Category: A Rationale
Posted by: Admin
The most general and the most pervasive way I make sense of the world is through economics. Concepts inspired by the great economic thinkers and philosophers applied to business and life. Here are their stories and my stories......
See also my blog Eye2theLongRun
See also my blog Eye2theLongRun
Very pertinent to NZ… for those unaware (and see Economist of last week circa 7 May for further discussion) Reinhart and Rogoff produced a paper asserting that once beyond 90% of GDP, Govt debt causes economic growth to stutter to nil or close. Subsequently it was found that their spreadsheet had errors and omissions in it…. Embarrassing yes… but as noted below, that’s not actually the point.
Brent Wheeler Group Limited has recently completed a report on the future of the heritage asset of Wanganui.
For a report which recently featured in the Wanganui Chronicle please see the History Page of this website.
For a report which recently featured in the Wanganui Chronicle please see the History Page of this website.
It is common to claim that property prices, especially in Auckland are irrational. That claim does not withstand scrutiny. Property returns are volatile and unpredictable as are those of any risky asset. Long run efficiency prevails again, as this article in The Economist tells us:
ROBERT MORRIS would have enjoyed the recent American housing boom. A signatory of the Declaration of Independence, he profited handsomely in the 1790s by “flipping” land on the American frontier. His business, acquiring millions of acres from Native Americans and friends of the crown and then selling them on to speculators, probably made him the richest man in America until dearer credit left him bankrupt. In a new paper Edward Glaeser of Harvard University argues that America’s long history of property manias has lessons for those aiming to minimise the pain of future busts. In particular, exuberant buyers may be more rational than many assume.
ROBERT MORRIS would have enjoyed the recent American housing boom. A signatory of the Declaration of Independence, he profited handsomely in the 1790s by “flipping” land on the American frontier. His business, acquiring millions of acres from Native Americans and friends of the crown and then selling them on to speculators, probably made him the richest man in America until dearer credit left him bankrupt. In a new paper Edward Glaeser of Harvard University argues that America’s long history of property manias has lessons for those aiming to minimise the pain of future busts. In particular, exuberant buyers may be more rational than many assume.
21/04: Handbag Economics
The Economist magazine claims that the way to understand Thatcher's policies is through her handbag. Throughout her career she carried a piece of paper with this quote on it:
"You cannot bring about prosperity by discouraging thrift.
You cannot strengthen the weak by weakening the strong.
You cannot help the wage earner by pulling down the wage payer.
You cannot further the brotherhood of many by encouraging class hatred.
You cannot help the poor by destroying the rich.
You cannot keep out of trouble by spending more than you earn.
You cannot build character and courage by taking away mans initiative and independence.
You cannot help men permanently by doing for them what they could and should do for themselves."
The quote is often attributed to Abraham Lincoln, but was actually penned by William J. H. Boetcker
"You cannot bring about prosperity by discouraging thrift.
You cannot strengthen the weak by weakening the strong.
You cannot help the wage earner by pulling down the wage payer.
You cannot further the brotherhood of many by encouraging class hatred.
You cannot help the poor by destroying the rich.
You cannot keep out of trouble by spending more than you earn.
You cannot build character and courage by taking away mans initiative and independence.
You cannot help men permanently by doing for them what they could and should do for themselves."
The quote is often attributed to Abraham Lincoln, but was actually penned by William J. H. Boetcker
Some seven years ago Alex Tarbarok (Marginal Revolution) wrote that the system of real estate commissions is horribly inefficient:
Consider, house prices are much higher in California than in Idaho but commissions are stable at around six percent. Thus, even though the realtor’s job, brokering a deal, is the same in California as in Idaho, a realtor in California will make much more per-house.
Consider, house prices are much higher in California than in Idaho but commissions are stable at around six percent. Thus, even though the realtor’s job, brokering a deal, is the same in California as in Idaho, a realtor in California will make much more per-house.
The Governance paper from which Brent Wheeler, Chair of The Boardroom Practice drew his remarks for the TBPL 10th anniversary birthday party recently:
Governance in New Zealand: Retrospect and Prospect
Governance in New Zealand: Retrospect and Prospect
This Ted talk by Dan Pallotta raises interesting issues about the fundraising drivers for charities and giving - the efficiency effects are quite different depending on the view taken:
Activist and fundraiser calls out the double standard that drives our broken relationship to charities. Too many nonprofits, he says, are rewarded for how little they spend -- not for what they get done. Instead of equating frugality with morality, he asks us to start rewarding charities for their big goals and big accomplishments.
The Way we Think about Charities
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Activist and fundraiser calls out the double standard that drives our broken relationship to charities. Too many nonprofits, he says, are rewarded for how little they spend -- not for what they get done. Instead of equating frugality with morality, he asks us to start rewarding charities for their big goals and big accomplishments.
The Way we Think about Charities
Browser back button to return to site
The final in our series “Learning Economics from the Classics” comes from Deidre McCloskey. This is a lengthy extract from Deirdre McCloskey’s book Bourgeois Dignity: Why Economics Can't Explain the Modern World . McCloskey is renowned for having ideas which are at once different from those being advocated by conventional economists but at the same time being right in the centre of economic thinking and the analysis of problems which are central to the areas economists wish to discover enlightenment about.
This extract summarises the findings of her book and sets them in the current socio-political climate in a clear fashion which deals with both spurious argument and what might be done about it. While the extract is reasonably long McCloskey’s formidable writing skills make it an easy read and most enjoyable.
It is a capital read as a means for reviewing all of the other eleven papers in the series which we have presented and sums up in an applied sense almost all of the lessons – along with a whole lot more – which are important.
We trust you have enjoyed this series. Further information is available by writing to us at brent@brentwheeler.com
Bourgeois Dignity: Why Economics Can't Explain the Modern World Browser back button to return to site
This extract summarises the findings of her book and sets them in the current socio-political climate in a clear fashion which deals with both spurious argument and what might be done about it. While the extract is reasonably long McCloskey’s formidable writing skills make it an easy read and most enjoyable.
It is a capital read as a means for reviewing all of the other eleven papers in the series which we have presented and sums up in an applied sense almost all of the lessons – along with a whole lot more – which are important.
We trust you have enjoyed this series. Further information is available by writing to us at brent@brentwheeler.com
Bourgeois Dignity: Why Economics Can't Explain the Modern World Browser back button to return to site
01/03: Links for February 2013
ECONOMICS
More than useful message for N.Z.
FINANCE
What a deal
Private equity - Shift-Ctrl-Dell
MUSIC
Top 100 Jazz Guitar Albums
More than useful message for N.Z.
FINANCE
What a deal
Private equity - Shift-Ctrl-Dell
MUSIC
Top 100 Jazz Guitar Albums
From Greg Mankiw
Give Me Your Tired, Your Poor and Your Economists, Too
ALL the recent talk in Washington about reforming immigration policy brings to mind Pat Paulsen, the comedian who, every four years, conducted faux campaigns for president.
“All the problems we face in the United States today,” Mr. Paulsen would say, “can be traced to an unenlightened immigration policy on the part of the American Indian.”
That quip contains a deep truth. Almost all Americans today are beneficiaries of a policy that welcomed our ancestors when they arrived at the border.
Give Me Your Tired, Your Poor and Your Economists, Too
ALL the recent talk in Washington about reforming immigration policy brings to mind Pat Paulsen, the comedian who, every four years, conducted faux campaigns for president.
“All the problems we face in the United States today,” Mr. Paulsen would say, “can be traced to an unenlightened immigration policy on the part of the American Indian.”
That quip contains a deep truth. Almost all Americans today are beneficiaries of a policy that welcomed our ancestors when they arrived at the border.
