Category Archives: Economy

The Problem with California

I love California. I have lived here for four years now and love the fact that I can wear flip flops in January. However, I will admit California has its problems. Let me be clear, this clip is not talking about California but, having started a business in this state, it isn’t that far off.

This is a huge problem when it comes to growing an economy. When my wife and I started our business it felt like playing Russian Roulette.  Which form was going to take so long to fill out that we wouldn’t be able to open? What regulation were we going to miss that would close us down just after we opened? It was a nightmare. Proof that California has taken things too far is the fact that many businesses have decided to leave the state in recent years to  open in places like Texas.

If you listen to the full episode from Planet Money you will hear about something called the Doing Business survey by the World Bank. This is basically a list of all the countries in the world based on how hard it is to do business. The good news is that the U.S. is number seven. The bad news is the story doesn’t end there.

The survey also breaks down information into several different categories.  When it comes to the ability to start a business, the U.S. is number 46, dealing with construction permits, 41 and when it comes to getting electricity we are 61st. What numbers pull us back towards the top? When it comes to getting credit we are the second best in the entire world and we are number four at resolving insolvency. So basically we are really good at giving you money and then letting you walk away when you lose it.

Those are actually really good qualities. It goes right along with the whole “fail early, fail often” mantra of today’s entrepreneurs.  The problem appears to be how hard it is to use that money.

Now I absolutely do not agree with President Reagan who said, “government is the problem.” Government regulation is very important, however, it needs to be smart, well run regulation. We have created a world where all of the onus is on the individual or the business to figure out whatever byzantine rules the government comes up with. The government needs to take some of the responsibility for asking the question, how does one actually apply these rules in the real world, before they pass a law.

These things have real world consequences. Not just in how fast an economy grows, but in individual lives. The podcast ends with the dramatic story of the Arab Spring, which was started by a merchant in Tunisia who was so fed up with the police interfering with his business that he set himself on fire. We are no where near that in the United States, but we are absolutely at the point where a lot of potential entrepreneurs will just throw up their hands and say, this isn’t worth the trouble.


Oil Speculators

I remember back in 2008 when I heard about all of the oil speculators who were causing the price of oil to go so high. The proof came after just a few months when the price of oil dropped by $100 per barrel. The one thing I didn’t really know what how speculators were doing what they were doing? Well, with current low oil prices, we are getting another view of how some of those speculators operate.

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Why gyms don’t want you to workout

Because I move around a lot, I have used many different gyms. Golds Gym, the YMCA, Lifetime Fitness, I have been to them all. Several years ago I started to feel something in the back of my mind. It seemed to me if you really wanted to workout, most gyms were not designed for you. Despite being marketed as a place to workout, they often made it hard to actually complete that workout. It seems like I was right.

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The Spending Bill

As I write this, Friday December 12th, the US Federal Government is operating under a 48 hour Continuing Resolution. Late Thursday night the House of Representatives passed a $1.1 trillion spending bill to cover the rest of the fiscal year but because the Senate also needs time to vote on that bill, the House also passed a two day spending measure to avoid a government shutdown.

Unlike the last time we were in this position, it is now the Democrats holding up the spending bill, with nearly all of them voting against the measure. Why is that? Here is Kai Ryssdal from Marketplace to explain.

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Tomorrow it Rain Money

Do you trouble saving money? Well, if you spoke Chinese you might have an easier time with it.

Chinese is one example of a future-less language, whereas English is a futured language, we make clear grammatical separations between the past, present and future. This talk from Keith Chen is just one example of the several great chapters to this weeks episode of the TED Radio Hour. In it he explains how the way we think about time has a great influence on our ability to make decisions concerning both future payoff and punishment.

The third chapter with Paul Piff is the most interesting to me. In this time of increasing inequality in America, it is important to think about how these changes affect us. One example from this talk is an experiment involving a rigged game of Monopoly. At the start of a game the two players would flip a coin, the winner of the flip would start the game with twice as much money and get to use two dice as opposed to one. As explained in his talk, the winning players in this rigged game begin to act very differently and also start to forget that the game is rigged to begin with.

All five speakers from this episode examine the way we look at money and the underlying reasons to explain our reactions. I highly recommend you listen to the whole talk or subscribe to the TED Radio Hour on iTunes.