Corporations are moving jobs away from Wall Street and New York City – the historic heart of corporate America, writes Nelson D. Schwartz. Highlights of his report include:

• While top-end investment traders continue to be based in NYC, accountants, legal support staff, and compliance authorities are now being moved to places such as North Carolina.
• In August 2007 New York’s securities industry jobs peaked at 213,000. These days it hovers around 191,200. Over the same period other areas such as Delaware and Arizona saw the number of securities industry jobs increase.
• This trend is exacerbated by state governments offering cash incentives to companies that relocate jobs. North Carolina, for example, offered Credit Suisse $14 million to bring jobs to the state.
• This trend is not limited to New York. Other financial centers such as London, Tokyo and Hong Kong are seeing the beginnings of the same shift. Costs are significantly lower outside these hubs.
• Over the long term this might threaten New York’s economic base.

To read more including what experts have to say, where the jobs have been shifted, how JPMorgan Chase is involved, the role that taxes play, what Delaware did, and what it hopes to achieve, and the salary cuts that these moves often entail for the employees, click here.

Source: The New York Times

This is Centives’ third time covering Michael Sandel’s book: What Money Can’t Buy: The Moral Limits of Markets. It is a book that discusses the role of the market embedded into a society. In the book Sandel argues that those who pay others to stand in queues for them are doing something ethically wrong and that this sort of market leads to corruption. Ed Dolan disagrees and highlights:

• If you stop people from paying others to stand in line for them, you’re saying that the best way to value a good is not how much people are willing to pay for it, rather it is how much time they are willing to spend on it.
• However both methods have their failings. If you allow people to pay others to stand in line for them (essentially scalping tickets), then it might push up the price of the ticket so high that it is out of reach for a passionate fan of the band, group or team.
• Yet if you force people to stand in line, then those with lots of extra free time could be willing to spend so much time in line, that it makes it impossible for those who are very passionate about the performance or event, but have limited time, to purchase the ticket.
• Either method could lead to ‘unfair’ outcomes.
• Moreover the queues that were prevalent within the Soviet Union demonstrate that lines can be just as corrupting as money.
• This is not to suggest that if an organizer wants to prevent people from scalping tickets you should disregard their wishes. You should comply with the rules set up by the organizers.

Dolan outlines a nuanced argument, the complexity of which is lost somewhat in this summary. Read his full argument, including some wonderful examples, and fascinating stories, and what the Soviet Union’s experience with queues was like over here.

Source: EconoMonitor

Mark Hill explored some of the economic reasons why the most well-intentioned acts of charity might have unintended consequences. Highlights from the humourous article include:

• Donating clothing is harmful because it drives local merchants out of business, ruining budding economies. Moreover the resources required to physically move clothes from rich countries to the poor could be used in better ways.
• Earmarking donations. While making sure that your funds are only used for a certain purpose sounds noble, it actually introduces horrible inefficiencies. After the 2004 tsunami people earmarked their donations to rebuild houses. But what people actually needed was food, and since they couldn’t actually spend that money on food, they ended up building mini-mansions for many, just to spend the money.
• Volunteering after disasters. Sacrificing your valuable time is impressive, but it’s also unhelpful. The locals can do as good a job as you, and you’re wasting their time by needing direction. What the affected really need are resources – that you are now consuming by being at the disaster site.

To read more including why picking a charity with low-overheads is a bad idea, why awareness campaigns are a waste of time, why even doctors are told not to go overseas, the arrogance of charity workers, why the Breast Cancer Awareness campaign has failed, how this relates to Kony 2012, and why Japan begged people to stop sending money, click here.

Source: Cracked

Tim Arango writes that underneath the veneer created by Iraq’s shiny new malls, there lies a rotting economic foundation that could lead to crisis in the future. Highlights include:

• Iraqis are awaking to a new era of consumerism and prosperity. American-style malls are opening up around the country. They have products from all over the world, floors where only women are allowed, and play areas for kids. The biggest will even include a five-star hotel, and a hospital.
• Yet the majority of the Iraqi government’s revenue is derived from oil. This has led to public sector workers receiving large salaries.
• Many Iraqis now strive to get a government job.
• This money and these jobs have now become a way of funding party loyalty.
• This hurts the private sector because the generous public sector wages means that they can’t hire top quality talent and compete at the highest levels.
• Just before the rise of Saddam Hussein Iraq was also a country with accelerating oil revenues and networks of corrupt patronage. History may be repeating itself.

To read more including some of the amazing things contained within these malls, the demand for McDonald’s, how Iraq relates to Saudi Arabia, what economic experts have to say about the economy, the growing powers of the Prime Minister, and Iraqi aspirations click here.

Source: The New York Times

Adam Davidson explored several facets of the economics of movies and those that produce them. Highlights include:

• Men In Black 3 has made over half a billion dollars world-wide yet it has just barely broken even. Why is an industry which requires such large margins still alive? For half a billion dollars the film studios could’ve worked on other projects with a much higher rate of return.
• Uncertainty is built into the movie business. Executives try to guess the latest fad such as 3-D or vampires.
• The movie industry continues to function because it has found innovative ways to make money. Tie-in video games, amusement park rides and TV rights all help revenue streams. And the big hits pay for a lot of flops.
• The main players – Columbia, Disney, Paramount, Warner Brothers etc. have remained remarkably stable. This is partly because of their expertise in getting disparate independent agents to collaborate together, but also because potential challengers could get much better returns in other industries.
• Yet rich people continue to invest in movie studios because of the very public glamour that it brings, which helps their other businesses.

To read more about how people explain the success of The Hunger Games, how they predict that The Amazing Spider-Man will do, why the matters are even more complicated than they appear, and why the movie industry might soon come to an end – and what will kill it – click here.

Source: The New York Times

Google’s latest home media player, the Nexus Q, will be made in the USA. John Markoff took a look at how this fits into a wider trend:

• There’s a slight uptick in the companies willing to build things in the USA. Reasons for the shift include:
  • Labour costs in China have increased.
  • Transportation costs have gone up.
  • China is infamous for intellectual theft.
  • Designers increasingly want to be closer to the manufacturers.
• Some analysts predict that this new trend could bring 2-3 million jobs to the United States.
• However Google is paying a price for its efforts. The product costs significantly more than other products on the market.

To read more including what experts have to say about this shift, the number of people involved, some details of the factory where Google’s device will be made, why Dell is a glorified design and marketing company, and the corporations that are considering a shift back to the United States, click here.

Source: The New York Times

David Graeber writes that we should be ashamed of ourselves. We’ve accomplished so little. He points out:

• These days we’re impressed by the special effects in science-fiction space movies. Yet 60 years ago people thought we would actually be a space-faring species, not just be able to depict one.
• We were meant to have undergone a revolution where all the robots did the work for us, letting us think and be creative. Instead we outsourced menial labour to third world countries – moving backwards in terms of technology.
• The Cold War might have inspired these grand ideas. The space-race and its associated innovation created a society of dreams. Moreover both the United States and the Soviet Union had histories of exploration. Americans explored the western frontier, while the Soviets had explored the Russian continent.
• The idea that the Soviet Union was unimaginative is mistaken. It requires creativity to envision a societal transformation. They also jump-started the space race and pursued esoteric projects such as solving hunger by seeding the oceans with edible bacteria.
• The top speed that humans can travel at is indicative of the problem. For most of human history we couldn’t travel faster than a horse would take us. By 1900 it was 100 m.p.h. and it was growing exponentially. It hit its peak in 1969 with the crew of Apollo 10. It has never been broken since.
• To add insult to injury high-speed projects such as the Concorde have been killed – meaning that the top speed of an average person is actually lower than what it could be in the 90s.
• The AK-47 is the most popular gun. It is named for the year in which it was invented – 1947.
• The internet might actually be hurting rather than helping innovation. Anybody with an innovative idea can enter it into a search engine and find that somebody has already tried it (and, even worse, perhaps succeeded at it.)
• We’ve also all become administrators. Before travel agents and accountants would take care of our flights and bank activity. Now we do it ourselves.

To read what is an extremely long and comprehensive article, and to find out exactly what the diagnosis of the problem is, what the solution is, how this relates to the Egyptian pyramids, how anarchy can play into it, and much more, in an exhaustive reflection on the issues, click here.

Source: The Baffler

Via: Marginal Revolution

As the 2012 London Olympics gets underway, Paul Cartledge took a look at how the games that were first played in Greece centuries ago have evolved over time. Highlights include:

• Not only were woman not allowed to participate, they weren’t even allowed to watch the events when the Greek games were first played.
• Perhaps this was because all of the (male) athletes were nude during the competition.
• There were no bronze or silver medals. The winner received a wreath made from sacred trees. Their home city might also have rewarded them.
• The Olympics was originally a religious event.

To read more including how the sports that athletes compete in have evolved, the ancient Greek word for “exercise”, who the original Olympics honoured, the strange location of the original stadium, the one event where athletes were allowed to wear clothes, why the game began to incorporate ‘barbarians’, and the Hitler connection, click here.

Source: BBC