Craigslist is one of the most popular websites in the U.S. (currently ranked #9 by Alexa), getting 8 billion page views per month. But you’d never know it by its world headquarters (see picture above), its staff (only 26 employees), or its business model – it doesn’t want to maximize revenues or profits, and refuses to take advertising.
See a 5-minute Forbes.com video of Craigslist’s CEO Jim Buckmaster.
Thanks to Sanil Kori.
Every improvident loan requires an improvident borrower to seek and accept it. Furthermore, when there is no penalty for folly — such as getting a variable-rate mortgage that will be ruinous if the rate varies upward — folly proliferates. To get a mortgage is usually to commit capitalism; it is to make an investment in the hope of gain. And if lenders know that whenever they go too far and require inexpensive money the Federal Reserve will provide it with low interest rates, then going too far will not really be going too far.
The Federal Reserve’s proper mission is not to produce a particular rate of economic growth or unemployment, or to cure injuries — least of all, self-inflicted ones — to certain sectors of the economy. It is to preserve the currency as a store of value — to contain inflation. The fact that inflation remains a worry is testimony to the fundamental soundness of the economy, in spite of turbulence in a small slice of one sector.
Happily, Chairman Ben Bernanke’s Federal Reserve remains committed to minimal management, which is what government does best.
~George Will from his most recent column
“If you protect a man from folly, you’ll soon have a nation of fools.”
“If you make the world safe for idiots, you’ll have a world of idiots.”
Most residential and commercial customers still pay their electric utility a flat rate (national average of 9 cents per kilowatt hour) multiplied by the kilowatt hours they use. That ‘s an example of a “dumb grid.”
But with a smart grid in place, a utility can restructure rates, and then offer all its customers products that allow either the customer, or the utility, to control usage based on demand and hourly rates.
For example, maybe you ‘d be ready to put off running your dishwasher until 3 a.m. if you could do it with electricity costing 5 cents a kilowatt hour, instead of 25 cents during the day at times of peak demand.
Read more about the increasing use of “smart grids” in Forbes.com.
Read Indian professor Ray Titus’ Buyer Behaviour blog here.
The average Indian has to work more than 6 hours to earn enough money to buy a beer, whereas it takes a U.S. worker only 10 minutes, and an Italian worker only 9 minutes, according to a beer affordability index compiled by global beer giant SAB-Miller. Based in South African, SAB-Miller is one of the world’s largest brewers, with brewing interests and distribution agreements in over 60 countries across six continents.
Read a news report here. Read a previous post on the Big Mac Index here, and a previous post on iPod parity here.
Thanks to Sanil Kori.
1. Socialize the individual’s surplus and you socialize his spirit and creativeness; you cannot paint the Mona Lisa by assigning one dab of paint to a thousand painters.
~William F. Buckley, Jr.
2. Everything that is really great and insipiring is created by the individual who can labor in freedom.
The chart above is from a 1995 Reason Magazine article “The Good Old Days Are Now,” by W. Michael Cox, senior vice president and chief economist at the Federal Reserve Bank of Dallas.
Forget what you’ve heard in the media about “working harder and getting further behind.” Most Americans today have both more leisure and better goods than they did even 10 or 20 years ago, and most of us certainly live at a much higher standard of living than our grandparents or great-grandparents, despite the fact that many people today mistakenly think their standard of living is declining.
Exhibit A: Look at the evidence in the chart above, and consider that further improvements have been made since 1990. We now live longer, start to work later in life and work much less annually (1,562 hours annually in 1990 vs. 3,069 hours in 1870), spend 30% less time working around the home vs. 100 years ago, retire earlier, have an increasing number of years in retirement (expected time in retirement was 0 years through all of human history until the last quarter century or so), experience 3X as much waking leisure now compared to our ancestors in the 1800s, etc. etc.
According to Dr. Cox, “Being distracted by the myth of declining living standards isn’t getting us anywhere. The evidence is overwhelming. On average, Americans are better off than ever before.”
Just ask yourself: would you be willing to trade the life you lead today, with your current income and with all of the modern conveniences, all of the new and improved products like computers and cell phones, all of the medical advances, for the life of your great-grandparents? I sure wouldn’t, and I think the people who would trade their standard of living today for their grandparents’ would be the rare exception.
A lot of attention is paid to the Federal Reserve’s monetary policy, especially its ability to frequently change its target for short-term (overnight) rates, the “Federal Funds Rate.”
As the chart above shows (click to enlarge), the target rate for the Fed Funds has ranged from a high of 6% in early 2001, to a low of 1% in 2003-2004, and now back up to 5.25% since July 2006. But notice how relatively stable both the 30-year mortgage rate and the 10-year T-Note rates have been, fluctuating in range of only about +/- 1% while the Fed Funds has fluctuated in a range of +/- 5%. Notice also how the Fed Funds rate has been above the 10-year T-note rate in 2001 and for the last year and a half, and below the 10-year bond rate by 3% in 2003-2004, with almost no effect on the 10-year bond rate in either case.
1) The Fed has very little control over long-term interest rates at horizons of 10 years or more, unless expectations of future inflation change significantly, which they apparently haven’t.
2) Long-term investment decisions are made based largely on long-term rates (10 years or longer), not short-term overnight rates (Fed Funds).
3) The Federal Reserve’s influence on the economy is probably significantly overstated, since it only moves overnight rates around without changing long-term rates.
4) Undeserved attention paid to the Fed injects unnecessary uncertainty into the economy, as Wall Street and Main Street engage in excessive “Fed watching.”
5) We’d probably be better off with an inflation target, like Canada, New Zealand, Australia, European Union and the U.K.
Gas prices in Michigan are now below $2.50 in some areas, check prices here, and the national average has fallen from $3.24 to $2.76 per gallon, or about 15%, in the last two months (see chart above, click to enlarge).
Notice in the graph above that gas prices are about the same today ($2.76 per gallon) as two years ago, and there have been alternating periods of rising and falling gas prices between a low of $2.10 and $3.24. However, there are 480,000 hits for a Google search of the term “rising gas prices,” but only 33,000 hits for a search of the term “falling gas prices.” So even though gas prices have fallen and risen with about the same frequency over the last two years, there is about 14.5X as much attention paid by the media to rising gas prices compared to falling gas prices. (Most of the Google hits are for news reports.)