THREE times in the last 35 years, Russian military forces have crossed international borders – in Afghanistan in 1979, Georgia in 2008 and the Crimea earlier this year. As Simon Derrick, the currency strategist at BNY Mellon points out, each occasion coincided with a peak in the oil price. And each incursion was followed by a very sharp fall in the price of crude (see chart).

…If the previous episodes are any guide, oil has a fair way to fall.

That is from Buttonwood at The Economist, file under “speculative”…

 

Sewage Infrastructure

by on November 23, 2014 at 9:08 am in Food and Drink, Uncategorized | Permalink

This Vice documentary on sewage in New York is actually quite interesting. I would enjoy the Richard Scarry book.

Hat tip: Connor.

China estimate of the day

by on November 23, 2014 at 3:53 am in Economics, History | Permalink

…the evidence suggests that China was larger (in terms of purchasing power parity) than any other economy in the world until around 1889, when the US eclipsed it. Now, 125 years later, the rankings have reversed again, following decades of rapid economic development in China.

That is from Jeffrey Sachs, there is more here.

…cetacean brain size, relative to body size, increased substantially about thirty-eight mill years ago when the odontocetes evolved from the ancient archaeocetes…

What drove these changes? It does not seem to have been the transition to an aquatic existence itself as that occurred about fifty-five million years ago and brains stayed at roughly the same relatively small size relative to body weigt as the archaeocetes made their gradual entry into the ocean.  A better hypothesis is that the increased brain size of the odontocetes thirty-eight million years ago was driven by the evolution of echolocation.  The early odontocetes had inner ear bones that were good at picking up high frequency sound, which suggests that they had developed a form of sonar.  Lori Marino thinks “that echolocation came on line and then got co-opted for social communicative purposes.”  In this scenario, the odontocete brains increased in relative size to deal with the acoustic information itself, as well as, perhaps, a new perceptual system based on the data from the returning echoes.  But…the change may have been even more profound: “This may indicate that the large brains of early odontocetes were used, at least partly, for processing this entirely new sensory mode [echolocation] that evolved at the same time as these anatomical changes and perhaps for integrating this new mode into an increasingly complex behavioral ecological system.”

That is from the new and notable The Cultural Lives of Whales and Dolphins, by Hal Whitehead and Luke Rendell, previously covered on MR here.  And here is my earlier post on the economics of dolphins.

Brazil (China) fact of the day

by on November 22, 2014 at 2:04 pm in Economics, History | Permalink

From 1967 to 1980, Brazil grew at an average annual rate of 5.2 per cent. Few would have predicted, then, that for the next 22 years per capita income would grow at precisely zero.

That is from David Pilling at the FT, who considers China as well.  And here is part of the first comment on the article, from Danny Quah:

Success, by definition, means being different from the mean. For economic growth the quantitative implications of such success (or even apparent failure) are laid out in http://blogs.worldbank.org/futuredevelopment/chinese-lessons-singapore-s-epic-regression-mean. Sure China’s continued growth faces manifold obstacles but many of those problems are not insurmountable http://www.boaoreview.com/perspective/2013/1115/296.html

The pointer here is from Helmut Reisen.

The Bill Cosby Collection

by on November 22, 2014 at 10:56 am in Current Affairs, The Arts | Permalink

It doesn’t sound quite right to still call it that, does it?  In any case it is on display at the National Museum of African Art.  At least two-thirds of the collection is lame and maybe a third or somewhat less is wonderful.  Cosby for instance has excellent works by Jacob Lawrence, Horace Pippin, Minnie Evans, Henry Ossawa Tanner, (and here), Romare Bearden, some amazing quilts and textiles (try here too), and quality African ethnographic pieces.  The works by lesser-known creators are mostly sentimental junk with lots of gloppy paint and hackneyed historical themes, or perhaps a maudlin portrait of some kind.

My hypothesis is simple: in any collecting area where price is a sufficient statistic for quality, Cosby did well by paying top dollar, or at least by letting himself be “mined” by his buyer agent, who probably had a financial incentive to pay top dollar.  In any area where judgment was required, Cosby chose very poorly.

Here is one review of the show and the surrounding controversy.  Here is WaPo coverage.  What is the average moral quality of assemblers of art?  How should we feel about the collection in the Louvre, the Prado, or for that matter art museums anywhere in Russia?  Here is an article on how colleges and universities are responding to their involvement with Cosby.

The African Mosaic show at the African Museum is worth a visit as well.  The Washington D.C. art exhibit scene is much worse than it was fifteen years ago, but right now the African Museum is the place to go.

Assorted links

by on November 22, 2014 at 1:35 am in Uncategorized | Permalink

1. When does the peak of emotional life occur?

2. Paul Krugman advising Japan.

3. What would a Ukrainian financial meltdown look like?

4. Bobsled desegregation.

5. The coming global domination of chicken?

6. How public pay phones are evolving.

The art sale gender pay gap

by on November 22, 2014 at 12:16 am in Economics, The Arts | Permalink

A Georgia O’Keeffe painting just sold for over $44 million, setting a new record for a painting by a woman; the previous record was for a Joan Mitchell painting auctioned for $11.9 million.  A Francis Bacon once auctioned for $142.4 million, and so:

Despite the huge O’Keeffe sale, the cavern between the men’s and women’s records remains yawning. The gender pay gap is something like 84 cents to the dollar. The art sale “record gap” is now about 31 cents to the dollar. Before Thursday, it was 8 cents.

That is by Oliver Roeder, the full article is here.

The Great Zynga Reset

by on November 21, 2014 at 2:03 pm in Current Affairs, Economics | Permalink

At companies where pampering employees has always been part of the culture, it is hard to stop if business turns sour. Zynga Inc. shares have fallen more than 80% since 2012 as the game maker struggles to find a follow-up hit to “Farmville.” Before going public in 2011, Zynga began serving lunch and dinner daily to its employees, using specialty ingredients like Japanese Kewpie mayonnaise and pinecone syrup.

A spokeswoman for Zynga, based in San Francisco, says the company ended free haircuts for employees earlier this year. She declined to comment further.

As perks get bigger and better, some employees figure they can ask for anything. One worker at Pinterest recently wanted the company to build a zip line to a nearby bar, while an Adobe employee asked the maker of Photoshop and Illustrator design software to buy a Slip ’N Slide for workday use.

The article, which focuses on perks in the workplace, is of interest more generally.  For the pointer I thank Samir Varma.

Assorted links

by on November 21, 2014 at 11:48 am in Uncategorized | Permalink

1. What Larry Summers is thankful for.  And Larry Summers reviews Too Big To Jail, an important book in his view.

2. Trying to predict the Supreme Court.

3. More evidence for The Great Factor Price Equalization.

4. The importance of Great Medieval Thinkers.

5. The liquidity monster that awaits.

6. The Karl Marx credit card.

You will find it here (pdf), forthcoming in the Erasmus Journal of Philosophy and Economics.

For the pointer I thank Ray Lopez, who in turn drew upon Patrick R. Sullivan, a commentator at The Money Illusion.

Human-dolphin fishing cooperatives

by on November 21, 2014 at 2:37 am in Books, Education, Science | Permalink

1. They have been reported to exist in Australia, India, Mauritania, Burma, and the Mediterranean, but the best known are in Brazil.

2. In parts of southern Brazil, human fisherman have been cooperating with dolphins for many generations (of each species).

3. If fishermen clap just the right way, dolphins will herd fish into the desired areas of fishermen, in muddy lagoon areas.

4. The dolphins perform a distinctive kind of dive to signal to the humans it is time to cast the net for the fish.

5. Only some individual dolphins are able (willing?) to do this well, perhaps the others belong to the forty-seven percent.

5b. The dolphins which cooperate with the fisherman are also more social, more socially connected, and more cooperative with other dolphins.

6. The Brazilian fishermen name the star cooperating dolphins after ex-presidents, soccer players, and Hollywood stars.

7. The names aside, it is not clear whether dolphins benefit from offering this assistance; some commentators suggest the dolphins end up with isolated or injured fish from these exercises.

Here is one blog post report on these practices.  Here is one piece of the original research.  I stumbled upon this while reading the new and excellent Hal Whitehead and Luke Rendell The Cultural Lives of Whales and Dolphins, a new book from University of Chicago Press.

What I’ve been reading

by on November 21, 2014 at 1:55 am in Books | Permalink

1. Daniel Schreiber, Susan Sontag: A Biography.  I never tire reading about her, or reading her, for that matter.

2. Richard Bernstein, China 1945: Mao’s Revolution and America’s Fateful Choice.  A very good book on how the Americans had a decent relationship with the Chinese Communists in 1945 and how rapidly that fell apart and why.

3. Paul Vigna and Michael J. Casey, The Age of Cryptocurrency: How Bitcoin and Digital Money are Challenging the Global Economic Order.  A good and useful introduction to the beliefs of those who believe in the subtitle being true.

4. Michael Pye, The Edge of the World: How the North Sea Made Us Who We Are.  The topic is so intriguing to me that I’m going to start this book over again fresh.  My first crack at it yielded no success, as I felt it was too much about Bede and Frisia and didn’t tie together a larger picture.  But I paid extra shipping charges to get it early from the UK (it’s not yet out in America), so perhaps I am not treating sunk costs as sunk…

5. Pramoedya Ananta Toer, This Earth of Mankind, volume one of the Buru Quartet.  These are the greatest books which most educated people never read, and I am giving them a reread.  So far volume one is as good as I remember it, maybe better.  I think of the set as an extended, four-volume meditation, by an Indonesian political prisoner, on what a life really consists of.  Here is a short essay on the quartet.

Adam Ozimek reports:

A 2002 paper from Kossoudji and Cobb-Clark found that following the 1986 illegal immigrant amnesty, the wages of those amnestied rose 6% between 1989 and 1992. They found that the majority of the wage penalty of being illegal is due to an inability to move between occupations.

…The effect this will have on labor markets is complicated slightly by the fact that it’s not really a full amnesty. Instead it’s really a three year promise to not deport, and a three year work permit.

There is more here.  The original research is on JSTOR here.

Jonathan Chapman, a job market candidate at CalTech, has a new paper (pdf) which suggests that was the case:

Many theories of democratization suggest that extending the right to vote will lead to increased government expenditure (e.g. Meltzer and Richard, 1981; Lizzeri and Persico, 2004; Acemoglu and Robinson, 2000). However, these models frequently assume that government can engage in transfer expenditure, which is often not true for local governments. This paper presents and tests a model in which government expenditure is limited to the provision of public goods. The model predicts that the poor and the rich desire lower public goods expenditure than the middle class: the rich  because of the relatively high tax burden, and the poor because of a high marginal utility of consumption. Consequently extensions of the franchise to the poor can be associated with declines in government expenditure on public goods. This prediction is tested using a new dataset of local  government financial accounts in England between 1867 and 1900, which captures government expenditure on key infrastructure projects that are not included in many studies of national democratic reform. The empirical analysis exploits plausibly exogenous variation in the extent of the franchise to identify the effects of extending voting rights to the poor. The results show strong support for the theoretical prediction: expenditure increased following relatively small extensions of the franchise, but fell following extensions of the franchise beyond around 50% of the adult male population.

It is perhaps too quick a jump from 19th century England to contemporary advanced economies.  Still, it is an interesting hypothesis that the current thinning out of the middle class will decrease the political support for infrastructure investment.