Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are eight fascinating pieces I read this week.
Necessity is the mother of invention
Stephen Schork explains why the world is finding so much oil. This is simple, but it's really important to how basic economics works. Via Business Insider:
"Our expressed skepticism was (and still is) based on common economic sense that high prices are indeed the cure for high prices. The mirror of this economic axiomatic is... low prices are the cure for low prices, which in the case of our Viennese fund manager, led him to the false messiah of peak oil. The reason why no new significant oil deposits were discovered in the 1980s and 1990s is because... at $20 a barrel it did not make any economic sense to go out and try and discover new oil. In hindsight, you drive oil to $147 barrel and lo and behold, five years hence the world is swimming in oil. It really is that simple."
How to eliminate poverty (in theory)
Switzerland is proposing a basic income policy. Annie Lowrey of The New York Times writes:
Activists delivered 125,000 signatures -- enough to trigger a Swiss public referendum, this time on providing a monthly income to every citizen, no strings attached. Every month, every Swiss person would receive a check from the government, no matter how rich or poor, how hardworking or lazy, how old or young.
Perception and reality
Cullen Roche comments on government job creation:
Barack Obama is on pace to preside over the only Presidency in the post-war era to average negative government employment growth. Since 2009 when he took office the total size of the government workforce has declined by 706K jobs. That's about 3.1% of the government workforce. That's not a huge number, but let's put that into perspective. During Ronald Reagan's first 5 years in office the government created 623K jobs which expanded the size of the government workforce by 3.8%. Ronald Reagan was a huge creator of government jobs. In fact, over the course of his entire presidency the size of the government workforce expanded by 9%.
Bill Gates comments on those trying to make the world better with technology:
Asked whether giving the planet an Internet connection is more important than finding a vaccination for malaria, the co-founder of Microsoft and world's second-richest man does not hide his irritation: "As a priority? It's a joke ... Take this malaria vaccine, [this] weird thing that I'm thinking of. Hmm, which is more important, connectivity or malaria vaccine? If you think connectivity is the key thing, that's great. I don't."
Fannie Mae and Freddie Mac have, in aggregate, come close to repaying their entire bailout:
Fannie Mae and Freddie Mac will pay $39 billion to the U.S. Treasury by the end of the year, the companies said Thursday, putting the firms close to having paid as much as the government injected in the mortgage-finance giants -- nearly $188 billion -- to keep them afloat through the housing bust ...Together, the companies will have paid more than $185 billion in dividend payments by year-end.
That's one way to think of it
Bloomberg asks gold bug Peter Schiff why some of his predictions haven't come true. He responds:
"If I say this is going to happen and then it all happens that way, but the markets react differently because they don't really understand what just happened, that was my mistake in overestimating the intelligence of everybody else to figure stuff out," he said.
Bloomberg writes about a new baby boom in states with high economic growth:
Rising fertility rates in states such as South Dakota, where unemployment is 3.8 percent, are prompting some demographers and economists to predict a reversal of the nationwide decline in fertility that coincided with the recession and its aftermath. More births would boost the economy by spurring demand for new homes and goods from pregnancy tests and diapers to furniture and cars.
Stocks for the long run
In an old video, Warren Buffett tells the story of turning $40 into $5 million:
Enjoy your weekend.
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