Current Affairs

Singapore’s nuTonomy, founded by two researchers from the Massachusetts Institute of Technology, said Thursday it began testing a free taxi-hailing service in a small business district in Singapore called one-north, a campus-like space dominated by tech firms and biotechnology companies. Other tech companies including Chinese internet giant Baidu Inc. have been testing self-driving cars on the roads for years, but this is the first time the vehicles have been open to public use.

…Mr. Parker said the Singapore government had laid out a series of milestones for nuTonomy to achieve before it is allowed to extend its trials to other areas of the city. He declined to provide details on those milestones, but said the next stage would be to expand the service to a neighborhood adjacent to one-north.

Here is the WSJ piece, here are other articles.  I recall predicting about a year and a half ago that Singapore would be the first to do this.  A Singaporean countered me, and interjected they were very worried that their plans were falling behind.  I said: “That is exactly my point.  You are worried that you are falling behind.  Congratulations.”

Worry.  Singapore.  Think about it.

When it comes to contingent government pension liabilities as a percentage of gdp, Poland appears to be above 350%.

France, Denmark, and Germany are next in line, with figures well over 300%.  For purposes of comparison, the United States is considered to have a serious pension problem but the corresponding number is only slightly above 100%.

Here is the John Authers and Robin Wiggelsworth FT story.  Australia seems to be doing best.

One reason for this high Polish sum is that the Polish government has semi-nationalized a lot of the private sector pension liabilities.  In 2014, this procedure (FT) did not receive much discussion:

As part of an overhaul of the country’s pension system, Warsaw will next week transfer from privately-managed funds to the state 150bn zlotys (€36bn) of Polish government bonds and government-backed securities, which will then be cancelled.

I believe this idea will reenter the broader policy debate sooner or later.

That is my latest Bloomberg column, here is one excerpt:

The virtues of business startups have led to many a success story. These enterprises start with clean slates. They embody the focused and often idiosyncratic visions of their founders. The successful ones grow faster than their competitors. Even after they become larger and more bureaucratic, these companies often retain some of the creative spirit of their startup origins.

It is less commonly recognized that some nations, including many of the post-World War II economic miracles, had features of startups. For instance, Singapore started as an independent country in 1965, after it was essentially kicked out of Malaysia and suddenly had to fend for itself. Lee Kuan Yew was the country’s first leader, and he embodied many features of the founder-chief executive: setting the vision and ethos, assuming responsibility for other personnel, influencing the early product lines in manufacturing and serving as a chairman-of-the-board figure in his later years.

Other start-ups nations have been UAE, Israel, Taiwan, Hong Kong, Cayman Islands, Estonia, South Korea, and of course way back when the United States.  You will note that many of these examples are imperfectly democratic in their early years, and they do not in every case grow out of it.  And this:

The world today seems to have lower potential for startup nations. This is in part because international relations are more peaceful and also because most colonial relationships have receded into the more distant past. Those are both positive developments, but the corresponding downside is not always recognized, namely fewer chances for reshuffling the pieces.

This is the close:

To paraphrase John Cleese from Monty Python, the startup nation concept isn’t dead, it’s just resting. Whether in business or in politics, the compelling logic of the startup just isn’t going away.

The best chances for future start-ups may be in Africa, around the borders of Russia, and perhaps someday (not now) Kurdistan.  Do read the whole thing.

From the University of Chicago letter welcoming students:

…Earning a place in our community of scholars is no small achievement and we are delighted that you selected Chicago to continue your intellectual journey.

Once here you will discover that one of the University of Chicago’s defining characteristics is our commitment to freedom of inquiry and expression. … Members of our community are encouraged to speak, write, listen, challenge, and learn, without fear of censorship. Civility and mutual respect are vital to all of us, and freedom of expression does not mean the freedom to harass or threaten others. You will find that we expect members of our community to be engaged in rigorous debate, discussion, and even disagreement. At times this may challenge you and even cause discomfort.

Our commitment to academic freedom means that we do not support so called ‘trigger warnings,’ we do not cancel invited speakers because their topics might prove controversial, and we do not condone the creation of intellectual ‘safe spaces’ where individuals can retreat from ideas and perspectives at odds with their own….

Here is the summary:

The stereotypical obituary is a formulaic recitation of facts — dry, boring, and without craft. But Margalit Fox has shown the genre can produce some of the most memorable and moving stories in journalism. Exploiting its “pure narrative arc,” Fox has penned over 1,200 obituaries, covering well-known and obscure subjects with equal aplomb.

In her conversation with Tyler Cowen, Fox reveals not only the process for writing an obituary, but her thoughts on life, death, storytelling, puzzle-solving, her favorite cellist, and how it came to be that an economist sang opera 86 times at the Met.

Here are the transcript, video, and podcast versions of the dialogue.  Here is one excerpt:

FOX: …Things happen. But in general, we try to have a certain level of preparedness with the major figures. We do indeed have the advance obits — all but the top, as it were — written, edited, on file. We have about 1,700.

That said, the vast majority of what my colleagues and I down in the trenches do, probably 90 percent of our working life, are daily obits that are found out about, reported, written, edited, copyedited, put in the paper all in the space of a single day, just like any other article in the paper.

And this:

COWEN: Are there obituaries of economists that stand out in your mind? Or maybe some you’ve written?

FOX: Well, interestingly, there is one. As I said, my original training was in classical music, so my editors almost jumped out of their skins with excitement when they discovered they could assign me the obituary of a Harvard economist named Richard T. Gill.

Now, why did they give that to me? Because as we say in the lede of the obit, “Richard T. Gill, in all statistical probability the only Harvard economist to sing 86 performances with the Metropolitan Opera, died,” etc., etc.

COWEN: Yes, I remember reading that one. That was before I knew that you were you.

FOX: I was me then. You just didn’t know it.

COWEN: Correct.

Do read the whole thing.  I asked her about privacy concerns, how well a famous person is really known by his or her family and friends, whether there should be affirmative action in the obituaries section, who is chosen for this exclusive club and why, what one learns reading obituaries (“death sucks”), what is underrated in life (“silence”), why British obituaries are different, and about her very good books on linguistic code cracking from antiquity and Bedouin sign language.  And more.

Here is the Conversations with Tyler series.  Here is basic information on Margalit Fox.  Here is Margalit Fox on Twitter.

This is perhaps the best and most instructive one I have heard:

…Mr Xi’s authority remains hemmed in. True, his position at the highest level looks secure. But among the next layer of the elite, he has surprisingly few backers. Victor Shih of the University of California, San Diego, has tracked the various job-related and personal connections between the 205 full members of the party’s Central Committee, which embodies the broader elite. The body rubber-stamps Mr Xi’s decisions (there have been no recent rumours of open dissent within it). But the president needs enthusiastic support, as well as just a show of hands, to get his policies—such as badly needed economic reforms—implemented. According to Mr Shih, the president’s faction accounts for just 6% of the group.

That is from The Economist.  Along related but not identical lines, here is a good story of the weak control of the Chinese central government:

Through July, claimed capacity reductions were less than half the target for the year (and less than 40% of the target for coal capacity reduction).  Some provinces were reported by the NDRC to have achieved only 10% of their annual targeted cuts.

…This resistance has led to more and more shrill directions from Beijing to act on instructions.  Now Beijing is sending out 10 inspection teams across the country to check on claimed capacity removal and to require follow through on additional closures.  I have one suggestion for them: The only way to ensure a closed plant remains closed is to physically destroy or remove key pieces of equipment.  Otherwise don’t be surprised when it starts back up again.

Don’t forget this:

Many steel mills are the key employer and tax payer in their city. In boom times, they might have provided as much as 30% of the tax revenue for local government.  Workers from the steel mill were at the forefront of buying property in the town, creating a positive cycle of additional demand for housing and steel.  If these workers are now laid off, even with one-time transfers from the center, local government faces an enormous challenge in trying to find new jobs for people who have been in a steel mill all their life.  They can’t all become part-time Uber/Didi drivers. Many government officials see delay as the most logical course of action.

That is from Gordon Orr.

In 2015 our iron ore exports alone were four times the value of all of our combined services exports to China. And in services the only things that really count are tourism and education. That’s not going to change for a long, long time.

The alas now gated article, by Greg Sheridan, is of interest more generally and concerns some myths about China and Australia.

Addendum: To read the piece, try here.

No, this is not a repeat of the post from yesterday, there is another twist:

Doctors in Belgium have rejected an imprisoned murderer and rapist’s request for medically assisted suicide, the Justice Ministry said on Tuesday, less than a week before he was due to receive a lethal injection.

…Van Den Bleeken, 51, and in prison for nearly 30 years, had complained of a lack of therapy provided for his condition in Belgium. He argued he had no prospect of release since he could not overcome his violent sexual impulses, and wanted to die in order to end his mental anguish.

Belgium has pioneered the legalization of euthanasia beyond terminal illness to include those suffering unbearable mental pain.

But others have received euthanasia:

Cases which attracted international attention included the euthanasia of two deaf twins who were in the process of losing their sight, and of a transgender person left in torment by an unsuccessful sex change operation.

In February, Belgium became the first country to allow euthanasia for terminally ill children at any age, a move which drew criticism from religious groups both at home and abroad, though application for minors is limited to those about to die.

It is perhaps the wrong mood affiliation to apply the euthanasia process to an actual criminal:

Belgium, like the rest of the European Union, does not have the death penalty.

Here is the full article, and for the pointer I thank A. Le Roy.

Uber passengers in Pittsburgh will be able to summon rides in self-driving cars with the touch of a smartphone button in the next several weeks. Uber also announced that it is acquiring a self-driving startup called Otto, co-founded by Israeli Lior Ron, that has developed technology allowing big rigs to drive themselves.

Via Mark Thorson, here is more.  And in Finland:

Residents of Helsinki, Finland will soon be used to the sight of buses with no drivers roaming the city streets. One of the world’s first autonomous bus pilot programs has begun in the Hernesaari district, and will run through mid-September.

Finnish law does not require vehicles on the road to have a driver, making it the perfect place to get permission to test the Easymile EZ-10 electric mini-buses.

So perhaps Finland can become a market leader in this area.

Very good sentences

by on August 19, 2016 at 2:21 pm in Current Affairs, Law, Medicine | Permalink

There are two unavoidable realities of making the American health-care system less costly: Americans must use less care, and our nation’s legion of well-paying, stable jobs in the health-care sector need to be both less numerous and less well paid. What no one can figure out is how to generate the political will to make this happen. The public option doesn’t fix that political problem.

That is from Megan McArdle, mostly on why the public option is no longer a viable…option.

Actuality, the Faroe Islands have a crude birth rate higher than that of Denmark, Sweden, or Norway. Their fertility rate of 2.37 is higher than anywhere else in the White world:

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2127rank.html

That is from Jason Bayz.

Should you go?  I give the place high marks for food and scenery, but the total population of about 48,700 limits  other benefits.  It is like visiting a smaller, more unspoilt Iceland.  There is a shop in the main city selling Faroese music and many shops selling sweaters.  They will not tell you where the sweaters were knitted.

The natives seem to think Denmark is an excessively competitive, violent, harsh and hurried place.  The norm here is to leave your door unlocked.  It is a “self-governing archipelago,” but part of the Kingdom of Denmark.  In other words, they get a lot of subsidies.

But they are not part of the EU, so they still sell a lot of salmon — their number one export — to Russia.

You see plenty of pregnant women walking around, and (finally) population is growing, the country has begun to attract notice, and the real estate market is beginning to heat up.  But prices remain pretty low, and it would be a great place to buy an additional home, if you do that sort of thing.

In the early 1990s, their central bank did go bankrupt and had to be bailed out by Denmark.  It is a currency board arrangement, and insofar as the eurozone moves in that direction, as it seems to be doing by placing Target2 liabilities on the national central banks, a eurozone central bank could become insolvent too, despite all ECB protestations to the contrary.

Every mode of transport is subsidized in the Faroes, including helicopter rides across the islands.  Often the bus is free, and there is an extensive network of ferries.  I wonder how many population centers there would be otherwise.  There is now the notion that all of the communities on the various islands are one single, large “networked city.”

The Faroes are a “food desert” of sorts, with few decent or affordable fruits or vegetables.  And not many supermarkets of any kind.  Yet the rate of obesity does not seem to be high.  And they have a very high rate of literacy with little in the way of bookstores or public libraries.

The seabirds including puffins are a main attraction, but I enjoyed seeing the mammals too, with pride of place going to the pony:

The domestic animals of the Faroe Islands are a result of 1,200 years of isolated breeding. As a result, many of the islands’ domestic animals are found nowhere else in the world. Faroese domestic breed include Faroe pony, Faroe cow, Faroese sheep, Faroese Goose and Faroese duck.

puffins-mykines-faroe-islands

The country receives a great deal of negative publicity for killing whales, but overall they seem to treat animals better than the United States does.  Fish consumption is very high and there are no factory farms.

If the Faroes had open borders, but no subsidies for migrants, how many people would settle there?

In 1946 they did their own version of Faerexit, from Denmark of course:

The result of the vote was a narrow majority in favour of secession, but the coalition in parliament could not reach agreement on how this outcome should be interpreted and implemented; and because of these irresoluble differences, the coalition fell apart. A parliamentary election was held a few months later, in which the political parties that favoured staying in the Danish kingdom increased their share of the vote and formed a coalition.

Overall I expect this place to change radically in the next twenty years.  It is hard to protect 48,700 people forever.  In part, they are killing those whales to keep you away.

Nice

by on August 17, 2016 at 12:18 pm in Current Affairs, Economics, Political Science | Permalink

Accordingly, raising residential building requirements in high-amenity areas should cause those areas to move gradually to the left.

That is from Jason Sorens at Dartmouth, via the excellent Kevin Lewis.

That is one question I consider in my latest Bloomberg column, here is one excerpt:

Nima Sanandaji, a Swedish policy analyst and president of European Centre for Entrepreneurship and Policy Reform, has recently published a book called “Debunking Utopia: Exposing the Myth of Nordic Socialism.” And while the title may be overstated, his best facts and figures are persuasive.

For instance, Danish-Americans have a measured living standard about 55 percent higher than the Danes in Denmark. Swedish-Americans have a living standard 53 percent higher than the Swedes, and Finnish-Americans have a living standard 59 percent higher than those back in Finland. Only for Norway is the gap a small one, because of the extreme oil wealth of Norway, but even there the living standard of American Norwegians measures as 3 percent higher than in Norway. And that comparison is based on numbers from 2013, when the price of oil was higher, so probably that gap has widened.

Of the Nordic groups, Danish-Americans have the highest per capita income, clocking in at $70,925. That compares to an U.S. per capita income of $52,592, again the numbers being from 2013. Sanandaji also notes that Nordic-Americans have lower poverty rates and about half the unemployment rate of their relatives across the Atlantic.

It is difficult, after seeing those figures, to conclude that the U.S. ought to be copying the policies of the Nordic nations wholesale.

There is more to the piece, and I will note that I see a Land of Twitter where many Danes have read only that part of the piece.   I close with this:

How’s this for a simple rule: Open borders for the residents of any democratic country with more generous transfer payments than Uncle Sam’s.

Do read the whole thing.  You can buy the Sanandaji book here.

Japan’s central bank is set to become the top shareholder of 55 companies in the Nikkei

Here is more.