March Madness could cost you some serious bucks, and not just in the office bracket pool. Daniel Fromson explains: http://nyr.kr/10o0HDP

A day after it emerged that Wall Street bonuses rose to twenty billion dollars last year, and that the typical financial-industry grunt received a payment on top of his salary that was more than twice the median household income, the latest corporate executive to run afoul of the Street was called to account. 

Remarkably enough, it was Tim Cook, the head of one of the most successful businesses in American history. At Apple’s annual shareholder meeting, in Cupertino, California, Cook, who took over from Steve Jobs in August, 2011, was pressed about the company’s stock price, which has fallen by about a third since last summer—drawing the ire of Wall Street, particularly David Einhorn, a billionaire hedge-fund manager who owns more than a million Apple shares. “I don’t like it either,” Cooksaid of the stock price.“Neither does the board or management—where the stock trades now versus a few months ago. But we’re focussed on the long term.”

That was precisely the response from Cook that I would have expected, and it was the appropriate one… 

Continue reading John Cassidy on Apple vs. Wall Street: http://nyr.kr/13mg7vi

Photograph, of Tim Cook, by Jim Wilson/The New York Times/Redux. 

(Source: newyorker.com)

No longer just America’s favorite investor, in recent years he’s become a kind of public sage…

James Surowiecki talks to Buffett about the economy, his investments, & his position on taxes: http://nyr.kr/Rp3qLz

Cartoon by Tom Toro. For more: http://nyr.kr/QTRAJd

In this week’s Financial Page, James Surowiecki writes “Invisible Hand, Greased Palm,” on the dangers of corporate corruption: http://nyr.kr/IHLN5z

Evening the Odds; Is there a politics of inequality?

Traditionally, class figured less in politics in America than in most other Western countries, supposedly because the United States, though more economically unequal, and rougher in tone, was more socially equal, more diverse, more democratic, and better at giving ordinary people the opportunity to rise. That’s what Alexis de Tocqueville found in the eighteen-thirties, and the argument has had staying power. It has also been wearing thin. During the five decades from 1930 to 1980, economic inequality decreased significantly, without imperilling “American exceptionalism.” So it’s especially hard to put a good face on the way inequality has soared in the decades since. Even if you think that all a good society requires is—according to the debatable conservative mantra—equal opportunity for every citizen, you ought to be a little shaken right now. Opportunity is increasingly tied to education, and educational performance is tied to income and wealth. When it comes to social mobility between generations, the United States ranks near the bottom of developed nations.

- In this week’s issue, Nicholas Lemann writes about Timothy Noah, Charles Murray, and America’s inequality: http://nyr.kr/JdmNNt

Cartoon of the night. Don’t forget to enter this week’s caption contest: http://nyr.kr/r46had

(Source: newyorker.com)

Magic Mountain: What Happens at Davos?

People like to project onto Davos their fears and fantasies about the way the world works. Right-wingers see insidious, delusional liberalism, in its stakeholder ethos and its pretense of world improvement. They picture a bunch of Keynesians, Continentals, and self-dealing do-gooders participating in some kind of off-the-books top-down command-control charade. Left-wingers conjure a plutocratic cabal, a Star Chamber of master puppeteers, the one per cent—or .01 per cent, really—deciding the world’s fate behind a curtain of heavy security and utopian doublespeak. The uninvited, the refuseniks, and even many of the participants see a colossal discharge of hot air, a peacock strut. They all deploy, with a sneer, the term Davos Man, coined by the late political scientist Samuel Huntington, who decried a post-national wealthy globe-trotting élite. Davos Man can be either a capitalist oppressor or a Commie conspirator. Either way, he is a windbag, a pedant, and a hypocrite. Businesspeople who have never been to Davos find many ways to be dismissive of it: “I can’t do business there.” “It’s too political.” “It’s not what it used to be.” The translation may be that that person has not been invited. Non-businesspeople assume the same. “Solipsistic wankers,” one person wrote me. “Kill the bastards,” wrote another.

Davos is, fundamentally, an exercise in corporate speed-dating. “Everyone comes because everyone else comes,” Larry Summers told me. A hedge-fund manager or a C.E.O. can pack into a few days the dozens of meetings—with other executives, with heads of state or their deputies, with non-governmental organizations whose phone calls might otherwise have been ignored—that it would normally take months to arrange and tens of thousands of Gulfstream miles to attend. They conduct these compressed and occasionally fruitful couplings, the so-called bilateral meetings, either in private rooms that the W.E.F. has set aside for this purpose or in hotel rooms, restaurants, and hallways. All that’s missing is the hourly rate.

Human Nature and a Volatile Stock Market

n other words, while crazy volatility may be great for traders (who live for the chance to make two per cent a day), it’s lousy for the rest of us, and for the economy as a whole. It isn’t just that volatility costs ordinary investors money. It also makes them more likely to give up on the stock market entirely: over the past three years, investors have pulled almost two hundred and fifty billion dollars out of equity funds, even though stock prices have almost doubled since the lowest point of the crash. And, while some of that money has gone into exchange-traded funds, most of it has just left the market. This flight from stocks is probably not a good thing for people’s retirement accounts—after all, in a capitalist country owning some capital is usually a smart way to make money. But it may well be a good thing for investors’ psychological well-being. In effect, they’ve decided that, in a market as volatile as this one, the only way to win the game is simply not to play

Delayed Gratification: Christmas shopping, credit cards, and layaway

Americans have been big spenders for decades now, but as Sheldon Garon observes in his new history of consumption, “Beyond Our Means,” that’s in large part because our economic system is set up to encourage overspending. And what the revival of layaway makes clear is that, while many shoppers are prone to spend what they don’t have on what they shouldn’t buy, they can also be sophisticated about their weakness, and savvy about finding ways to control it. They know that sometimes you have to have your hands tied in order to grab what you want.

- In this week’s issue, James Surowiecki examines the appeal, and recent resurgence, of layaway at retail outlets: http://nyr.kr/tcnptb