February 5, 2012

Note to Washington: You Cannot Separate Human Psychology from Economics

Predictably Irrational Book

The Huffington Post is talking about Obama's handling of the economy and the world view of his economic advisers now that Larry Summers is resigning. Those policies -- the bailout of Detroit automakers, an $814 billion stimulus package, subsequent programs under TARP, Cash for Clunkers and the administration's unlimited backstop of Fannie Mae and Freddie Mac -- arguably saved an economy that many considered to be on the verge of collapse. But while the recession officially ended last year, … [Read more...]

Free Trade Isn’t Always Fair Trade

Free Trade and Fair Trade Global Policies

A few days ago, I wrote a five-part essay called How to Solve the Trade Deficit in response to a reader question about trade policy in the United States. The reader, Adam, responded on his blog.  Here is my followup to his commentary. I Would Love to Run Trade Surpluses But It Isn't Going to Happen If the United States were to run trade surpluses, as opposed to going trade neutral, we would be accused of mercantilism (rightly).  This would immediately cause our trade partners around … [Read more...]

A $1,000,000 Municipal Bond Dilemma

Municipal Bonds and Muncipal Bond Investments

Those of you who follow my writings at About.com, a division of The New York Times, know that I've written about municipal bonds at the Investing for Beginners site including one article that detailed some ways to help you determine if a specific municipal bond was "safe". At the wedding this weekend, I was discussing a family friend, who shall remain nameless, who is in his 80's and has more than $1,000,000 parked in municipal bonds.  As many of you know, this means he earns tax-free … [Read more...]

Thierry Mugler, I Love You

Thierry Mugler Scarlet Velvet Suit Look No. 8

Designer Thierry Mugler unvieled the 2010 winter men's collection and I am seriously considering spending a couple grand and buying the tailored red suit (ref: Look No. 8 - Young American).  I mean, the fact that it isn't conservative: Who's going to be stupid enough to say anything to me about it?  I don't work for anyone and can wear whatever the hell I want.  (Although ... wait ... this could be like that tie I wore freshman year that Jocelyn hated so much she refused to speak to me … [Read more...]

Mental Model: Social Loafing

If you were starting a project or business, common sense would tell you that you could produce 5x as much output if there were five people working on your goals than if there were just one person.  If you are running a counseling program, ten counselors should be able to do 10x the work as a single counselor, right?  If you are starting a candle company, twenty employees should be able to produce 4x the work as five employees, right?  If you are a mom cleaning out a garage, you should get … [Read more...]

Here Is One of My Secrets to Making Money (Or, How I Once Bribed Women to Code for Me with Diamonds, Rubies, and Chanel)

Diamond and Ruby Bracelet with Bottle of Coco Chanel Mademoiselle Perfume

The Secret: Strike Deals Where Everyone Has Limited Downside and Harness the Super Power of Incentive Some of you have been writing to me privately and asking about the early days when we started out and were trying to build our companies.  I thought it would be useful to share some of the things we did during that time that worked out well ... and maybe I'll even talk about those things that didn't work out so favorably.  I hope you find it useful in your own endeavors. When Aaron and I … [Read more...]

“Dreams Become Reality One Choice at a Time” – A Lesson on Life, Business, and Money

Country Club Plaza in Kansas City

Isn't that a fantastic quote?  I got it from Tara Beth Workman a few days ago and I've been thinking about it since.  I realize that it is entirely true and that my life is a reflection of that.  All of our lives are reflections of that.  Let me explain. This afternoon, Aaron and I decided to take an impromptu trip to Hall's department store because we were restless and wanted to get out of the office.  Turns out, we hit a major financial milestone so rewarded ourselves by spending just … [Read more...]

The Creed Fragrance Counter Is One of My Favorite Places in the World

Creed Bois du Portugal

This morning, I walk into my kitchen to find my grandmother and mother sitting there waiting for me, wanting to know if I want to go out and eat or spend the day together.  Long story short, the three of us, plus my youngest sister, who is in high school, end up at the Country Club Plaza in Kansas City for a day of luxury shopping and fine food.  It was what life is all about, in a nutshell; experiencing great things with people you love. Creed Fragrance - One of My Favorite Companies in … [Read more...]

Health Care Reform Taxes Will Hit Top 1% of Households

Rich Uncle Penny Bags, aka the Monopoly Man, now has to pay Medicare taxes on dividends, interest, and real estate rental income.

I don't think there is any reasonable chance health care will be overturned as unconstitutional because it is written in such a way that you aren't technically required to buy health insurance, you will just be subject to a special excise tax if you don't. A lot of very, very expensive lawyers made sure the language would stand up to a challenge.  That may seem like a small distinction but it has the effect of requiring everyone to do it through an incentive system and doesn't actually … [Read more...]

It’s Comforting How Oddly Predictable Humans Can Be on the Small Things

Gold Rimmed Coffee Cup and Saucer with Montblanc Fountain Pen

A few days ago, Aaron got a message from one of our friends, Jimmy, at about 4 in the morning.  We were both still up working on a project that's going to have some fairly large financial ramifications for us in about a year or two, so we happened to read it in near real-time.  Anyway, Jimmy said he wished he could come down to our dorm room, curl up on the lower bunk, as Aaron played video games and I read at my desk, drinking coffee out of a gold-rimmed cup and saucer, reading a book with a … [Read more...]