from pay stubb to pay stubb.
But for the first time they are having pay-check driven spikes in the sales of baby formula suggesting the economic pressure is more widespread.
It is about the real economy now.
Bronte Capital: It’s about the real economy now.

-Lost Amid The Financial Meltdown News-Marginal Revolution: China policy proposal of the day

wow this is like big, wow speechless
wow! if this works I don’t know peace nobel for the whole politburo?
from marginal revolutions blog:

China policy proposal of the day
Shouldn’t this story be on p.1 of every newspaper?
Now China’s government has unveiled a controversial plan to achieve universal care that would both increase health-care funding and control prices.
As this morning’s WSJ explains, the proposed plan would be quite a shift for China. The draft plan’s overall goal is to cover 90% of the population within two years and achieve universal care by 2020. It aims to return to non-profit national health care, an idea that was largely abandoned in the country 1980s.
This all stands in contrast to China’s current system, which provides little government funding to government hospitals and requires patients to pay heavy out-of-pocket expenses. The WSJ notes that out-of-pocket payments made up more than 60% of health spending in China at the end of the 1990s.
The plan — drafted in consultation with groups including the World Health Organization, the World Bank, consultant McKinsey & Co. and a few Chinese university-based public health experts — requires all revenue raised by public hospitals to be funneled to the state. The government also aims to set pricing standards for medical services.
Marginal Revolution: China policy proposal of the day.

This is Extremely Dangerous–Rough Type: Nicholas Carr's Blog: Remembering to forget

I’m beginning to think that this if ready for human ingestion must be regulated.
I believe primarily for people with depression or people who can’t cope with the memory. Basically suicide risks.
We learn by experience and personally pain for me leads to compassion and if we erase every painful memory then maybe we cease to really exist.

The memory losses, report the authors, are “not caused by disrupting the retrieval access to the stored information but are, rather, due to the active erasure of the stored memories.” The erasure, moreover, “is highly restricted to the memory being retrieved while leaving other memories intact. Therefore, our study reveals a molecular genetic paradigm through which a given memory, such as new or old fear memory, can be rapidly and specifically erased in a controlled and inducible manner in the brain.”
Rough Type: Nicholas Carr’s Blog: Remembering to forget.

Great Keynes quote – Paul Krugman – Op-Ed Columnist – New York Times Blog

This is what one loves about the net the anonimity brings out the worst and the best from everyone!

John Maynard Keynes is my economic idol, which is why I jumped at the chance to write the intro to the new edition of The General Theory. But I’d never heard this quote, from today’s FT:
Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.
Presumably that was said in response to someone who called him shrill.
Great Keynes quote – Paul Krugman – Op-Ed Columnist – New York Times Blog.

flip Pride-NBA Edition-Head Coach of Miami Heat Half-Filipino

The youngest Asian-American Head Coach in the NBA is a Filipino!
If you’ve been to the Philippines (like Gilbert Arenas), You know how basketball crazy the Philippines is!
Another reason to cheer for Dwade and the Miami Heat!

ESPN – Monday Bullets – TrueHoop By Henry Abbott
New Heat Coach Erik Spoelstra to Sports Business Radio (subscription): “I am half Filipino. I’m proud of my heritage. I didn’t know when I got hired that I was the first Asian-American head coach in the NBA. So, I took that with a great deal of respect and honor. I think any time that you can be a part of something to possibly break down any kind of barriers or stereotypes, then I’m all for it. And if it’s at all possible for somebody down the line to have a door opened or see an opportunity that might not have been there before, then I think that’s a tremendous opportunity.”
ESPN – Monday Bullets – TrueHoop By Henry Abbott.

getting paid to study (incentives for exams)

Book cover of
Book cover via Amazon

A father writes Tim Harford (author of the book Undercover Economist) to inquire on how to divvy up a stash of cash as incentives for his son to pass his exams. Harford answers:

Start by promising more than you can deliver. If you offer €10,000 for a perfect score, you will only need to apologise after your scheme has succeeded. That may seem to undermine your credibility, but the real risk lies the other way: your son may expect to get the money from his doting dad anyway. Discourage this view or your plan will be in vain.
You must also pitch the stakes just right. Research in behavioural economics suggests that trivial rewards are worse than no rewards, but also that performance suffers when too much is at stake.
Finally, focus on the early exams, because success breeds success. Promise your son €200 for every excellent result in these: that should engage his interest without throwing him into a panic. If things go well, the money will run out before the high-pressure exams. But by then he will have mastered his subjects anyway.
Link

Now, the question here is can we develop an insurance scheme that will fund the incentives (drawing from the insurance policy)? In the payment term, parents would be pressed to help their child (via tutoring). In the long run, (in the ideal case) the child will have enough study habits and have high enough grades to qualify for college scholarships.
On the other hand, the child may be put off by the hard work involved with studying which will increase the lure of those ‘get-rich-quick’ schemes when he gets older.

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Study to be paid

Philantrophist Eli Broad has an educational program called Spark to improve school children’s test scores:

Seventh-graders can earn up to $50 a test — for 10 assessment tests throughout the year. There’s a similar program for fourth-graders. The money goes into a bank account that only the student can access. The better you do, the more money you earn, up to $500 a year for seventh-graders. The idea is to make school tangible for disadvantaged kids — short-term rewards that are in their long-term best interest…
[Eight-grader Soledad Moya] said she wasn’t a “studying kind of” person before the awards. Now she and her friends like to look in the dictionary and memorize words and their definitions, and they ask their teachers for more practice tests. Even though she’s not eligible for the awards now that she’s in eighth grade, she’s still studying harder before tests, she said. “Once you get started with something, you keep doing it.”
The changes she saw in students like Moya caused Lisa Cullen — a literacy and social studies teacher at the school — to go from skeptic to supporter: “I saw how it takes away the uphill battle you have trying to get students to study for tests.” She saw a definite increase in students’ excitement, enthusiasm and effort.
Link

Wow! That is exactly of why I studied to ace that Science in fourth grade, to buy myself a horde of comics.
Even though they may say that it’s basically bribing kids to study (isn’t that what scholarhsips are about?), you have to concede that the short-term gains are quite tangible and attractive enough to be taken upon on. In plain economics, it’s the power of incentives!
What experts underestimate here is the power of building a long-term habit in the school children participating with the program. Not only are study habits going to be built, but the confidence and self-esteem of the students will also be given a boost.

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Investment Advice From Warren Buffet!

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Op-Ed Contributor – Buy American. I Am. – NYTimes.com.

Franklin D. Roosevelt: First Inaugural Address. U.S. Inaugural Addresses. 1989

Thanks to Bryan Caplan for the pointer
Franklin D. Roosevelt: First Inaugural Address. U.S. Inaugural Addresses. 1989

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men. 7
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live. 8
Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.
Franklin D. Roosevelt: First Inaugural Address. U.S. Inaugural Addresses. 1989.