Friday, January 18, 2013

Ability to take risks–our greatest asset I

Nicolas Nassim Taleb – he of the Black Swan and Fooled by Randomness suggests in his latest book Antifragile that America’s greatest asset is its ability to take risks. This is a powerful concept and one worth thinking about very carefully. It is also one which is applicable well beyond the United States.

It is risk taking which allows and facilitates the trial and error that leads to innovation. It is risk taking which provides the capital to develop innovation. It is risk taking which emboldens people to try something new – a journey of discover, a new way of pursuing an old challenge, an alternative way of accomplishing a familiar task.

With innovation comes wealth – in myriad tangible and intangible forms.

With innovation comes increased choice – greater freedom to follow what appeals.

Consequently decisions, attitudes, policies, regulations and fears which make people more risk averse tend to make them less innovative. Fewer risks less innovation.

To live in a less risky universe girt with high vis protection from ever greater fears of an increasing number of apparent risks is to live in a less innovative universe.

So what sort of universe are you living in?

Brent

Sunday, January 6, 2013

Fiscal cliff economics simplified

Lesson #1:
-U.S. Tax Revenue:        $  2,170,000,000,000
-Federal Budget:             $  3,820,000,000,000
-New Debt:                     $  1,650,000,000,000
-National Debt:               $14,271,000,000,000
-Planned Budget Cuts :    $       38,500,000,000

Remove 8 Zeros and pretend this is a household budget

Lesson #2:  
-Annual Family Income:    $   21,700.00
-Family Expense               $   38,200.00
-New Credit Card Debt:     $   16,500.00
-Outstanding CC balance:  $ 142,710.00
-Total belt tightening:       $         38.50

Let's say, you come home from work and find there has been a sewer backup in your neighborhood...and your home has sewage all the way up to your ceilings.  What do you think you should do?  Raise the ceiling?
With thanks to Merrill Lynch

Friday, January 4, 2013

Oh dear, how sad, never mind

From the New York Times report on the sale of Al Gore's Current TV to Al Jazeera, via Mike Allen's Politico Playbook: "people with direct knowledge of the deal pegged it at around $500 million, indicating a $100 million payout for Mr. Gore, who owned 20 percent of Current. Mr. Gore and his partners were eager to complete the deal by Dec. 31, lest it be subject to higher tax rates that took effect on Jan. 1. … But the deal was not signed until Wednesday."