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【PART I: SPEED】
Article 1: What’s an Idea Worth?
【TIME 1】
Like a lot of accountants, Jason Blumer never really wanted to be an accountant; he wanted to play guitar in a hair-metal band. But like most guys who want to play guitar in a hair-metal band, Blumer eventually realized that there wasn’t much money in touring bars and being paid in beer-smeared $20 bills. So he changed gears and decided to follow his dad into what seemed like one of the more steady businesses around. After college, he bought some suits, joined a midsize firm in South Carolina and processed his clients’ payroll and tax returns. He billed them by the hour. He hated every second of it.
Blumer, 42, wanted to infuse a bit more rock ’n’ roll into his industry. So when he eventually took over his father’s small firm, he made his own rules: There would be no time sheets, no dress code and, most radical of all, no billable hours. He was convinced, in fact, that the billable hour was part of a series of mistakes that took all the fun out of his profession. To him, it seemed like a relic of a dying economic age and one that was depriving his industry of billions in profit.
The notion of charging by units of time was popularized in the 1950s, when the American Bar Association was becoming alarmed that the income of lawyers was falling precipitously behind that of doctors (and, worse, dentists). The A.B.A. published an influential pamphlet, “The 1958 Lawyer and His 1938 Dollar,” which suggested that the industry should eschew fixed-rate fees and replicate the profitable efficiencies of mass-production manufacturing. Factories sold widgets, the idea went, and so lawyers should sell their services in simple, easy-to-manage units. The A.B.A. suggested a unit of time — the hour — which would allow a well-run firm to oversee its staff’s productivity as mechanically as a conveyor belt managed its throughput. This led to generations of junior associates working through the night in hopes of making partner and abusing the next crop. It was adopted by countless other service professionals, including accountants.
【TIME 1 ENDS – 345 WORDS】
【TIME 2】
During the past few decades, as the economic logic of the United States has changed, global trade and technology have made it all but impossible for any industry to make much profit in mass production of any sort. (Companies like G.E., Nike and Apple learned early on that the real money was in the creative ideas that can transform simple physical products far beyond their generic or commodity value.) Similar forces have ripped through professional services, particularly accounting, a profession that, until recently, was little changed from its 16th-century roots. Software like Turbo¬Tax has made the most basic work worth little. Cheaper accountants in India, Ireland, Eastern Europe and Latin America have steadily taken over the more routine types of business, though not quite as voraciously as once predicted.
Just as Apple doesn’t want to be in the generic MP3-player business, Blumer didn’t want to be just one more guy competing to charge a few hundred dollars an hour to do your taxes. A few years ago, he said, he realized that the billable hour was undercutting his value — it was his profession’s commodity, suggesting to clients that he and his colleagues were interchangeable containers of finite, measurable units that could be traded for money. Perhaps the biggest problem, though, was that billing by the hour incentivized long, boring projects rather than those that required specialized, valuable insight that couldn’t (and shouldn’t) be measured in time. Paradoxically, the billable hour encouraged Blumer and his colleagues to spend more time than necessary on routine work rather than on the more nuanced jobs.
But those complex problems were the ones that Blumer wanted to solve, and he also knew his insights were more valuable than the time it took him to conjure them. So he identified a niche — creative professionals who struggled to manage their finances as their start-ups became mature businesses — and he endeavored to help his clients make (and save) enough money that they would gladly pay a significant fee without asking about the hours it took him to figure out what to do. Blumer has been so successful in his approach that he has become a leading voice among a national band of accountants who call themselves the Cliff Jumpers. Many Cliff Jumpers have abandoned the traditional bill-by-the-hour approach to focus on noncommodity accounting solutions for specific client groups. One focuses on entrepreneurs hoping to sell their new businesses; several work with people who are terrified about starting a small business.
【TIME 2 ENDS – 412 WORDS】
【TIME 3】
Perhaps without realizing it, the Cliff Jumpers are at the forefront of one of the great challenges of modern economics. Measuring productivity is central to economic policy — it’s especially crucial in the decisions made by the Federal Reserve — but we are increasingly flying blind. It’s relatively easy to figure out if steel companies can make a ton of steel more efficiently than in the past (they can, by a lot), but we have no idea how to measure the financial value of ideas and the people who come up with them. “Compared with the mid-1900s, goods production is not as important a part of our economy, but we continue to devote about 90 percent of our statistical resources to measuring it,” says Barry Bosworth, a Brookings Institution economist who is a leading thinker on productivity in the service sector.
Many economists have tried to break professional “knowledge workers” down into their component parts. It’s fraught enough with lawyers and accountants, Bosworth says, but it’s all but impossible with other professions, like doctors and teachers. “We don’t even try with education,” he says. In the meantime, the Bureau of Labor Statistics directly measures the productivity of only 60 percent of U.S. industries, which means that nearly half of our economic activity is unknown, including almost all of the fastest-growing sectors. If education and health care are not becoming more productive, as many economists fear, it will be hard to know if government policies to improve those sectors are working without knowing what to measure in the first place.
During the 20th century, industry started out in small workshops that created unique handcrafted products. Over time, they morphed into massive plants that churned out a countless number of identical units. Now there’s a synthesis. In the era of mass specialization, companies are using high-tech efficiencies to make customized products that each consumer finds especially valuable. This has enormous advantages for both consumers and producers, but the big problem it creates is that we don’t know how to do the math. Blumer, who, after all, is an accountant, told me that set formulas and financial spreadsheets are just not compatible with this new approach to work. He can only figure out what to charge his clients after spending a lot of (unbilled) time talking to them about their needs. But now that it’s clear that the fundamental nature of work has changed, it is fitting that a bunch of rogue outliers from one of the world’s oldest professions are helping guide the way.
【TIME 3 ENDS – 420 WORDS】
Source: New York Times
http://www.nytimes.com/2013/08/04/magazine/whats-an-idea-worth.html?hp&_r=0
Article 2: The End of the Suburbs
The country is resettling along more urbanized lines, and the American Dream is moving with it
By Leigh Gallagher July 31, 2013
【TIME 4】
A major change is underway in where and how we are choosing to live. In 2011, for the first time in nearly a hundred years, the rate of urban population growth outpaced suburban growth, reversing a trend that held steady for every decade since the invention of the automobile. In several metropolitan areas, building activity that was once concentrated in the suburban fringe has now shifted to what planners call the “urban core,” while demand for large single-family homes that characterize our modern suburbs is dwindling. This isn’t just a result of the recession. Rather, the housing crisis of recent years has concealed something deeper and more profound happening to what we have come to know as American suburbia. Simply speaking, more and more Americans don’t want to live there anymore.
The American suburb used to evoke a certain way of life, one of tranquil, tree-lined streets, soccer leagues and center hall colonials. Today’s suburb is more likely to evoke endless sprawl, a punishing commute, and McMansions. In the pre-automobile era, suburban residents had to walk once they disembarked from the train, so houses needed to be located within a reasonable distance to the station and homes were built close together. Shopkeepers set up storefronts around the station where pedestrian traffic was likely to be highest. The result was a village center with a grid shaped street pattern that emerged organically around the day-to-day needs and walking patterns of the people who lived there. Urban planners describe these neighborhoods, which you can still see in older suburbs, as having “vibrancy” or “experiential richness” because, without even trying, their design promoted activity, foot traffic, commerce and socializing. As sociologist Lewis Mumford wrote, “As long as the railroad stop and walking distances controlled suburban growth, the suburb had form.”
【TIME 4 ENDS – 297 WORDS】
【TIME 5】
Then came World War Two, and the subsequent housing shortage. The Federal Housing Administration had already begun insuring long-term mortgage loans made by private lenders, and the GI Bill provided low-interest, zero-down-payment loans to millions of veterans. The widespread adoption of the car by the middle class untethered developers from the constraints of public transportation and they began to push further out geographically. Meanwhile, single-use zoning laws that carved land into buckets for residential, commercial and industrial use instead of having a single downtown core altered the look, feel and overall DNA of our modern suburbs. From then on, residential communities were built around a different model entirely, one that abandoned the urban grid pattern in favor of a circular, asymmetrical system made of curving subdivisions, looping streets and cul-de-sacs.
But in solving one problem—the severe postwar housing shortage—we unwittingly created some others: isolated, single-class communities. A lack of cultural amenities. Miles and miles of chain stores and Ruby Tuesdays. These are the negative qualities so often highlighted in popular culture, in TV shows like Desperate Housewives, Weeds andSuburgatory, to name just a few. In 2011, the indie rock band Arcade Fire took home a Grammy for The Suburbs, an entire album dedicated to teen angst and isolation inspired by band members’ Win and William Butler’s upbringing in Houston’s master-planned community The Woodlands. Although many still love and defend the suburbs, they have also become the constant target of angst by the likes of Kate Taylor, a stay-at-home mom who lives in a suburb of Charlotte and uses the Twitter name @culdesacked. “If the only invites I get from you are at-home direct sales ‘parties,’ please lose my number, then choke yourself. #suburbs.”
There is still a tremendous amount of appeal in suburban life: space, a yard of one’s own, less-crowded schools. I don’t have anything against the suburbs personally—although I currently live in Manhattan’s West Village, I had a pretty idyllic childhood growing up in Media, Pennsylvania, a suburb twelve miles west of Philadelphia. We are a nation that values privacy and individualism down to our very core, and the suburbs give us that. But somewhere between leafy neighborhoods built around lively railroad villages and the shiny new subdivisions in cornfields on the way to Iowa that bill themselves as suburbs of Chicago, we took our wish for privacy too far. The suburbs overshot their mandate.
【TIME 5 ENDS – 400 WORDS】
【TIME 6】
Many older suburbs are still going strong, and real estate developers are beginning to build new suburban neighborhoods that are mixed-use and pedestrian-friendly, a movement loosely known as New Urbanism. Even though almost no one walks everywhere in these new communities, residents can drive a mile or two instead of ten or twenty, own one car instead of two. “We are moving from location, location, location in terms of the most important factor to access, access, access,” says Shyam Kannan, formerly a principal at real estate consultancy Robert Charles Lesser and now managing director of planning at the Washington Metropolitan Area Transit Authority (WMATA.)
As the country resettles along more urbanized lines, some suggest the future may look more like a patchwork of nodes—mini urban areas all over the country connected to one another with a range of public transit options. It’s not unlike the dense settlements of the Northeast already, where city-suburbs like Stamford, Greenwich, West Hartford and others exist in relatively close proximity. “The differences between cities and suburbs are diminishing,” says Brookings’ Metropolitan Policy Program director Bruce Katz, noting that cities and suburbs are also becoming more alike racially, ethically, and socio-economically.
Whatever things look like in ten years—or twenty, or fifty, or more—there’s one thing everyone agrees on: there will be more options. The government in the past created one American Dream at the expense of almost all others: the dream of a house, a lawn, a picket fence, two or more children, and a car. But there is no single American Dream anymore; there are multiple American Dreams, and multiple American Dreamers. The good news is that the entrepreneurs, academics, planners, home builders and thinkers who plan and build the places we live in are hard at work trying to find space for all of them.
【TIME 6 ENDS – 304 WORDS】
Source: TIME
http://ideas.time.com/2013/07/31/the-end-of-the-suburbs/#ixzz2aivH7ZvD
【PART II: OBSTACLE】 Article 3: Why Is Insider Trading Even Illegal?
By Christopher Matthews July 26, 2013
Ever since the financial crisis, U.S. regulators have been hard at work putting away Wall Street financiers who play fast and loose with the law. The only problem is, those Wall Street crooks that the feds have been cracking down on aren’t those who actually caused the financial crisis, but a different breed of white collar criminal: inside traders.
As Charles Gasparino explains in his new book on insider trading, it’s largely coincidental that the fed’s recent crackdown on the practice — which includes yesterday’s indictment of the hedge fund SAC Capital – is taking place in the wake of the worst economic recession in several generations. But the coincidence does provide opportunity to ponder why — given the fact that insider trading isn’t anywhere near as pernicious a crime as some other white collar shenanigans — the government spends so much time and energy trying to stop it.
In fact, there are large number of professional economists and legal theorists — albeit generally of the libertarian persuasion — who feel that insider trading shouldn’t be illegal at all. Doug Bandow, a senior fellow at the Cato Institute, for example, writes:
“The objective of insider trading laws is counter-intuitive: prevent people from using and markets from adjusting to the most accurate and timely information. The rules target “non-public” information, a legal, not economic concept. As a result, we are supposed to make today’s trades based on yesterday’s information.
Unfortunately, keeping people ignorant is economic folly. We make more bad decisions, and markets take longer to adjust.”
He goes on to argue that the goal of insider trading laws, which is to promote a fair stock market, is misguided. Every day stock market participants trade securities based on incomplete information. In nearly every transaction, one party has superior information than the other. Furthermore, it’s only possible to enforce insider trading laws when a trader decides to buy or sell a security. But the decision to not trade a security is sometimes equally important. If your inside source at a company whose stock you don’t own gives you a peak at a financial statement, and it’s disappointing, you will decide not to buy that security. And that decision is illegal, but can never be proven. Writes Bandow, “You’re entitled to rely on the best and most timely information so long as you do nothing. Such a rule is not likely to improve private investment decision-making or promote more efficient markets.”
Finally, Bandow argues that insider trading laws prevent the market from reflecting all available information about securities. By preventing those who know more about a stock from acting on that information, you impede the natural tendency of markets to set a fair price.
These arguments are not new. Ever since 1934, when insider trading became illegal in the United States, theorists have argued about the merits of such restrictions. But what may come as a surprise to many is that even though insider trading has technically been illegal since the 1930′s, regulators have only been enforcing the law with vigor for the past 30 years. That changed radically in the 1980s, when several new laws were passed to stiffen penalties for insider trading, and regulators started bringing many more cases against Wall Street.
So why was there a sudden shift against insider trading in the 1980s, and what is the rationale behind these laws? While it’s true that, as Bandow argues, insider trading deprives markets of some pertinent information, allowing insider trading would weaken other pillars of a modern securities market.
One such organ of modern financial system are market professionals like hedge fund, pension, and mutual fund managers. These are the people who spend significant time and resources digging up non-inside information about the economy and individual firms. For instance, big hedge funds often produce vast amounts of research concerning companies using publicly available data from the government or private institutions. This information helps make markets more efficient and helps to price assets more accurately. But if insider trading were legal, it’s possible that all this work may not be worth it when competing with insiders and those able to get hold of insider information. If these market professionals leave the market as a result, it could lead to much less efficient markets.
Second, insider trading most certainly puts the average investor at a disadvantage. If the nonprofessional investor feels that he can’t participate in the markets without getting ripped off, he’ll also leave the markets. Just as with professional money managers, this will have the effect of reducing liquidity. Reduced liquidity in turn means that those who do invest will pay less for a stock because of the risk that they won’t be able to sell it when they want to — and this in turn makes the cost of capital for firms more expensive and the economy less efficient overall.
Another effect of decreased liquidity is on so-called market makers: the folks who hold a large inventory of a particular security and will buy that security slightly cheaper than it will sell it. That price difference is called the “spread,” and it represents the market maker’s profits. Fewer participants in the market mean wider spreads, as market makers have to make up for decreased volume. Bigger spreads mean less efficient markets — as less capital is getting to those who will most efficiently make use of it.
The conclusion that researchers from the Federal Reserve Bank of Atlanta came to when looking at all these effects is that insider trading laws do indeed present a trade off. On one hand, insider trading laws distort the market by making it more difficult for prices to reflect all available information. On the other hand, a developed and modern securities market relies on the participation of different types of investors with different motivations and levels of expertise — and without insider trading laws many of these types of investors would stop participating.
And this explains why it takes so long for nations to develop insider trading laws. (Insider trading rules were laughably lenient in the U.K. until 1980, for example.) When an economy is young, it often doesn’t have a developed financial services sector with people whose dedicated job is to make markets or trade for a living. Markets in such economies have few sources for information about the economy and the individual companies, and so it is important for inside information to be able to filter its way through to markets. But once an economy is mature, it can forgoe these sources of information in the name of more robust markets.
Ultimately, however, Congress didn’t establish insider trading laws because of such refined economic theories. For better or worse, Congress doesn’t set policy by soberly analyzing economic models. Often its actions simply reflect the emotional will of the American people. And Americans like fair play. With this in mind, it’s easy to see why insider trading rules contain some of the contradictions Bandow emphasizes, and why we often see them most strictly enforced during times of financial excess — even when that excess isn’t a result of insider trading.
【OBSTACLE ENDS – 1178 WORDS】
Source: TIME
http://business.time.com/2013/07/26/why-is-insider-trading-even-illegal/#ixzz2aX9dSyhD
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发表于 2013-8-1 21:44:08
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