The Gift-Card Economy
Virginia Postrel, The Atlantic, May 2009, pg. 28

In this fascinating article, Virginia Postrel explores the “all-too-familiar inner conflict between the would-be disciplined self who wants to get up early, exercise, and lose weight and the pleasure-seeking self who prefers to sleep in, watch TV, and eat chocolate.”

Marketers aren’t the only people who can benefit from the research of behavioral economists; individuals can internalize these lessons to increase their own happiness.

Shu and Gneezy found in surveys (as we all know from our own experiences) that tourists with limited time are more likely to visit local attractions than are residents, who presumably can go whenever they want. In fact, residents tend to make their tourist-like visits when they have out-of-town guests or when they’re about to move away. With no immediate reason to hit nearby landmarks, locals put off for tomorrow what they might enjoy today.

A Saturday at the museum sounds great until you have to leave your errands undone and find a place to park. You wind up sticking to your routine, even though you’d be happier breaking it.

Does this mean I should stop procrastinating another visit to Acadia?

Related post:

Gift Cards
Brent Danley, The Rhetoric, November 27, 2007

economics · gift card · happiness · psychology · the atlantic

How the Crash Will Reshape America
Richard Florida, The Atlantic, March 2009, p44

The economic recession in which we currently find ourselves is the result of bad public policy and an embarrassing culture of greed, consumption and self. Hopefully we will learn from our folly and reshape a better America. The effect on population distribution of what will be a long recession will, I believe, put us in a much stronger position to innovate, produce and conserve in the future. It will also be better for the environment, our collective intelligence and our psychological well-being. We need to be a more urban, producing, saving and renting nation.

This essay in the current issue of The Atlantic magazine(March 2009) is insightful and important. Here are a few of my favorite excerpts.

To an uncommon degree, the economic boom in these cities was propelled by housing appreciation: as prices rose, more people moved in, seeking inexpensive lifestyles and the opportunity to get in on the real-estate market where it was rising, but still affordable. Local homeowners pumped more and more capital out of their houses as well, taking out home-equity loans and injecting money into the local economy in the form of home improvements and demand for retail goods and low-level services. Cities grew, tax coffers filled, spending continued, more people arrived. Yet the boom itself neither followed nor resulted in the development of sustainable, scalable, highly productive industries or services. It was fueled and funded by housing, and housing was its primary product. Whole cities and metro regions became giant Ponzi schemes.

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american dream · buy · economics · home ownerhsip · recession · rent · suburb · the atlantic · urbanization

Daniel Wasserman, Boston Globe, November 25, 2008

boston globe · capitalism · cartoon · economics · humor · obama

We are all Keynesians now
Editorial, Boston Globe, November 25, 2008

Bush’s economic stimulus didn’t work, quite simply, because people banked the tiny checks or spent the money on foreign-produced goods. It was a political move that failed because it was bad policy. And every thinking person knew it at the time.

Obama’s stimulus promises to be far more effective. I’m glad it will be big, because it needs to be. I just hope it’s big enough.

My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.
~Paul Krugman, NY Times, November 10, 2008

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economics · health care · keynesian · obama · stimulus

I stopped for gas tonight at a Shell station in Dorchester, Massachusetts. I paid $1.999/gal. (I used to live in Dorchester.)

Cheap gas is good because I make more money that way. But very very bad for the country. Therefore, by extension, it is also bad for me. It’s like ice cream: we love eating it until it goes straight to our ass.

Related posts:
Are We On an Oil Diet?
Gas Prices Are Still Too Low!
Recipe for Success: Higher Gas Prices

I’ll admit, paying $6 or $7 per gallon for gasoline right now would really hurt already battered family budgets. We got ourselves into this mess by sticking our collective heads in the sand. Detroit obviously didn’t get it. Getting out won’t be easy, quick or pain-free.

Cheap gas is still very bad for America! The government needs to artificially raise fuel prices to stimulate development and adoption of clean alternatives. The free-market is incapable of working towards alternatives when gas is so cheap. Let’s do the hard things; let’s do what’s right and good for America.

economics · gas · gas prices · petrol

I’ve been reading Paul Krugman‘s New York Times column for quite a while now and am a big fan. I especially like his ideas about the government setting a floor price on gasoline. After he won the Nobel Prize in Economics this year I decided to read his latest book, The Conscience of a Liberal.

Related posts:
Are We On an Oil Diet?
Gas Prices Are Still Too Low!
Recipe for Success: Higher Gas Prices

Mr. Krugman is an excellent writer and, therefore, this book was easy to read and flowed nicely. It is, above all, a pragmatic book about economic policy, history, and politics. He begins with a long explanation of the history of economics in the United States and how public policy has had dramatic effects on income and class inequality over time. He then spends significant pages discussing the history of the Republican party and the rise in power of “movement conservatism”. Finally, he describes specific policies we should enact to fix the problems that plague our country economically.

What I enjoyed most about this book was reading about the political and economic history of the United States. It strengthened my opinions about our urgent need for single-payer universal health care and totally changed my views about labor unions. Mr. Krugman is a brilliant intellectual and an incredible communicator. I can only hope he has some advisory role in an Obama administration.

Now I have to purchase my own copy so I can reread it and mark it up. Unfortunately, the copy I read must be returned to the library. :)

book review · economics · liberal · paul krugman