Some of the following links have been open for over a week, but have gotten buried under the onslaught of reading material I’ve accumulated since. Regardless, the following articles are all very interesting and well-worth reading, unless you think ignorance is, in-fact, bliss.
The Economist, Enemies of progress: The biggest barrier to public-sector reform are the unions
“John Donahue at Harvard’s Kennedy School points out that the egalitarian culture in Western civil services suits those who want to stay put but is bad for high achievers. Heads of departments often get only two or three times the average pay. As Mr Donahue observes, the only American public-sector workers who earn well above $250,000 a year are university sports coaches and the president of the United States. Hank Paulson took a 99.5% pay cut when he left Goldman Sachs to become America’s treasury secretary. Bankers’ fat pay packets have attracted much criticism, but a public-sector system that does not reward high achievers may be a much bigger problem for America.”
Federal Reserve Bank of Atlanta: President Lockhart Describes “Multifaceted” Employment Challenges
Guess what? Between just structural issues and productivity increases, “normal” unemployment could be anywhere from ~5.5%-8%, far higher than the ~5% pre-crisis. Here’s a thought: productivity has increased for the past ~10-20 years, but it took a shock like the crisis for firms to realize it them. Anyone who’s worked in a large corporation and isn’t blind to what’s going on around them can attest, there is (was?) LOTS of fat to cut in the employment rolls. The question is whether firms have cut-down to appropriately lean size, and if so, whether such realization of productivity gains are sustainable.
Bill Gross (not the Pimco one) on why Twitter suspended UberTwitter. I’m assuming the Twitter folks are just really pissed off/jealous/bitter that they didn’t have the (obvious) foresight to buy the most popular interfaces like UberTwitter and Tweetdeck (which, coincidentally, were both bought by Bill Gross’ firm UberMedia.
The other Bill Gross (the Pimco one) continues his long-running streak of rank hypocrisy, blaming the Financial Sector for its own problems, yet not taking any blame himself or for Pimco. I really hate that guy, but you’ve gotta give him credit. Pimco might have more influence over the Government than Citigroup or Goldman Sachs. When you run the largest bond fund in the world, Washington HAS to listen to what you have to say, lest their policy decisions screw over the millions of Pimco fund holders. His argument is a valid one though, even though he never, ever, ever admits to having any hand in the sort of short-sighted nasty behavior of the Financial Sector (emphasis mine):
As a profession we have failed miserably at our primary function – the efficient and productive allocation of capital: The S&L debacle of the early 1980s, the Asian crisis, LTCM, dotcoms, subprimes, Lehman and the resurrection, instead of the reformation, of Wall Street, are major sins of the modern era of money. Hang your heads, moneychangers …
Financiers have lost their high ground and, if truth be told, we began to lose it a long time ago when we figured out that money was more than a medium of exchange or a poor substitute for a store of value. We figured out a turbocharged way to make money with money and proclaimed ourselves geniuses in the process. Well, we’re not. … the only productive invention to come out of the banking industry over the past generation was the ATM.