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Education and class: America’s new aristocracy January 24, 2015

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The Economist | Education and class: America’s new aristocracy http://www.economist.com/news/leaders/21640331-importance-intellectual-capital-grows-privilege-has-become-increasingly?frsc=dg%7Cd via @theeconomist

The Rise (and Likely Fall) of the Talent Economy September 15, 2014

Posted by tkcollier in Economy & Business, philosophy & politics.
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mrmoneybagsAs recently as 50 years ago, 72% of the top 50 U.S. companies by market capitalization still owed their positions to the control and exploitation of natural resources.

By 2013 more than half the top 50 companies were talent-based, including three of the four biggest: Apple, Microsoft, and Google. (The other was ExxonMobil.) Only 10 owed their position on the list to the ownership of resources. Over the past 50 years the U.S. economy has shifted decisively from financing the exploitation of natural resources to making the most of human talent.

Over the past 13 years the list’s number of hedge fund managers, by far the fastest-growing category, has skyrocketed from four to 31, second only to computer hardware and software entrepreneurs (39) in possessing the greatest fortunes in America.

The Republican Party seems foursquare behind hedge funds, which it sees as embodying capital—even though hedge fund managers are in fact talent, a breakaway branch of labor (their overcharged customers are the real representatives of capital). The Democratic Party, traditionally supportive of organized labor, has increasingly transferred its allegiance to capital, largely because pension funds have become the most important form of capital and their beneficiaries represent the traditional Democratic power base. Neither party represents labor directly.

via The Rise (and Likely Fall) of the Talent Economy – Harvard Business Review.

You Would Probably Blow An Inheritance March 17, 2013

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According to the Boston College Center for Retirement Research, two-thirds of baby boomers will inherit family money over their lifetime—most during their later middle-age years—to the collective tune of some $7.6 trillion. Add in the many postwar babies who receive a significant financial gift or two from Mom and Dad while the latter are still alive, and the asset shift jumps even more. Not bad, experts say, considering that Americans’ total household wealth at the end of 2012 was $64.8 trillion. “There’s a lot on the line,” says John Davis, faculty chair of the Families in Business program at Harvard Business School.

mrmoneybagsBut if the past is any prelude, inheritors, especially those who are new to the family-windfall phenomenon, face an unpleasant reality: They’re likely to blow it. Although it’s not widely discussed, financial advisers say that new riches prove particularly hard to hold onto—and even harder to patiently nurture and grow. Indeed, research shows that family money rarely survives the transfer for long, with 70 percent evaporated by the end of the second generation. By the end of the third? Ninety percent. Hence the old saw, “Shirtsleeves to shirtsleeves in three generations.”

The most obvious reason, of course, is that money gets spread thinly over fast-growing family trees. But wealth managers also say many people are simply inexperienced at handling large piles of dough in any disciplined way—think of the so-called sudden-wealth syndrome experienced by lottery winners and many professional athletes. Another common trend advisers see?

A belief among some inheritors that, hey, it’s permanent vacation time, and there’s no need to create any new income streams.

via Lost Inheritances – Studies Show Americans Blow Through Family Fortunes at a Remarkable Rate |.

Rich Blocks, Poor Blocks | Neighborhood Income and rent maps of U.S. cities February 18, 2013

Posted by tkcollier in Economy & Business, Lifestyle, Web Site.
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mrmoneybagsRich Blocks, Poor Blocks is an interactive map (created by Christopher Persaud, a data reporter for a bank website) showing the average income for every neighborhood in America. Type in your address, press search, and there you have it: Your city, shaded by income, according to data from an annual survey conducted by the Census Bureau. The greenest blocks–Census blocks, that is, not city blocks–signify the richest areas, typically bringing in an average household income of $100,000 or more a year. The reddest blocks are the poorest, with annual income somewhere around $20,000. All the rest get some shade of red or green, depending where they fall.

Rich Blocks, Poor Blocks | Neighborhood income and rent maps of U.S. cities.

Why Are Indian Reservations So Poor? January 12, 2013

Posted by tkcollier in Economy & Business, philosophy & politics.
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At a time when there’s a spotlight on America’s richest 1%, a look at the country’s 310 Indian reservations–where many of America’s poorest 1% live–can be more enlightening. To explain the poverty of the reservations, people usually point to alcoholism, corruption or school-dropout rates, not to mention the long distances to jobs and the dusty undeveloped land that doesn’t seem good for growing much. But those are just symptoms. Prosperity is built on property rights, and reservations often have neither. They’re a demonstration of what happens when property rights are weak or non-existent.

The vast majority of land on reservations is held communally. That means residents can’t get clear title to the land where their home sits, one reason for the abundance of mobile homes on reservations. This makes it hard for Native Americans to establish credit and borrow money to improve their homes because they can’t use the land as collateral–and investing in something you don’t own makes little sense, anyway.

This leads to what economists call the tragedy of the commons: If everyone owns the land, no one does. So the result is substandard housing and the barren, rundown look that comes from a lack of investment, overuse and environmental degradation. It’s a look that’s common worldwide, wherever secure property rights are lacking—much of Africa and South America, inner city housing projects and rent-controlled apartment buildings in the U.S., Indian reservations.

via Why Are Indian Reservations So Poor? A Look At The Bottom 1% – Forbes.

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else October 14, 2012

Posted by tkcollier in Economy & Business, Geopolitics, philosophy & politics.
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Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish.

Several recent studies have shown that in America today it is harder to escape the social class of your birth than it is in Europe. Educational attainment, which created the American middle class, is no longer rising.

Economists point out that the woes of the middle class are in large part a consequence of globalization and technological change. Culture may also play a role. In his recent book on the white working class, the libertarian writer Charles Murray blames the hollowed-out middle for straying from the traditional family values and old-fashioned work ethic that he says prevail among the rich (whom he castigates, but only for allowing cultural relativism to prevail).

The crony capitalism of today’s oligarchs is far subtler than Venice’s. It works in two main ways.

The first is to channel the state’s scarce resources in their own direction. This is the absurdity of Mitt Romney’s comment about the “47 percent” who are “dependent upon government.” The reality is that it is those at the top, particularly the tippy-top, of the economic pyramid who have been most effective at capturing government support — and at getting others to pay for it.

Exhibit A is the bipartisan, $700 billion rescue of Wall Street in 2008. Exhibit B is the crony recovery. The economists Emmanuel Saez and Thomas Piketty found that 93 percent of the income gains from the 2009-10 recovery went to the top 1 percent of taxpayers. The top 0.01 percent captured 37 percent of these additional earnings, gaining an average of $4.2 million per household.

via The Self-Destruction of the 1 Percent – NYTimes.com.

Video – Our 200 Year Increase in Life Expectancy and Wealth December 2, 2010

Posted by tkcollier in Geopolitics, health, Life, Video.
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The New Millionaire Psychology December 22, 2008

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Our culture has changed from buying books on “How To Be A Millionaire” to watching a TV Game- Show with an entitlement angle – “Make Me A Millionaire”.

“California, sales are down 10% since the beginning of fiscal year 2009, which began on July 1” says Alex Traverso, a spokesman for the California lottery. Traverso says he hopes sales will revive with larger jackpots and with the January launch of a new televised game show called Make Me a Millionaire.

via Losing Faith in Gambling’s Allure – BusinessWeek.

Bling Goes Stealth December 18, 2008

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At Hermès and a handful of other exclusive retailers, “secret shopping” has becoming the winter season’s newest trend. Anyone who can still afford, say, the three cashmere throws at $2,225 each that Mrs. Fuld bought when she stopped by the store that day isn’t likely to advertise it. Instead, the city’s most extravagant shoppers are ferrying their purchases home in unmarked bags; delegating delivery to assistants; or manipulating credit card bills to disguise their spending from outsiders—and their spouses.

via What Rich People Don’t Want You to Know About Their Spending – The Daily Beast.

Hurricane Bernie Slams Palm Beach December 17, 2008

Posted by tkcollier in Economy & Business.
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Sunday afternoon there were supposedly four multi-million dollar condos at Breakers Row already put up for sale by Hurricane Bernie casualties forced to evacuate. Partly true. A real estate broker pal of mine told me on Monday morning there were actually only two on the market, one at $7.6 million and the other at $8.6 million.

By Tuesday morning it was good news for both broker and seller of the Breakers condos. Both were under contract at almost their full asking price. Somewhere, someone has some dough left. What is true is that Hurricane Bernie will have a long term effect on the fabric of Palm Beach life—financially, socially and philanthropically.

via I Survived Hurricane Bernie – The Daily Beast.

Palm Beach In Shock Over Madoff December 15, 2008

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bebBelow is a piece that I posted on Huffingtonpost.com yesterday. About ten minutes after it went on line, the metropolitan editor of the New York Post emailed me about running it and it’s on page four in Saturday’s paper. The piece has reacted in a full range of opinion, from overwhelmingly positive to outrage. I’m trying to understand why some people are so upset. And as soon as I have a full grasp on this I’m going to publish again at Huffingtonpost.com and put it in my personal blog as well. (Thanks to Randy Marks)

via THE WAGES OF WEALTH.

Wretched Excess At Sea March 17, 2008

Posted by tkcollier in Economy & Business.
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Measuring Wealth by the Foot – New York Times
megayachts-stmaarten0208w.jpg Over 20 megayachts in this picture, taken last month in St. Maarten. There are 4 times more that aren’t in view. There are no signs that demand will slacken. “There are 2,000 superyachts in the world today” over 120 feet long, “and nearly 200,000 people who could afford to buy them,” Mr. Beckett says.

The arms race in yachts echoes the competition among business titans in the last century to build the world’s tallest skyscraper.

(more…)

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