It is almost Christmas time and the song “Santa Claus is coming to town” keeps playing over and over. For me the key lines of this ear-worm are “He knows if you’ve been bad or good so be good for goodness sake.” The song clearly states doing the right thing leads to more gifts on Christmas day.
I have been puzzling over these lyrics for years and wondered if the lines are true. Outside of Christmas does being ethical and honest lead a person to riches or poverty? While the debate has lasted a long time, only recently have actual data been gathered that can answer the question. My recently published analysis contained results that surprised me; only a few ethical and unethical acts were associated with financial changes. Continue reading
Eating fast food is frequently blamed for damaging our health. It is not the healthiest type of meal since it is typically high in fat and salt. Because of this some government officials have considered regulating parts of the fast food industry to improve public health and reduce health inequalities across society.
Regulating fast food locations to improve health among low income Americans rests partly on a key assumption: that fast food is primarily eaten by poor people, who cannot afford nutritious but more expensive food. Mark Bittman in the New York Times, summed it up nicely: “The ‘fact’ that junk food is cheaper than real food has become a reflexive part of how we explain why so many Americans are overweight, particularly those with lower incomes.”
Our recently published research examined this assumption by looking at who eats fast food using a large nationwide random sample. What we found surprised us. The poor don’t eat the most fast food. Instead, the middle class do. Moreover, the difference between the proportion of rich people and poor people who eat fast food was quite small. It seems when you ask people if they ate at a fast food restaurant like McDonalds, Kentucky Fried Chicken or Taco Bell last week, the majority of rich, poor and middle class said “yes.” Continue reading
Do you procrastinate about taking care of financial matters in your life? Recently a fascinating article about financial procrastination appeared online. The author publicly admitted that “after years of procrastinating,” he finally logged on to his retirement account. It took him years to get around to dealing with it because the entire task made him anxious. Continue reading
This past week I was in England and I had the privilege of looking through John Maynard Keynes’ personal papers stored at Cambridge University. Keynes was a famous Englishman who helped lay the cornerstones of modern macroeconomics and helped create the modern financial system. Keynes’ archive is amazing because the man was a pack rat. He kept everything. You can look at some of his golf scores, check book stubs, and read his personal letters to friends, family and many of the famous people alive from the 1920s until World War II. Among the things I examined were the ledgers where Keynes recorded his personal purchases and sales of stocks, bonds, commodities and currency. (It is a real treat to hold the books written in the great man’s own handwriting.) Continue reading
Bill Gates is currently the U.S.A.’s richest man with a net worth of about $80 billion dollars according to Forbes magazine. Mr. Gates has been at the top of the wealth charts for decades. As the wealthiest man he is the person most impacted by any kind of inheritance tax since his estate will pay the most when he dies. What does Bill Gates think about inheritance taxes? As I’ll show below, Mr. Gates thinks that inheritance taxes are a good idea. Continue reading
For more than a week protestors in Hong Kong have been shutting down key roads and preventing some shops and stores from opening. The media has been reporting the protestors’ goal as more democracy. In Hong Kong’s case this means more say in how the next leader is chosen. Democracy is a wonderful concept, but concepts don’t get hundreds of thousands of people to take time off from work and classes, sit in the broiling sun for days on end and occasionally get tear gassed or pepper sprayed. Grievances, however, do get normal people to come out and protest. What grievances are really driving the protestors in Hong Kong? Continue reading
I was listening to a financial radio show where listeners call in their questions. A man called in with a frequently asked question; “my wife and I have a 30 year mortgage at 3.5%, we have a little bit of extra money now and were wondering if we should pay down the mortgage faster or put the money into our retirement accounts?” The financial expert gave the standard advice and said “fund the retirement accounts.” He then gave a detailed explanation why funding a retirement account was much better. Unlike most callers this one had some guts and told the expert he was not convinced and then hung up. The caller’s negative reaction got me thinking; is the standard advice wrong?