CategoryEconomics

Factfulness

If you’ve never seen Hans Rosling speak, scroll down, click play, and be amazed. Before Hans passed away, he wrote down his big learnings in Factfulness. This is one one those books everyone should be read. It’s a easy read, and insightful and hopeful, and at the same time, frightening. The key lesson is that almost no one really knows what is going on in the world. Population growh...

Creative Capital

Back in 1992, at age 22, I started my first company. Before cellphones. Before the Web. Before broadband. Before everyone had an email address. Before the Lean Startup. But what I (and others) took for granted was a system of Angel investors and venture capitalists. I didn’t think twice back then where that system came from. I didn’t consider whether the same system funded Edison...

Bernanke: The Courage to Act

Here in the midst of the Coronavirus Pandemic and attached economic crisis, it seemed a good time to read Ben Bernanke’s memoir of the Panic of 2007-2008. Like most of the economics history books I’ve read and posted about, the stories are interesting but the writing quite dry. Too many words devoted to unnecessary details. But ideas that are well worth remembering and learning from...

Americana: A 400 Year History of American Capitalism

Economic history books tend to be dry. Not so with Americana: A 400 Year History of American Capitalism. The author does a very good job of weaving threads of stories together to keep the narrative fast paced and interesting. The story spans from the Mayflower in the 1600s through the iPhone in 2007. I previously posted the Mayflower story, as I hadn’t before seen details on how the oft...

Sharing Equity with Employees

There are a few aspects of venture capital whose origins are lost to history. One of these is the 20% stock option pool. Or more simply, the idea that everyone in the startup should own (at least a small amount of) the equity. Does this idea date all the way back to Rock and Davis, or did it come later? Why 20%? Why not 10% or 33% or 50%? Was this idea ever debated, or did one VC decades ago tout...

America Started with Capitalism

The story of the Pilgrims and the Mayflower taught to every American child in every American school is less than half of the actual story. Obviously there are a lot of day to day details left out, but the most striking of the omissions is the fact that the endeavor was a for-profit business. The corporate side of this story is told in the first chapter of Americana: A 400-Year History of American...

Pandemic Response per GDP

McKinsey latest report on the pandemic response in Africa includes this very interesting chart of the size of the government responses to the pandemic as a percentage of GDP: It is interesting as South Korea and Italy both spent very little, with vastly different outcomes. It is interesting as if there is any correlation here, it is that the smaller the outbreak, the less spent on stimulus. Thus...

Socialism with Billionaires

The coronavirus pandemic is laying bare quite a lot of the normally hidden features of our modern capitalism system. And the government reactions to the economic shutdown is demonstrating that we don’t actually live in an capitalistic system, but something of a hybrid with the incentives and rewards of capitalism (when times are good) but the downside cost of socialism (when the economy...

Economy 2020?

APRIL 2020 – As I write this, we are a few days from the projected peak day of death from the pandemic here in the United States. With that “light at the end the tunnel” economists are starting to predict what comes next for the economy. McKinstry this week published a prediction. TL;DR: U.S. GDP drops by 8%-13% in 2020. Personally I don’t understand how 15%+ unemployment...

50% Unemployment (or more)

What comes next from the global pandemic? Unfortunately, it looks like we’re headed to massive unemployment. At least the 25% of the Great Depression. Possibly more, if the lock downs continue for 6 or 9 months. From today’s Seattle Times, the following chart shows the number of jobs at risk in King County (where Seattle and Bellevue are located), Snohomish (the northern suburbs, and...

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