How to Make Money From Home in a Bad Economy - Try This Business

Millions of people are out of work.Thousands of businesses are failing.The economy is in the tank."OK", you say, "Thanks for that cheery news bulletin. Now tell me something I didn't know. Like, how can I earn money from home, even though the economy is bad?"Did you know there is a business that has done well in good times and bad during at least the last 50 years? Did you know that it will continue to do well for the next 50 years too?What is it?Selling information by direct marketing. Surprised? Don't be.I believe information products marketing is the perfect home based business for good economic times and bad. Dozens of internet marketing experts, like Terry Dean, Marlon Sanders, and Fred Gleeck, agree.People just like you continue to buy information that helps them solve a problem, meet a need, or satisfy a deep desire. We are in the information age, and the need for useful and valuable information is not going to go away anytime soon.Everyone knows more about at least one subject than almost everybody else. That makes the more knowledgeable person an "expert". Are you an expert? I bet you are and don't even realize it. If you know a lot about something, it is easy to assume everyone else knows that too. But, they often don't know much, and are very interested in knowing more.

Global Market Relationships - Don't Forget the News

As I have been saying, 2010 will be an interesting year in the markets, and this week only supports my contention. Many bearish voices are suggesting a correction is coming, but we have been hearing this since March of last year. Nonetheless, something bearish is afoot, as the world wrestles with the continuing ramifications related to recovering from the worst economic collapse since the 1930s. Here is where we are this week.The risk aversion following the 2-day slide in the markets has supported safe haven currencies such as the dollar and the yen, sending commodities lower. Amid this backdrop and in the absence of any key economic report, the major averages may fight to hold key support levels.  - World Daily Markets Bulletin The factors contributing to this bearish influence are global in scope, and they offer insight into just how interrelated all the global markets have become, and, as we will see at the end of this article, how one less-discussed factor just might be a prime mover in the market of today.China, the driver of today's economic recovery, is so "hot" it is tapping the brakes on its rapidly growing GDP, which hit 10.7% in Q4. China announced it would begin reducing liquidity in its markets. The announcement of this "normalization" process immediately and negatively impacted the global equity and commodity markets, but positively affected the U.S. dollar and Japanese yen. One might argue that this relationship is typical, and so it is, but now factor into that the possibility that China has a larger problem with its developing housing bubble. Housing prices have jumped some 70% in the last two years. Put that together with an over-stimulated economy, a government that is putting on the monetary brakes, and you now have one huge market (China as a whole) acting as a drag on the global economy.Fine, China is China, and we know that its debt-free and rapidly growing economy is influencing the global markets, but what about our markets right here in the U.S.? We have mixed economic data indicating our recovery is happening, but it is not quite solid in its footing. Q4 corporate earnings for the most part have been strong, but some would argue that is true only because of major cost-cutting and tighter inventories.

Two millenia of growth in a couple of equations

Many scientists dream of finding a unified theory of something, a theory that would encompass others and explain, with a few equations, a large number of observations. Physicists in particular have been looking for fundamental equations. In economics, there is currently a drive among growth theorists to find a unified growth theory, although here the focus is not on a single equation, but rather a model. Indeed, one has to realize that explaining several thousand years of economic growth involves some complexity.

And now the physicists get interested in the topic. Andrey Korotayev and Artemy Malkov actually go beyond a simple one equation model and use some theory, linking surplus output to population growth à la Malthus. Up to 1970, population is hyperbolic, while GDP is quadratic-hyperbolic (in both cases levels, and not growth as the authors assert). They conclude from this that technological progress is expanding because of the larger number of inventors as population grows. That seems a bit simplistic, as one should also bear in mind that there are decreasing returns to inventing, as documented by rather constant long-run growth rates for total factor productivity in modern history despite an increasing share of a growing population dedicated to research and development. But one can get misled when one looks only at few indicators.

On the negative correlation between effort and pay

It would seem natural that in a system where pay is linked to performance, better performers are rewarded more handsomely. Yet, there are plenty of examples where this does not work. If it is difficult to find a metric of performance, then the selected metric may give wrong incentives. The classic example is programmers paid by the number of code lines written, which leads to bloated and confusing code. Another one is with many civil servant jobs where the output is not related to a marketed good. The issue can be so bad that a negative correlation between performance and pay emergence.

Ola Kvaløy and Trond Olsen show that this could happen in another way that is not related to monetary and non-monetary rewards, yet has an impact on intrinsic motivation: weak enforcement probability. Suppose the latter is variable. Then high monetary rewards may be associated with a low probability that the scheme will actually be used. Workers may then just slack off. The above hypothesis is not completely insane, as one can imagine situations where there is moral hazard on the side of the worker, and the work contract tries provide the worker both with incentives and with some insurance. It works also without worker risk aversion if there is limited liability.

Spouses and unemployment duration

When unemployed, some people search more intensely for a new job than others. That will of course depend on their personal circumstances. The urgency of getting some income is obviously more pressing when there is little alternative income, and one such alternative is the spouse.

Stefania Marcassa studies French couples where one spouse works and the other is unemployed. It turns out unemployed men search longer for a job if their spouse earns less, while it is reversed for unemployed women. That turns out to be consistent, in a standard labor search model, with a breadwinner stigma for men. French men do not seems to be able to bear the thought of having a successful wife while being unemployed, while women see no hurry to work if their husband is doing well. Clearly, the sexist ones here are the men.

Is obesity an information problem?

As mentioned yesterday, childhood obesity is a problem that can be reduced by giving more opportunities to be outside and away from the television. But one may also try to combat the problem with information campaigns. One way is to publish dietary information in restaurants, something that even benefits the restaurants, as I reported earlier. But most food is not consumed in restaurants, especially for poor households who also are most likely to be obese. But do such information campaigns really work?

Andres Silva, Marian Garcia and Alastair Bailey show that when news about childhood obesity hit the media in the UK, households change their food habits for the better, and without having an impact of expenses. It is thus possible for the poor to do something about the obesity risk without financial consequences.

The fact that information matters is corroborated in a study by Linda Thunström, Jonas Nordström, Jason Shogren and Mariah Ehmke that shows that people use strategic self-ignorance to make choice they know has bad future implication. Specifically they did an experiment where people could choose meals and obtain without cost calorie information. Most subject chose to remain ignorant and then took in more calories than the enlightened ones.