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Archive for the ‘Business’ Category

I’ve long wondered why some big company doesn’t set up shop in Detroit. Real estate is cheap. You’ve got a major airport, freeways, a football, basketball and baseball team and a large downtown full of office space. Seems like a great opportunity.

Well we know that no one has done that yet but here’s a great article in the New York times about small businesses setting up in Detroit. A creperie is among these new small businesses. Who would have thought?

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You find out the most interesting things in articles detailing the fall of financial institutions. I found out this about failed bank Washington Mutual (WaMu):

“Someone in Florida had made a second-mortgage loan to O.J. Simpson, and I just about blew my top, because there was this huge judgment against him from his wife’s parents,” she recalled. Simpson had been acquitted of killing his wife Nicole and her friend but was later found liable for their deaths in a civil lawsuit; that judgment took precedence over other debts, such as if Simpson defaulted on his WaMu loan.

“When I asked how we could possibly foreclose on it, they said there was a letter in the file from O.J. Simpson saying ‘the judgment is no good, because I didn’t do it.’ “

Well you know, WaMu really got what they deserved.

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Founder Visas

Here’s another interesting article on Slate talking about a proposal to create an immigration classification for entrepreneurs.

He wants the government to create a new immigration class for founders of new firms. Every year, Graham’s “Founder Visa” program would let in 10,000 immigrants who’ve shown a plan for starting a new company. These people would be barred from working at existing companies—in other words, they wouldn’t be “taking American jobs.” Instead, Graham argues, they’d be creating jobs: “If we assume four people per startup, which is probably an overestimate, that’s 2,500 new companies. Each year,” Graham writes. “They wouldn’t all grow as big as Google, but out of 2,500 some would come close.”

I have to admit that the above proposal sounds good. One of the reasons I’m reluctant to embrace immigration reform in general is that usually the reform is focused on increasing the immigration numbers for desirable high-paying jobs. A lot of people assume talks of reform are focused on the undesirable jobs that Americans don’t want; that isn’t the case. It’s about keeping wages artificially lower than they would be in the tech industry and it’s about an assumption that Americans are not as capable of performing high-tech jobs as foreigners.

I have known many a Computer Science graduate in America who have not been able to find work. Is that a problem with our education system in America? I believe it almost certainly is. Again from the article:

Why do American tech firms need so many immigrant employees? Because there aren’t enough native workers to fill the jobs tech companies need. According to the National Science Foundation, about 60 percent of doctorate degrees in engineering at American universities are awarded to foreign students who are in the country on temporary visas (PDF). And foreign workers are responsible for some of the tech world’s signature innovations.

I think it’s an important question to ask why our American schools can only send students that make up only 40% of the doctorate degrees in engineering at American universities. I’m making the assumption that 60% of the foreigners are more qualified than their American counterparts, and I’m asking why that is. Can we acknowledge that our education system may have flaws.

It justs strikes me that if we give up on Americans ever fulfilling the American dream then we do our country a disservice.

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I haven’t read this myself yet, but Jake highly recommends this Rolling Stone article on the Goldman Sachs influence in various bubbles in the U.S. economy.

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With United Airlines announcing they will charge extra-wide passengers with an extra seat (if it’s available), William Saletan comes up with a pretty good solution.

Two days ago, I spent seven hours on a United flight to London. The passenger in front of me was reclining the whole way. To stretch my legs, I had to angle them diagonally.

But if your legs don’t fit, United doesn’t ask you to buy an extra seat. It offers you a deal. On Monday, I’m going to fly back to Washington. I’m sitting here looking at my return flight online, and United is inviting me to buy “Economy Plus” (“the comfort of extra legroom near the front of the Economy cabin”) for “as low as $69.00.” That’s about one-fifth the price of the ticket.

How much leg room would I get? “Up to five extra inches,” says the company.

Why shouldn’t fat people have a similar option? Most of them don’t need two seats side-by-side any more than we long-legged guys need two seats front-to-back. Like us, they just need a few extra inches.

If United can swap out a row of three normal coach seats for two wide ones, two fat people should be able to buy those seats for an extra 50 percent instead of an extra 100 percent.

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The agency liquidating Bernard Madoff’s brokerage says the $2.6 billion it has on hand is enough to satisfy all legitimate claims by victims of the money manager’s $65 billion Ponzi scheme.

This is good news, right? I was flabbergasted by the following:

Some Madoff investors are up in arms about SIPC’s decision, announced by Picard at a Feb. 20 creditors’ meeting, to limit victim claims to “net equity” — cash invested minus sums taken out. That formula ignores profit reported on customer brokerage statements for the past 20 years, gains that were fictitious because Picard found no evidence Madoff had made any trades or profits going back decades.

I can’t think of any reason why the victims should be compensated with the money that never existed. Am I cold-hearted? I am not in any way saying that the Madoff victims are responsible for their victim-hood, but let’s be honest there were many people who invested and lost money in the past year from completely legitimate investment funds. Rewarding people who participated in a scheme, granted unwillingly, makes no sense. Why should they profit when many others didn’t.

A lot of people have blamed the victims of Madoff for being greedy. I think that is unfair to people who have clearly suffered quite a bit by the selfishness of this man. Now, I’m thinking that maybe they are a little greedy.

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How does such a large Ponzi scheme work without attracting attention? For insight into the inner workings of a highly functional yet dysfunctional office, this article is an amazing read detailing the Bernard Madoff scandal. I’ve worked in an office with an eccentric CEO, and I know Jake has too. What if all the weirdnesses actually add up to outright fraud? It blows my mind.

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