Economist Jul 5th 2014

Red Tape Blues: the best and worst states for small business

  • Data source: Thumbtack;
  • local tax rates actually matter little vs. the difficulty of complying with complex regulations was a strong predictor;
  • problematic licensing rules, now 35% of workers required state licenses, vs. 5% in the 1950s;
  • changes to regulation makes a difference in the long run: a stronger job growth;
  • difficulty: no politician wants to be accused of compromising public safety.

Not Floating, but Flailing: the global monetary system

  • gold standard: lubrication of global trade, “though the free flow of capital left currencies vulnerable, the system survived for decades thanks to governments’ iron commitment to gold.”
  • first world war changed all this: gold reserves grew increasingly unbalanced; America could have expanded its money supply allowing prices to rise while refused to do so (due to domestic worries of Wall Street boom);
  • then depression, by 1936 the gold standard was dead;
  • another crack at a universal system, Bretton Woods – fixed values to the dollar, which was in turn pegged to gold;
  • repeated collapse of fixed exchange-rate system, because of the tension between currency pegs and 1) capital controls and 2) lifted trade; big countries started to drop out;
  • Euro’s recent crisis is a variation on an old theme;
  • for developing countries, pegs hard to resist – encourage discipline, tame inflation, reduce borrowing costs; but too often pegs ended painfully – overindebted (debt binge), and forced devaluation in crises;
  • aversion to floating is a puzzle: (Joseph Gagnon) economies with floating currencies did better in the global financial crisis and its aftermath;
  • faced the rise of the emerging world, the prevailing currency alignment can survive?

China claims to be gradually freeing its capital account and encouraging trade denominated in yuan. That may finally bring down the curtain on the dollar era initiated by Bretton Woods. Yet in practice China is reluctant to give up the perceived safety of a managed exchange rate. Gold habits are hard to break.


flailing: 挥舞
tame: 驯服
binge: 狂欢

If They Build It: corporate spending

  • (S&P) capex in real terms fell 1% in 2013, and is expected to decline again this year;
  • the emerging market shares of capex fell from 34% in 2011 to 27% last year;
  • mining and energy firms, capex has slowed sharply;
  • R&D seems more robust, but grew only 2.6% last year;
  • reason: corporate revenue has not been growing very fast, for global non-financial companies, ratio of capex to revenues is close to its highest level in a decade;

Life at the Top: Tibetan genetics

  • Tibetans found to carry genes from Denisovan;
  • EPAS-1: help acclimatize to high altitude; for Tibetans, they are well acclimatized without having noticeably raised red-cell counts;
  • 90% of Tibetans have this version of the gene, compared with fewer than 10% of their Han Chinese neighbors.


homo sapiens: 智人
acclimatize: 适应新环境
thromobosis: 血栓形成

Practice May Not Make Perfect: genetics and music

  • (Miriam Mosing, Karolinska Institute, in Sweden) drew conclusion by studying twins – a time-honored way – between 1959 and1985;
  • 1) measuring the lifetime practice;
  • 2) measuring abilities to detect difference in pitch, melody, and rhythm;
  • result: no apparent relationship between practice and musical ability of the sort she was measuring;

Misery Merchants: revenge porn

  • legislators in many countries started to tackle revenge porn;
  • (Randazza) may end up producing nothing more than “chicken-soup laws – they make everyone feel a little bit better but they don’t really do anything”
  • (case in Israel, the one which has gone furthest) 37 of the 55 cases in the past four months are still being investigated – establishing beyond doubt who first disseminated an image is hard;
  • difficulty (in U.S.): crafting laws that manage to criminalize at least the most egregious case without falling foul of the protections for free speech guaranteed by the constitution;


egregious: 过分的

The Dedicated Followers of Fast Fashion: clothes retailing

  • two Spain followers to Inditex (Zara) – Mango and Desigual;
  • but they followed industry’s conventions – outsourced production in Asia; while Zara stitched together in Spain or nearby countries so it can react fast to changing trends, albeit cost more;

Capital Punishment: BNP Paribas

  • the announcement raises a raft of questions about 1) the proportionality of penalties, 2) the responsibility of individuals in corporate crime, 3) the duties of firms dealing with objectionable regimes, and 4) the resonableness of America imposing its foreign policy via the international financial system and its dominant currency;
  • the case has left people on both sides of the Atlantic unhappy: individuals getting off lightly vs. shareholders and customers bearing the burnt of misdeeds; discontent in Europe – an example of America throwing its financial weight around, using the threat of withholding access to its market and currency to force compliance with its own priorities;


clamoring: 吵着
scalp: 头皮
cripple: 削弱
saga: 冒险故事

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