Knowing and Making

I may have more to say about this in the next few weeks, but this New York Times article about industrial policy reminds me of a question I asked on twitter the other day: ...hedge funds and venture capitalists are geared toward investing in financial instruments and software companies. In such endeavors, even modest investments can yield extraordinarily quick and large returns. Financing brick-and-mortar factories, by contrast, is expensive and painstaking and offers far less potential for speedy returns. This might not just be a change in investors' preferences. (Although if they have decided they prefer fast returns over slow ones, I don't know that I'd criticise them for that.) What if something deeper has happened. In the late 1940s and early 50s, macroeconomic trends were fairly clear: Europe was on the verge of a major recovery, and American growth was likely to continue. In conjunction with this, we could predict with some confidence what people would want to

It's the one simplest thing President Obama could do to seize control of the economic agenda. It's counterintuitive - but done right, it could be the tonic both for the economy and for a divided political scene. Don't click on your back button yet - I haven't gone crazy. Obama should propose a Balanced Budget Amendment with the following key features: The balance must be achieved over ten years, not one It should include   automatic (not discretionary) investment programmes when unemployment is high, which are scaled down when the economy is doing well It should commit to share the proceeds of future growth between deficit reduction/debt repayment, tax cuts and investment This policy would provide countercyclical intervention - exactly as a responsible government should. Right now, the US economy could use five to ten million more jobs (that's about $500 billion a year, by the way). Five years ago it didn't need anything like that - there was plenty of

I've been listening to NPR's Planet Money podcast, and one of the recent episodes  [mp3 link] is about how much it costs to make - and promote - a hit single. Or more accurately: to attempt to make a hit single. A friend in the music industry asked me to write down their figures with so he doesn't have to listen to the whole podcast. So here they are. The record in question is Rihanna's "Man Down", which her record company Def Jam was hoping would be one of the anthems of the summer. The costs break down like this: Initial demos made at a "writing camp": $18,000 (it costs around $200,000 to hire 10 studios for a couple of weeks and make 50-100 demos for Rihanna to choose between; this cost is apportioned over the 11 tracks on the album) Fee to lyricist: $15,000 Fee to producer/composer: $20,000 Fee to vocal coach/producer: $10-15,000 Cost of other studios and recording costs: $10,000 Total production cost: around $78,000 And then the marke