Eduardo Porter in The New York Times:

As negotiations between Greece and its creditors stumbled toward breakdown, culminating in a sound rejection on Sunday by Greek voters of the conditions demanded in exchange for a financial lifeline, a vintage photo resurfaced on the Internet.

It shows Hermann Josef Abs, head of the Federal Republic of Germany’s delegation in London on Feb. 27, 1953, signing the agreement that effectively cut the country’s debts to its foreign creditors in half.

Open course by Robert Shiller. Link is to the fourth lecture which impressed me by explaining Efficient Portfolio Frontier in a way I actually grokked.

In this lecture, Professor Shiller introduces mean-variance portfolio analysis, as originally outlined by Harry Markowitz, and the capital asset pricing model (CAPM) that has been the cornerstone of modern financial theory. Professor Shiller commences with the history of the first publicly traded company, the United East India Company, founded in 1602. Incorporating also the more recent history of stock markets all over the world, he elaborates on the puzzling size of the equity premium and the very high historical return of stock market investments. After introducing the notion of an Efficient Portfolio Frontier, he covers the concept of the Tangency Portfolio, which leads him to the Mutual Fund Theorem. Finally, the consideration of equilibrium in the stock market leads him to the Capital Asset Pricing Model, which emphasizes market risk as the determinant of a stock’s return.

J. B. MacKinnon in The New Yorker:

Earlier this month, a peculiar vehicle appeared on the streets of Manhattan and Brooklyn: a biodiesel-fuelled, reclaimed-wood camper that could have been a food truck selling vegan “ish” and chips. But instead of a meal, the truck was made to sell a message on behalf of Patagonia, the outdoor-clothing company.

The camper, dubbed Delia, was on a six-week cross-country road trip, repairing outdoor gear and selling used Patagonia products along the way. The amount of fixing that went on was humble in scale: ninety-three garments in New York City and about twenty-one hundred nationwide. The tour, which ended May 12th in Boston, is better thought of as the latest embodiment of the company’s ongoing campaign to encourage a national conversation about the threat posed to the planet by a global economy that depends on relentless growth and consumerism.

Ben Austen in the NYT Magazine:

The Anti-Eviction Campaign always canvassed a neighborhood before acting, J. R. explained to the young parents. He asked if they would support a takeover of either of the empty houses that sandwiched theirs or of any of the abandoned homes on their block. A family that moved in, he said, most likely wouldn’t pay rent or a mortgage, but wasn’t that preferable to a vacant property further deteriorating, becoming a haven for gangbangers or drug users?

“Hell, yeah,” the woman said, without hesitation, from her lawn chair.

“That’s what we need, uh-huh, exactly,” the man added.

Over the last few years, J. R. has been inside more than a hundred abandoned properties, each one a variation on the same theme of despair. He has stumbled upon drugs and whatever paraphernalia people needed to use or make them, along with the gathered sheets and worn-down mattresses of so-called trick houses. He has seen the carcasses of dogs and cats and rats and possums and raccoons. And yet J. R. proves surprisingly upbeat when talking about the efforts of the Anti-Eviction Campaign. At a Y.M.C.A. in Bronzeville, on the South Side, as people crowded into the basement for a screening of “Inside Job” — the 2010 documentary that essentially detailed the depressing back story of their own foreclosure plight — J .R. told them that he had seen the film 19 times and hoped to see it 150 more. It inspired him. “The government failed us. The market failed us. Harvard, Yale and the University of Chicago failed us. Our government — the government — doesn’t belong to us. Forget them; they forgot us. We need to solve our problems ourselves.”

Why are so many people so bad with money? Because we treat money as a taboo topic in the home, worse then sex. Here is a good column exploring this:

Ron Lieber in the NYT:

Money is a source of mystery to children. They sense its power, so they ask questions, lots of them, over many years. Why isn’t our house as big as my cousin’s? Why can’t I have a carnivorous plant terrarium? Why should I respect my teachers if they earn only $60,000 per year? (Real question!) Are we poor? Why didn’t you give money to the man who asked you for some? If my sister can have Hello-Kitty-themed Beats by Dre headphones, why won’t you get me the Bluetooth-enabled Lego Mindstorms set? (It’s only $349, and it’s educational, Mom!)

We adults, however, tend to do a miserable job of answering. We push our children’s money questions aside, sometimes telling them that their queries are impolite, or perhaps worrying that they will call out our own financial hypocrisy and errors. Sometimes we respond defensively and viscerally, barking back, “None of your business,” unintentionally teaching our children that the topic is off limits despite its obvious importance. Others want to protect their children from a topic many of us find stressful or baffling: Can’t we keep them innocent of all of this money stuff for just a little bit longer?

Olga Khazan in The Alantic:

At a drab community center on Chicago’s West side, there’s a room where families sit around idly. Unemployment is high here, and so is crime: Last month, East Garfield Park was ranked the seventh most violent out of 77 Chicago neighborhoods. The center offers everything from domestic-violence help, to financial assistance, to warmth during the long winter.

It also offers salads, which visitors can purchase from a futuristic-looking vending machine. The salads are made from high-end ingredients like blueberries, kale, fennel, and pineapple. Each one comes out in a plastic mason jar, its elements all glistening in neat layers, the way fossils might look if the Earth had been created by meticulous vegans.

She finally gets there: “It’s not the money, it’s the time.” I’m sick of rich people wondering why poor people eat shit food. Duh.

John Timmer at Ars:

The hypothesis focused on the motivation for continuation of the conflict. Individuals on any side of it will believe that their own group is driven to work together by love of each other. They’ll refuse to recognize that same love in their opponents, instead assuming that the opposition is driven by hatred. That hatred, naturally, is directed at your own group. By assuming your opponents have an intractable negative bias against you, you end up with no desire to work with the opposition and pessimism about the prospects for any compromise. “If adversaries believe inflexibility on the other side renders mutual compromise impossible, they will be unlikely to adopt seemingly rational strategies for conciliation,” as the authors put it.

To test this, the authors surveyed both US citizens about the Democrat-Republican divide, and Israelis and Palestinians about their conflict. In general, their hypothesis held up well. Most groups felt that their own members were motivated by love of each other, while the opposition was united in their hatred of the survey subjects.

To quantify the negativity, the authors measured the relative bias between how much individuals ascribed mutual love to their opponents and how much they ascribed hatred to them. The strength of this bias correlated with a reduced willingness to negotiate, reduced perception that a favorable compromise could be reached, and other measures of optimism. In short, once you’re convinced your opponents hate you, then future prospects start to look bleak.

Is there a way out of this morass? Since money makes the world go around, the authors decided to try a small payment. They told a group of US participants that they’d give them $12 if their evaluation of their opponents’ motivations matched the value their opponents gave for themselves. In other words, if a Democrat gave Republicans a self-love/opponent-hate rating that matched the one Republicans gave themselves, they’d get $12.

The goal wasn’t really to harness greed; rather, it was simply to get people to stop and think of their opponents more carefully—to view them as humans, rather than some generic “other.” To an extent, it worked. Simply offering the payment reversed the general trend, with people ascribing more self-love than other-hate to their opponents.

It would be easy to dismiss this as participants simply matching what they’d expect their opponents to say in order to get some money. But this change had the effect of reducing the bias score the authors calculated above. And they again showed that bias correlated with pessimism about compromise, a sense that a win-win agreement wasn’t possible, and a tendency to assume that the opposition’s opinions were an essential part of their nature. By reducing this bias, the small payment made people more open to the idea of compromise.

Paper is here.

Pam Belluck in the NYT:

“We think it’s really important to incentivize this kind of care,” said Dr. Barbara Levy, chairwoman of the A.M.A. committee that submits reimbursement recommendations to Medicare. “The idea is to make sure patients and their families understand the consequences, the pros and cons and options so they can make the best decision for them.”

Now, some doctors conduct such conversations for free or shoehorn them into other medical visits. Dr. Joseph Hinterberger, a family physician here in Dundee, wants to avoid situations in which he has had to decide for incapacitated patients who had no family or stated preferences.

Recently, he spent an unreimbursed hour with Mary Pat Pennell, a retired community college dean, walking through advance directive forms. Ms. Pennell, 80, who sold her blueberry farm and lives with a roommate and four cats, quickly said she would not want to be resuscitated if her heart or lungs stopped. But she took longer to weigh options if she was breathing but otherwise unresponsive.

“I’d like to be as comfortable as I can possibly be,” she said at first. “I don’t want to choke, and I don’t want to throw up.”

With reimbursement, “I’d do one of these a day,” said Dr. Hinterberger

There are two things I care passionately about, and believe american culture (western culture generally) have wrong; education, and death. Here is a great piece on the latter. This is not something we can fix through legislation. (see: Death councils). It will have to be a cultural shift.

Atul Gawande in The New Yorker:

A few days before Thanksgiving, she had another CT scan, which showed that the pemetrexed—her third drug regimen—wasn’t working, either. The lung cancer had spread: from the left chest to the right; to the liver; to the lining of her abdomen; and to her spine. Time was running out.

This is the moment in Sara’s story that poses a fundamental question for everyone living in the era of modern medicine: What do we want Sara and her doctors to do now? Or, to put it another way, if you were the one who had metastatic cancer—or, for that matter, a similarly advanced case of emphysema or congestive heart failure—what would you want your doctors to do?

The issue has become pressing, in recent years, for reasons of expense. The soaring cost of health care is the greatest threat to the country’s long-term solvency, and the terminally ill account for a lot of it. Twenty-five per cent of all Medicare spending is for the five per cent of patients who are in their final year of life, and most of that money goes for care in their last couple of months which is of little apparent benefit.

And the hour long documentry on Frontline is here. Trailer for that:

It’s a standard assumption in the West: As a society progresses, it eventually becomes a capitalist, multi-party democracy. Right? Eric X. Li, a Chinese investor and political scientist, begs to differ. In this provocative, boundary-pushing talk, he asks his audience to consider that there’s more than one way to run a succesful modern nation.

Sandeep Jauhar in the NYT:

Of all the ways to limit health care costs, perhaps none is as popular as cutting payments to doctors. In recent years payment cuts have resulted in a sharp downturn in revenue for many hospitals and private practices. What this has meant for most physicians is that in order to maintain their income, they’ve had to see more patients. When you reduce the volume of air per breath, the only way to maintain ventilation is to breathe faster.

As our workdays have gotten busier, we doctors have had less time to devote to individual patients. An internist I know in private practice used to see 15 patients a day. “Now reimbursement is so low I have to see at least 30,” he told me. “If I stay in the room more than 10 minutes, my assistant will call me and tell me to hurry up.”

Racing through patient encounters, we practice with an ever-present fear that we will miss something, hurt someone and open ourselves up to legal (not to mention moral) liability. To cope with the anxiety, we start to call in experts for problems that perhaps we could handle ourselves if we had more time to think through a case. The specialists, in turn, order more tests, scans and the like.

And therein lies the sad irony of the health cost containment paradigm in this country. There is no more wasteful entity in medicine than a rushed doctor.

In the southeast corner of Belgium, there is a town of about 20,000 that is known, to the extent it is known at all, as a key battleground during the Battle of the Bulge and, more recently, as the center of the tiny slice of this country that speaks German instead of French.

Time moves slowly here. There is a quaint stretch of shops and a small train station and a hotel, the Ambassador, which has 28 rooms. The biggest commotion on any given day is when the children at the school in town go outside for recess.

Except on soccer days. Then, much of the town treks up a steep hill to a modest soccer stadium, the Kehrweg-Stadion, home to K.A.S. Eupen, the local professional team that has spent most of its 69-year existence in the lower divisions of Belgium’s national league. The stadium is unremarkable, with its squat, steel stands and patchy grass, and yet it was the site, on a March morning two years ago, of one of the strangest couplings in professional sports.

On that day, a group of about 20 men toured the 8,000-seat stadium, examining its sparse amenities and looking out at the drab surrounding areas. They then moved on to K.A.S. Eupen’s small offices, where a candid meeting between club officials and executives from Qatar’s Aspire Academy, based in Doha some 3,000 miles away, began promptly at 10 a.m.

Those in the room would later describe this meeting between the officials of a mostly anonymous Belgian soccer team and representatives of a Middle Eastern royal family as surreal. As they negotiated the details of an acquisition, four languages were spoken — English, French, German and Arabic — and while the club had a multilingual staff member on hand to help translate, there were still moments of inevitable confusion.

Matthew Yglesias in Vox:

Thomas Piketty’s Capital in the 21st Century is the most important economics book of the year, if not the decade. It’s also 696 pages long, translated from French, filled with methodological asides and in-depth looks at unique data, packed with allusions to 19th century novels, and generally a bit of a slog.

The good news is that there’s no advanced math, and anyone who puts in the time can read the book. But if you just want the bottom line, we have you covered.

And a more academic one at Harvard Business Review.

Absolutely amazing TV, William O’Brien of BATS gets into it with Brad Katsuyama of IEX live on the NYSE floor, traders stop trading, and start shouting at the TVs.

Backstory is here: The Wolf Hunters of Wall Street

Alexis C. Madrigal in The Atlantic with a great long form on Califonian water crisis:

Lund doesn’t expect a grand bargain. “It’s hard to ask us to value things explicitly,” he told me. Everything has to at least seem like a win-win for everybody. Who wants to look farmers in the face and tell them that it’s their land that should be fallowed? Or tell the farmworkers who labor for that farmer that it’s their jobs that are going to go? Or tell the urban poor that their water bills are going to go up?

“We need alcohol to function, that’s the disadvantage of chronic alcoholism,” said the 45-year-old, somewhat fatalistically.

For lunch, the team returns to the shed where they get two beers and a warm meal, before heading off again for the afternoon shift.

The working day ends with a final beer at around 3:30 pm.

“You have to see things like this: everyone benefits,” said Gerrie.

“They’re no longer in the park, they drink less, they eat better and they have something to keep them busy during the day.”

Jay Porter:

This is the first of a multi-part series detailing what I learned from operating our farm-to-table flagship restaurant, the Linkery, as a “no-tipping” restaurant that instead charged a fixed percentage for service, from 2006 to 2013. We also operated a sister restaurant, El Take It Easy, that followed the traditional tipping model, allowing for a fairly direct comparison.

This has been making the rounds, I read the Slate piece a while ago, but was re linked to this, and sat down to read it today. Absolutely worth reading. Starts off slow and obvious, but really gets to the good bits around part 4 and 5.

Ben Paynter in New York Magazine:

Shoppers have surprisingly strong feelings about laundry detergent. In a 2009 survey, Tide ranked in the top three brand names that consumers at all income levels were least likely to give up regardless of the recession, alongside Kraft and Coca-Cola. That loyalty has enabled its manufacturer, Procter & Gamble, to position the product in a way that defies economic trends. At upwards of $20 per 150-ounce bottle, Tide costs about 50 percent more than the average liquid detergent yet outsells Gain, the closest competitor by market share (and another P&G product), by more than two to one.

Atul Gawande in The New Yorker:

Restaurant chains have managed to combine quality control, cost control, and innovation. Can health care?

Tim Jackson in the NYT:

Productivity — the amount of output delivered per hour of work in the economy — is often viewed as the engine of progress in modern capitalist economies. Output is everything. Time is money. The quest for increased productivity occupies reams of academic literature and haunts the waking hours of C.E.O.’s and finance ministers. Perhaps forgivably so: our ability to generate more output with fewer people has lifted our lives out of drudgery and delivered us a cornucopia of material wealth.

But the relentless drive for productivity may also have some natural limits. Ever-increasing productivity means that if our economies don’t continue to expand, we risk putting people out of work. If more is possible each passing year with each working hour, then either output has to increase or else there is less work to go around. Like it or not, we find ourselves hooked on growth.