Economist Round-Up

On my flights from Orange County to Chicago to Providence, I was able to catch up on a few issues of the Economist that started to pile-up because of finals. Here are a few things that I thought others might find interesting:

Must-read: Where Have All Your Savings Gone?

Any American who has diligently put $100 a month into a domestic equity mutual fund for the past ten years will find his pot worth less than he put into it. The Asians’ parsimony made the Anglo-Saxons’ profligacy possible. Through their increasingly sophisticated financial systems, the Americans and British were able to borrow from the thrifty Asians to finance their spending spree. And, because their house prices were rising so fast, they had the collateral and the confidence to do so.

If savers treated financial assets as they do other goods, they would sell them when they are expensive and buy them when they are cheap. Actually, they do the opposite.
The average American scheme member contributes just 7.8% of salary to his pension scheme. His employer, on average, contributes only 4.4%. He has a pot worth only $68,000. A rule of thumb is that total contributions need to be around 20% of wages to match a traditional final-salary scheme. Inadequate savings, badly invested, are a problem for individuals and the economy. Cautious savers are putting their money in banks; banks are reluctant to lend; companies therefore find it hard both to borrow money and to raise equity capital. This timidity hurts companies and, in the long term, savers. Implausible as it may sound, right now equities and corporate bonds are a better long-term bet than cash.

Space Solar Power:

DNA Databases: "Of some 40 states that have their own databases, only California allows permanent storage of DNA profiles of those who are charged but then cleared"

Facebook Connect: "A new button is appearing on some websites. It says “Facebook Connect” and saves visitors from having to fill out yet another tedious registration form, upload another profile picture and memorise another username and password. Instead, visitors can now sign into other sites using their existing identity on Facebook."

I've been talking about this for over a year, but hopefully more studies will convince legislatures to alter their laws. Studies are showing that when people talk on the phone while driving, even hands-free, their driving is impaired. However, reaction times and driving ability are not impaired when talking to a passenger in the car, especially when the passenger can play a role by commenting on surrounding traffic.

Good article about the challenges facing Obama soon when it comes to the environment

One of the most chilling things I've read in awhile is from this article about preventing genocide: "The most upsetting sight was that of small skulls which, unlike the larger ones around them, were mostly incomplete. Babies’ jawbones tend to break off when clubbed."

Special Report on India:

"India has 60m chronically malnourished children. 40% of the world's total." It is also facing a huge demographic crisis. Every year, 14m Indians are being added to the labour market. Half of India's people are under 25 & 40% under 18. An underinvestment in education means most are unskilled and if India cannot find employment for them, then poverty will not be reduced and India will face instability.

Also, India's politics are a little insane to me. The current government was a coalition of about 13 parties. This still wasn't enough for a majority, so they recruited outside support from another 5 parties, including the "Left Front," a coalition of Communist parties. The Communists stopped everything, but they walked out of the government, but the polity is so fragmented that it is hard for them to get anything done.

Speaking of insane, police are having a hard time dealing with the anarcists leading the riots in Greece. The reason: "The anarchists have also exploited a constitutional loophole that bans police from university campuses. As a result, demonstrators can regroup behind barricades at the Athens Polytechnic and pick up fresh supplies of petrol bombs before heading back onto the streets."