My August Conversation with Mike Chmielewski on Alaska's Budget Crisis on Radio Free Palmer. Listen Here <a href="http://www.radiofreepalmer.org/2016/08/19/matsu-college-professor-holly-bell-talks-about-budgets-8-10-2016/">http://www.radiofreepalmer.org/2016/08/19/matsu-college-professor-holly-bell-talks-about-budgets-8-10-2016/</a>
Much to the disappointment of many of my friends and readers, I tend to be a rational person. I don't panic at the latest media or twitter hype. As long as I'm not in danger of a head-on collision requiring immediate action, I like to think about things a bit before I draw any conclusions. The horrific terror attacks in Paris, have fueled fears about Syrian refugees entering the U.S.. I understand the immediate gut reaction, I had it too, then I started thinking about it and exploring the data. One of the keys to quelling these fears is to understand the difference between asylum seekers and refugees. The risk of radical Islamists entering Europe are high because their geographic location leads to asylum seekers, who are arriving unscreened and in large numbers. But refugees are highly screened and take years of processing before they are allowed to enter a country.
<h3><a href="http://www.professorhollybell.com/wp-content/uploads/2012/01/55124g2kpw9j7g02.jpg"><img class="alignleft size-medium wp-image-224" alt="Bell School of Economics" src="http://www.professorhollybell.com/wp-content/uploads/2012/01/55124g2kpw9j7g02-300x237.jpg" width="300" height="237" /></a>"I'll leave labeling the "school" of economics I fall into to others."</h3> <p>By Holly A. Bell</p> <p>When I discuss economic issues people often ask me which “school” of economic thought I subscribe to. This question usually leaves me a bit tongue-tied because my approach to economics doesn’t fit neatly into any specific “school” as they are generally defined. The “Bell School” is firmly grounded in the classic market economics of supply and demand, but tends to be considerably more holistic and interdisciplinary in its approach than many of the schools of economics that are widely discussed.</p> <h3>Holistic</h3> <p>First, the Bell School is less interested in narrow interpretations of theory and more interested in practical application. It seeks to describe how an economy actually works at any point in time and assumes non-market factors are always causing distortions that draw actual market behavior
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<h2>Redefining Defined Benefit Pensions<a href="http://www.professorhollybell.com/wp-content/uploads/2012/09/ID-10049304.jpg"><img class="alignright size-medium wp-image-1891" title="ID-10049304" src="http://www.professorhollybell.com/wp-content/uploads/2012/09/ID-10049304-300x243.jpg" alt="pensions"width="300" height="243" /></a></h2> By Holly A. Bell For most people in the private sector, defined benefit <b>pensions</b> have become a distant memory. Something their grandfather talks about over Thanksgiving dinner while reminiscing about his days at "the plant". These plans, which guaranteed a certain percentage of a worker’s wages or salary in retirement, have been replaced with defined contribution plans like 401(k)s. However, is it possible that a defined benefit hybrid model based on employee contributions might be a better, yet equally sustainable model? There were several reasons traditional defined <i>pensions</i> proved to be unsustainable: Built in cost-of-living increases, benefit rates up to 90 or even 100% of annual earnings, earnings calculations based on the highest five years of earnings, the inclusion of generous health insurance benefits, early retirement ages (and longer life expectancy), inadequate funding or companies raiding pension funds, high return
<a href="http://www.professorhollybell.com/wp-content/uploads/2012/07/1136584_61497057.jpg"><img class="alignleft size-medium wp-image-1761" title="1136584_61497057" src="http://www.professorhollybell.com/wp-content/uploads/2012/07/1136584_61497057-300x225.jpg" alt="decision-makers"width="300" height="225" /></a> <h2>Decision-makers perform worse as financial incentives increase</h2> Research by behavioral economist Dan Ariely (see video below) found that high financial incentives actually make individuals perform worse than when given low to moderate financial incentives. These results were most dramatic when the tasks involve cognitive elements as opposed to mechanical elements. The reason is that loss aversion (people's tendency to strongly prefer avoiding losses to acquiring gains) causes stress that negatively impacts performance. So if highly compensated individuals are counting on their salaries and bonuses they are afraid of losing them, and are more likely to feel stress and make poor decisions. So what does this tell us about highly compensated CEOs, other executives, and highly incentivised Wall Street traders? Might their high compensation cause loss aversion resulting in stress and worse decision-making than average employees? Is it possible their fears about losing their
<h2>What Penguins Know About Business: The Value of Sharing in Markets</h2> <a href="http://www.professorhollybell.com/wp-content/uploads/2012/06/penguin.jpg"><img class="alignleft size-medium wp-image-1705" title="penguin" src="http://www.professorhollybell.com/wp-content/uploads/2012/06/penguin-200x300.jpg" alt="" width="200" height="300" /></a>From Paul J. Zak at Claremont Graduate University: <div></div> "There’s nothing new about being shameless, or ruthless and cynical, when it comes to making a buck. Plenty of people in business seem to think that fakery and exploitation is the name of the game. Which is one reason that trade and commerce have always had something of an image problem. “Behind every fortune is a great crime” is one way of looking at it. “Never give a sucker an even break” is another. Contrary to those sentiments, research in my lab and in numerous field experiments has shown that the marketplace actually makes people more <a title="Psychology Today looks at Morality" href="http://www.psychologytoday.com/basics/morality">moral</a>, not less. Trade not only depends on moral behaviors like trustworthiness; it extends it beyond the small circumference of kinship or