Interesting Stuff I read

This is a page in which I intend to drop articles and resources that I find interesting. Chances are very good that you will find most, if not all of this stuff to be utterly useless and boring, but this is ths sort of stuff I love to read. These are all recent reads (Feb-March 2007).

Everything is in PDF format.

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“Design by Deception: The Politics of Megaproject Approval”, Harvard Design Magazine, Volume 22, 2005 - Bent Flyvbjerg
GREAT article by the author with a very interesting name. Basically - how you win a project bid is to deliberately, but convincingly, underestimate costs and overestimate revenues. The article is an informative read for anyone trying to make sense of the politicians, government agencies and developers who make up total shit to get megaprojects approved.

Which large projects get built? My research associates and I found it isn’t necessarily the best ones, but instead those for which proponents best succeed in designing—deliberately or not—a fantasy world of underestimated costs, overestimated revenues, overvalued local development effects, and underestimated environmental impacts. Project approval in most cases depended on these factors.
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Many project proponents don’t hesitate to use this approach, even if it means misleading lawmakers, the public, and the media about the true costs and benefits of projects. This results is an inverted Darwinism—an unhealthy “survival of the unfittest”—for large public works and other construction projects.


Economic ramnifications of building new sports stadiums

In Pittsburgh, and many cities across the country, a large amount of public expense goes into building new stadiums and arenas. They argue that the economic windfall in the form of taxes from hotel nights, etc. from such mega-projects is a huge one. Baade, Baumann, and Matheson’s analysis of taxable sales in Florida cities demonstrates that none of the 6 new franchises or 8 new stadiums and arenas in the state since 1980 have resulted in a statistically significant increase in taxable sales in the host metropolitan area. In addition, using the numerous work stoppages in professional sports as test cases, again no statistically significant effect on taxable sales is found from the sudden absence of professional sports due to strikes and lockouts.

Note: I think that it’s important to look beyond direct economic impact in these situations, and arenas and stadiums provide a lot of intangibles to a city as well, particularly if used to gain or retain a major sports team, or in the case of an arena, hold many other events as well. I just think it’s silly to use a purely economic justification for building such projects, as is often the case.


Four Essays by Leonard Read, Founder of the Foundation for Economic EducationThe most significant (and my favorite) of these is I, Pencil, which I blogged about earlier. The three other essays are “The Myth of the See-It-All”, “The Law Without”, and “The Law Within.” I, Pencil is about a simple Eberhard Faber pencil, and all that it takes to make one.

“The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.”

Have you ever tried to sell a diamond? From the Atlantic Monthly, Feb ‘82

Absolutely fascinating read. Diamonds aren’t forever. Don’t buy into the hype.

The diamond invention… the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem is a relatively recent development in the history of the diamond trade. Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year. In 1870, however, huge diamond mines were discovered near the Orange River, in South Africa, where diamonds were soon being scooped out by the ton. Suddenly, the market was deluged with diamonds. The British financiers who had organized the South African mines quickly realized that their investment was endangered; diamonds had little intrinsic value and their price depended almost entirely on their scarcity. The financiers feared that when new mines were developed in South Africa, diamonds would become at best only semiprecious gems.

The major investors in the diamond mines realized that they had no alternative but to merge their interests into a single entity that would be powerful enough to control production and perpetuate the illusion of scarcity of diamonds. The instrument they created, in 1888, was called De Beers Consolidated Mines, Ltd., incorporated in South Africa.

Livestock’s Long Shadow, a report from the Food and Agriculture Organization of the United Nations
Ok, the report is way too long. But the executive summary is only 5 pages long.
It turns out that Livestock are responsible for roughly 18 percent of the global warming effect, which is more than cars and planes combined! The main greenhouse gases produced by livestock are methane — the natural result of bovine digestion — and the nitrogen emitted by manure. Furthermore, the deforestation needed for grazing lands also contributes to global warming, by eliminating the CO2 sinks that forests provide. Global livestock grazing and feed production use 30 percent of the land surface of the planet. Crazy! If you want a short article about the report, click here or just google “livestock’s long shadow.” Anyway, it’s one (of many) reasons I choose to be vegan. Someday, when I have some free-time, I’ll put together an analysis of what is better for the environment: Trading in your Hummer for a Prius, or trading in the standard American omnivorous lifestyle to a vegan or vegetarian one. My guess is that being vegetarian is far better for the environment than driving a Prius.

Update- Related great article (much shorter too): Vegetarian is the new Prius - Huffington Post


New York City 2006 Taxi Fact Book
Information on taxi ridership, trip purposes, fares, customer satisfaction, service availability, industry finances, driver earnings, medallion prices, cars, accidents, driver quality, driver background and nationality, and history and development of the NYC taxi industry. Fascinating stuff. There are about 12,500 taxicabs in Manhattan, making 240 million trips per year. The average fare is $9.61 for a 2.8 mile trip, or $11.44 with surcharges and tips. 38% of NYC taxi drivers were born in South Asia (14% each from Bangladesh and Pakistan, and 10% from India). Taxi drivers take home pay is about 57 cents of every dollar in fare… They make about $175 for a 10 hour shift.


Warren Buffet’s 2006 Letter to Berkshire Hathaway Shareholders
Wikipedia link to Warren Buffet
Yeah, it seems like it would be incredibly boring to read the value investing guru’s letter to his shareholders, but Warren’s letters are in fact both entertaining and informative… I would consider them a must read if you want to get involved in investing or corporate management. Actually he’s also a guru in good business practices and transparency. With a net worth upwards of $50 Billion, he’s the worlds 2nd richest person. The letter has some details about his plans to give away his entire fortune to philanthropic causes in the next 25 years. Someday, I plan to make it to Omaha for the “Woodstock for Capitalists,” Berkshire Hathaway’s shareholder meeting. First I’ll need to buy a share though… current price of Berkshire-A share is something like $108,000, which is also Warren’s annual salary.

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Funny stuff:

Creative solutions to exams - If you haven’t studied, atleast be funny
I like the 4th one about El Nino best.