Nudge by Richard H. Thaler & Cass R. Sunstein

I just finished reading Nudge, and I am glad I read it. This book emphasizes the little things ("nudges") that can be done to profoundly affect behavior, with a particular focus on potential applications for these nudges in public policy (health care, tax reform, education reform etc). Nudges are things that we, as a society, should take the time to explore and utilize so as to guide people to make sensible choices (within the context of free choice). An example of a successful nudge at work is the targets (flies, actually) that were painted in the bottom of the men's urinals/toilets in the airport in Amsterdam, which resulted in an 80% reduction in spillage. Such a small update contributes to consistent (and thus major over time) labor and capital savings for the airport, as well as significant improvements in sanitation (and thus health) and the overall user experience. The authors also emphasize the nudging power of "default options" and how every effort should be made to ensure that default options are presented in such a way so as to maximize optimal outcomes.

Thaler and Sunstein are self-professed "libertarian paternalists". They believe in a system of beneficent guidance that does not hinder or interfere with freedom of choice. Their public policy prescription lies somewhere between the Democratic one-size-fits-most mandates and Republic laissez-faire. It is certainly a worthwhile prescription to consider.

The book is dense and pedantic at times, but this is merely a testament to the amount of substantive research and analysis that the writing is based upon. The recommendations set forth by these two authors are steeped in years of dedicated research in the fields of psychology, neuroscience, behavioral science and so forth. This book provides refreshing insights, and will certainly have an effect on the way you think about your own methodology and especially that employed by the government.

As is well-stated on its back cover, Nudge is certainly a worthwhile read for "anyone with an interest in our individual or collective well-being" (I am assuming, or rather hoping, that means most of us).

Here are a couple of websites you can visit, which I read about in the book:

1. The blog associated with the book: http://nudges.org/

2. A website developed in-line with behavioral science to help you achieve your goals. I found this one to be pretty cool: http://www.stickk.com/

Why didn't I join the debate team in middle school?

Hi all,

I am working on a really interesting art-related blog post right now, but in the meantime I figured I would post Talita's new debate topics, to see if anyone has any interesting feedback. I've learned from helping her put together her debate outlines, that these are always topics worth knowing more about anyway.

Aside from simply posting the topics, I want to let you all know how incredible the debate program is, and how worthwhile of an activity it is to get your children (current or future) involved in from an early age (earliest they can become formally involved is usually 6th grade, and in some cases 7th grade). Debating develops so many skills for young students; they become more comfortable with and/or interested in: public speaking & oral communication, critical thinking, knowledge of current events and the social sciences, reading, research, reasoning skills, and, not to mention debate involvement is almost always correlated with significant increases in GPA (grade point average)! Aside from these things, I have noticed that being on the debate team gives kids the opportunity to associate and socialize with other kids who are especially dedicated to academic achievement and learning, which can never hurt, if you ask me...

Anyway, here are the topics...let me know your thoughts (note: debaters must come to the tournament prepared to argue both the opposition and the proposition for all of the below topics):

1. The United States should significantly expand its use of nuclear power.

2. Single sex education does more good than harm.

3. The California lottery should be abolished.

4. Public funding should not be used to attract professional sports teams to cities

If I have time, I will also try to post concise versions of our outlines for all of the topics...probably after the tournament.

ECONOMICS vs. BUSINESS, Paul Krugman breaks it down

On my flight from JFK to LAX, I just read "A Country is Not a Company" by Paul Krugman.

My reason for this posting is two-pronged:

1. I figure if I begin my blog with an exceedingly boring post, my next post can only be more exciting.

2. An understanding of Economics does not come as naturally to me as an understanding of Business & Finance. My mind is more practically-wired so theory often evades me. The perfectionist that I am, I like to improve where I am lacking. Maybe you can relate?!

Anyway, here is what I learned, and I will try and attach my complete outline, if, in fact, there is a place to attach a document here:

1. Contrary to the belief of many businesspeople, The U.S. Economy's success in creating jobs has essentially nothing to do with its ability to increase exports or cut back imports. I found it particularly interesting that the real factor that limits the overall number of jobs available is the Fed's belief that, if it were to create too many jobs, the result would be unmanageable inflation. The permissive factor does not have to do with the U.S. economy's ability to generate sufficient demand.

2. Again contrary to the belief of many businesspeople, a country that attracts large capital inflows (say, they become the 'hot' new hub for manufacturing in a particular industry and attract billions of dollars from multinationals) will necessarily run a trade deficit! This is basically because they will import some parts of their manufacturing equipment so their important demand will increase, and, at the same time, the investment inflow with either drive up the currency's value (in the case of a floating exchange rate) or the result may be inflation (in the case of a fixed exchange rate); their domestically-produced goods will then be priced out of the export markets, while the purchasing power of their currency will be greater, so import demand will further increase and the result will be a trade deficit.

3. Business strategy and economic analysis are profoundly and fundamentally different, and must be approached and understood as such. A business leader cannot just 'jump' into being an economic manager without some serious schooling: the vocabulary and concepts are different, business accounting is different from national income accounting (measure different things and use different concepts); personnel management and labor law are not the same; corporate financial control and monetary policy are very divergent as well. Furthermore, businesses are open systems that typically experience positive feedback; the U.S. Economy is a closed system that typically experiences negative feedback. "In spite of growing world trade, 70% of U.S. employment and value-added is in industries, such as retail trade, that neither export nor face import competition. In those industries, one U.S. company can increase its market share only at the expense of another, and, furthermore, no matter how well-managed they are, all of the businesses in the same industry would not be able to increase market share exponentially simultaneously. Businesses, on the other hand, can increase share in all of their markets simultaneously if managed well enough to do so, and, if one part of a business is doing well, the feedback to the other parts of the business, or to the business overall, is usually very positive.
Basically, from a management perspective, when someone is running a business, he or she can bake more pies; when someone is running a country, he or she is dealing with many pieces of the same pie.

Who is Paul Krugman and why is there a good chance his words on this topic are valuable?

Paul Krugman is the professor of economics and international affairs at Princeton University. He was awarded the Nobel Prize for Economics in 2008