Why is Dubai so wealthy?

Dubai as a city is not as wealthy as, let’s say New York or London. It seems very wealthy, because the city’s PR agency does a great job in marketing it as the wealthiest place. Abu Dhabi is actually the richest city in the world. Dubai has no oil left, only 2% of its GDP is based on oil. Everything else is trade, tourism, finance, entertainment and nowadays real estate and health care.

The native population of Dubai is so low in number that if the government distributed the wealth of the city, it would be enough to make everyone very rich. Despite being a wealthy city, Dubai is also in debt because during a real estate boom, the city borrowed loads of cash from banks and private funds.

Dubai is a perfect example of a well curated capitalism. Yes, there are many wealthy families, but their wealth is far less compared to those families in Abu Dhabi let’s say.

Since the local population of Dubai lives a good life, mostly because they are either supported by their rich relatives or government, the general scene of Dubai is wealthy.

The Ruler of Dubai is an amazing person and he is very progressive. He is not afraid to do things others would not even dare, hence his actions draw interest from foreign investors. When money pours business grows. Also, due to Dubai’s lenient financial regulations many foreign wealthy people prefer to invest here or simply park their money, similar to Switzerland.

Dubai has a potential to be a very rich city on a global scale, and I hope this happens in near future because it deserves it.

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The smallest skyscraper in the world

According to Emporis, a real estate data company, a skyscraper is a “multi-story building whose architectural height is at least 100 metres”. By that measure, the Newby-McMahon building in Wichita Falls, Texas, which is widely known as the “world’s smallest skyscraper”, isn’t actually a skyscraper at all.

In fact, it’s not even close – the building is four storeys and 12 metres tall, which in most peoples’ minds makes it little more than a house with ideas above its station. When it was built in 1919, skyscrapers weren’t reaching the heights they are today – but even then, the Newby-McMahon wouldn’t have cut an impressive figure next to the 241 metre Woolworth building in New York, the world’s tallest building at the time.

Unfortunately for its investors, the building’s limited stature came as shock to pretty much everyone – apart from the man who built it.

J. D. McMahon was the owner of the Wichita Falls oil company, whose offices occupied a one-story brick building on the corner of Seventh and La Salle. Next door was a vacant lot, and during the local boom sparked by the discovery of oil in 1912, he decided to meet the city’s growing demand for office space by turning it into a new skyscraper. The building would, plans appeared to show, be 480 feet (146 metres) tall – not bad for a small city barely past its 40th birthday. 

McMahon drew up blueprints and plans to show investors, who promptly gave him a total of $200,000 (around $2.7m at today’s prices) to get going on construction. Preferring to keep things in-house, he decided to use his own construction company to build the structure. 

This might be why it took the investors a little while to realise they’d been had. Slightly too late, it became apparent that McMahon was not, in fact, building a 480 foot tower: he was building a 480 inch one. The investors tried to bring a lawsuit against him, but the judge found that they didn’t have a case: they’d signed off on the original blueprints. Sure enough, these promised that the building would be 480″ tall, and not, as they’d assumed, 480′.

Construction was completed, if you can call it that, in 1919. The building was 12 feet long, 9 feet wide and 40 feet tall. The elevator company had pulled out, so there wasn’t even a way to get from one floor to the next. And McMahon hadn’t even asked for permission to build on the land. None of this bothered him, however – he disappeared from the town, and probably the state, shortly after, presumably with a good chunk of the investors’ $200,000 in his back pocket.

In his absence, the building became the city’s problem. During the oil boom, it had been an embarrassment; during the depression that followed, it was a liability. For a while, the building was occupied by two firms (the extra-narrow stairs that were added later took up around a quarter of the floor space); later it was boarded up.

For the rest of the 20th century the block was occupied by a string of barber shops and cafes, and on multiple occasions it was scheduled for demolition, but it somehow survived to be palmed off onto a local heritage society. However, the building remained controversial. In 1996, Ralph Harvey, of the Wichita County Historical Commission told a reporter from Texnews, “I’ve never understood why some people make such a big deal about it. But about half of the people around here want to save it. The other half would prefer it just to be hauled off.”

In the end, the first half won out, and the building was restored to its former, er, glory. Today it’s a local tourist attraction, with an antiques dealership on the ground floor and an artist’s studio upstairs.

The Newby-McMahon has often been used as a symbol of the gullibility of the boom era: of the eventual realisation that no, the emperor isn’t wearing any clothes, the petroleum boom won’t last, and this building is not, by any definition, a skyscraper. Yet Fodor’s 2008 guide to Texas, which prides itself on highlighting “the best this big and beautiful state has to offer”, names the Newby-McMahon building as a must-see attraction. If those investors had known, maybe they’d have hung on to it.

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Basic income for everyone

The Finnish government is getting serious about the idea of a national basic income. It has commissioned KELA, the national social insurance provider, to study the concept, calculate the costs, and run an experiment in 2017 to judge the feasibility of rolling it out across the country. If, eventually, the government were to approve of such a plan, Finland could scrap all existing benefits and instead hand out a monthly stipend to everyone. According to some reports, the monthly payment could be €800 ($870).

Whereas several Dutch cities will introduce basic income next year andSwitzerland is holding a referendum on the subject, there is strongest political and public support for the idea in Finland.

A poll commissioned by KELA showed that 69% support (link in Finnish) a basic income plan. Prime minister Juha Sipilä is in favor of the idea and he’s backed by most of the major political parties. “For me, a basic income means simplifying the social security system,” he says.

But for those outside Finland, the plan raises two obvious questions: Why is this a good idea, and how will it work?

 It may sound counterintuitive, but the proposal is meant to tackleunemployment. Finland’s unemployment rate is at a 15-year high and a basic income would allow people to take on low-paying jobs without personal cost. At the moment, a temporary job results in lower welfare benefits, which can lead to an overall drop in income.
 Previous experiments have shown that universal basic income can have a positive effect. Everyone in the Canadian town of Dauphin was given a stipend from 1974 to 1979, and though there was a drop in working hours, this was mainly because men spent more time in school and women took longer maternity leaves. Meanwhile, when thousands of unemployed people in Uganda were given unsupervised grants of twice their monthly income, working hours increased by 17% and earnings increased by 38%.

One of the major downsides, of course, is the cost of handing out money to so many people. Liisa Hyssälä, director general of KELA, has said that the plan will save the government millions. But, as Bloomberg calculated, giving €800 of basic income to the population of 5.4 million every month would cost €52.2 billion a year. Finland only plans to give the basic income to adults, not every citizen, but with around 4.9 million adults in Finland, this would still cost €46.7 billion per year. The government expects to have €49.1 billion in revenue in 2016.

Another serious consideration is that some people may be worse off under the plan. As a proposal hasn’t been published yet, it’s not yet known exactly who might lose out. But those who currently receive housing support or disability benefits could conceivably end up with less under national basic income, since the plan calls for scrapping existing benefits. And as national basic income would only give a monthly allowance to adults, a single mother of three could struggle to support herself compared to, for example, a neighbor with the same government support but no children and a part-time job.

Finally, this raises the question of whether it’s really fair to give a relatively better off individual the same amount of welfare as someone who’s truly struggling. Finland’s constitution insists that all citizens must be equal, though, of course, equality can be interpreted in many different ways. So far, there’s no definitive answer as to whether national basic income will create a more or less equal society.

Correction (Dec. 5): An earlier version of this article questioned whether it was fair for millionaires to get the same level of welfare as those who are struggling. As wealthier people still pay tax, a millionaire would technically get €800 per month but would not get net support from the government. The article also cited non-seasonally adjusted unemployment data, which has been changed to the seasonally adjusted figures, and stated the cost of providing basic income for every citizen rather than every adult.
Correction (Dec. 8): An earlier version of this article did not explain that KELA is conducting a study to explore the possibility of a implementing a basic income program. There is no government plan to introduce a basic income for all adults at this time.

Infamous prizes for 2015

One again here are the best prizes ever. This is what “intelligent” scientists do, and they are awarded. Here are the main facts, if you are interested (no joke) you can click on the link at the bottom of the page.

CHEMISTRY PRIZE —  for inventing a chemical recipe to partially un-boil an egg.

PHYSICS PRIZE — for testing the biological principle that nearly all mammals empty their bladders in about 21 seconds (plus or minus 13 seconds).

LITERATURE PRIZE — for discovering that the word “huh?” (or its equivalent) seems to exist in every human language — and for not being quite sure why.

MANAGEMENT PRIZE — for discovering that many business leaders developed in childhood a fondness for risk-taking, when they experienced natural disasters (such as earthquakes, volcanic eruptions, tsunamis, and wildfires) that — for them — had no dire personal consequences.

ECONOMICS PRIZE — To the Bangkok Metropolitan Police [THAILAND], for offering to pay policemen extra cash if the policemen refuse to take bribes.

MEDICINE PRIZE —  for experiments to study the biomedical benefits or biomedical consequences of intense kissing (and other intimate, interpersonal activities).

MATHEMATICS PRIZE —  for trying to use mathematical techniques to determine whether and how Moulay Ismael the Bloodthirsty, the Sharifian Emperor of Morocco, managed, during the years from 1697 through 1727, to father 888 children.

BIOLOGY PRIZE — for observing that when you attach a weighted stick to the rear end of a chicken, the chicken then walks in a manner similar to that in which dinosaurs are thought to have walked.

DIAGNOSTIC MEDICINE PRIZE — for determining that acute appendicitis can be accurately diagnosed by the amount of pain evident when the patient is driven over speed bumps.

PHYSIOLOGY and ENTOMOLOGY PRIZE — Awarded jointly to two individuals: Justin Schmidt for painstakingly creating the Schmidt Sting Pain Index, which rates the relative pain people feel when stung by various insects; and to Michael L. Smith [USA, UK, THE NETHERLANDS], for carefully arranging for honey bees to sting him repeatedly on 25 different locations on his body, to learn which locations are the least painful (the skull, middle toe tip, and upper arm). and which are the most painful (the nostril, upper lip, and penis shaft)

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