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theatlantic:

Zenaide Muneton is a nanny in New York City. Last year, she made more than $200,000, Planet Money reports. Yes, with five zeros.

How in the world can Manhattan nannies be worth $200,000 a year? One answer is that they’re more talented than your typical babysitter. The highest-paid nannies can…

(Source: The Atlantic)

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"Quiggin thinks he’s only writing about the failure of free-market ideas, but he’s actually describing the intellectual life cycle of most ideas in political economy. All intellectual movements start with trenchant ways of understanding the world. As these ideas gain currency, they are used to explain more and more disparate phenomena, until the explanation starts to lose its predictive power. As time passes, the original ideas become obscured by ideology, caricature and ad hoc efforts to explain away emerging anomalies. Finally, enough contradictions build up to crash the paradigm, although current adherents often continue to advance the ideas in zombielike form. Quiggin demonstrates with great clarity how this happened to the Chicago school of economics. How he can think it won’t happen with whatever neo-Keynesian model emerges is truly puzzling."

Review: First Bank of the Living Dead

HT: MarginalRevolution.com

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The theory of the “rentier state” says that countries that receive substantial amounts of oil revenues from the outside world on a regular basis tend to become autonomous from their societies, unaccountable to their citizens, and autocratic. The theory is used to help explain why Iran, the Gulf States, many African states ( Nigeria, Gabon) and other countries (e.g., Netherlands) with abundant resource wealth perform less well than their resource-poor counterparts. How does this happen, according to the rentier state theory? The short answer, according to Yates (1), is that a rentier state and rentier economy lead to a rentier mentality, which dooms a country’s economy and long-term prospects.

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Jaw-dropping, amazing, unbelievable, fascinating.

Laurie Santos looks for the roots of human irrationality by watching the way our primate relatives make decisions. A clever series of experiments in “monkeynomics” shows that some of the silly choices we make, monkeys make too.

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"From China to India, from Japan to Germany, nations everywhere are racing to develop new ways to producing and use energy. The nation that wins this competition will be the nation that leads the global economy. I am convinced of that. And I want America to be that nation… There are going to be those who make cynical claims that contradict the overwhelming scientific evidence when it comes to climate change, claims whose only purpose is to defeat or delay the change that we know is necessary."

Obama at MIT