Carnival of the Capitalists 5-15-2006

Step right up! Step right up and behold the wonder of the Carnival of the Capitalists, a traveling weekly roadshow that celebrates the many, many ways in which we earn, manage and spend money to educate and entertain you. Depending on your politics and your mood, they may make you cheer, boo, laugh, cry or scream, but above all, they will make you do one thing… think!

Posts are self-selected, i.e., bloggers submit their best posts of the week, and all those that meet the guidelines are accepted. I have marked my "editor’s choice" in each category with a simple asterisk (*) for those who may want to filter their reading a bit. If your post didn’t get run, it’s most likely because either a) it wasn’t "substantially original" (links and re-posts of others’ articles and posts don’t cut it), or b) you submitted more than one post (you’re supposed to pick your best, not make the host do it).

So without further ado, on with the show!

The Economy

  • * Jewelers Dangling takes a look at how the 37% increase in the price of gold since January is impacting jewelry businesses. I love stories like this that take the impersonal numbers we read on the market pages and make them personal.
  • Is SOX Dragging Down the US Economy? Yes, says Professor Bainbridge, and new legislation is intended to ease Section 404 requirements for entrepreneurs.
  • The Fed’s New Conundrum: Slowing Housing explains the thinking behind last week’s 1/4 point interest rate hike.
  • Corporate Debt Financing Is on the Rise, which might be a good thing if it were being used to fund revenue-generating projects, but the fact that it’s being used to fund acquisitions has blogger David Foster concerned.
  • An Interview of Abundance argues that we need to have more free-market privatization of health care, not less, and that one of the keys is to have patients make more adult choices about their care. It’s thought-provoking, but I think the interviewee misses the mark on why so many people are uninsured. I’ll be leaving a comment there.
  • Getting Transparent continues in the same vein as the previous post, saying that pricing has to become transparent in order for consumers to make informed, rational healthcare decisions.
  • Bad Loans in China reports that more than $900 billion is invested through the Chinese economy in non-performing loans, mostly to state-owned enterprises. What does this mean for those who are so eager to get a piece of the action in China? Read and find out.
  • Wage Increases for State Workers says that urban workers are reaping the benefits of Chinese economic growth and leaving migrant workers out in the cold.
  • Zimbabwe Inflation Hits 1,000% – Imagine using a wheelbarrow to haul enough cash for a simple shopping trip. Yikes! That’s what tyranny tends to do to a country.
  • Iranians Blaming Ahmadinejad , Nukes For Sluggish EconomyThe Khaleej Times reports that Iranian businessmen aren’t happy about the current extremist president’s recent isolationist moves.

Economics and Capitalism

  • * The Friendly Version argues that capitalist theories of justice are more substantial than leftists, or even most right-wingers, give them credit for. In particular, he explains how they can give rise to a duty to implement a Friedman-style "negative income tax", or some other equivalent of an unconditional basic income
  • Social Justice – Who’s In the Right? Are $10-million-dollar salaries justified or not? This blogger says that the only true social justice is "where you receive resources and popularity proportionally to the perceived value of your contributions, and give proportionally to how you perceive other people’s work."

The Market / Investing

  • * Return on Capital & Equity Growth explains two of Warren Buffett’s favorite indicators that demonstrate how fast a company can grow the money it has to invest in itself.
  • Keep an Eye on the Fundies gives an overview and offers a template for keeping track of a company’s fundamentals.
  • Vanguard STAR Fund Performance Analysis shows how just managing the allocations in this balanced fund has produced an 11% higher return over 10 years than an individual investor would have realized putting money in the same secondary funds at current allocations. It never ceases to amaze me how much money can be made just by shuffling it around.
  • Ultimate 2006 Berkshire Hathaway Annual Meeting Guide provides links to all the best meeting notes, press coverage and photos from Warren Buffett’s annual confab. The next best thing to being there.
  • The Week Ahead is Tom Hanna’s weekly guide to the announcements and events that impact our economy.


  • * Please Stop with Your Chinese Math explains that small numbers aren’t necessarily related to easy success and urges entrepreneurs to stop presenting low percentages of a huge market potential to investors as if that means it’s a sure thing.
  • Entrepreneurship Gap says that Gen X’ers are not starting businesses at as high a rate as those before or after them, but that it may be a part of where they are in their life at the moment more than anything. Jeff goes on to summarize five ways to start a company without quitting your day job.


  • * High Gas Prices Are Overrated makes a compelling argument that gas prices are not really having a substantive impact on either personal spending or the cost of doing business.
  • What’s the Big Deal About Gas Prices? This blogger has a slightly different take, saying that gas prices cut into the disposable income of the bottom 60% of wage-earners, who don’t have much disposable income to begin with.
  • Congressionally Mandated Shortages looks at the Energy Price Protection Act of 2006 that is supposed to prevent "price gouging". Of course, it doesn’t actually define price gouging – they have s
    ix months to figure that out. I buy Hamilton’s argument to a point – the thing he’s missing here is that neither consumers nor business owners always act completely rationally, fully considering the long-term consequences.
  • My Crystal Ball Knows All reports that one year after price caps on gasoline were implemented in Hawaii, legislators are eliminating the caps under public pressure. This is what happens when politicians try to control the market.
  • Bursting Into Flames: The World’s Battle for Oil says that for all we may rail against it, the fact is simple: we as individuals have to decide to consume less oil and spend more money on alternative fuels.
  • Climate Change vs. CO2 Capture Technology makes the case for CO2 capture technology in order to prevent CO2 emissions from reaching critical levels in about 35 years.

Career / Personal Development

Human Resources


  • * Gresham’s Law and Leadership makes a compelling case that "the only way to produce a working environment worthy of a civilized nation is to value some things more highly than financial results."
  • * Meet the Nick Carr of Organizational Change Management – Cambridge Professor Chris Grey’s new paper, "The Fetish of Change", challenges the idea that constant change is a given and says that the practice of change management has been largely a failure.
  • Six Sigma and Employee Satisfaction reports on a recent study showing that focusing purely on customer satisfaction and financial results is short-sighted, and that employee satisfaction must be a consideration for long-term success.

Intellectual Property


Personal Finance

  • * Home Improvement Investment lists ten home improvements that should increase the value of your home by more than they cost. The ROI varies greatly depending on the type of improvement and where you live, so if you’re doing this to improvie your home’s value, and not just for your personal taste, invest wisely.
  • Another Advantage of Education: It Saves You Money on Your Car Insurance – In states where rating factors can legally include education and occupation, insurers are now charging drivers in certain jobs lower insurance rates. Politically incorrect? Maybe, but the facts are the facts.
  • Dance Dance Revolution shows that many of the same strategies for a healthy diet are parallels of healthy money management.
  • Time for Medical Checkups says that freelancers need regular checkups, just like employees do, and offers some tips on how to find the time and money for them.

Real Estate

Business Blogging

  • * Business Ideas: Bloggers As Partners shows how to use blogs to identify and connect with potential business partners. I love seeing stuff like this that helps expand the view of new media tools beyond just journalism and marketing.
  • When Blogging Meets the Law asks if the 500-word legal disclaimers found on the comment submission forms of many Fortune 500 blogs detract from the blogging experience. I suppose it might if I actually read them.


  • * Massively Multiplayer Innovation says there are organizational lessons to be learned from massively multiplayer online role-playing games (MMORPG) like World of Warcraft and Anarchy Online (my personal preference).
  • How to Win Friends & Influence People is, in my mind, still the best book ever written on the topic of "networking". This 19-year-old entrepreneur offers a brief summary and a fresh perspective on it.
  • Figure and Ground looks at the growing field of ergonomics. Particularly funny is the study which showed that people apparently make subconscious attempts to ingratiate themselves to their computer.
  • Karl Rove at the Salem Communcations Annual Meeting is Jack Yoest’s humorous account of how he spent his wedding anniversary, including an intriguing quote from a Chinese academic about Western culture. If that doesn’t pique your curiosity, nothing will.
  • For a Psychic, He Doesn’t Seem to Think Very Far Ahead shows why clairvoyance may be over-rated. Very funny.
  • Series 7 is Joshua Sharf’s personal account of the cram course he’s taking to prepare for the Series 7 license. Also very funny ("I’m sure there must be films noir where the husband and the femme fatale can only raise the money to get to Brazil by getting the bearer bonds out of the unsuspecting wife’s safe deposit box."), but practical probably only if you happen to be cramming for the Series 7 yourself.
  • The Hypocrisy of Anita Roddick comes down hard on the Body Shop founder who’s calling for a consumer boycott of Nestle, who is a major shareholder in L’Oreal, which now owns the Body Shop. This "guilty by association" chain stretches just a little too far for me – ’tis the nature of the networked world in which we live – but decide for yourself.
  • We’re Losing in Iraq, Just Like We Lost in Vietnam – Chuck says that there is good news coming out of Iraq every day, but the mainstream media chooses not to cover it in favor of personnel changes on "The View" and who got kicked off "American Idol". I think what frustrates me is the lack of balance – we have individual shows and commentators that all demonstrated obvious strong biases, but virtually no one in the mainstream media presenting a balanced view.
  • Nobel Prize Economics Game “Trade Ruler” shows that Wendy Boswell apparently has a penchant for unfair trade practices. I want to play!

That wraps up this week’s Carnival of the Capitalists – I hope you enjoyed the show! Next week’s carnival will be hosted at The Integrative Stream. To learn more about the Carnival of the Capitalists, including how to subscribe, how to submit a post, or how to host a future edition, visit

And if you like the carnival format, I also invite you to add the Carnival of Entrepreneurship, Carnival of Marketing and the new Carnival of Business to your weekly reading.

Personal note: Sorry it’s late – in retrospect, hosting a carnival at the end of a three-day weekend during which I didn’t touch the computer probably wasn’t such a great idea. Future hosts take note.