Even successful business founders typically earn 35% less than they would have working for others, according to Case Western University Professor Scott Shane, author of “The Illusions of Entrepreneurship,” reports BusinessWeek.com. “People who run their own businesses have greater job satisfaction,” states Shane, but then we create a “myth (of entrepreneurship) that says because we like it and it makes us happy, it must also make financial sense.”
Even successful business founders typically earn 35% less than they would have working for others, according to Case Western University Professor Scott Shane, author of “The Illusions of Entrepreneurship,” reports BusinessWeek.com. “People who run their own businesses have greater job satisfaction,” states Shane, but then we create a “myth (of entrepreneurship) that says because we like it and it makes us happy, it must also make financial sense.”
Best Buy, General Electric, Hewlett-Packard and others are having their own employees participate in “prediction markets” to gain insight into product demand, store opening dates, and other future events, the “NY Times” reported. The notion that the opinion of a large group of well-informed individuals will be more accurate than one or a few “experts” was popularized by James Surowiecki’s book “The Wisdom of Crowds,” and is now being tested by dozens of major corporations, including Google, Cisco Systems and General Mills. Small service providers like Consensus Point, NewsFutures and Xpree (since renamed Crowdcast) are assisting companies that don’t have the in-house expertise to establish prediction markets on their own.
In this enlightening podcast, University of Maryland Professor Michael Greenberger explains to Fresh Air’s Terry Gross some of the origins of the current mortgage-related losses and write-downs impacting Wall Street. Credit default swaps, or bets on whether mortgage holders would default, are today unregulated at both the Federal and State level due to the Commodity Futures Modernization Act, a 262 page bill passed by Congress in 2000, right before its 2000 Christmas recess. According to Greenberger, banks have also been careful to word their credit default swap contracts to avoid falling under insurance industry regulations. “It’s as if a bunch of Las Vegas bookies started taking bets, and never bothered to write them down or record them……here, these banks didn’t bother to hedge themselves…..we would have been better off if Las Vegas had handled this operation, than having Bear Stearns handle it,” asserted Greenberger.
Speaking to members of the Westchester County Association in Tarrytown this morning, New York State Comptroller Thomas DiNapoli said, “For too many years, New York State has treated debt as a surrogate for wealth, using it to buy things we want, rather than things we need.” New York is spending more money than it is taking in, DiNapoli told his listeners, adding that “faced with a budget deadline, and demands from constituencies, we make compromises, we get the budget done, but don’t deal with structural imbalances.” The New York budget crisis is not as severe as New Jersey’s Di Napoli told a questioner, but its budget practices are not as good as New York City’s, where Mayor Michael Bloomberg used recent good years as an opportunity to pay down old debt and build reserves.
