Centives

Bloomberg reports on a fascinating report that examines the composition of the Chinese legislature:

• The increase in the wealth of the richest 70 members of China’s legislature ($11.5 billion) in 2011 was more than the entire net worth of the entire US Congress, the President, the Cabinet, and the Supreme Court ($7.5 billion).
• The richest member of the United States congress, with a net worth of $700.9 million, would rank just 40^th in the list of the richest in China’s legislature.
• China’s top political leaders – including the President – don’t disclose their personal finances.

To read other startling comparisons as well as more about the former Chinese President who allowed the rich onto the legislature, why in a country of weak legal rights, it is in the interest of the rich to be on the legislature, and where their wealth comes from click here.

Source: Bloomberg

Via: Shanghai List, Marginal Revolution

Laser guns have long been a staple of science-fiction. Why then don’t we have any yet? Jeff Hecht answered the question:

• Lasers aren’t energy efficient. They work by converting other forms of energy into light, but a lot of energy is lost as heat in the process.
• The only way for a laser to kill is through heat. But the human body is mostly made up of water, and it requires a lot of energy to heat water up. Thus a laser gun would require a prohibitive amount of power.
• The one thing lasers can do well is burn out a person’s retinas. However staring at the sun has the same effect, and anyway the Geneva conventions don’t allow for such tactics.

To read more about how lasers can be used to take out non-human targets, as well as equally heinous alternatives for aspiring evil overlords, click here.

Source: Light Speed

Illusionist Teller from Penn and Teller recently revealed seven principles that magicians use to manipulate you. Here are three of them:

• “It’s hard to think critically if you’re laughing” – follow up an amazing trick with a joke so that the viewer doesn’t have time to analyze the deception.
• “Nothing fools you better than the lie you tell yourself” – let your audience feel as if they had the opportunity to use their own intellect to figure out what you’re doing.
• “Make the secret a lot more trouble than the trick seems worth” – if there’s a conceivable explanation for how you performed your trick, but that explanation suggests you did a prohibitive amount of work, then do the work, people will assume it’s a trick.

To read the rest of the seven, as well as an example of a trick that integrates all of the principles outlined, click here.

Source: Smithsonian

Via: The Boston Globe

In Time Michael Schuman argues that a financial crisis on the level of the one seen by Japan and Korea is inevitable. Here’s why:

• China has used the “Asian Devilment Model” to reach its current levels of growth and prosperity. The steps to this model include exploiting low wages to quickly industrialize with generous amounts of investment as determined by the government, allowing it to ‘direct’ the growth.
• The involvement of the government causes prices to settle at the ‘wrong’ levels. The study of economics has shown that if prices are at the wrong level for an extended period then this will trigger a financial crisis that will lead to a correction of prices.
• In China there is ample evidence that prices are wrong – especially in the property sector. While analysts are correct to note that China needs extensive infrastructure projects to house its people, the type of housing being built is often of the wrong type. It is either too expensive, or it does not meet the safety specifications required by corporations. The multitude of malls seem to mostly be empty.
• Countries that follow the Asian Development model generally have a crisis after about 35 years of following the model. Unless China reforms, this would place a potential Chinese financial crisis around 2015.

To read about what it means for prices to be wrong, other signs that the country is headed towards a crisis, and the things that China could do to prevent such a fate for itself, click here.

Source: Time

Via: Newmark’s Door

Clare O’Connor had the opportunity to conduct the first ever interview with Manoj Bhargava, the creator of 5-hour energy, a product that went from nothing to $1 billion in sales in just eight years. Some of the highlights from the profile include:

• Bhargava maintains a graveyard of his competitor’s products. Every time he manages to sue or bully off of the market a similar product, he places a bottle of it in a bookcase and a placard underneath it with a skull and crossbones drawn in.
• The parent company is thought to command a 90% share of the energy-shot market.
• Bhargava chose names such as “Living Essentials LLC” and “Innovation Ventures” for the companies he runs because of how bland they sound.
• The secret to the success of the drink is that unlike other energy drinks at the time such as Red Bull or Coke, 5-hour energy came in a small, single serving bottle. You don’t have to be thirsty to drink it.
• It’s also a product that either lives or dies. Costing just $3, consumers can try it, test it, see if they like it, and immediately reject it. The first experience must be perfect if it is to be popular.
• Bhargava, who spent his 20s at an Ashram in India in search for inner peace, believes that he’s probably the richest Indian in the United States.

To read more about Bhargava’s history, his questionable claims about charity, how he made his first million, and what he’s working on now, read the entire profile here.

Source: Forbes

Via: Newmark’s Door

Michael Blanding reports on a paper being written by academics about the way that lobbyists exert their influence on politics in the United States.

The primary findings of the paper include:

• Relatively few firms lobby.
• Larger firms are more likely to lobby than smaller ones.
• The companies that do lobby do so consistently. Lobbying in one year was a near-perfect predictor of lobbying in the next.

What does this all mean?

• A company can’t just jump into the fray and lobby on a particular issue. Lobbying has high fixed costs and requires expertise in the art of lobbying and complying with regulations, as well as extensive relationship networks. These can only be built up over time.
• This means that a small number of corporations are able to consistently influence the government.
• These companies decide what issues do and don’t get lobbying support – they may support or oppose a bill even if it has nothing to do with them.

To read about the details of the study, the surprising things they found when they looked at H1-B lobbying, and what this means for democracy, click here.

Source: Harvard Business School

Via: Newmark’s Door