The U.S. government is arguably the largest financial institution in the world. If you add the outstanding stock of government loans, loan guarantees, pension insurance, deposit insurance and the guarantees made by federal entities such as Fannie Mae and Freddie Mac, you get to about $18 trillion of government-backed credit. Through those activities, the government has a first-order effect on the allocation of capital and risk in the economy. Read More »
From off-shoring good jobs to the great and growing income divide, finance-driven decision-making has long been at the core of many of our economic problems. It’s not that financial analysts and operatives are necessarily evil or uncaring – rather, they believe they have a fiduciary responsibility to generate maximum returns for their funds, even when the results have worker and society-unfriendly consequences.
Changing this mindset has proven a tough nut to crack even for union pension fund managers, who are aware of the social consequences of investment decisions. But there are glimmers of hope and interest. On June 7, for example, some of the nation’s largest institutional investors and the biggest single pension fund investor – the California Public Employees’ Retirement System (CALpers) — will hold a conference to explore ways to transform socially and environmentally sustainable investment criteria from a perceived liability to an asset. CALpers has a commitment to responsible investing – for example, it calls for neutrality in union organizing – but it has never figured out how to make such policies systemic. Read More »
During a recession, why do some people spend money while others save?
Money issues can be grounds for conflict in relationships. One person may be a spender while the other is a saver. Throw in financial stress such as an economic recession and one person’s preference can seem completely irrational to the other.
How can people be so different when it comes to the “right” decisions? Recent research shows that our childhood economic environments have a lot to do with how we make financial decisions and handle financial risk later in life
There is a lot of buzz lately about entrepreneurship hotspots across the country. We hear about successful startups in many places, from Austin, Tex., to Reston, Va. What does this mean for entrepreneurs? If you’re launching a startup, does it really matter where you locate?
Yes, it does matter. If you’re starting out, it’s by far best to be in either Silicon Valley or the Boston area. They remain the hottest centers of entrepreneurship and venture capital, so you’ll be in an inherently supportive ecosystem where entrepreneurship is as natural as drinking water. Read More »
For years Argentina has lied to the world about its inflation rate. INDEC, the official statistics institute, claims the country’s inflation rate stands at around 10%. But estimates by economists—myself included—show that figure is two to three times less than the real rate. According to MIT’s Billion Prices Project, which runs an index that aggregates online price information from the largest supermarkets all over the world and provides real-time inflation estimates, Argentina’s inflation rate is currently about 25%.
This vast discrepancy between reality and what the government claims has been observed since 2007. At that time the government began putting pressure on INDEC, traditionally an independent body, to change its statistical methodologies. It eventually fired workers responsible for creating the price index, and replaced them with employees who had close ties to the government. Since then the official inflation rate has been surprisingly stable—hovering around10%. Read More »