Results for “September 5, 2005”
18 found

What should I ask Annie Duke?

I will be doing a Conversation with her.  Here is part of her Wikipedia page:

Anne LaBarr Duke (née Lederer; September 13, 1965) is an American professional poker player and author. She holds a World Series of Poker (WSOP) gold bracelet from 2004 and used to be the leading money winner among women in WSOP history (a title now held by Vanessa Selbst). Duke won the 2004 World Series of Poker Tournament of Champions and the National Heads-Up Poker Championship in 2010. She has written a number of instructional books for poker players, including Decide to Play Great Poker and The Middle Zone, and she published her autobiography, How I Raised, Folded, Bluffed, Flirted, Cursed, and Won Millions at the World Series of Poker, in 2005.

Duke co-founded the non-profit Ante Up for Africa with actor Don Cheadle in 2007 to benefit charities working in African nations, and has raised money for other charities and non-profits through playing in and hosting charitable poker tournaments. She has been involved in advocacy on a number of poker-related issues including advocating for the legality of online gambling and for players’ rights to control their own image.

She also has a new book coming out this fall, How to Decide: Simpler Tools for Making Better Choices.  So what should I ask her?

Has Australia Really Had a 28-Year Expansion? (Yes!)

It’s often said that Australia hasn’t had a recession in nearly 30 years. Paulina Restrepo-Echavarria and Brian Reinbold of the Federal Reserve Bank of St. Louis take a closer look. If a recession is defined as two quarters of negative growth in GDP then the claim is true but if you define a recession as two quarters of negative growth in GDP per capita then there have been three such recessions since 1991: circa 2000-2001, 2005-2006 and 2018-2019.

Line Chart Showing Australia Real GDP Per Capita Growth Rate from 1960 - 2015

Most countries, however, have had more recessions when measured in GDP per capita than in GDP and Australia still looks comparatively good on this measure. Moreover, the official definition of a US recession is not two quarters of negative growth in real GDP it’s the more holistic

A significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Did Australia have three recession since 1991 by this measure? It’s difficult to say but I would look more to unemployment rates. The following graph shows Australian real GDP growth rates in purple measured quarterly, real GDP per capita in green measured annually and the unemployment rate in blue. (The data is not identical to Restrepo-Echavarria and Reinbold (RER) as I use FRED data and the FRED economists do not!). As per RER the purple line is generally above the green so you are more likely to see recessions in GDP per capita than in GDP. Take a look at the unemployment rate, however. The 2005-2006 Australian “recession” is completely absent in unemployment so I would rule that out. I also do not see any recession as measured by unemployment in 2018-2019, perhaps it is coming but I would rule it out as of today. The unemployment measure clearly identifies recessions circa 2001-2002 which agrees with RER and also in 2008-2009 where RER do not identify a recession!. Thus, the RER identification of recessions doesn’t work very well as it has both false positives and false negatives.

On the larger issue of Australian economic performance, at worst, I would identify two mild recessions since 1991, circa 2001-2002 and 2008-2009. Now look again at the graph. The shading is US recessions! The Australian and US economies are united enough and subject to similar enough shocks that US recession dating clearly picks out Australian recessions as measured by increases in unemployment rates.

The bottom line is that however you measure it, Australian performance looks very good. Moreover RER are correct that one of the reasons for strong Australian economic performance is higher population growth rates. It’s not that higher population growth rates are masking poorer performance in real GDP per capita, however, it’s more in my view that higher population growth rates are contributing to strong performance as measured by both real GDP and real GDP per capita.

 

The jobs of the future, circa 1988

A syndicated article published in the September 5, 1988, edition of the Press and Sun-Bulletin newspaper in New York talked with a number of experts about what the jobs of tomorrow would look like. The article first quotes S. Norman Feingold, a clinical psychologist and career counselor who died in 2005.

From the 1988 article:

Feingold envisions a range of exotic careers: Ocean hotel manager, wellness consultant, sports law specialist, lunar astronomer and even robot trainer.

The piece also quotes the George Tech engineering professor Alan Porter who gave his opinion on the future of fast food.

He predicts such innovations as “the Autoburger,” a fast-food dispensary something like McDonald’s, but without human workers.

And the article ends with a mixed bag of good and bad predictions:

Marvin Cetron, a technological forecaster, looks at the year 2000 and predicts a 32-hour work week. “The only job a woman won’t be holding is Catholic priest,” he said.

Cetron said college students of the future will study enzyme research and genetic and robot engineering.

Here is the piece, via Tim Harford.  The broad lesson I think is that bets on computers were basically right, and will be for some time to come, and other bets are either obvious or stupid, in retrospect.

The boom continues and indeed broadens

Growth in the all-important US services sector picked up sharply in September, providing further evidence that the recent string of hurricanes that battered swathe of southeastern US is unlikely to have a significant impact on US third quarter growth.

The Institute for Supply Management’s non-manufacturing gauge came in at 59.8 last month – the highest reading since August 2005. It is a sharp leg up from the reading of 55.3 recorded in August and easily trounced expectations for it to dip to 55.1.

Readings above 50 point to expansion, while those below indicate contraction.

The services sector, which includes professional services, healthcare and other non-manufacturing industries, makes up about 80 per cent of US gross domestic product.

The report comes just days after another ISM survey showed US manufacturing activity grew at its fastest pace in more than 13 years in September and reinforces the view in the market that US economic recovery remains on course for the second half of the year.

That is from Pan Kwan Yuk at the FT, file under “The Show So Far.”

Facts about flood insurance

The National Flood Insurance Program (NFIP) owes $24.6 billion to the Treasury. Most of it covered claims from Hurricane Katrina in 2005, Superstorm Sandy in 2012, and floods in 2016, the program’s third most severe loss-year on record with losses exceeding $4 billion, according to the Federal Emergency Management Agency (FEMA), which manages it.

The NFIP was extended 17 times between 2008 and 2012 and lapsed four times in that period. A 2012 law extended the program to September.

The only source of flood insurance for most Americans, it will be in place for homeowners and businesses in Harvey’s path along the central Texas coast.

But Harvey-related claims covered under the program could push it deeper into the red and possibly toward its borrowing limit of just over $30 billion, said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan budget watchdog in Washington, D.C.

Federal law requires that homes in flood-risk areas have flood insurance before a mortgage can be completed. The program is the only flood insurance available to the vast majority of Americans, although a small market for private flood insurance is sprouting in flood-prone states such as Florida.

Here is the article.  Note the Trump administration previously was pushing a plan to cut the insurance to pay for The Wall.  I do see a case for doing without a federal role for this insurance, but the benefits there come ex ante, not from yanking it away ex post.

Did China’s one-child policy have benefits?

As a leader I would never institute a one-child policy, which I consider to be an immoral restriction on personal liberty.  But if we ask whether this policy had benefits for China, it absolutely did.

For instance the policy made China a more educated society more rapidly.  It is simple economics that putting a lot of money into the education of each child is easier to do with a single child than with three or for that matter seven kids.  The effects of the one-child policy are illustrated through a natural experiment of sorts.  Chinese children who ended up born into twin pairs showed significantly slower rates of schooling progress, worse grades, lower chances of college enrollment, and worse health.  These differences do not follow mainly from the lower birth weight of twins or other birth-related problems (though that is one factor), but rather they stem from the lower resources which are invested in children in larger families.

See Rosenzweig and Zhang, Review of Economic Studies 2009.

By the way, the one-child policy was not the main reason why Chinese fertility fell.  Between 1970 and 1979, before the policy was put in place, the total fertility rate fell dramatically from 5.9 to 2.9.  After the policy was introduced, the total fertility rate actually fell more gradually than during that earlier stretch, settling into 1.7 by 1995.  The best estimate we have is that the one-child policy lowered Chinese births by an average of 0.33 per woman, which is a noticeable but not drastic change.

Even in purely practical terms, it is highly likely the policy has been obsolete for some while.

See Therese Hesketh, Li Lu, and Zhu Wei Xing. “The Effect of China’s One-Child Family Policy after 25 Years.” New England Journal of Medicine, September 15, 2005, 1171-1176, and Marjorie McElroy and Dennis Tao Yang. “Carrots and Sticks: Fertility Effects of China’s Population Policies.” American Economic Review, May 2000, 389-392.

My International Trade reading list

Many people have been asking me for this.  It’s not yet finished, but you can find the current version under the fold of this post.  Suggestions for adding are of course welcome…

Books: Paul Krugman, Pop Internationalism, Geography and Trade, and Development, Geography, and Economic Theory.  Dani Rodrik, One Economics, Many Recipes, and Jacob Viner, Studies in the Theory of International Trade (on-line).

All videos can be found on MRUniversity.com, if not in the (forthcoming, in September) international trade section than in the development economics class or a few on Mexico in the Mexico class.  In general I recommend viewing the videos before tackling the readings.

 

I. Comparative advantage and free trade

Bernhofen, Daniel and John C. Brown. 2005. “An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan.” American Economic Review.

Autor, David H. David Dorn and Gordon H. Hanson. 2013. “Untangling Trade and Technology: Evidence from Local Labor Markets.” NBER Working Paper.

Acemoglu, Daron, David Autor, David Dorn, and Gordon H. Hanson. 2013. “Import Competition and the Great US Employment Sag of the 2000s.” NBER Working Paper.

Goldberg, Pinelopi Koujianou and Nina Pavcnik. 2007. “Distributional Effects of Globalization in Developing Countries.” Journal of Economic Literature.

Videos: The two videos on Comparative Advantage, Sources of Comparative Advantage, Development and Trade, empirical evidence, Evidence on Comparative Advantage from Japan.

 

II.Free trade and tariffs

Paul Krugman. “The One-Minute Trade Policy Theorist.” (powerpoint)

Humphrey, Thomas M. 1987. “Classical and Neoclassical Roots of The Theory of Optimum Tariffs.” Economic Review, Federal Reserve Bank of Richmond.

Broda, Christian, Nuno Limao, and David Weinstein. 2008. “Optimal Tariffs and Market Power: The Evidence.” American Economic Review.

Arkolakis, Costas, Arnaud Costinot and Andres Rodriguez-Clare. 2012. “New Trade Models, Same Old Gains?” American Economic Review.

Kehoe, Timothy J. and Kim J. Kuhl. 2006. “How Important Is the New Goods Margin in International Trade?” NBER Working Paper.

Bernhofen, Daniel M., Zouheir El-Sahli, and RIchard Kneller. 2012. “Estimating the Effects of the Container Revolution on World Trade.” University of Nottingham Discussion Paper Series.

Nunn, Nathan and Daniel Trefler. 2010. “The Structure of Tariffs and Long-Term Growth.” American Economic Review.

Videos: Tariffs v. Quotas, International Trade Disciplines Monopolies, Effective rate of protection, Theory of Optimal Tariffs, Does “fair trade” help?, Malawi restrict trade in corn, Market reforms in Bangladesh, John Stuart Mill Terms of trade, The Shipping Container.

 

III. Heckscher-Ohlin and factor abundance theories of trade

Helpman, Elhanan. 1999. “The Structure of Foreign Trade.” Journal of Economic Perspectives.

Debaere, Peter. 2003. “Factor Abundance and Trade.” Journal of Political Economy.

Deardorff, Alan V. 1979. “Weak Links in the Chain of Comparative Advantage.” Journal of International Economics.

Trefler, Daniel. 1993. “International Factor Price Differences: Leontief Was Right!” Journal of Political Economy.

Davis, Donald R. and David E. Weinstein. 2001. “What Role for International Trade.” NBER Working Paper.

Davis, Donald R. 1995. “Intra-Industry Trade: A Heckscher-Ohlin-Ricardo Approach.” Journal of International Economics.

Deardorff, Alan V. 1982. “The General Validity of the Heckscher-Ohlin Theorem.” American Economic Review.

Videos: What is at Stake in Trade Theories?, The Heckscher-Ohlin Theorem, Evidence on the Heckscher-Ohlin Theorem.

 

IV. Increasing Returns

Donaldson, David. “Increasing Returns to Scale and Monopolistic Trade.” Powerpoint, on-line.

Helpman, Elhanan. 1987. “Imperfect Competition and International Trade: Evidence from Fourteen Industrial Countries.” Journal of the Japanese and International Economics.

Davis, Donald R. and David E. Weinstein. 2003. “Market Access, Economic Geography, and Comparative Advantage: An Empirical Test.” Journal of International Economics.

Baldwin, Richard and James Harrigan. 2010. “Zeros, Quality, and Space: Trade Theory and Trade Evidence.” NBER Working Paper.

Antweiler, Werner and Daniel Trefler. 2000. “Increasing Returns and All That: A View from Trade.” NBER Working Paper.

Debaere, Peter. 2005. “Monopolistic Competition and Trade, Revisited: Testing the Model Without Testing for Gravity.” Journal of International Economics.

Yi, Kei-Mu. 1999. “Can Vertical Specialization Explain the Growth of World Trade?” Journal of Political Economy.

Harrigan, James. 2001. “Specialization and the Volume of Trade: Do the Data Obey the Laws?” NBER Working Paper.

Bernard, Andrew B., J. Bradford Jensen, Stephen Redding, and Peter K. Schott. 2007. “Firms in International Trade.” NBER Working Paper.

Helpman, Elhanan. 2013. “Foreign Trade and Investment: Firm-Level Perspectives.” NBER Working Paper.

Tybout, James R. 2001. “Plant- and Firm-Level Evidence on “New” Trade Theories.” NBER Working Paper.

Bernard, Andrew B. and J. Bradford Jensen. 2004. “Why Some Firms Export.” Review of Economics and Statistics.

Videos: Trade and External Economies of Scale, Monopolistic Competition and International Trade, Trade and Increasing Returns: Evidence, Paul Romer, Robert Torrens on strategic trade policy, The Economics of Bollywood.

 

V. Gravity models

Anderson, James and Eric van Wincoop.  2004. “Trade Costs” Journal of Economic Literature.

Head, Keith. 2011. “Gravity for Beginners.” Presented at US-Canada Border Conference.

Hummels, David. 2007. “Transportation Costs and International Trade in the Second Era of Globalization.” Journal of Economic Perspectives.

Deardorff, Alan V. 1998. “Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?” NBER Working Paper.

Feenstra, Robert C., James R. Markusen, and Andrew K. Rose. 2001. “Using the Gravity Equation to Differentiate Among Alternative Theories of Trade.” The Canadian Journal of Economics.

Evenett, Simon J. and Wolfgang Keller. 1998. “On Theories Explaining the Success of the Gravity Equation.” NBER Working Paper.

Trefler, Daniel. 1995. “The Case of the Missing Trade and Other Mysteries.” American Economic Review.

Anderson, James and Eric van Wincoop. 2003. “Gravity with Gravitas: A Solution to the Border Puzzle.” American Economic Review.

Novy, Dennis. 2012. “Gravity Redux: Measuring International Trade Costs with Panel Data.” Economic Inquiry.

Eaton, Jonathan and Samuel Kortum. 2002. “Technology, Geography, and Trade.” Econometrica.

Donaldson, David. 2011. “Gravity Models.” No Journal—powerpoint.

Rossi-Hansberg, Esteban. 2005. “A Spatial Theory of Trade.” American Economic Review.

Chaney, Thomas. 2008. “Distorted Gravity: The Intensive and Extensive Margins of International Trade.” American Economic Review.

Anderson, James E. 1979. “A Theoretical Foundation for the Gravity Equation.” American Economic Review.

Video: The Gravity Equation and the Costs of Trade.

 

VI. Offshoring and factor prices

No Author. “Trade and Factor Prices” (powerpoint)

Feenstra, Robert C. 2008. “Offshoring in the Global Economy.” Ohlin Lecture Series.

Grossman, Gene M. and Esteban Rossi-Hansberg. 2006. “The Rise of Offshoring: It’s Not Wine for Cloth Anymore.” Federal Reserve Bank of Kansas City.

Grossman, Gene M. 2008. “Trading Tasks: A Simple Theory of Offshoring.” American Economic Review.

Donaldson, David. 2011. “Trade and Labor Markets.” powerpoint.

Khandelwal, Amit. 2009. “The Long and Short (of) Quality Ladders.” Review of Economic Studies.

Bernard, Andrew B., Stephen J Redding, and Peter K. Schott. 2012. “Testing the Factor Price Equality with Unobserved Differences in Factor Quality or Productivity.” U.S. Census Bureau Working Paper.

Baldwin, Richard. 2011. “How Trade and Industrial Organization After Globalization’s 2nd Unblundling: How Building and Joining a Supply Chain are Different and Why it Matters.” NBER Working Paper.

Videos: Factor price equalization, Specific Factors Models, Economics of Offshoring, The Rybczynski Theorem, Trade, Investment, and Migration as Substitutes, Unbundling the Supply Chain.

 

VI. Trade in economic history

Blecker, Robert A. 1997. “The ‘Unnatural and Retrograde Order’: Adam Smith’s Theories of Trade and Development Reconsidered.” Economica.

Irwin, Douglas. 2002. “Interpreting the Tariff-Growth Correlation of the Late Nineteenth Century.” American Economic Review.

Irwin, Douglas. 2002. “Did Import Substitution Promote Growth in the Late Nineteenth Century?” NBER Working Paper.

Clemens, Michael A. and Jeffrey G. Williamson. 2001. “A Tariff-Growth Paradox? Protection’s Impact on the World Around 1875-1997.” NBER Working Paper.

John Nye, “The Myth of Free Trade Britain and Fortress France,” Journal of Economic History, 1991.

Harrison, Ann and Andres Rodriguez-Clare. 2009. “Trade, Foreign Investment, and Industrial Policy for Developing Countries.” NBER Working Paper.

Irwin, Douglas. 1997. “From Smoot-Hawley to Reciprocal Agreements: Changing the Course of U.S. Trade Policy in the 1930s.” NBER Working Paper.

Irwin, Douglas. 1998. “The Smoot-Hawley Tariff: A Quantitative Assessment.” The Review of Economic Statistics.

Crowley, Meredith A. and Xi Luo. 2011. “Understanding the Great Trade Collapse of 2008-09 and the Subsequent Trade Recovery.” Journal of Economic Perspectives.

Gopinath, Gita and Oleg Itskhoki. 2009. “Trade Prices and the Global Trade Collapse of 2008-2009.” NBER Working Paper.

Francois, Joseph and Julia Woerz. 2009. “The Big Drop: Trade and the Great Recession.” No Journal, article online.

Videos: Corn Law debates, Friedrich List, Robert Torrens on sliding tariffs, The deindustrialization of India, Tariffs and Growth in the late 19th Century, South Korea and Industrial Policy, The Smoot-Hawley Tariff, Why Did Trade Plummet in the Great Recession?

 

VII. FDI and multinationals

Blonigen, Bruce A. 2005. “A Review of the Empirical Literature on FDI Determinants.” NBER Working Paper.

Ramondo, Natalia and Andres Rodriguez-Clare. 2009. “Trade, Multinational Production, and the Gains from Openness.” NBER Working Paper.

Antras, Pol and Stephen R. Yeaple. 2013. “Multinational Firms and the Structure of International Trade.” NBER Working Paper.

Videos: Basics of multinational corporations, Intra-firm Trade, Intra-industry Trade, Gains from Multinationals, Who Gains from FDI?, Productivity in firms, Foreign investment in India, Competition from foreign retailers, What is a Maquiladora? Introduction to NAFTA, NAFTA and Mexican Agriculture, The Effect of NAFTA on the Mexican Economy.

 

VIII. The politics of trade

Grossman, Gene M. and Elhanan Helpman. 1994. “Protection for Sale.” American Economic Review.

Goldberg, Pinelopi Koujianou and Giovanni Maggi. 1999. “Protection for Sale: An Empirical Investigation.” American Economic Review.

Mayda, Anna Maria and Dani Rodrik. 2005. “What are Some People (and Countries) More Protectionist than Others?” European Economic Review.

Grossman, Gene M. and Elhanan Helpman. 1995. “The Politics of Free-Trade Agreements.” American Economic Review.

Harrison, Ann and Jason Scorse. 2010. “Multinational and Anti-Sweatshop Activism.” American Economic Review.

Videos: The Political Economy of Tariffs, Does Trade Help the Environment?, Regulation as a Major Trade Barrier, Who Supports Free Trade?, The Cultural Diversity Critique of Markets.

 

Do economists think TV is good for you?

In a nutshell, yes:

The variation Mr. Gentzkow
and Mr. Shapiro exploited was the timing of the introduction of TV into
different cities. Television began taking off in the U.S. in 1946,
after a wartime ban on TV production was lifted. But the Federal
Communications Commission stopped granting new commercial television
licenses from September 1948 to April 1952 while it made changes in
allocating broadcast spectrum. There was a long lag between when some
cities got television and when others did.

The economists then
looked at results of a survey of 800 U.S. schools that administered
tests to 346,662 sixth-grade, ninth-grade and 12th-grade students in
1965. Their finding: Adjusting for differences in household income,
parents’ educational background and other factors, children who lived
in cities that gave them more exposure to television in early childhood
performed better on the tests than those with less exposure.

The
economists found that television was especially positive for children
in households where English wasn’t the primary language and parents’
education level was lower. "We don’t exactly know why that is, but a
plausible interpretation is that the effect of television on cognitive
development depends on what other kinds of activity television is
substituting for," says Mr. Shapiro, 28.

Here is much more.  And yes the "Mr. Shapiro" is in fact Wunderkind Jesse Shapiro, a familiar figure to MR readers everywhere.  You’ll find two versions of the paper here.

Addendum: Here is Alex’s excellent post on the topic.

Department of Uh-Oh, a continuing series

After each move Mr. Kramnik immediately heads to the rest room and from it directly to the bathroom.  During every game he visited the relaxation room 25 times at the average and the bathroom more than 50 times – the bathroom is the only place without video surveillance…

Should this extremely serious problem remain unsolved by 10.00 o’clock tomorrow (September 29th, 2006), we would seriously reconsider the participation of the World [chess] Champion Veselin Topalov in this match.

Here is the story.  Kramnik is leading 3-1; with the exception of his B x f8?? move in game two, his tactical play has been uncannily accurate, and indeed computer-like, at key moments.  Or maybe he has learned that new style by playing with computers.  Here is my previous post on the topic.

The Republican War on Science

Chris Mooney’s new tract is one of the most important books of this year.  Here is a CrookedTimber review.  If you can’t figure out the book’s contents from the title, here is Chris’s blog

My take: I agree with most of the arguments but would have called it The Political War on Science.  Democrat politicians are excessively enamored of government regulation, for instance, and many of them do not pay enough attention to incentives.  (Admittedly these issues are not as clear cut as the theory of evolution; Mooney in fact suggests a scientific approach will lead to more regulation.)  The left often treats human beings as excessively malleable.  Both Carter and Clinton committed some gross errors out of self-deception; they violated the simple principle of dominance rather than any complicated scientific hypothesis.  (What exactly should count as an error of science?)  In fairness to Mooney he does point out many Democrat or left-wing transgressions although not all of these.

Has the increase in Republican hostility to science sprung from an especially bad and craven administration on this issue?  Or has there also been a more fundamental shift in the political equilibrium, due to the greater mobilization of interest groups?  Perhaps voters will be judging science on a more frequent basis from now on, and asking their politicians to take the side of untruth.  Advances in biology will spur this tendency.  Why do Democrat errors more frequently get framed as failures of will or morality, rather than ignorance, vice versa for current Republican errors?  How much of the difference is real and how much is framing?  For how long will media take the side of the Democrats on scientific issues?  Here is today’s New York Times piece on related issues.

Elsewhere on the book front, John Coetzee’s Slow Man is due out September 22, pre-order it hereThe FT reviewer was not crazy about it but I hold greater trust in the author.

How robust are cities?

Can New Orleans take some small comfort in history?

Their [David Weinstein and Donald Davis] conclusions are based on a study of population growth in Japanese cities that suffered through earthquakes in 1923 and 1995 and bombing during World War II. Following these catastrophes, many Japanese cities suffered greater population and building losses than did New York on September 11. Yet, these cities rebounded not only to where they had been before the attacks, but actually saw their populations rise to levels that one would have predicted based on their prewar size and growth rates. Not only was there no discernable impact from bombing on city size 20 years after the end of the war, recovery from earthquakes seems, if anything, faster. Following the 1923 earthquake in Tokyo and the 1995 earthquake in Kobe, both cities recovered their pre-quake populations within five years.

Paul Krugman summarized this research.  Here is the paper.  Here is Davis’s home page, with related papers.

My doubts: Postwar Japan offered healthier institutions than what came before, so the motives for rebuilding cities were obvious.  Plus much of Japan was destroyed, so there was less reason to reallocate resources elsewhere in the country.  Post-1995 Kobe is the more relevant case for optimism, or try post-1905 San Francisco.  But New Orleans has, for a long time, had subpar urban government compared to the rest of the United States.  And the city has been declining in relative status for 150 years.  If we are starting urban decisions over again from scratch, why reinvest in a lower quality legal environment?  And did Johnstown ever recover its previous position, after its flood?  Will New Orleans see recurrent flooding, as did Johnstown?  What ever happened to Pompeii?

Here is a short essay on the natural geography of New Orleans.  Will the new city simply be support services for nearby oil and natural gas, or will the residents and tourists return in their previous numbers?  Will the unique position of its Mississippi port guarantee its future?  Or will the destruction of the Garden District herald the beginning of the end?

Addendum: Here is a Wall Street Journal article on said topic.

Unintended consequences

The September 11, 2001, terrorist attacks are increasingly viewed in the oil-rich Arab countries of the Persian Gulf as the catalyst for an economic boom when Arabs divested from America and reinvested at home.
    Arab investors pulled tens of billions of dollars out of the United States. They were angered by perceived American hostility toward Arabs. They worried their assets would be frozen by U.S. counter-terrorism measures. And U.S. markets happened to be plummeting while economies in the Persian Gulf were on the upswing, buoyed by rising oil prices.
    The results have been spectacular.
    Since late 2001, economies in the six Gulf Cooperation Council countries — Bahrain, United Arab Emirates, Kuwait, Oman, Qatar and Saudi Arabia — have soared, with stock markets up a collective 400 percent. The Standard & Poor’s 500 rose 24 percent over that period.

It is noted that rising oil prices have not hurt either; here is the story.  Dubai has probably been the biggest beneficiary.

What went wrong with red delicious apples?

I now find these apples inedible.  Why?  Falling prices led to overbreeding and lack of care:

Who’s to blame for the decline of Red Delicious? Everyone, it seems. Consumers were drawn to the eye candy of brilliantly red apples, so supermarket chains paid more for them. Thus, breeders and nurseries patented and propagated the most rubied mutations, or "sports," that they could find, and growers bought them by the millions, knowing that these thick-skinned wonders also would store for ages…

The Washington harvest begins in mid-August and runs to late October, and most apples sold through December are simply stored in refrigerated warehouses. Fruit shipped later in this cycle is kept in a more sophisticated environment called controlled-atmosphere storage — airtight rooms where the temperatures are chilly, the humidity high and the oxygen levels reduced to a bare minimum to arrest aging. Last year’s fruit will be sold through September, just as the new harvest is in full swing.

Storage apples must be picked before all their starches turn to sugar. Pick too late, and the apple turns mealy in the supermarket, but pick too soon, and the apple will never taste sweet. Growers test for optimum conditions, but today’s popular strains of Red Delicious turn color two to three weeks before harvest, making it difficult for pickers to distinguish an apple that is ready from one that isn’t…

The grower could deliver a better apple by harvesting a tree in two or three waves — the outside fruit ripens earlier than fruit in the center of the tree. This is done for Galas and other premium varieties, but the prices for Red Delicious are so depressed that farmers can’t afford that. "You would put yourself out of business," said Roger Pepperl, marketing director for Stemilt Growers Inc., a major grower in Wenatchee. In addition, the redder strains’ thicker skins, found to be rich in antioxidants, taste bitter to many palates.

The bottom line is that this practice has backfired.  Consumers are no longer looking to buy artificial fruits simply for their color or durability.  Here is the full story, and please support this trend by refusing to buy the standard red delicious apple.

Dollars for Guns

When the UN entered Liberia in September 2003, they instituted a voluntary disarmament program.  The program specified that ex-combatants could turn in their guns for $300 and a free education (completion of high school or a choice between various trade schools).  The $300 alone is a significant figure, as it is more than double the per capita gross national income.  From outside Liberia, this program appeared to be successful.  Kofi Annan ended the voluntary disarmament in June 2005. 

With no official data to support their claims, many Liberians feel that the program was a disaster, and that all of the significant factions still have plenty of arms.  The problems they cite are not surprising to an economist:

  1. Many guns were imported to Liberia to cash in on the $300, a price well above market-clearing.
  2. UN military personnel, enjoying their immense power, actually declined guns in several parts of the country, in order that their assignment in Liberia might last longer.

Will the violence return after the elections in October?  Liberians seem to be split on this.  Given that there are currently 52 candidates for President, most citizens will be disappointed with the outcome.

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