Poverty Traps

A fantastic quote from two of the world's leading development economists:

“We often see the world of the poor as a land of missed opportunities and wonder why they don't invest in what would really make their lives better. But the poor may well be more skeptical about supposed opportunities and the possibility of any radical change in their lives. They often behave as if they think that any change that is significant enough to be worth sacrificing for will simply take too long. This could explain why they focus on the here and now, on living their lives as pleasantly as possible and celebrating when occasion demands it.”

                                                                                    - Banerjee and Duflo (2011)

Europe Rethinks the Welfare State

http://www.washingtonpost.com/world/europeans-shift-long-held-view-that-social-benefits-are-untouchable/2011/02/09/AFLdYzdE_story.html

A Neat Graphic from the Washington Post:
http://www.washingtonpost.com/world/before-austerity-sizable-social-benefits/2011/04/24/AF22IvdE_graphic.html

Why Did It Take So Long?

http://online.wsj.com/article/SB10001424052748704004004576270693061767996.html

S&P Cuts its Outlook on US Treasury Securities.

My only comment is – Why did it take so long? If one were objectively evaluating the level of debt and risk, this should have occurred a while back. A key lesson that we need to learn from the recent financial crisis is that when the market forces are prevented from acting as a disciplinary force (either due to crony capitalism or regulatory capture or improper incentive structure), and unsustainable policies are allowed to persist, the ultimate shock/crisis is likely to be very painful. The atrocious performance of rating agencies prior to the financial crisis has carried over to the present ... their evaluation of sovereign debt quality is at times ridiculous. How long can you run trillion dollar plus deficits and still retain AAA ratings?

There is an obvious conflict of interest when it comes to sovereign states such as the US and UK:
trying to be objective in evaluating the debt issued by the regulator (the government is the ultimate regulator) is likely to be difficult. This is why we need more than three rating agencies (especially when they are geographically concentrated). See previous post on this issue.

Undergraduate Business Education - Does it Have Any Real Value?

An interesting and thought provoking piece from the NYTIMES
http://www.nytimes.com/2011/04/17/education/edlife/edl-17business-t.html

Creative Desctruction

Schumpeter's creative destruction at work here ... while some new industries are being created (Mobile Apps, for instance) others are headed for extinction.

The Top Ten Industries Headed the Wrong Way:
http://www.ibisworld.com/Common/MediaCenter/Dying%20Industries.pdf

Life Expectancy Changes and Retirement Age

An interesting videographic from The Economist:
http://www.economist.com/node/21017618

Nova's Extraordinary Look at the Japan Quake

Nova is reason enough to support PBS

Watch the full episode. See more NOVA.

Financial Crisis Related Articles

Dubai – A Cautionary Tale of Greed and Bad Taste

It is astonishing how little attention is paid to the horrible treatment meted out to Asian workers in the Middle East.

http://www.vanityfair.com/culture/features/2011/04/dubai-201104?printable=true&currentPage=all

Economist Stanley Fisher discusses the lessons learnt from the financial crisis in this excellent lecture

http://rbi.org.in/Upload/Publications/PDFs/SFL110211.pdf