“In 1969, a 14-year-old Beatle fanatic named Jerry Levitan, armed with a reel-to-reel tape deck, snuck into John Lennon’s hotel room in Toronto and convinced John to do an interview about peace. 38 years later, Jerry has produced a film about it. Using the original interview recording as the soundtrack, director Josh Raskin has woven a visual narrative which tenderly romances Lennon’s every word in a cascading flood of multipronged animation. Raskin marries the terrifyingly genius pen work of James Braithwaite with masterful digital illustration by Alex Kurina, resulting in a spell-binding vessel for Lennon’s boundless wit, and timeless message…”

The existence of black markets in virtually every economy on the planet is a testament to human resourcefulness and natural entrepreneurship. For those that are building tunnels under Gaza’s border with Egypt, $100,000 and a few months work can generate up to $10,000 a day in fees, and help to provide critical supplies and less critical desires into the struggling Gaza strip. One economist has estimated that roughly 90% of the annexed economy is driven by these covert smuggling operations. Unfortunately, along with tea, cows, washing machines, and gas flow AK-47s, drugs, and anti-aircraft missiles as soaring Gazan demand meets profitable Egyptian supply…

Assuming that our lot in life is simply a function of hard work, acquired skills, and a bit of good luck, the only real difference between liberals and conservatives is the degree to which we believe that those who fall on hard times – for whatever reason beyond their control – deserve a helping hand. How we publicly spend on that assistance is not only a question of socio-political philosophy, but also a matter of practical statecraft. Whether “leveling the playing field” or simply “setting the rules of the game”, pharohs, kings, and presidents have all made use of their regulatory oversight with varying degrees of success. This piece in the Boston Review by noted macroeconomist Dean Baker explores the …

The latest in a long series of articles on the Rational Post sharing a common refrain: those who forget economic history are condemned to repeat it…
Originative sin: the future of banking
By John Plender at FT.com, January 4 2009
For the late John Kenneth Galbraith, an acute observer of market folly, finance and innovation were fundamentally incompatible. Every new financial instrument, he said, “is, without exception, a small variation on an established design, one that owes its distinctive character to the … brevity of financial memory”. The world of finance “hails the invention of the wheel over and over again, often in a slightly more unstable version”.

A eulogy for 20th century finance by one of its greatest poets…
The End of the Financial World as We Know It
By MICHAEL LEWIS and DAVID EINHORN
Americans enter the New Year in a strange new role: financial lunatics. We’ve been viewed by the wider world with mistrust and suspicion on other matters, but on the subject of money even our harshest critics have been inclined to believe that we knew what we were doing. They watched our investment bankers and emulated them: for a long time now half the planet’s college graduates seemed to want nothing more out of life than a job on Wall Street.

For those still convinced that the Federal Reserve is the lynchpin in some grander economic conspiracy, this brief history of central banking in America should put some of your doubts to rest…
Myth #1: The Federal Reserve Act of 1913 was crafted by Wall Street bankers and a few senators in a secret meeting.
On the Georgian resort hideaway of Jekyll Island (which has some excellent golf courses, by the way), there once met a coalition of Wall Street bankers and U.S. senators.  

This counter-factual analysis of China’s path toward capitalism reveals that the country’s biggest cities aren’t necessarily the engines of dynamic Asian progress that modern commentators have suggested, and that the country’s future may lie in rural areas where entrepreneurship and competition have thrived since Deng Xiaoping’s Four Modernizations…

This brief history of regal extortion draws some parallels to today’s “sinister” Federal Reserve, though the links are less tenuous than Dr. Hoye and others often suggest…

As the Annus Horribilis finally comes to an end, many forecasters in the policy and financial communities have been left licking their wounds. This effort from Moises Naim and his team at Foreign Policy tries to capture the best of the worst and is certainly worth a look…

Prescient words from Lebanese poet Khalil Gibran in 1934…
Pity the nation that wears a cloth it does not weave,
eats a bread it does not harvest,
and drinks a wine that flows not from its own wine-press.
Pity the nation that acclaims the bully as hero,
and that deems the glittering conqueror bountiful.
Pity the nation that despises a passion in its dream,
yet submits in its awakening.

Over-the-counter gambling on the markets has been around much longer than modern derivatives pundits would have you believe. The New York Times was warning against “casino capitalism” as early as 1905, when side bets on market movements were both commonplace and unregulated, and won the attention of an American government still swaggering after its victory over the mega-trust companies of the late 19th century. The following 60 Minutes segment discusses both the nature of CDS instruments and how they’ve become just as dangerous today as they were in the “bucket rooms” or gambling houses of the 1920s…

“Despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression…” This advice from the Harvard Economic Society on November 2, 1929 illustrates that unbridled optimism in the capital markets was just as dangerous 80 years ago as it is today. Modern financial crises aren’t simply failures of regulatory oversight or inherent structural weakness. They’re a combination of the cyclicality of human behavior, the dangers of unbridled leverage, increased speculation by unsophisticated investors, and our complete lack of financial memory beyond 20 or 30 years.

As institutions around the world tighten their belts in response to the coming economic storm, we can only glimpse from their preparations the full breadth and depth of of “The Great Correction” and the many ways capital markets dictate the rules in our daily lives…

While the world comes to terms with yesterday’s historic call for change, Nouriel Roubini and his team have pulled together a laundry list of the many great challenges that lie ahead…

“Spectacular episodes in financial history” come about more often than we might expect, and certainly more often than we remember. Harvard economist John Kenneth Galbraith wrote a brilliant primer on financial speculation in the early 1990s, suggesting that our memory for financial disaster was far more limited than our intelligence might otherwise suggest:

Keynesian reflections from 1919 on the first era of true globalization, complete with bountiful trade, unparalleled upward mobility, liquid labor markets, secure international travel, and a blissful ignorance of the fragility of this new 20th Century World Order…
What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914! The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot. But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes, for whom life offered, at a low cost and with the …

See below for yet another in a series of elaborate digital frauds. Somewhat surprising is the considerable improvement in grammar and argument – it may even have been written by a native English speaker. Not surprising is the use of a decade old framework – the Nigerian 419 scheme – to lure unsuspecting Westerners into providing key banking information in exchange for a share in a large and unattributed overseas estate. The “four one nine” comes from the section in the Nigerian penal code which deals with such frauds. To hear Der Spiegel tell it: “A 419 is a mass crime, a money generator, and could aptly be described as the use of globalized methods as revenge by the losers …

It isn’t everyday that mega-corporations act outside of their own financial interest. It simply isn’t in their design. But suppose that it was possible to expand profitability by reducing environmental impact, sourcing sustainable products, and pushing “green” across an entire supply chain. Such is the latest logic out of Bentonville, Arkansas, where the world’s largest retailer and private sector employer is taking a decidedly new approach to the age-old challenge of perpetual corporate growth, and blazing a profit- and eco-friendly trail for other industrial titans to follow…

Social entrepreneurship is at the heart of Capitalism 2.0, and the country’s leading minds are finally demanding a full system upgrade…
Thoroughly Modern Do-Gooders
By DAVID BROOKS
Fashions in goodness change, just like fashions in anything else, and these days some of the very noblest people have assumed the manners of the business world — even though they don’t aim for profit. They call themselves social entrepreneurs, and you can find them in the neediest places on earth.
The people who fit into this category tend to have plenty of résumé bling. Bill Drayton, the godfather of this movement, went to Harvard, Yale, Oxford and McKinsey before founding Ashoka, a global change network. Those who follow him typically went to some fancy school and …

An expanded look at the role corporations and hospitable business environments have played in stabilizing the anarchic system of international relations. This work is based on an earlier paper which focused on the rise of the corporation as a key variable in the calculus of global peace and security…