The conscience of a liberal

Why do you study economics? For making big money? For learning to be a CEO? For changing our society? The author believes that economics should be used to improve the living standard of people. This book focuses on the health care and income inequality. These issues happen to be the concern of HK people as well. Perhaps we may get insights from it.

In his book, Krugman finds out that it is the institutions and norms that account for the unique income inequality and the under provision of health insurance/care in the United States. Under the “small government big economy” principle, people believe that the welfare state is illegitimate as high tax and the extensive provision of free lunch remove the incentive to work and innovate. People tend to argue that:

“life may be unfair, but it’s not the job of the government to ride the world of injustice. If some people can’t afford health insurance, this argument would assert, that’s unfortunate, but the government has no business forcing other people to help them out through higher taxes. If some people inherit genes that make them vulnerable to illness, or acquire conditions at some point in their lives that make it impossible for them to get medical insurance from then on, well, there are many strokes of bad luck in life. The government can’t fix them all, and there’s no reason to single out these troubles in particular (p.214-215).”

But is it morally right to let it be like that?

At the end of his book, the author declares that:

“I believe in a relatively equal society, supported by institutions that limit extremes of wealth and poverty. I believe in democracy civil liberties, and the rule of law. That makes me liberal, and I’m proud of it (p.267).”

What is your believe?

Krugman, Paul (2009). The conscience of a liberal. NY: W.W. Norton & Company, Inc. 

收到巴菲特的回信

作者在書中分享了他的投資心得。他「追求零風險」，所以他投資股票的原則是「只要有超過一個不確定性，倒不如放棄」(p.62)。對他來說，投資某公司的股票即是投資在該公司的業務發展之上，他會用心看該公司的業績報告和年報，仔細研究該公司的新產品及市塲前景。就好像他認真地分析中移動如何重組其業務，更不惜求教專業人士有關3G牌的各種不同制式等。他的分析更涉及宏觀層面，如內地政策及經濟發展等。既然是要如此小心謹慎的作出研究，投資者是不可能亦「不必認識所有的上市公司，只須集中掌握幾家公司的資訊，作出正確評估，便可以了。」(作者推介巴菲特的名言 p.77)。

作者對傳媒「全民皆股」、「學生股神」等報導感到不安。他不贊成投資講求回報快，投資並非賭博；公司業務的回報是需要一點時間。他更認為金錢取之於社會，也應用之於社會，好盡其社會責任。

無獨有偶，這本書的作者對投資理財的看法跟前一篇所介紹的十分相似。他也認為我們得投資在自己身上，所謂「三日不看書，說話空洞；一個月不看書，做人沒方向；一年不看書，做人失了意義(p.92)。」他建議大家不妨多看書，而且好書不妨多看幾遍。

在書的後半部，作者分享了不少故事，給我很多啓發。而印象最深的一篇內容大約是這樣的:

有一日誠信被一個自以為聰明的少年掉落水，他游到一個孤島上，並向經過的朋友求救。快樂拒絕了誠信，說：「不行、不行，我一有了誠信就變得不快樂了，你看社會上有不少人因為說實話而變得不快樂。」誠信再向地位求救，同樣被拒絕了：「不行、不行，我的地位得來不易，有了誠信我的地位會保不住。」接着他又向競爭求救，還是被拒：「現今競激烈，我這不正當競爭怎敢接你呢？」正當誠信感到絕望時，一位白髮蒼蒼的老人主動救了誠信。

你猜猜這位老人是誰呢？


答案在129-131頁內。

火燎森。 (2008)。《收到巴菲特的回信》。 香港：香港財經出版社。

理財有道

投資雖然不再是教會的禁忌，但從來不是一個可以坦誠討論的問題。不知為何投資多會變成貪財、屬世等的同義詞。這本書更是少數既包含聖經對財富的看法，亦詳細分析理財概念。作者更分享了他的投資經驗以供讀者參考。

作者首先挑戰我們：「到底為何要積聚財富？是積穀防饑，幫助有需要的人：抑或是為了囤積居奇，投機炒賣？」(p.42) 書中並指出財富本身並不是罪惡，但它會給人萬能的錯覺，可惜它不能換取生命、健康、名譽、友情、愛情和家庭和諧。另外，成功聚積財富不一定代表上帝喜悅我們，恩待我們 – 關鍵在於我們是否以上帝所喜悅的方法賺取和使用財富。作者分享他理財的七大原則：（一）作個忠心管家；（二）學習積穀防饑；（三）不應心存僥倖；（四）重視道德誠信；（五）不貪不義之財；（六）不為財富煩惱；（七）與人分享所有。

弄清楚理財的原則之後，作者簡述了過去三十多年香港市場上出現的十個災害。（若想對香港金融市場的歷史有更深入的了解，可以參考上文所介紹的《香港金融風雲35載》）。接着作者握要地解釋了一些經濟學名詞，如：資本、利息、名義利率、實質利率、複息、折現、通脹、通縮，以及如何計算預期回報率等等。內容跟他在寫給高考生的參考書大至相同。作者繼而引用這些知識去分析每一種投資組合如股票、股票掛鈎票據、外幣以及物業的利與弊，此外，亦羅列了投資十誡和投資十要。

作者最後更語重心長的指出除傳統投資組合之外，還有另類投資可以叫我們的人生更豐盛，如（一）珍惜生命；（二）終生學習；（三）重視婚姻；（四）生兒育女；（五）孝敬父母；（六）捐得樂意；（七）事奉上帝等。

我個人認為現今的投資環境變得很複雜，遠超過經濟學知識可以解釋的範疇。在金融體系全球化下，大投資者和散户失衡，財富分配越見傾斜，貧富懸殊日趨嚴重。投資的態度及原則遠比投資的知識來得重要，盼望在這場金融風暴之後，市場能作出一個健康的調整。

林本利。 (2008)。《理財有道》。香港：天道書樓。

Everything I know about business I learned at McDonald’s 2

Suppose you’re the CEO of McDonald’s and what would you do if:

²         you caught an owner/operator opened a chicken restaurant directly across the street from his McDonald’s unit and used McDonald’s product in his chicken restaurant (p.13)

²         the operators grumbled about the time and money needed to achieve the new standards and were using the fact that it was difficult to set up and tear down the new shake machines as an excuse not to make extra investment in restaurants (p.68)

²         you found stores graded with an F by field inspectors, having found dirty sites where menu items were not prepared with the prescribed recipes and the food was served up cold and unappealingly (p.81)

²         you discovered a young store manager had a very bad case of body odor which he might not realize (p.136)

Facella, Paul. (2009). Everything I know about business I learned at McDonald’s. NY: McGraw Hill

Everything I know about business I learned at McDonald’s 1

There are seven leadership principles that drive McDonald’s break out success. Can you match the following examples with the corresponding leadership principles?

Examples	The Leadership Principles
(A) A CEO claimed proudly that “I would not under any circumstances take anything from the company” (p.11) not even a free hamburger to his wife. “[H]andshake agreements are alive and well with McDonald’s suppliers, even in today’s litigious society (p. 4).”	(1) Relationship
(B) In order to boost the sales and morale, a CEO once sent 35,000 tins of popcorn to managers, the regional offices, and all staff and wrote “sit down with your family and watch television and eat some popcorn” in the letter.	(2) Lead by Example
(C) A CEO would still clean the toilets today if he saw a dirty one in a McDonald’s. His message is clear and loud that all units much have clean restrooms and he meant it. (p.94)	(3) Honesty and Integrity
(D) The CEOs have no hesitation in closing down underperforming restaurants that were dirty, under-staffed, and poorly run (p.60). As there are “operations manual clarifies job descriptions and roles, and there are any number of corresponding tools to support each individual, from training videos, to courses at Hamburger University, to field visits, to coaching, and more. (p.62)”	(4) Standards
(E) In January 2003, a CEO did something rather unusual when the Wall Street laid enormous pressures on him to quickly improve the performance of McDonald’s: he cut the development of new stores, and focused on getting more sales in existing restaurants. (p.120)	(5) Communications
(F) The courses offered by Hamburger University are taught in 28 languages so as to support a diverse culture and accommodate its global workforce. Also the university displays the flags that represent the countries of the visitors that are there that week, and those that work on the premises. (p.40)	(6) Courage
(G) McDonald’s values the exchange of ideas and there are no doors on offices. Moreover, CEOs in McDonald’s still appreciate old-fashioned conversations like handwritten notes, letters and phone calls.	(7) Recognition

Answers:

(A) – (3)

(B)  – (7)

(C)  – (2)

(D) – (4)

(E)  – (6)

(F)  – (1)

(G) – (5)

Facella, Paul. (2009). Everything I know about business I learned at McDonald’s. NY: McGraw Hill

香港金融風雲35載

這本書講述了早期香港金融業缺乏中文資訊， 股民只可以道聽途說， 盲目跟風， 結果鬧出「香港黐線」的笑話。 而當時政府亦因苦無對策遏止炒風， 竟想出叫消防處以「防止火警」為由， 勒令交易所「疏散人群」。 及後亦因有偽造股票流於市面， 導致股民恐慌性拋售， 在一個月內市場股票價值蒸發接近一半。書中亦有提及一些老牌英資洋行如太古、怡和及和記， 在73年股災中， 如何伺機收購資產值遠被低估的公司， 從而擴充業務。於70年代末， 華資商人冒起， 書中亦詳細述說李嘉誠如何鯨吞和黃、包玉剛如何奪取九倉等。

及至80 年代， 香港經歷前途談判及信心危機， 人心惶惶。港元兌美元更在 1983年 9 月 24日「黑色星期六」急瀉至 9.6水平。書內詳細描述當年的情形； 如銀行出現手持「紅簿仔」人龍； 商人把港元暴跌的損失轉嫁給消費者， 調高貨物價格； 普羅大眾為保港元購買力， 爭相搶購糧食， 超級市場人頭湧湧； 而商人恐防不能以同樣價格補回存貨， 拒將新貨補回架上， 引起群眾不滿， 更暴發騷動。書中也記載了聯繫滙率的制定過程， 亦刊登了現任金管局總裁任志剛的訪問。

除此以外， 書中亦交代了四會 (香港會、遠東交易所、金銀會、九龍會) 合併組成聯交所的過程。及90 年代， 中資抬頭， 紅籌崛起的經過。書中並有不少篇幅記述了97年亞洲金融風暴是怎樣由泰國蔓延至馬來西亞、菲律賓、印尼、韓國、台灣, 及後國際炒家如何狙擊港元， 特區政府如何捍衛聯擊滙率， 入市擊退炒家。 及至踏入21世紀， 科網爆破、沙士肆虐、七一大遊行、CEPA 及自由行救港等等， 亦有提及。

書中記述了本港這三十五年金融發展的起起跌跌, 對活在金融海潚下的我們, 又帶來了甚麼啓示和提醒呢?

陳景祥編。(2008)。《香港金融風雲35載》。香港： 天窗出版。

The Armchair Economist: Economics and Everyday life

Have you ever wondered the followings?

(1)               Sales increase even though the endorsement of a celebrity appears to convey NO information about the quality of a product (p.14).

(2)             Some concerts predictably sell out weeks in advance, and would still sell out even if the promoters raised ticket prices, but the prices AREN’T raised (p.13).

(3)             Much primitive agriculture and even in parts of the Third World today shares a strange common feature. There are very few large plots of land; instead, each farmer owns several SMALL plots SCATTERED around the village (p.16 – 17).

(4)             People give each other store-bought gifts but NOT cash or gift voucher, which is never the wrong size or color (p.18-19).

(5)             Many firms provide their employees with more health coverage than is required by law, say $5000 worth of medical insurance. But NOT giving employee an extra $5000 in wages and let them spend it as they want (p.23).

(6)             The demand for beef is far greater than the demand for shark fin, but cattle are NOT threatened with extinction (p.81).

(7)             Once you enter the theater, the owner has a monopoly on popcorn, soft drinks and rest rooms.  Popcorn and soft drinks are usually charged higher in the theater whereas rest rooms are FREE of charge (p.159 – 167). 

(8)             Government officials told you that the number of driver deaths would be lowered by mandating the use of seat belts. However, the economists predicted that once the regulation went into effect, the number of auto accidents INCREASED (p.3 - 4).

The human behviours mentioned above seem to be irrational. Some even appear to violate the economics theories that we learn in high school. But are they? How does the author reconcile or explain these phenomena? If you are interested in the way he explores and explains these phenomena, there is another book, More sex is a safer sex, that I mentioned in this blog “008. Are you ready for this?” You are welcome to read this too.

Landsburg, Steven E. (2009). The Armchair Economist: Economics and Everyday life. London: Pocket Books.

More sex us safer sex 2

You may wonder why the paradoxes above seem unrelated to its title. And here it is:

Imagine a country where almost all women are monogamous, while all men demand two female partners per year.

A few prostitutes end up servicing all the men. Before long, the prostitutes are infected by AIDS and they pass it on to the men. The men bring it home to their wives.

But if each of those monogamous wives were willing to take on one extramarital partner, the market for prostitution would die out and so does the virus.

Therefore monogamy can be deadly. (p.11)

This book is about a general principle of economics:

things tend to work out best when people have to live with the consequences of their own behaviour

OR

things tend to work out poorly when the consequences of our actions spill over onto other people (p.4).

What do you think?

Landsburg, S. (2008). More sex us safer sex. NY: Free Press

The Starbucks Experience

This book is more about people than coffee. As the CEO of Starbucks said, “We are not in the coffee business serving people, but in the people business serving coffee (p.28).”  Take a look at the stories below and you will see.

*****

Barista Bernadette Harris confesses, “I didn’t like making Frappuccinos®. I wasn’t always happy to leave my line of hot drinks to make a drink that took twice as long! One customer helped me gain a different view of the blended beverages. This woman would come in every evening and order a mocha Frappuccino® blended beverage. She was always in a hurry, and we would barely converse. One evening she came in and mentioned that her husband was in the car. Then she thanked us for always delivering the drink in such a nice way and said that though she personally never drank Starbucks, it was the only thing her husband could stomach after this chemotherapy (p.75-76).

*****

Michael Cage writes on his “Marketing and Entrepreneurship” blog, at 5 a.m. and he decided that it was time to take a break. His first thought was to reward himself with a predictable favorite, a vanilla latte. He hopped in his car and drove to his local Starbucks, anticipating his treat the whole way.

“As I pulled to the store,” he explains, “I knew something was terribly wrong; the sign was still dark, and the lights were off inside. I stopped the car and went up to the door to look at the hours. It was an hour before they opened, so I turned around to walk back to my car and figured the coffee would have to wait … And then the lock was thrown, the door flew open, and one of my regular barista stepped out and asked me whether I wanted something to drink.” As Michael says, “Starbucks ‘gets it.’”

*****

And here it is, my favorite story:

“There was a wonderful regular customer,” says Kimberly Kelly, a current Starbucks licensed store operations specialist, “in her seventies, named Irene, who had been a teacher and a principal. She and her husband visited daily – coming to Starbucks was an event for them. The husband always had on a sport jacket, she was dressed very elegantly and they would order the same thing: a tall coffee and an extra cup so they could split it. They’d also order one muffin and two forks and a knife to share that as well. The couple would take their coffee and their muffin, and they would go slowly over to their table and spend maybe an hour or so visiting with each other and enjoying their time together.”

Kimberly said the couple stopped coming into Starbucks, and she worried about them. One day she ran into Irene at a bank, and Irene shared that her husband had died of a sudden heart attack. Kimberly encouraged Irene to join her back at Starbucks after she finisher her banking. Kimberly continued, “Irene came to my store, and when she approached the counter, she stood there and said, “Kimberly, I just don’t know what to order because we always shared items.” I simply said, “You know what, I’m going to share that cup of coffee and that muffin with you today.” We sat down and talked for about 30 minutes. She told me about how she missed her husband and how hard it was for her to move on. A few days later, Irene came back to my store. She was dressed in a beautiful outfit. She said, “I’m ready to do this by myself now.” Irene asked if she could order a smaller cup of coffee. She took the muffin, one fork this time, and the knife. She split the muffin and told me, “I guess I’ll just have to make it last for two days (p.77-78).”

*****

That is how Starbucks makes its coffee extraordinary. What experience do you have in Starbucks?

Michelli, Joseph A. (2007). The Starbucks Experience. NY: McGraw Hill.

遇見天天微笑的自己

每當我們遇到經濟逆境時，這一類勵志書籍有如雨後春筍擺滿書架，亦為書商帶來額外的收入。難怪不少經濟學者都認為，單以收入入賬的國民生產總值未能完全反映一個國家的生活質素。無論如何，這本書中有好些故事值得跟大家分享。

******

「找做對的事情 (Do right thing)，遠比把事情做對 (Do thing right) 來得重要。」

現代管理學之父彼得‧杜拉克

一位教授上課的時候，在講台上擺了一只玻璃樽，玻璃樽旁邊放著一堆大大小小的石頭和細沙。教授先把大的石頭放滿玻璃樽，然後問學生：「滿了嗎？」學生回答說：「滿了。」

教授又拿起一些小石粒，倒進樽裡，直到每一個空隙都填滿了。然後，他再問學生：「滿了嗎？」學生依然回答說：「滿了。」

接著，教授抓起細沙，一把一把地放進玻璃樽中，玻璃樽終於有一絲空隙了。

教授依然問：「滿了嗎？」學生依然回答說：「滿了。」

教授意味深長地解釋說：「大的石頭代表人生中最重要的來西，例如人生觀、信仰、信念、智慧……小石粒代表人生中第二重要的東西，例如家庭、配偶、兒女；細沙則代表人生中第三重要的東西，例如事業、工作、財富……如果先把細沙放進樽裡，玻璃樽何來有空間盛載小石粒，甚至大石頭呢！」(p.160-162)

******

古時候有一位國王，夢見山倒了下來，水枯乾了，花也謝了，他便叫王后給他解夢。王后說：「大勢不好了。山倒塌，指江山要倒了，水枯乾了，指民眾離心，君是舟，民是水，水枯乾了，舟也不能行了；花謝了，指好景不長了。」

國王驚惶失措，出了一身冷汗之後，便從此患了病，而且病愈來愈重。

一位大臣要參見國王，國王在病禢上說出他的心事，大臣聽了之後，大笑說：「太好了，山倒了，指從此天下太平；水枯了指真龍現身，國王，你是真龍天子；花謝了，花謝便可以見果子呀！」國王隨即放下心頭大石，全身像鬆了綁一樣，很快地痊癒了。(p.27)

******

看過這兩側小故事，你又有甚麽體會呢？書中亦談及森美在06年遇到的人生低潮(p.35-37)，以及沒有手腳的阿Nick如何為身邊的人帶來歡樂(p.39-42)，他們的經驗也很值得我們參考。

林以諾 (2009)。《遇見天天微笑的自己》。香港：天窗出版社

The return of depress on economics

In this book, the author surveyed the economic crises that had swept across America in 1930s, Japan in 1970s, Latin America in 1980s, Asia in 1990s and around the world in mid-2000s. The author also pointed out that these crises “like diseases that have become resistant to antibiotics, the economic maladies that caused the Great Depression were making a comeback (inside the book jacket).”

The author tells a very interesting story about a baby-sitting cooperative: an association of about 150 young couples who are willing to baby-sit each other’s children. When babies are sat, the baby-sitters will receive the appropriate number of coupons from the baby-sittees. These coupons can then be used to exchange for baby-sitting services when the couples see fit (p.16-20, 68-75).

This system automatically ensures that each couple will provide exactly as many hours of baby-sitting as it receives over time. However, it requires a fair amount of coupons in circulation.

What would happen if:

(1)       there were couples wanted to save the coupons they earned from baby-sitting in the winter to use in the summer?

(2)     there were couples tried to accumulate coupons as reserves for future use?

(3)     there were couples who would have been willing to go out more often if they could have gotten access to extra coupons?

(4)     couples confidence declined?

And the most import of all, how to solve these problems?

If you are wondering about how the story of this baby-sitting co-op relates to the financial crises that mentioned above, you better read this book. It is very inspiring.

Krugman, Paul (2009). The return of depress on economics. NY: Norton.