Saturday, December 20, 2014

Mark Zuckerberg Buys 700 Acres of Hawaiian Island

Mark Zuckerberg has paid more than $100-million for a swath of land in Hawaii.

The Facebook chief  bought part of Kauai, the fourth largest of the Hawaiian islands, Forbes magazine reports.

His 700 acres on the north shore will include a pristine white sand beach, a former sugarcane plantation and an organic farm.

However, the beach will have to remain open to the public as the state of Hawaii does not recognize private property on stretches of beach sand.

In 2011,  Zuckerberg spent $30-million buying four homes adjoining his own property in Palo Alto to fend off a developer who was going to purchase them and market them to potential buyers as being “next door to Mark Zuckerberg.”

Why Federal Reserve Interest Rate Policy is a Form of Monetary Socialism

Richard Ebeling emails:
Dear Bob,

In this radio interview on "The Jerry Doyle" show on December 18, 2014, I explain why Federal Reserve interest rate policy is a form of "monetary socialism," in that manipulating interest rates down to near zero has basically undermined the existence of a functioning banking market.

Interest rates are the intertemporal prices that coordinate the choices of income earners to save with the investment decisions of entrepreneurs and enterprises to borrow. Interest rates are supposed to keep savings and investment in proper balance, and to determine which investments, with what time horizon, are market-based profitable.

By, basically, abolishing much of the price mechanism of an essential element of the financial markets, the Federal Reserve has introduced a high degree of economic irrationality into savings and investment decision-making.

We should not be surprised if the Federal Reserve's monetary central planning has led to a new round of misdirection of resources and labor, and mal-investment of capital that will result in a future economic downturn, when these mis-matches will have to be corrected and rebalanced.


Possession-Less Monk Says Money Is Not the Problem

The common feature of modern capitalism is mass production of goods destined for consumption by the masses. The result is a tendency towards a continuous improvement in the average standard of living, a progressing enrichment of the many. 
-Ludwig von Mises, The Anti-Capitalist Mentality

Could a monk, who has given up his worldly possessions, possibly understand that it is capitalism and free exchange that has resulted in millions being lifted from poverty?  Perhaps so.

Atrhur C. Brooks writes at NYT:
On a recent trip to India....I sought guidance from a penniless Hindu swami named Gnanmunidas at the Swaminarayan Akshardham Hindu temple in New Delhi. We had never met before, but he came highly recommended by friends. If Yelp reviewed monks, he would have had five stars.
To my astonishment, Gnanmunidas greeted me with an avuncular, “How ya doin’?” He referred to me as “dude.” And what was that accent — Texas? Sure enough, he had grown up in Houston, the son of Indian petroleum engineers, and had graduated from the University of Texas. Later, he got an M.B.A., and quickly made a lot of money.
But then Gnanmunidas had his awakening. At 26, he asked himself, “Is this all there is?” His grappling with that question led him to India, where he renounced everything and entered a Hindu seminary. Six years later, he emerged a monk. From that moment on, the sum total of his worldly possessions has been two robes, prayer beads and a wooden bowl. He is prohibited from even touching money — a discipline that would obviously be impossible for those of us enmeshed in ordinary economic life.
As an economist, I was more than a little afraid to hear what this capitalist-turned-renunciant had to teach me. But I posed a query nonetheless: “Swami, is economic prosperity a good or bad thing?” I held my breath and waited for his answer.
“It’s good,” he replied. “It has saved millions of people in my country from starvation.”
This was not what I expected. “But you own almost nothing,” I pressed. “I was sure you’d say that money is corrupting.” He laughed at my naïveté. “There is nothing wrong with money, dude. The problem in life is attachment to money.” The formula for a good life, he explained, is simple: abundance without attachment.

Harvard Business Review: When It's OK to Fake It Until You Make It

The Authenticity Paradox
By Herminia Ibarra

Authenticity has become the gold standard for leadership. But a simplistic understanding of what it means can hinder your growth and limit your impact.

Consider Cynthia, a general manager in a health care organization. Her promotion into that role increased her direct reports 10-fold and expanded the range of businesses she oversaw—and she felt a little shaky about making such a big leap. A strong believer in transparent, collaborative leadership, she bared her soul to her new employees: “I want to do this job,” she said, “but it’s scary, and I need your help.” Her candor backfired; she lost credibility with people who wanted and needed a confident leader to take charge.

Or take George, a Malaysian executive in an auto parts company where people valued a clear chain of command and made decisions by consensus. When a Dutch multinational with a matrix structure acquired the company, George found himself working with peers who saw decision making as a freewheeling contest for the best-debated ideas. That style didn’t come easily to him, and it contradicted everything he had learned about humility growing up in his country. In a 360-degree debrief, his boss told him that he needed to sell his ideas and accomplishments more aggressively. George felt he had to choose between being a failure and being a fake.

Because going against our natural inclinations can make us feel like impostors, we tend to latch on to authenticity as an excuse for sticking with what’s comfortable. But few jobs allow us to do that for long. That’s doubly true when we advance in our careers or when demands or expectations change, as Cynthia, George, and countless other executives have discovered.

In my research on leadership transitions, I have observed that career advances require all of us to move way beyond our comfort zones. At the same time, however, they trigger a strong countervailing impulse to protect our identities: When we are unsure of ourselves or our ability to perform well or measure up in a new setting, we often retreat to familiar behaviors and styles.

But my research also demonstrates that the moments that most challenge our sense of self are the ones that can teach us the most about leading effectively. By viewing ourselves as works in progress and evolving our professional identities through trial and error, we can develop a personal style that feels right to us and suits our organizations’ changing needs.

That takes courage, because learning, by definition, starts with unnatural and often superficial behaviors that can make us feel calculating instead of genuine and spontaneous. But the only way to avoid being pigeonholed and ultimately become better leaders is to do the things that a rigidly authentic sense of self would keep us from doing.

Read the rest here.

Murray Rothbard on Ruling Class Motivations

The Federal Reserve Manipulated Rebound in One Chart

Thomas Sowell: Culture Matters

EPJ Week In Review - Week Ending 12/19/14

Below you'll find everything that has been published on EPJ for the week ended Friday December 19, 2014. The hottest posts for each day are highlighted in red.

Friday 12/19/14
Thursday 12/18/14
Wednesday 12/17/14
Tuesday 12/16/14
Monday 12/15/14
Sunday 12/14/14
Saturday 12/13/14

Friday, December 19, 2014

If You Don't Pick Up Pennies You See on the Street...

...Extending the logic, you shouldn't pick up pennies that you, yourself, drop on the sidewalk, or wait for a penny in change.

Even inside of most stores, I generally don't pick up a penny, or even a dime, that I have accidentally dropped.

At present, if change is 10 cents or less, I don't wait around for the change. I have blog posts to put up.

Why is Tipping for Service Assistance Spreading?

Observations from Tyler Cowen:
I now regularly find that when I buy something from a cashier — especially small ticket items — that I have the option of tipping the salesperson.  There will be a cup for tips, or the space to write a tip into the credit card transaction.  If I buy a gelato, or a newspaper in the airport, these tipping chances present themselves.
I take it there are a few classes of customer:
1. Those who are looking for chances to tip more, to feel good about themselves.
2. Those who are uncertain about when they should be tipping, and who will now enter a tip to avoid feeling bad, out of fear that the social default has shifted toward tipping in some additional arena.  They don’t prefer to tip, but they figure they are supposed to, and do not therefore hold a grudge.
3. Those who are indifferent to this new possibility, or perhaps who actively resent it, and who will leave no tip at all and do not feel guilty about that.
4. Those who aren’t sure what they should be doing, ultimately decide against the tip, feel bad about this, identify the establishment which made them feel bad, and avoid that establishment in the future.
If the share of individuals described by #4 is sufficiently large, suppliers will be reluctant to create new tipping opportunities, but it seems that is not the case.  And so the practice of tipping is spreading.  Note that as new tipping opportunities spread, uncertainty about the true social defaults increases (“hmm…maybe coffee servers do deserve a tip…”) and that increases the share of individuals who fall into #2.  Which in turn raises the profitability of creating new tipping opportunities, which in turn muddies the understanding of social defaults, and so on.  That is indeed the Dantean inferno we live in these days.
I ignore most tip jars. I tip when I believe it will improve service (generally if it is a place I frequent with some regularity) or if a  person is particularly cheerful. BUT, when I do tip, I make sure I do it when the person I am aiming the tip at sees me put it in the jar.

If the person you are tipping doesn't know that you made a tip, you might as well go home and burn that money in the fireplace.

The Advance of the Robots: Hershey’s 3-D-Printed Kisses

Television scenes like this will only be about providing perspective on how things once were.

Even candy manufacturers are battling minimum wage hikes with technology.

Hershey's and 3D Systems are collaborating to make the candy of the future. The company is planning to unveil a 3D Chocolate Candy Printing exhibit at Hershey’s Chocolate World in Hershey, Pennsylvania, according to RetailingToday. People who visit the exhibit will be able to print and purchase their own chocolate. They can also see what they look like as 3-D chocolate molds. 

Some of this technology would have developed without minimum wage laws, but not all. Escalating minimum wage laws are acting as a catalyst in the robot sector.

Ron Paul's Christmas List: The Top Three Things Washington Should Shut Down

Even though there was widespread dissatisfaction with $1.1 trillion, 1,774 page federal spending bill that nobody read, it passed anyway in large part because of the governing classes’ palpable fear at the thought of a government shutdown.

This week on the his podcast, Ron Paul shares the top three things he would shut down in Washington.

Listen HERE.

Scientists Say the Key to Living 8 to 10 Years Longer Could Be Ibuprofen

The newest ant-aging wonder drug may be that anti-inflammatory workhorse you probably already take: ibuprofen.

"You can see them under the scope, " says Buck Institute lead researcher Chong Hu, showing KTVU thousands of microscopic worms exposed to ibuprofen.

Typically, the worms' life span is only three weeks and, like humans, they tend to slow down toward the end.

"When they get old, they don't move a lot," observed Dr. Hu, pointing to a motionless shape.

By comparison, younger worms thrash around and eat vigorously. And when they were treated with ibuprofen, worms remained active, and lived days longer.

In people, that might translate to living eight to ten years longer, and equally important, staving off the diseases of old age.

"Alzheimers disease, diabetes, cancer, Parkinson's disease," Dr. Hu recited, "so we don't care about how long a worm lives, we care about how can we make people live longer and live healthier."

Ibuprofen was created in England in the 1960's, first available by prescription, then after widespread use, offered worldwide over-the-countier in the 80's.

It is in a class of compounds known as NSAID's- nonsteroidal anti inflammatory drugs. It is used by millions to relieve pain, fever, and muscle soreness.

Pharmacists are intrigued that it may also have been extending lives.

"It may also depend on how many years someone has been taking it, " observed pharmacy-resident Afsheen Ahmad, of Ross Valley Pharmacy. "But it's very exciting."

Partnered with researchers at Texas A&M University, Buck scientists have found ibuprofen extends vitality and life-span in worms, fruit flies, and yeast.

"What it means is, instead of picking one disease and trying to cure it, we're going to target the one common thing behind all the diseases, which is aging" declared Kennedy...
Before anyone puts them self on a daily Advil or Motrin routine, think again. Ibupfrofen has side effects.
"Even if you're using this over the counter, you should not be taking it for a long period of time," warned pharmacist Ahmad, "someone who is taking it constantly, or chronic use, it can cause ulcers or gastrointestinal bleeds."
That damage to the stomach and liver, may offset an anti-aging benefit.

Harvard Business Review: Stop Using Battle Metaphors in Your Company Strategy

By Frank V. Cespedes

The economist Fritz Machlup wrote an essay about weaselwords: “words concealing voids of thought . . . used to avoid commitment . . . which destroy the force of a statement as a weasel ruins an egg by sucking out its content.” Machlup was talking about how economists often use words like “structure” instead of empirical cause-and-effect linkages. Ironically, after years of books, articles, and MBA programs dedicated to strategic thinking, that’s the danger with how strategy is used in business meetings. It’s too often a way of sounding smart or leader-like and used to avoid necessary choices.

Machlup explained how this can happen: when an economist uses the word “labor,” no one “will ever think of the painful muscle contractions preceding childbirth, and if we say ‘capital’ he may not know precisely what we mean, but he will rarely confuse it with the seat of government in a state or country.” But when multiple words used to refer to different aspects of complex phenomena have overlapping meanings, then “the context [cannot] be relied upon to indicate which meaning is intended [and] the writer or speaker has a moral duty, I would say, to state what he means.” So let’s first clarify what strategy is not.

The word strategy comes from the ancient Greek for a “general” in a military campaign. Strategy gurus constantly use analogies with battle plans for “competitive advantage” versus the enemy. But the metaphor is not suitable because business, unlike a war or battle, is not primarily about defeating an enemy. Business is primarily about customer value: targeting customer groups and tailoring products, sales and other activities to serve those groups better or differently than others. You don’t learn much about that from studying Caesar, Napoleon, Sun Tzu, or whoever your favorite general is.

The analogy is also used selectively and inconsistently. A repeated example is Hannibal’s defeat of the larger Roman army at Cannae by his pioneering use of flanking tactics. But we don’t often hear about Fabius Maximus, a Roman general nicknamed “The Delayer,” who simply wore down Hannibal’s invading army by avoiding pitched battles. Hannibal lost that war. Or another favorite, von Clausewitz, tells us that detailed planning is everything but drop the plan once the shooting starts. Which is it? We already know that business, like other mortal activities, is uncertain. As Damon Runyan said, “All life is six-to-four against.” So what gain really comes from the military analogy?

Read the rest here.

The Social Function of Economic Inequality

By Mark Tovey

The unhampered market creates economic inequality. Free marketeers tend to concede this fact as an
unfortunate defect in an otherwise laudable system. F.A. Hayek, however, in a chapter from The Constitution of Liberty, argued that inequality is fundamental to a society's progress. Hayek explained

Texas Could Be Headed for an Oil-Fueled Recession

“As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession,” Michael Feroli,  J.P. Morgan Chase’s chief U.S. economist, said in a note to clients.

Texas has seen strong growth in recent years, outpacing the U.S. recovery in part thanks to a boom in domestic oil production. The state’s unemployment rate in October was 5.1%, below the national rate of 5.8%, according to the Labor Department. Gross domestic product in Texas expanded 6.9% in 2012 and 3.7% in 2013, beating national GDP growth of 2.5% and 1.8% respectively, according to the Commerce Department.

Any downturn wouldn't be a classic business cycle decline, as the Fed continues to aggressively pump money into the overall economy (SEE: The EPJ Daily Alert), but the oil drop is going to be some kind of problem for Texas---and even more so for Wyoming and North Dakota, which have economies that are much less diversified than Texas and have been booming largely because of oil production.

(via WSJ)

The Central Bank Delirium Phase

By David Stockman

Virtually every day there is an eruption of lunacy from one central bank or another somewhere in the world. Today it was the Swiss central bank’s turn, and it didn’t pull any punches with regard to Russian billionaires seeking a safe haven from the ruble-rubble in Moscow or investors from all around its borders fleeing Mario Draghi’s impending euro-trashing campaign. The essence of its action was that your money is

Gold-Hater Ron Insana is Concerned the Fed is Too Focused on Inflation

Ron Insana thinks Janet "Easy' Yellen is too tight.

He writes at CNBC:
There was no reason for the Federal Reserve to alter the language in its official policy statement...
The world is still at risk of deflation and weak economic growth...
What bothers me most is the notion that the drop in domestic inflation is transitory.
Is Insana a vegetarian or something? He sure would not be getting the sense that deflation was a problem if he was buying beef.  (SEE: Price of Ground Beef Climbs to Another Record...)  He sure isn't looking at the most regularly watched economic data if he thinks the economy isn't recovering (SEE:The Big Four Data Points: Flashing Green). And he sure isn't looking at the leading economic index (SEE: US Leading Economic Index Increased Again in November to Highest Level Since July 2007).

Is this guy doing anything beyond reading Paul Krugman confusion?

Thursday, December 18, 2014

ECONOMIC TERRORISM: Last Week's Massive LA Fire at Apartment Complex Under Construction Was Arson

Last week's massive downtown LA fire at an apartment complex that was under construction was an act of arson, authorities now say. reports NBC Bay Area.

Investigators said they recovered an accelerant, pointing to arson. The fire on Dec. 8 at 900 West Temple Street destroyed a seven-story complex under construction, damaged a nearby high-rise structures and the Harbor (110) Freeway.

The blaze caused up to $30 million in damage to the DaVinci Apartments.

I suspected it was "economic terrorism" at the time of the fire (SEE:Massive Fire in Downtown Los Angeles).

There is a small but growing anti-growth, anti-society element on the West Coast.