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Younger Americans Less Likely to Start Businesses
Tweet Share on Facebook November 23, 2009 CommentOver the weekend, Elliot Gerson of the Rhodes Trust wrote about the trend over the last two decades of more and more Rhodes scholars going into business over supposedly more noble pursuits such as medicine, law, science and public service (HT: David Boaz). Although he never explicitly says it, Gerson strongly implies that the financial crisis should make bright young people question the value of business as a career, and maybe even reverse this trend among Rhodes scholars (although he's not hopeful):
Many thought a silver lining of last year's financial crisis -- or from the populist rage that flared against Wall Street excess and to profits born not from creativity but from leverage -- would be that earnings differentials would return from obscene to merely enormous levels, if not to the very generous multiples that had long been adequate to fuel a vibrant economy. Well, the hyper-bonuses are back -- astonishingly having been made even easier to achieve with taxpayers socializing the downside risks. And the crisis? What crisis?
So how many more of America's young and brightest will ask themselves what kind of chumps they are to give up the chance to earn 100 or 500 times as much as their mentors, their doctors, their favorite professors, their idols and heroes?
But Gerson should be careful what he wishes for. It's probably true that the Great Recession has made business a less desirable career. But when business loses its luster among those entering the workforce, we don't just lose Ken Lays or subprime mortgage lenders—we also lose the entrepreneurs who will start the next great businesses.
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Should Consumers Vote With Their Dollars on Gay Rights Issues?
Tweet Share on Facebook November 23, 2009 Comment (3)Remember when progressives staged a boycott of Whole Foods after CEO John Mackey wrote an op-ed criticizing single-payer healthcare, and critics of Obamacare staged a "buycott" to promote the company? Of course, that won't be the last time activists use consumer power as ammunition in political battles.
What was strange about that episode is that Mackey has for a long time publicly declared himself as a libertarian, and made clear he supports economic policies many progressives find horrific. But what about companies where we don't know the ideologies of executives? Activists have an incentive to find out those secrets.
Enter the Corporate Equality Index from the Human Rights Campaign. It's an annual index that rates companies based on what HRC sees as adherence to LGBT rights. Large employers filled out surveys with questions regarding company policies toward LGBT people, such as harassment policies, or benefits for same-sex couples.
You might think that because it's a voluntary survey, only the most progressive companies would comply. BUt HRC says that the index reveals stark differences between some competing companies.
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Palin Fan Can't Believe Sarah Supported Bank Bailout
Tweet Share on Facebook November 20, 2009 Comment (4)Skip to about two minutes into this video, and enjoy the awkwardness.
She responds, "I don't think if you asked [Palin] today, she would support it."
Well, of course not. That's what you do when supporting small government suddenly becomes politically convenient—you switch positions.
Bruce Bartlett has a column today on a much bigger instance of Republican hypocrisy regarding small government. Most Republicans in Congress today argue that healthcare reform is unacceptable because it would cost $900 billion over 10 years. But six years ago, when President Bush proposed a prescription drug benefit that would cost $1 trillion over 10 years, many of those same Republicans were all for it.
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Ron Paul Fed Provision Passes House Financial Services Committee
Tweet Share on Facebook November 20, 2009 Comment (55)Ron Paul has received the most attention he's got since his presidential campaign with his "audit the Fed" bill. Now, that legislation seems to have a shot at passing, as it has been attached to Barney Frank's financial regulation bill.
But the irony is that, for Paul and other Republicans, in order to limit what they see as overreaching federal government power in the form of the Federal Reserve, they would have to greatly expand federal government power in the form of other aspects of the Frank bill. Among other things, it would establish a Consumer Financial Protection Agency, an idea that has been maligned by free-market groups.
See my interview with Rep. Paul for more on his plan, which may become a reality.
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Interchange Fees: GAO Recommends Caution on Regulation
Tweet Share on Facebook November 19, 2009 Comment (3)The Government Accountability Office just issued a report on the issue of rising interchange fees for merchants who offer credit card services. As I wrote in a previous article, merchant groups have got the ears of certain members of Congress, and regulation is on the table that would theoretically lead to lower interchange fees for merchants and lower prices for consumers.
But, as I explained, the issue isn't that simple. There are several myths that both sides (merchants on one side, credit card issuers on the other) are bandying about to make their individual stance look like the unalloyed good.
The GAO report serves to show how complicated interchange regulation is. But it does provide some notes of caution that Congress should heed before it acts.
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Ground Beef Hysteria Is Overblown
Tweet Share on Facebook November 19, 2009 Comment (2)The Senate is currently considering a bill to beef up (pun intended) food safety regulations. They've been prompted to act by the rash of food scare headlines that have cropped up in the news over the past year or so, with "killer spinach" and "killer peanut butter" each getting a turn in the spotlight.
Ground beef has been an object of fear for much longer, from notorious deaths from e. coli at Jack in the Box in the 90's to mad cow disease hysteria. Now, Atlantic food blogger Marion Nestle declares in a stark headline that "ground beef is dangerous" and this danger is another reason for Congress to regulate the food supply.
When people die from contaminated food, it is a tragedy, and any company that distributes contaminated food should be justly punished. But take the issue in proportion. Getting sick from eating ground beef is very low on the list of fears that the average American worries about, and it should be. That's not to say Congress should do nothing about the issue, but let's not jump into crisis mode without considering the facts.
Look behind the headlines, and at the actual statistics.
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Where The Stimulus Is Working
Tweet Share on Facebook November 18, 2009 Comment (2)The Obama administration has claimed that over 600,000 jobs have been created by the stimulus so far through direct grants, and many have argued this is a deceptive argument in light of the "disturbingly high unemployment rate," as Michael Boskin writes today.
The White House is at a bit of a disadvantage in this debate because the method of counting jobs through direct contracts misses out on perhaps the stimulus's greatest successes. The ripple effects created by stimulus spending have consequences that are hard to calculate in the short-term. Nevertheless, we can identify certain winners from these ripple effects.
Take the education industry, for example. Not the schools and the people they employ, but the range of businesses that provide services to educators. At a conference yesterday, I spoke to the CEO of one such business, Dennis Heneger of the Provenio Group based in Austin, Texas. His company sells a piece of software called LEAPS that helps teachers deal with behavioral problems in their classrooms. The software lets teachers evaluate their students' behavior, and then offers resources to fix the problems based on the evaluations. Heneger said he was growing his business throughout the decade, spreading the technology to more and more school districts, but that changed in 2008.
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The Big Global Warming Offenders
Tweet Share on Facebook November 17, 2009 Comment (5)Here's a pretty cool graphic of countries around the world and how much they increased or decreased their greenhouse gas emissions from 2006 to 2007. Predictably, there are way more increasers than decreasers. But the top three that increased their emissions the most might surprise you.
Venezeula - 14.2 percent
United Arab Emirates - 10 percent
Australia - 9.2 percent
So Australia pumped out more emissions at a rate almost nine times that of the United States.
Chile had the biggest decrease—even more so than Germany and France.
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Public Transportation and Fast Commutes: Harder to Find Than You Might Think
Tweet Share on Facebook November 17, 2009 CommentMy story on cities with short commuting times and low auto dependence touched on an interesting debate. As clogged as our highways are, driving is generally a much faster method of commuting than public transportation. Nationwide, the average time for driving alone to work is 24 minutes, while for public transportation, it is 48.3 minutes. Now, this is a bit of an unfair comparison because "public transportation" includes commuter rail, and people riding the train to work often travel over much greater distances than people driving to work. But even if we limit ourselves to just subways and streetcars (which cover much shorter distances than commuter rail), the difference is still stark: 47 minutes is the average commuting time for those systems.
Population alone doesn't explain the difference, either—in Houston, the vast majority of commuters drive. The Washington, D.C. metro area is of comparable size to Houston in terms of population, but has a much greater use of public transportation. But D.C. has a longer average commuting time than Houston.
The political debate enters in because advocates of smart growth, urban living, and mass transit would probably argue that this difference stems from the relative lack of investment in public transportation compared to road and highway infrastructure.
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Snoop Dogg Gives Business Advice
Tweet Share on Facebook November 17, 2009 Comment (1)Of course Obama called Kanye West a "jackass," but as the president meets with business leaders to discuss innovation, maybe one rapper he'll want to take seriously is West Coast hip-hop icon Snoop Dogg. Snoop has gone from the LBC to Wall Street, as yesterday he was a panelist at an event for Global Entrepreneurship Week. He has perhaps the most successful brand to emerge from the music world since Kiss, with his own dolls, youth football league, and even a car.
Check out the questions CNBC's Maria Bartiromo asked him in this video (Snoop appears about three-quarters of the way in).
Where did he learn his most valuable lessons to succeed in business? Surprisingly, Snoop says it was in school. "Sometimes a loss is the best thing that can happen. It teaches you what you should have done next time," says Snoop. He failed a lot in school, but his mom "wouldn't let me come home with no F." So he eventually worked hard enough to go from the basic math classes to calculus. "If you stop at general math, you're only going to make general math money," Snoop said to wild applause from the crowd.
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