Matthew Yglesias writes that we should really appreciate T-Mobile’s latest scheme to double the price you pay for a smartphone:

• Subsidized smartphone contracts are a scam. Verizon will, for example, purchase an iPhone for $649, sell it to you for $199, and then make it up by overcharging you for service every month.
• You would actually save money if instead you paid full price for the phone and paid a fair monthly fee for your contract.
• This is likely why the makers of phones themselves – such as Google and Apple – are consistently ranked as the most admired companies, while America’s telecom operators, AT&T and Verizon are the most reviled.
• T-Mobile has decided to get rid of the subsidized carrier model. It remains to be seen if Americans will choose to take this better deal.

Read more about why Americans are stuck with this inefficient system, and what can be done to fix it over here.

Source: Slate

As bonus season comes around, Kevin Roose wrote an article that is likely to be rather unpopular as America continues to limp on after its financial crisis:

• While Wall Street bankers are paid too much, if they’re going to be paid a high amount then bonuses are the best way to do it.
• It’s good for banks because they can adjust the compensation given to employees based on performance in that year. In a bad year they can quickly cut costs without having to fire employees.
• As much as bankers might be hated at the moment they play an important role in the economy, and it’s bad for everybody if they are fired. It is estimated that for each financial service job lost in New York City, two non-financial jobs are lost as well.
• Bonuses might also be better for the economy. By getting a one-time lump sum payment bankers might be more likely to spend it all – putting it back into the economy – rather than if they had received it in standardized amounts over the year.

Read more about bonuses and some implausible alternatives over here.

Source: New York Magazine

Every Christmas, New York City’s Rockefeller Center puts up a giant Christmas tree. Venessa Wong looked at how much it would cost if you tried to get one for your living room:

• The ornament on top of the tree comes from the jeweler Swarovski and has 25,000 crystals embedded in it. It would cost $35,000.
• The 45,000 LED lights would cost just $13,500 – a bargain when compared to retail prices.
• The tree itself is a Norway Spruce that weighs 10 tons and is 80 feet tall. It would cost you about $25,000.
• All in all the tree would cost $73,500 – although the Center itself doesn’t have to pay this cost. The tree, for example, is a free donation every year, and this year’s tree is a Hurricane Sandy survivor.

Read more about the value of the tree, and how it compares to other expensive Christmas trees around the world over here.

Source: Business Insider

Ben Tausig opened up the economics of the ubiquitous but poorly understood crossword puzzle:

• Contrary to popular perception crosswords aren’t made by computer algorithms, or an individual puzzle master. Instead, freelancers make them and submit them to various newspapers for consideration.
• It can take a long time to hear back from the newspaper – in once case it took The New York Times over a decade to approve a writer’s submission.
• Once the submission is accepted, the writer can expect to make just $100 for a standard puzzle and $300 for a Sunday-sized one.
• The puzzle-creator is rarely identified in the paper itself.
• Despite the low pay, the newspapers themselves make millions from the crosswords – in fact – some people buy their newspapers for the crossword alone.
• Things are getting better for puzzle makers though. Competition from apps and other newspapers is pushing up the pay rate, making it easier for individuals to make a living from making crossword puzzles.

Read more about the premium you get for making a New York Times crossword puzzle, the person who helped edge up pay rates, and the rivalry between newspapers over here.

Source: The AWL

Via: Marginal Revolution

The latest initiative to modernize Afghanistan’s economy depends on RadioShack writes Nick Leiber:

• Beyond fast food shops in American bases, there aren’t many western franchises in Afghanistan.
• Yet there is a great demand for them from young Afghans who have grown up with the internet and access to global cultural norms.
• RadioShack, which intends to sell seven franchises in 2013, is joining up with other companies such as Hertz and AlphaGraphics to tap the Afghan market.
• The United States supports these efforts as the franchise system is an effective way to transfer expertise and knowledge to help the country develop.
  • An Afghan RadioShack buyer would, for example, be sent for two weeks of training in the United States to learn about the company’s culture and corporate practices.

Read more about the benefits that this may have for Afghanistan as well as the challenges that lie ahead over here.

Source: Business Week

The technology company Apple – once the darling of investors – has seen its share price crash by almost 25%. What happened? Salon outlined a few theories:

• Apple is losing its edge in smartphones. The Nokia Lumia 920 as well as RIM’s upcoming Blackberry re-launch are both threats that have the potential to steal the company’s thunder.
• In the tablet space, Microsoft has launched its initial salvo in the form of Windows 8, and this, along with the successful efforts of Amazon and Google, could herald the end of the iPad era.
• Apple has also had trouble innovating in recent times. The company has gone from underdog to market leader and it’s hard for a company on top to continue to innovate in the way that Apple did when it first created the iPhone.
• It might, however, have nothing to do with Apple. The looming fiscal cliff will raise taxes on stocks and shareholders could merely be locking in their gains in case the United States does decide to drive off into the chasm below.

Read more about the theories, and the direction that Apple might take under Tim Cook over here.

Source: Salon

Derek Thompson outlined the economics of Gangnam Style, the Korean music sensation that we’ve covered before, and which has recently been embroiled in controversy:

• With over 900 million views the upbeat video is the most viewed video in the entire history of YouTube. Yet this has made Psy, the artist behind it, just $870,000.
• This comes out to a measly 0.1 cents per viewing of the video.
• The video has made almost three times as much money from downloads of the song by individuals across the world.
• However, the real revenue driver for Psy is the $4.6 million he has made so far from endorsements and commercials.

Read more about the relatively hard times for musicians these days over here.

Source: The Atlantic

High Point University – a campus that’s trying to attract top students with luxury accommodations – is facing stiff competition according to Dawn Wotapka. Luxury campus living is becoming increasingly popular:

• Students can now find university living accommodations with amenities rivaling those of resorts. They include individual bed and bathrooms, super-sized televisions, and, in one case, a 300 foot long lazy river.
• The luxury accommodation generally isn’t built by the University. However the private developers try their best to build a campus community. Housing is often restricted only to students, cookies are available in common areas, and students willing to tutor others might be offered free housing.
• Real estate developers have found it to be the ideal market – there is a guaranteed customer base that can usually rely on high-income parents to pay the rent.
• However the private dorms might struggle as online education continues to grow.

Read more about the Universities where you can find these amenities, how much the rent will run you, and what you’ll get for your money over here.

Source: The Wall Street Journal