(Real Time Economics - The Net)

Is the recession corroding Americans' health in addition to their incomes? "Yes, for some" says a recent study led by health economists at Yale University, which found that job losses can make the fat fatter and the drinkers drunkards. The study focused on workers above 50, who have been figuring prominently among the laid-off in recent decades and constitute an older group for whom heavy eating and drinking is more likely to have serious health consequences. (...)

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(Economix - The Net)

By Nancy Folbre

Robert Frost put it this way: "Home is the place where, when you have to go there,/They have to take you in." In this day and age, it's not exactly clear who "They" are. We don't know enough about the size or resilience of the informal support networks that help people cope with economic misfortune.

Long-term unemployment is at a record high, and foreclosures that often lead to eviction of either owners or renters are increasing the ranks of the homeless. Fewer than half the unemployed receive state unemployment compensation, and the largest cash assistance program for low-income parents, the earned-income tax credit (E.I.T.C.), provides benefits that are conditional on having earned income. (...)

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A Wall Street Smackdown(TIME - U.S.)

By Stephen Gandel

Goldman Sachs is a giant pig. A giant pig that blows bubbles through a wand shaped like a dollar sign. A giant pig that laughs at us when we invest in worthless dotcom stocks. A giant pig that happily watches us get carried away and burned by rising home prices. A giant pig that smiles widely when we have to fill our tanks with $4-a-gallon gas. Quite simply, the investment bank that is revered on Wall Street could just be a bunch of crooks, and greedy ones at that.

That's the view of Goldman Sachs delivered by an article in the current issue of Rolling Stone. The rock mag's The Great American Bubble Machine by Matt Taibbi says that the investment bank is responsible for creating, and in many cases popping, every great bubble of nearly the past 100 years in order to profit from them at our expense -- and the article uses plenty of illustrations of pigs to drive home what it thinks of Goldman.

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Amid Recession Economists Embrace Haiku (Real Time Economics - The Net)

Invisible hand:

Mother of inflated hope,

Mistress of despair!

The sour economy is giving an unconventional economics professor new reasons to spread his wisdom: Economists should learn to write haiku poetry.

Haiku, writes Stephen T. Ziliak from Roosevelt University in Chicago (the poem that starts this post is one of his), is a form of short poetry dating back to 17th century Japan - and it has a lot to do with economics. With only 17 syllables at her disposal, writes Ziliak in his paper upcoming in the International Journal of Pluralism and Economics Education, a haiku writer has an economic problem to solve: She must deliver "maximum-impact stories" with a very small endowment of words. What better way to learn the art of problem-solving at a time when budgets are tight everywhere? (...)

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The Death of Macho(Foreign Policy - U.S.)

By Reihan Salam

The era of male dominance is coming to an end.

Seriously.

For years, the world has been witnessing a quiet but monumental shift of power from men to women. Today, the Great Recession has turned what was an evolutionary shift into a revolutionary one. The consequence will be not only a mortal blow to the macho men's club called finance capitalism that got the world into the current economic catastrophe; it will be a collective crisis for millions and millions of working men around the globe. (...)

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Friends Without Money(Slate - The Net)

In his book The Big Sort, Bill Bishop shows how our country is ever more divided along economic lines. Migration patterns differ by income, reinforcing the separation of people into rich and poor counties--a phenomenon that has been on the rise since 1976 with a big jump since 2003, according to a recent paper by professor of government James Galbraith. One of the reasons schools are so often segregated, in terms of class as well as race, is that rich and poor people--or even middle-class and working-class people--don't live side by side in many places(...)

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(The New Yorker - U.S.)

The world of banking, it's becoming clear, operates according to different norms from those of the rest of the business world. Take the offsite corporate weekend. Normal behavior on these occasions consists of punishing the minibar and nursing consequent hangovers, hitting on long-fancied colleagues, and putting embarrassing items, ideally pornographic videos, on one another's hotel bills. For form's sake, a few new ideas are cooked up, and then gradually allowed to die a natural death when everyone is back at work and liver-function levels have stabilized. In June, 1994, when a team from J. P. Morgan went on an off-site weekend to Boca Raton, they conformed to normative behavior in certain respects. Binge drinking occurred; a senior colleague's nose was broken; somebody charged a trashed Jet Ski and many cheeseburgers to somebody else's account. Where the J. P. Morgan team broke with tradition was in coming up with a real idea--an idea that changed the entire nature of modern banking, with consequences that are currently rocking the planet (...)

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That Freshman Course Won't Be Quite the Same (TIME - U.S.)

By Greg Mankiw

MY day job is teaching introductory economics to about 700 Harvard undergraduates a year. Lately, when people hear that, they often ask how the economic crisis is changing what's offered in a freshman course.

They're usually disappointed with my first answer: not as much as you might think. Events have been changing so quickly that we teachers are having trouble keeping up. Syllabuses are often planned months in advance, and textbooks are revised only every few years.

But there is another, more fundamental reason: Despite the enormity of recent events, the principles of economics are largely unchanged. Students still need to learn about the gains from trade, supply and demand, the efficiency properties of market outcomes, and so on. These topics will remain the bread-and-butter of introductory courses. (...)

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The Consolations of Pessimism (City Journal - U.S.)

By Alain de Botton

It's been clear for a while, at least since the collapse of Lehman Brothers last fall, that what we have to fear above all is hope itself. Attempts to trust that the worst is over and to stop frightening ourselves seem doomed to propel us into yet worse disappointment. We are not only unhappy, but--believing calm and happiness to be the norm--unhappy that we're unhappy.

It's time to recognize how odd and counterproductive is the optimism on which we have grown up. For the last 200 years, despite occasional shocks, the Western world has been dominated by a belief in progress, based on its extraordinary scientific and entrepreneurial achievements. But from a broader historical perspective, this optimism is an anomaly. Humans have spent the greater part of their existence drawing a curious comfort from expecting the worst. In the West, lessons in pessimism derive from two sources: Roman Stoic philosophy and Christianity. It may be time to remind ourselves of a few of their lessons--not to add to our misery but to alleviate our injured surprise and sorrow.(...)

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Those willing to spend can find great remodeling deals (USA Today - U.S.)

ORINDA, Calif. -- In this wooded, high-end suburb near San Francisco, Darien Destino isn't accustomed to getting deals from people who work on her house. But the dour economy -- which has hurt the home renovation business -- has a silver lining for her and others with cash or strong home equity (...)

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In Slump, Networks Scramble Lineups (The New York Times - U.S.)

Each May, the big broadcast television networks invite advertisers, agency executives and affiliates to peek at their schedules for the coming season. But the awful economy threatens to spoil the party before it begins on Monday.

The recession has suppressed demand for commercial time during the shows the networks are planning for the 2009-10 season, which starts in September. That is particularly true for crucial advertising categories like automotive, retail and financial services.

As a result, the broadcasters are making some startling moves in hopes of shaking up the market, most notably a decision by NBC to replace traditional fare at 10 p.m. on weeknights with a comedy talk show hosted by Jay Leno (...)

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(The Washington Post - U.S.)

By Ylan Q. Mui

The nation's retailers have begun to embrace the new cost-conscious consumer, developing products they can sell at lower prices without driving themselves out of business in the post-splurge era. (...)

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A Recess From the Recession (Newsweek - U.S.)

We need a vacation more than ever. Battered and broke, anxious and exhausted, we are desperate for an escape from our day-to- day lives. Yet in this new age of austerity, jet-setting has been jettisoned, private yachts docked and presidential suites left to the presidents. Though even French President Nicolas Sarkozy fielded plenty of grief recently when he and his wife jetted off to Mexico for a two-day holiday as guests of the Mexican president.

The travel industry is bracing for possibly the worst season since 9/11. The U.N. estimates that worldwide tourism will fall by up to 2 percent this year, with the Americas and Europe hardest hit. The number of international tourists going to the United States fell 9 percent during the year ending in January, and the amount they spent fell 7 percent. The number going to Britain fell 2.6 percent in 2008, and the number of Brits traveling abroad fell nearly 9 percent in the last three months of the year. Even France--still the world's top tourist destination--saw a 3 percent drop in visitors, most of it coming at the end of the year as the crisis took hold.

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End the University as We Know It (The New York Times - U.S.)

By MARK C. TAYLOR

GRADUATE education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans).

Widespread hiring freezes and layoffs have brought these problems into sharp relief now. But our graduate system has been in crisis for decades, and the seeds of this crisis go as far back as the formation of modern universities. Kant, in his 1798 work "The Conflict of the Faculties," wrote that universities should "handle the entire content of learning by mass production, so to speak, by a division of labor, so that for every branch of the sciences there would be a public teacher or professor appointed as its trustee."(...)

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(The New Yorker - U.S.)

Like ornithology, it turns out that stimulus watching involves a larger, more passionate subculture than might initially be expected. I thought faithful readers might, after so much patience, appreciate access to some alternative voices.(...)

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The Gift-Card Economy (The Atlantic - The Net)

By Virginia Postrel

"While individuals given a longer time frame are more positive about and expect to be more likely to complete an enjoyable task, they are actually less likely to do so," the behavioral economists Suzanne B. Shu and Ayelet Gneezy write in an article under review at the Journal of Marketing Research.

Their research belongs to a relatively new application of behavioral economics: looking at situations in which people seem to exercise too much self-control, rather than too little. In an economic environment where shopping seems like a sin, this research provides clues that could help businesses attract customers. It even suggests that some of the manipulations designed to lure our dollars may redound to our own good.(...)

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The Great Recession: America Becomes Thrift Nation (TIME - U.S.)

By Nancy Gibbs

Sometimes we change because we want to: lose weight, go vegan, find God, get sober. But sometimes we change because we have no choice, and since this violates our manifest destiny to do as we please, it may take a while before we notice that those are often the changes we need to make most. We ran a good long road test of the premise that more is better: we built houses that could hold all our stuff but were too big to heat; we bought cars that could ferry a soccer team but were too big to park; we thought we were embracing the simple life by squeezing in a yoga class between working and shopping and took an extra job to pay for it all.

Now we're stripping down and starting over. A platoon of TIME reporters and pollsters fanned out to every corner of the country to measure -- anecdotally and empirically -- what's changed in the way we set our priorities and spend our money since the Great Recession began. Most people think the pain will be lasting and the effects permanent: only 12% expect economic recovery to begin within six months, half believe it will be another year or two, and 14% believe we are at the start of a long-term decline.(...)

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With Finance Disgraced, Which Career Will Be King? (The New York Times - U.S.)

In the Depression, smart college students flocked into civil engineering to design the highway, bridge and dam-building projects of those days. In the Sputnik era, students poured into the sciences as America bet on technology to combat the cold war Communist challenge. Yes, the jobs beckoned and the pay was good. But those careers, in their day, had other perks: respect and self-esteem.

Big shifts in the flow of talent can ripple through the nation and the economy for decades with lasting effect. The engineers of the Depression built everything from inter-city roads to the Hoover Dam, while the Sputnik-inspired scientists would go on, often with research funding from the Pentagon, to create the building-block innovations behind modern computing and the Internet. (...)

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(The New York Times - U.S.)

Anne Hubbard has not lost her job, house or savings, and she and her husband have always been conservative with money But a few months ago, Ms. Hubbard, a graphic designer in Cambridge, Mass., began having panic attacks over the economy, struggling to breathe and seeing vivid visions of "losing everything," she said. (...)

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An interview with Benjamin M. Friedman (VoxEU - The Net)

Benjamin Friedman of Harvard University talks to Romesh Vaitilingam about his book, The Moral Consequences of Economic Growth, which explores how growth boosts such values as opportunity, tolerance, generosity and democracy. They discuss how growth relates to inequality, happiness and the environment - and the potential consequences of a period of economic stagnation. The interview was recorded at the American Economic Association meetings in San Francisco in January 2009(...)

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Why Adam Smith Still Matters (Standpoint - U.K.)

John Maynard Keynes is high in the list of bestselling books now. Adam Smith is not quite as popular. The reason is not that books from the 18th century tend to be a demanding read: Keynes's General Theory of Employment, Interest and Money, although from the 20th century, is no piece of cake either. Instead, the present global financial crisis has made the godfather of classical economics look strikingly irrelevant in comparison with Keynes, the inventor of modern disequilibrium theory. Even worse, now that bankers are being castigated as the incarnation of greed, blindness and irresponsibility, the man who wrote in his famous Inquiry into the Nature and Causes of the Wealth of Nations that "it is not from the benevolence of the butcher, the brewer, or the baker" - or perhaps the banker in our day - "that we expect our dinner, but from their regard to their own interest" is again accused of being the chief advocate of heartless laissez-faire capitalism, a system that failed and had to fail. In this view, capitalism is nothing but a false religion, with Mammon as its god and Smith as its high priest. Critics worry that markets need a moral foundation that they automatically erode. They ridicule the naïve belief that free markets bring everybody happiness at no cost, a conviction allegedly lacking all philosophical underpinnings.(...)

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RIP, MBA (Slate - The Net)

By Matthew Stewart

The economic crisis has exposed the myth of business-school expertise.

Put your ear to the ground near any business school campus, and you will hear the sound of another bubble about to pop. The MBA will soon be joining equities and house titles in the museum of formerly overvalued pieces of paper.(...)

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