Elon Musk Wants to Get Paid. He Will Get His 2019 Bonus Thanks to an Accounting Magic

In March 2018, Tesla’s Board of Directors granted Musk a potential bonus of 20,264,042 stock option awards under a  plan that uses “adjusted EBITDA” as one of its metrics. According to general accounting principles, Tesla recorded a 2019 net loss of $862 million, but thanks to using different accounting principles this loss became an adjusted EBITDA profit of $2.985 billion.

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Populism Weakened the Immune System of Our Democracies. Chile Is an Example

Modern societies have developed immune systems to deal with epidemics: international cooperation, social cohesion, universal health care systems. But today we face the greatest planetary emergency since World War II with these immune systems severely weakened: populist nationalisms disrupt international cooperation and promote every-man-for-himself, and the anti-science wave infects the debate with irrationality.

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Keeping Business Alive During the Coronavirus Crisis: Government as Buyer of Last Resort

The government has to compensate businesses and workers for their losses so that each business can re-emerge almost intact after the hibernation due to social distancing ends. An economy-wide fall in the demand for goods and services of 40 percent over 3 months leads to a 10 percent drop in annual GDP. The government can transfer 10 points of GDP to the private sector, financed via public debt.

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Captured Western Governments Are Failing the Coronavirus Test

In deciding on possible countermeasures, residents of Western democracies often hear only two opposite perspectives: Is the priority to minimize the loss of human lives, or to minimize the impact that the countermeasures might have on the economy? Even the simplest cost-benefit analysis suggests that the US government should be willing to spend up to $65 trillion and lock down the country to avoid extra deaths.

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Why Depending on China for US Health Needs Is Dangerous

In 2018, the Health Industry Distributor’s Association opposed Trump’s tariffs on China with the argument that dependence on China for things hospitals needed, like gloves, diagnostic, and surgical kits, was good because it increased efficiency. But structuring markets to focus entirely on cost and efficiency expose the US to the risk of mass shortages.

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How to Save American Middle-Sized Businesses from the Coronavirus Supply-Chain Crisis

Congress passed an $8.3 billion spending bill to address the coronavirus epidemic, but the bill will not protect small companies. Republican Senator Marco Rubio put forward the idea of mass direct government lending to American small and medium-sized businesses. But Democrats, who have traditionally advocated for such a policy, now oppose it. 

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How Regulators and PwC Fooled Reporters—Again

Is the PCAOB really investigating PricewaterhouseCoopers (PwC) for its role in the Mattel auditing mess? I may be wrong, but I seriously doubt it. Since the PCAOB and the SEC are captured by the Big Four auditing firms, regulators use the same PR tactics to preserve their own—and the audit firms’— survival.  

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The Most Persistent of All Zombie Ideas: That Taxing the Wealthy Is Destructive to the Economy

Economics can’t tell you what values to have. It can, however, shed light on what to expect from policy that reflects any particular set of values, Nobel Prize-winning economist Paul Krugman argues in his new book. Values, not rational ideas, polarized US politics: opponents of a larger role for government think that such a role is not just immoral but even destructive. And if the evidence doesn’t agree, they attack both the evidence and those producing it.

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The Amazon of Health Care: How CVS Is Evolving From a Drug Store Chain into a Tech Platform

CVS is built on a dominant chain of drug stores, but it is now trying to turn itself into a “uniquely powerful platform” for delivering health care. It uses one part of the supply chain to squeeze competitors in another part of the industry.    

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The World Bank’s “Papergate”: Censorship Is Not the Best Way to Stop Development Aid From Fueling Corruption

A new study of World Bank data finds that aid disbursement to highly aid-dependent countries coincides with sharp increases in bank deposits in offshore financial centers. According to The Economist, the World Bank refused to release the study. Afterward, its chief economist resigned. Here is the full content of the allegedly-censored paper. 

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