Tim Harford worries about financial illiteracy:
You buy a new £1,000 computer and borrow money to pay for it. You have a choice: either (a) pay 12 monthly instalments of £100; or (b) borrow money at an APR of 20 per cent, meaning you pay back £1,200 at the end of the year. Which offer is better – or are they (c) identical?
There’s nothing like getting a missive from the alternative reality where neoliberalism works and all consumer problems can be solved by more diligent shopping (and remember, since we are all consumers first and citizens second, the corollary is that pretty much any problem can be solved by better shopping).
There are few journalists both more reasonable and more insightful than The New Yorker’s James Surowiecki. At Techonomy 2014 in Half Moon Bay last month, Surowiecki moderated the fascinating “Can Tech Bring Equality and Peace?” panel, which included Jack Dorsey and Intel’s Genevieve Bell. So it was a real honor to have the opportunity to sit down with Surowiecki and pick his brain about the future of innovation, the Internet, and even death itself.
Back when I had time to read The New Yorker, I was a big fan of James Surowiecki. I would always look for his column; if it was there, it was usually the first thing I would read. Unfortunately, he’s no fan of mine.
Surowiecki makes three points about our recent long post on nationalization:
Failing to pay for the deferred costs of current expenditures gets all those practicing credit card budget thinking in trouble. That includes lots of individuals. But it also includes many governments. They pay huge rewards to special interests and act like they think the cost doesn’t exist. Only an extremely financially illiterate society could elect so many of these people.
: New Labour’s Economic Illiteracy Exacts a Terrible Price: “I’m afraid there is no money.” - New Economic PerspectivesNew Economic Perspectives: "New Labour’s Economic Illiteracy Exacts a Terrible Price: ‘I’m afraid there is no money.’
Posted on May 17, 2015 by William Black | Leave a comment
By William K. Black
Quito: May 17, 2015
On Twitter the hashtag “bubble” has become a staple of the American lexicon: it’s been tweeted nearly 30,000 times in the past six months. But referring to the stock market as a bubble would be a misnomer, says New Yorker staff writer James Surowiecki.
It makes intuitive sense that complicated mortgage products would pose the most danger the borrowers who were least able to understand them. But did that intuition bear out in the real world? Sadly, yes. According to a new paper by Kristopher Gerardi, Lorenz Goette and Stephan Meier, "foreclosure starts are approximately two-thirds lower in the group with the highest measured level of numerical ability compared with the group with the lowest measured level.