Live in California? Consider Ottoman Turkish Empire Settlement Payments

Wow…. there is actually a tax credit on my CA tax return for Ottoman Turkish Empire Settlement Payments. I’m glad to see I’m not the only one who finds this laughably frustrating.

What Microloans Miss

Here here to James Surowiecki for his recent piece in the New Yorker on what microfinance can and can’t deliver. It’s not a piece meant ot bash microfinance, but rather to remind us that the real lever to remove mass numbers of folks from poverty is economic growth, and in particular, the small and medium-sized enterprises that tend to arise and grow as a result of economic growth.

What poor countries need most, then, is not more microbusinesses. They need more small-to-medium-sized enterprises, the kind that are bigger than a fruit stand but smaller than a Fortune 1000 corporation. In high-income countries, these companies create more than sixty per cent of all jobs, but in the developing world they’re relatively rare, thanks to a lack of institutions able to provide them with the capital they need. It’s easy for really big companies in poor countries to tap the markets for funding, and now, because of microfinance, it’s possible for really small enterprises to get money, too. But the companies in between find it hard. It’s a phenomenon that has been dubbed the “missing middle.”

I couldn’t agree more. Finding a way to finance those companies in the “missing middle” is, I believe, one of the greatest remaining challenges in the poverty fighting game. Ultimately, this means more than $500 loans repayable in 6 months.

The problem is a dearth not just of lenders but also of people willing to buy an ownership stake in companies, like the angel investors and venture capitalists that American entrepreneurs often rely on. Microfinance has led us to focus on lending, but it can be hard for young companies to get big purely on bank loans, which consume cash flow that could be reinvested in the business. Supplying the missing middle will require backers who want to invest in companies rather than just lend to them.

Thanks, Reuben.

Dear Amazon.com, please save the online wine business!

Amazon.com has announced that they will enter the online wine business, the FT reports. For any who’ve ever tried to order wine online, you are certainly familiar with the numerous vexations associated with this trade, including crazy state-by-state shipping restrictions, incredibly high shipping charges, and opaque pricing. The FT notes some of the travails of Wine.com, the largest online wine retailer:

Wine.com has a long history of financial problems, illustrating the challenges of dealing with state restrictions on shipping wine shaped in the 1930s after the end of Prohibition. The retailer can ship wine to customers in only 26 states and is obliged to operate 10 different warehouses that buy from state-licensed wholesalers, increasing its costs.

A 2005 Supreme Court ruling has led to an easing of restrictions on shipping by vineyards.

But Tom Wark of the Speciality Wine Retailers Association said new legislation required by the ruling has led some states to tighten restrictions on out-of-state online retailers.

Some smaller e-commerce sites have been shipping wine to customers in defiance of state laws, taking advantage of the difficulty state regulators face in identifying unmarked small shipments to individuals.

IT’s chaos out there, as I realize every time I try to order a present for a friend or to save some money by buying wine from cheaper alternatives than the extortionist wine retailers in New York City. Thus far, I have had pretty good luck at Empire Wine (despite one corked bottle) and DrinkUpNY.

the downside of wind energy

it’s hard not to chuckle at this gem about a power outage caused by a sudden, inexplicable loss of wind power.

Electric Reliability Council of Texas (ERCOT) said a decline in wind energy production in west Texas occurred at the same time evening electric demand was building as colder temperatures moved into the state.

The grid operator went directly to the second stage of an emergency plan at 6:41 PM CST (0041 GMT), ERCOT said in a statement.

System operators curtailed power to interruptible customers to shave 1,100 megawatts of demand within 10 minutes, ERCOT said. Interruptible customers are generally large industrial customers who are paid to reduce power use when emergencies occur.

No other customers lost power during the emergency, ERCOT said. Interruptible customers were restored in about 90 minutes and the emergency was over in three hours.

ERCOT said the grid’s frequency dropped suddenly when wind production fell from more than 1,700 megawatts, before the event, to 300 MW when the emergency was declared.

In addition, ERCOT said multiple power suppliers fell below the amount of power they were scheduled to produce on Tuesday. That, coupled with the loss of wind generated in West Texas, created problems moving power to the west from North Texas.

Amusing, but also, I think, a dangerous portent of what the push into renewable energy might mean for the sustainable, uninterrupted supply of power that we take for granted today. I hope we can work this one out….