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Pigovian Taxation

Below is a NYTimes essay  about “Pigovian taxation” — an interesting economic idea. The essential idea behind the concept is that we should recognize the full cost of everything we do, including the “externalities” — costs that aren’t obvious — and take those into consideration when making pricing decisions. That makes sense. What I don’t like is the idea of putting the government in charge of such decisions by pricing the externalities in the form of taxes. Government, of course, loves taxation because it is the only form of income a government typically has. Increasing taxation increases the size and scope of government — something I don’t like. Still, the idea of paying one’s fair share of everything seems sensible, …

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Cellphone Rudeness

I was waiting in line at my neighborhood bookstore when I became aware of a struggle going on behind me. “I thought I told you to turn that thing off,” snapped a woman in gray slacks. She was scolding her son, whose cellphone was ringing. I hadn’t even noticed the sound – a sad testament to how cellphones have become woven into the tapestry of everyday life. The kid – high school age, scuffed sneakers and baggy jeans – started fumbling around in his backpack, trying to find the offending item. “Out!” his mother commanded. “Go wait in the car.” She practically threw her keys at the boy, who slunk out the door. To my surprise, the woman turned to …

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Know Thyself

By the time you are an adult you should understand your core, motivating desires and core moral values. It is impossible to live a fully conscious and rewarding life unless you know what they are and act in accordance with them. Tapping into your core desires releases a great deal of energy. Acting in accordance with your core values allows you to have an untroubled spirit.

How to Beat the Wrap

This Dave Barry column was originally published Dec. 9, 2001 and is always a great read around the holidays. BY DAVE BARRY This is the time of year when we think back to the very first Christmas, when the three Wise Men — Gaspar, Balthasar and Herb — went to see the baby Jesus, and, according to the Book of Matthew, “presented unto Him gifts: gold, frankincense and myrrh.” These are simple words, but if we analyze them carefully, we discover an important, yet often-overlooked, theological fact: There is no mention of wrapping paper. If there had been wrapping paper, Matthew would have said so: “And lo, the gifts WERE inside 600 square cubits of paper. “And the paper WAS …

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The Broken Window Fallacy

This interview was originally published in the October 4th issue of The Palm Beach Letter.

Tim Mittelstaedt: Let’s talk about books. What is the best book on economics or investing you’ve ever read?

Mark: Gee, I haven’t read all that many. But I’d have to say that the book that had the greatest impact on my thinking was Henry Hazlitt’s Economics in One Lesson.

Tim: A classic. How did that affect you?

Mark: It was one of those “eureka!” moments. It was like coming up from a murky basement into a bright room. The book gave me a clear, common-sense explanation of why things were the way they were. I could finally see the fallacies that supported so much stupidity that passed for economic science.

Tim: Such as?

Mark: Such as why public works are so often wasteful, why government credit diverts production, why technological advances are good, not bad, for employment, why spread-the-work schemes inevitably fail, why government price fixing and tariffs make us poorer, etc.

Tim: So what is the most important thing you got from reading Economics in One Lesson?

Mark: That you can’t understand any economic policy unless you look at the whole picture. It’s not enough to see the immediate, localized consequences of any public action. You must see its long-term effect on the entire economic community. Hazlitt says that nine tenths of the economic fallacies that politicians use do so much harm because they ignore this lesson. After reading the book, I can’t help but agree.

Tim: That’s a little abstract. Can you explain?

Mark: Hazlitt explains it beautifully in the second chapter, entitled “The Broken Window.” It goes like this: A hoodlum throws a rock through a baker’s plate glass window. A crowd gathers and talks about what a shame it is. But someone suggests that it is actually a blessing. He points out that the $250 the baker must pay for a new window will make the glazier $250 richer. And the glazier will use that $250 to spend with other merchants. The smashed window, according to this theory, will go on providing money and employment in ever-widening circles.

The logic is that the hoodlum who threw the brick was not a menace at all, but a public benefactor. The crowd agrees.

Tim: It does seem like a compelling argument.

Mark: It does. Yet, it’s a logical fallacy.

Tim: So what’s the fallacy?

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The Three P’s

Leadership in business should be about three things that begin with the letter P: prospects, products, and profitability. Prospects are your customers-to-be. If you want your business to grow, you must focus your people’s attention on their needs. Products are about your existing customers. If you want them to stay with you, you must constantly motivate your people to refine and upgrade your products. (Think Apple.) Profitability is the metric by which you can best judge the health of any business. You must inspire your people to do what needs to be done to reach your financial goals.

Holiday Career Advice from Mark Ford (Or 15 Rules of the Holiday Office Party)

There are three social environments when it comes to your career. At one end, is the formal atmosphere of your professional business life. Here, all eyes are on you … and to succeed, you must conduct yourself with the utmost energy, enthusiasm, and decorum. At the other end (if you are lucky), is a personal life that is free from business relationships. Here, you do exactly as you please. In the middle, are the social events that surround business functions — the dinners and dances and cocktail parities that often follow conferences, trade shows, and seminars. It is this middle ground that is difficult for some people (like me). It’s easy to convince yourself that anything goes in such situations – …

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Ernest Hemingway’s Cats in Federal Court

If you visit the former home (now a museum) of Ernest Hemingway in Key West, Florida, you can walk the halls and visit the rooms where he lived and wrote some of his greatest works. You will also probably notice the incredible amount of cats that roam the grounds unfettered. Now, these cats have become the focus of a Federal court case. (via Brainpickings)