Krugmenistan vs. Estonia
What Estonia can teach us about economic recovery—and how the country’s leaders got into a fight with New York Times columnist Paul Krugnan:
“On June 6, in a blog post titled ‘Estonian Rhapsody,’ Krugman took on what he called ‘the poster child for austerity defenders.’ In his post, he graphed real GDP from the height of the boom to the first quarter of this year to show that, even after a recovery, Estonia’s economy is still almost 10 percent below its peak in 2007. ‘This,’ he wrote, ‘is what passes for economic triumph?’
“‘It was like an attack on Estonian people,’ says Palmik, in an office above his plant, surrounded by blueprints for his new production line. ‘These times have been very difficult. People have kept together. And this Krugman took all these facts that he wanted.'”
The God Clause and the Reinsurance Industry
In the fall of 1998 I started a job in New York with one of the world’s largest reinsurers. Soon after, at a meeting in a conference room above Park Avenue, someone complained that the market for reinsurance had gone soft. “What we need,” he said, “is a good catastrophe.” It was a joke, but true, too. I offered that a cyclone had hit Bangladesh and it had been an active year for cyclonic storms. No, he explained, little of that value was insured. “Honestly,” said someone else, “I’ve never understood why those people don’t just leave. It’s a dangerous place.” By definition, reinsurers work at the edge of suffering, and so have developed euphemisms to help them stand at a distance. A catastrophe is called a “loss event.” A catastrophe big enough to affect several reinsurers is called an “industry loss event.” #Sept11
Daniel Ek’s Spotify: Music’s Last Best Hope
Without Spotify, labels know only when an album is sold. If a CD is ripped for a friend or borrowed for a party, they know nothing. Spotify gives them a record, by location, age, and gender, of every single time a track is played. Jay-Z used to think he was big in London, based on U.K. album sales; it turns out he’s big in Manchester. Spotify has discovered that radio plays—on real, terrestrial, electromagnetic spectrum—still drive interest in artists, as do Sweden’s summer talk shows. Sundin has a Spotify chart tracking Rihanna and Lady Gaga over seven weeks. Both show a bump on Friday and a spike on Saturday. They are weekend artists. Spotify knows when your party plays Gaga.