Nice little post here from the blog “Unbundling as a Pricing Strategy.”  It’s a good example of applying choice architecture and libertarian paternalism to everyday choices that cary with them much grander consequences.

“When people see a 5 cent charge per bag they are more than likely to bring their own bags than if there were given a credit for each bag.”


I just finished Thaler and Sunstein’s Nudge.  Though my enthusiasm faded a bit as the book wore on, I have to admit that the concept of choice architecture that they explore is one of the most exciting ideas that I’ve encountered in a long time.  So exciting, in fact, that I would consider making a career of it (in some ways I already am).

Enthusiasm aside, as I finished the last chapter on “Objections” tonight, I was struck by one of the authors’ comments.  

They discuss the objection that policymakers should always attempt to be neutral.  Well, the premise of the book rests largely on the fact that many of us are choice architects, even though we may not realize it.  We are involved in designing the environments in which people make decisions.  Therefore we influence decisions, whether we like it or not.  So we might as well be intentional in how we go about our design.

What struck me about the neutrality discussion was the assumption that neutrality somehow denotes innocence.  For some reason, as a society we forgive neutrality and punish or reward intentionality (depending on how things turn out).  So if I kill someone unintentionally – in a car accident, for example – I am treated differently than if I kill someone in a premeditated fashion.  The first is likely to somehow be a result of negligence, while the second is a result of something much more insidious.  In this way, they are different.  Yet, both result in the same outcome.  

Along the same lines, choice architects who drive us toward stupid decisions unintentionally are somehow innocent.  Yet, those who drive us toward bad decisions intentionally are somehow evil because they game the system.  

This seems a bit strange to me.  Maybe it shouldn’t.  But  I would prefer a set of cultural norms that places slightly greater emphasis on personal awareness and responsibility.  

If you drive, you drive safely.  If you nudge, nudge intentionally.

From liccle_minxs photostream

From liccle_minx's photostream

WordPress’s Tag Surfer feature I’m finding very handy.  This morning it served up an interesting post from The Guru Investor on the myth that it took it took investors 25 years to recoup their investment after the great crash of 1929.

Here’s a snippit, but do check it out:

“While many have cited the fact that the Dow Jones Industrial Average took 25 years to get back to its pre-Great-Depression highs as reason to worry that the coming market recovery could take a upwards of 10 or even 20 years, Hulbert says the 25-year Depression recovery figure is misleading for a number of reasons. In reality, he says, it took only four-and-a-half years after the Depression bottom for investors to recapture their losses.”

This is a bit of an old reference in internet time (from > month ago), but this is a new blog, so who cares.

Below is a link to one of the better bits I’ve heard on the reality and dangers of deratives trading, how the trade was allowed to grow and thrive over the years, and how the lack of transparency leant itself to the eventual collapse.

“Frank Partnoy directs the University of San Diego’s new Center for Corporate and Securities Law.”  He’s also a former derivatives trader.


Frank Partnoy on NPR’s Fresh Air

From Ze Eduardos Photostream

From Ze Eduardo's Photostream

I’m generally not a highly detail-oriented person.  I am usually quite good at, and content with, understanding the gist of things.  My eyes glaze over as people dive into the minutae of an issue.  

I don’t know if this is inherently good or bad – it’s probably neither – but I do know that  my appreciation for details seems to grow greater all the time.  More specifically, I’m learning that as you approach the upper end of the performance/competitiveness continuum, winning becomes a game of inches.  

A couple examples of what I mean…

1. In the world of cycling, my newfound love, winning is about most efficiently transforming human force into speed and movement on the bike. Every turn of the pedal is an opportunity to either leverage or waste the force that your legs are generating.  If you pedal 80-90 times/minute in a race that lasts several hours, every microscopic bit of leverage counts.  So don’t roll your eyes (like I did) when you hear the bike salesman talk about “system integration” and “aggressive geometries.”

2. I had the privilege of seeing an amazing Minnesota Orchestra concert on Friday night, where I learned that the average string player owns an instrument worth somewhere between $100,000-$200,000.  I’d be the last person to believe that the delta in sound quality between a $10,000 and $100,000 violin somehow mirrors the delta in price, but it seems that here again, where competition is fierce and people are enormously talented, we’re talking about little differences making all the difference.

If you have other good examples I’d love to hear them.  Ultimately, it makes me feel better about the idea of one day becoming an expert in a particular field versus the generalist that I’m currently on a path to become.

Smoky Beef Tacos

Smoky Beef Tacos

My sister, Steph, bought a cookbook for Sarah as thanks for the baby shower Sarah threw recently.  The cookbook is Everyday Food , and yes, I also initially rolled my eyes about the fact that it’s Martha Stewart.

Anyway, the point being, Sarah made the most amazing tacos from the cookbook earlier this week –

While Sarah’s version was outstanding (she got adventurous with the spices), I’ve been experimenting with the leftovers.  My suggestion – toast the tortillas in a non-stick pan with no oil, lay cheese on the tortillas to melt as the tortillas finishing toasting, then top with sour cream and cilantro.  Amazing!

If someone out there happens to try it, let me know what you think.

Every mainstream religion in the world tells us, in some form, that it’s best to isolate ourselves from worldly desires and possessions. But, dammit, I love my bike.

My Bike

My Bike

I bought her (hmm… she needs a name…) about three weeks ago and have already logged 125 miles. That’s nothing to brag about, perhaps, but something I’m pretty proud of as a total novice.

What I’m loving so far:

1. The endorphin kick after a long ride
2. The amazing feeling of “clean” – of being purged of all things dirty and unhealthy – after a shower after a long ride.

Thank you, Erik’s bike shop, for the great deal and Minneapolis for your beautiful and well-maintained trails. My life is more complete because of you.

Whether you are an avid follower and interpreter of the financial crisis or just trying to figure out why you lost your job, look no further. 

Lots of good analysis from Simon Johnson, former IMF chief economist and MIT professor, and his co-authors, James Kwak and Peter Boone.

The Baseline Scenario.

I began this blog over two years ago, but it never got off the ground. Instead, I started a typepad blog focused on goings-on in my profession.

Two things I’ve learned:
1. WordPress is much better than typepad
2. Professional blogs are hugely valuable but don’t feed your soul

We’ll see if I can get it right this time.

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