Monthly Archives: October 2013

Shopping on Thanksgiving? Time to talk turkey

22 Tuesday Oct 2013

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If your brother or sister earns a living at JCPenney you may have to cut short the Thanksgiving family time spent together. At 8pm, the retailer announced last week, most of its 1,100 stores will open their doors. JCPenney had no choice. Macy’s announced a few days ago that it will be open as well, breaking with a century and a half tradition. Two years ago, Toys R Us started this, and Wal-Mart, Target and others followed suit last year.

2012 Black Friday Stampede (Brian Davies, AP)

2012 Black Friday Stampede (Brian Davies, AP)

Why does JCPenney have no choice? This is a classic case of the Prisoners’ dilemma in game theory. The best outcome of the game occurs when all retailers cooperate (i.e. stay closed on Thanksgiving). But the incentive to defect is extremely strong, in the hope that your shop could be the only one open and boost its sales. Continue reading →

Do governments solve problems, or merely apply solutions?

15 Tuesday Oct 2013

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Are governments driven by a search for better solutions, or do they apply existing solutions to new problems?

Can a country be competitive and enjoy life?

Can a country be competitive and enjoy life?

At a Harvard talk last week French Finance Minister Pierre Moscovici was questioned aggressively by a Chinese official. The claim by the Chinese economist was that France can never become competitive because of its addiction to holidays and short working weeks. And as Moscovici tried to corner the questioner with the higher productivity of French workers, someone else took the relay baton for bashing French economic policy. Part of the audience reacted approvingly, as often happens in US public debates when France is being criticized. Continue reading →

Political leadership: should party unity trump clear purpose?

07 Monday Oct 2013

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Let’s assume that House Republican leader John Boehner is a reasonable man, as Democrats repeatedly say. Let’s also assume that he wants a Republican candidate to win the 2016 presidential elections. His behavior in the shutdown saga so far undermines these two assumptions. What then does Boehner value most in today’s crisis management? It must be the unity of his Republican caucus in the House. But chasing that value damages Republican prospects for future elections.

John Boehner and Democratic Senate leader Harry Reid secretly whispering - Photo taken from Tea Party News Network site

John Boehner and Democratic Senate leader Harry Reid secretly whispering – Photo taken from Tea Party News Network site

In the 2012 fiscal crisis, Boehner was outvoted when a majority of House Republicans pulled him back from a compromise with Obama on more taxes for the rich in exchange for expenditure cuts. Today, off the record Republican statements illustrate uncertainty about their end game. The Speaker is floating in order to avoid antagonizing some of his own members. Continue reading →

Can you trade in a shotgun for a car?

01 Tuesday Oct 2013

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I googled buying a used car in the Boston area upon arriving here, and now I get ads like: “$0 dollar Down/Low Monthly Lease Payment. Bad Credit, No Credit, No Problem!”

Picture taken at the lot of a used car dealer - Boston area (Medford)

Picture taken at the lot of a used car dealer – Boston area (Medford)

No problem for whom? Subprime car loans did not get much coverage in the financial crisis compared to bigger brother subprime mortgages. But the business model is similar, and it is partly based on predatory lending. This picture was taken on a car lot that I visited last week. Continue reading →