Travel

Arbitrage!

by on July 26, 2016 at 3:35 am in Economics, Law, Television, Travel | Permalink

Man faces prison for scheme inspired by Seinfeld plot where he ‘brought 10,000 cans from out of state to take advantage of Michigan’s higher deposit rates’

That is the headline, here is the story via the excellent Mark Thorson.  For the under-informed amongst us:

In Michigan you can get 10c for every bottle you give back – whereas places such as New York will only give you 5c.
But it is illegal for someone to knowingly bring them from somewhere else in order to get cash.

I very much liked yesterday’s Ross Douthat piece, and I agree with most of it, and I regard him as one of the truly great columnists writing today.  Still, there was one tiny part I disagreed with, and I see the point being repeated in varying forms elsewhere, so I thought I would pull it out and add a few comments, namely:

(There is more genuine cosmopolitanism in Rudyard Kipling and T. E. Lawrence and Richard Francis Burton than in a hundred Davos sessions.)

That is Ross, do read the whole piece for context, but here are my worries.  They may be nitpicks, but actually I feel a fair amount is at stake here:

1. It seems unfair to compare Davos sessions to some rather robust, historically important, top-of-the-line explorers.  Virtually all sessions are boring, including or maybe even especially in the 19th or early 20th centuries.  How about comparing the elites of back then to the elites of today?  Then I think the Davos set would look quite good.  Or if you compare the explorers of more recent times — say Jan Morris or Louis Sarno — to the explorers of back then, still the present day looks good and possibly even considerably superior in terms of curiosity, tolerance, and a broad outlook.

Overall, I see a lot of evidence — both cross-sectional and time series — that those qualities are what economists call normal goods rather than inferior goods, or in other words those qualities rise with income.  And do we moderns not in some ways have an overall better and more accurate perspective?  Have we not read much more, learned better social science, and developed a greater facility for spotting prejudices and logical fallacies?

2. I suspect either the elites or the explorers of today are better when it comes to understanding differing perspectives of gender, neurology, sexuality, race, age (should you beat your kids?), and a variety of other dimensions.  Maybe none of these wisdoms fall exactly under the heading of the adjective “cosmopolitan,” but still they seem relevant for whether today’s elite is wiser and broader.  How many of the earlier elite were women, and embodied that set of diverse perspectives, to pose a simple comparative question?

3. I’ve never been to Davos, but I know some people who have.  They’re weird!  And I mean that in a (mostly) good way.  I am reluctant to overgeneralize about them, and I suspect they are more diverse than is often thought to be the case.  Almost by the virtue of having been invited, they are some pretty extreme outliers, consider for instance Bill Gates or Elon Musk.  I’d also like to see data on how many of them have spent serious time in say poor rural villages in less developed nations, or had other strange or diverse experiences.  The answers might surprise us.

Who amongst us knows this about CEO and billionaire Patrick Byrne of Overstock?:

“30 years ago in China I contracted Hep C.  I got a bad head wound and a ‘barefoot doctor’ they called him, sewed me up.  I’ll give you the facts, I went stage 4 last summer, seemed to have gotten through the treatment but it’s been quite harsh on me and it’s on top of a long, I’ve actually had 106 surgeries, 51 times they stopped my heart electrically, another 50 times chemically,”

Isn’t that a kind of cosmopolitanism?  And the medical treatments also have given him some pretty novel perspectives.  Patrick by the way is fluent in Mandarin and has spent years in strange and unusual parts of China, and during a time when it was far less safe and comfortable than today.

Or how about what Jeff Sachs does?  Whether or not you agree with all of his economics, it’s not easy, and I mean on both the mind and the body.  How about those Harvard MBAs who are Mormons and have done missions in exotic locales and gone door to door for two years?

Muhammad Yunus was born in a Chittagong Muslim village into a family of nine children, circa 1940.  Later “From 1969 to 1972, Yunus was assistant professor of economics at Middle Tennessee State University in Murfreesboro.”  Isn’t that a pretty incredible diversity of life experience?

Thomas Friedman, a classic exemplar of the globalist mindset and whipping boy for many, in fact spent serious time in Beirut covering the civil war, and doing original reporting in situations of very real danger, winning Pulitzers and a National Book Award for the quality of his work.  During one later four-year period, he traveled over 500,000 miles.  Nicholas Kristof is another good example of someone who really “gets out there,” in his case often in Africa but not only.

If you are curious, here’s a basic list of Davos attendees.   Note also that the very real increase in segregation by income in America — mostly a bad development and which Ross mentions — seems to be centered around the upper middle class, not the Davos set, as the very wealthy and the elites always have lived somewhat apart.

Overall I think Ross and many others are somewhat underrating Davos.  I do understand that Davos attendees may, as a whole, suffer from excess hubris, excess complacency, or be excessively fond of technocracy.  And the fact that many (by no means all) of them have not suffered very much does limit some of their perspectives.  But are they not in fact actually about as cosmopolitan as we might hope for?

Addendum: Rob Howse offers some useful remarks, and also notes the connection of the “genuine cosmopolitan” idea — a tricky concept — to Leo Strauss.  Here is his closing bit:

Is it so that the cosmopolitans Douthat despises merely retreat into comfortable and familiar neighborhoods in global cities?…[many are] working in a combat zone with Medicins sans frontiers; or persisting as a foreign correspondent in a country where journalists’ lives are threatened; or setting up a truth commission to heal wounds in a conflict-ridden nation; or soldiering as a social entrepreneur to empower women’s small business in an African village; or confronting traditional community leaders about female genital mutilation.  These are all quintessentially cosmopolitan roles, which involve real risks, real sacrifice, and often wrenching encounters with otherness.

I agree with Ross’s description that the Davos set is very often “liberal Christianity without Christ.”  But maybe that’s the most cosmopolitan philosophy going these days.  The bigger question of course is, given slow economic growth and institutional rigidification, how much that really helps us.

…the surveys also revealed a lack of enthusiasm for buying or using a driverless car programmed to avoid pedestrians at the expense of its own passengers. One question asked respondents to rate the morality of an autonomous vehicle programmed to crash and kill its own passenger to save 10 pedestrians; the rating dropped by a third when respondents considered the possibility of riding in such a car.

Similarly, people were strongly opposed to the idea of the government regulating driverless cars to ensure they would be programmed with utilitarian principles. In the survey, respondents said they were only one-third as likely to purchase a vehicle regulated this way, as opposed to an unregulated vehicle, which could presumably be programmed in any fashion.

That is from an MIT press release, here is the background:

The paper, “The social dilemma of autonomous vehicles,” is being published today in the journal Science. The authors are Jean-Francois Bonnefon of the Toulouse School of Economics; Azim Shariff, an assistant professor of psychology at the University of Oregon; and Rahwan, the AT&T Career Development Professor and an associate professor of media arts and sciences at the MIT Media Lab.

The abstract notes that if drivers are required to purchase “utilitarian-programmed” vehicles, they may be less willing to buy at all, thus postponing the adoption of what is likely to be a much safer technology.

For the pointer I thank Charles Klingman.

After education and occupation, the share of people not holding a passport was the next most strongly correlated characteristic with the Leave vote.

Here is more from John Burn-Murdoch at FT blogs, via Tim Harford.

Molenbeek is the “Islamist” section of Brussels which recently became well-known as a breeding ground for terror attacks; it is sometimes described as a kind of desperate hell hole.  The Time Out guide for Brussels doesn’t mention it at all.  Naturally I wanted to see it.

I visited yesterday morning and saw the fruit, vegetable, and clothing market, and then walked around for another two hours.  It was charming, everyone was friendly to me, and I never felt threatened.  I bought some excellent cherries at a very good price (“cheap cherries,” and the surrounding streets offer “cheap charcuterie” as well).

Most of the people seem to be either Moroccan or Turkish.  The high ratio of Muslim women to Muslim men in the market was striking.

On the vegetable but not the clothing end of the stalls, I saw a fair number of blond Belgian women pushing their baby strollers and buying produce.  On my way in from the airport, my (white) Belgian cab driver told me he lived in Molenbeek and loved it, including the low rent — my apologies to Thomas Friedman of course.

Inside the boundaries of the market is a well-known Art Deco church from the 1930s, which upon first glance appeared to be an old mosque tower.  At that moment I was surrounded by hundreds of Muslims, and so was primed for the mosque look I suppose.  I walked up the stairs of the church to the door, and found it was barred and showed no signs of life.

One plaintive-looking Belgian man was standing on the steps, and he asked me quietly (in French) “Are you here for Mass?”  “Yes,” I said, not wanting to end the conversation.  “You’ll have to wait, then,” was his dead pan response.

Molenbeek

Here are ten reasons you should never visit Molenbeek.

Hermance

I am here to give a talk on randomized control trials, a public choice perspective.  Angus Deaton and Josh Angrist are among the other speakers, along with many people in the medical field.  The first question, not quite resulting from a controlled experiment, is whether this setting, on Lake Geneva, improves or worsens my mood…

Geneva notes

by on June 19, 2016 at 4:18 pm in Food and Drink, Law, Travel, Uncategorized | Permalink

This is still the land of the $76 veal chop, and that is not at Michelin-starred restaurants.  You will do better by seeking out ethnic food on and around Rue de Monthoux, which is in center city and concludes right by the lake.  At an Indian-Iranian restaurant just off this street, Royal India, I had perhaps the best fesenjan in memory.

Due to lost bank secrecy, international banks are leaving Geneva, and Swiss watch exports are falling.  The view of the lake is still beautiful, and some of the lake shore real estate now seems to be empty.  The swans are still all white, however.

Barbier-Mueller is piece for piece one of the higher quality museums in the world, mostly African and Oceanic items, and currently they have a good show on media of exchange with artistic qualities.

Center city now seems to be at least fifty percent immigrants, and I am not referring to the numerous French and Germans who settle in Switzerland.  This was not what I was expecting the first time I saw Geneva in 1985.  It is a livelier city, but it still radiates that old, vague sense of dullness.

Brussels bleg

by on June 17, 2016 at 1:05 pm in Food and Drink, Travel | Permalink

I’ll be there next week, in fact just in time for the Brexit vote.  Above and beyond the obvious guidebook sights, what do you all recommend that I do?  And where should I eat?

Here is a good Ian Buruma survey of where Brussels the city is at right now.

WSJ: In the 1960s the future of aviation seemed bright. In 1958 Boeing had built its first jetliner, the 707, which cruised at speeds of up to 600 mph. The Concorde came along in 1969, flying at Mach 2—more than 1,500 mph. An age of affordable supersonic flight seemed inevitable, promising U.S. coast-to-coast travel in just 90 minutes.

Today, neither the Concorde nor any other supersonic passenger jet operates. And the 707, still in limited use, remains one of the fastest commercial jets operating in the world. What happened?

Regulation happened. In 1973, shortly after Boeing abandoned the 2707, its Mach 3 government-funded competitor to the British- and French-made Concorde, the Federal Aviation Administration issued a rule banning supersonic transport over the U.S.

And why did we ban supersonic transport? It seems almost like a joke–because we were worried about noise. What would Chuck Yeager say? (He’s still alive and re-enacted his 1947 supersonic flight in 2012 at the age of 89).

Moreover, the noise scare was overblown. Incredibly, it was only after the FAA banned supersonic transport over the US that a careful study was done at Heathrow airport and that study found that the Concorde taking off and landing was only modestly louder than a regular jet. Moreover, as the study reported:

Whenever there was a Concorde departure from Heathrow, subsonic jets recorded a higher or equal noise level at the relevant fixed monitoring sites on 2 days out of 3.

The technology to produce quieter supersonic aircraft exists today but we won’t see really big investment in the industry until the outright ban on supersonic aircraft is lifted. As Dourado and Hammond write:

If the original ban was an overreaction, today it’s an outright absurdity—and remains in place due more to regulatory inertia and the FAA’s deeply precautionary culture than a sober accounting of costs and benefits.

I suspect that we will eventually lift the ban and get quieter and faster supersonic aircraft. But when we do so don’t make the mistake of thinking that it was wise to wait. As I pointed out in my earlier piece on Uber of the Sky, technological development is endogenous. If you ban supersonic aircraft, the money, experience and learning by doing needed to develop quieter supersonic aircraft won’t exist. A ban will make technological developments in the industry much slower and dependent upon exogeneous progress in other industries.

When we ban a new technology we have to think not just about the costs and benefits of a ban today but about the costs and benefits on the entire glide path of the technology.

Geneva bleg

by on June 9, 2016 at 10:55 am in Travel | Permalink

I’ll be there for two days, soon.  Please outline an optimal recipe for avoiding boredom, noting that I have been there three times before, though not recently.  Your suggestions are most appreciated.

Uber is not only fast and convenient it spreads the capital cost of an automobile over a large group of people, thereby increasing efficiency. A typical general aviation aircraft costs ten times or more the price of an automobile so the case for an Uber of the sky is strong. Indeed, shortly after the Wright Brothers flew, informal ride-sharing bulletin jetsonsboards and word of mouth connected pilots with passengers who wanted to hitch a ride and were willing to share the cost.

Flytenow created an app to more easily connect pilots to “passengers” who would pay a share of the “cost” (the reason for the quotes will become clear) but was shut down by the FAA. Flytenow argued that they were simply modernizing the bulletin board system but the FAA worried that they were doing an end run around regulation. The Federal Aviation Act of 1958 requires pilots who are being compensated for their services to have a commercial license. Flytenow was shut down.

Jared Meyer interviewed the founders:

Jared Meyer: …from what I understand, it is still completely legal to find people to share flights (and their costs) by using old-fashioned tools such as bulletin boards or telephone calls. Why does the FAA not allow people to use peer-to-peer online interaction to make the process much more efficient and inclusive?

Alan Guichard: You’re exactly right. Pilots have always been allowed to share flights as long as the pilot and the passenger share a common purpose, which they clearly have on an online bulletin board such as Flytenow. The FAA’s concern is that online interaction will lead to sharing beyond what they refer to as “friends and acquaintances.”

For example, the FAA explained that advertising a shared flight on Facebook would be permissible if a person only had a few friends, but that the same flight would transform the pilot into Delta or American Airlines if he or she had “thousands” of friends.

An Uber of the sky would increase the number of private flights and put pressure on the airlines. It would also create some safety issues. Right now only the rich regularly risk their life in a small airplane. Do we want more people to have access? It’s debatable but there is certainly some level of safety where we would want more passenger-carrying small-aircraft. But which is chicken and which is egg? Safety doesn’t just happen–safety is in part an endogenous consequence of investment and demand. How will we get flying cars if we restrict investment?

That is a new paper from Sean E. Mulholland and Angela K. Dills.  Here is the abstract:

The advent of smart-phone based, ride-sharing applications has revolutionized the vehicle for hire market. Advocates point to the ease of use and lower wait times compared to hailing a taxi or pre-arranging limousine service. Others argue that proper government oversight is necessary to protect ride-share passengers from driver error or vehicle part failure and violence from unlicensed strangers. Using a unique panel of over 150 cities and counties from 2010 through 2013, we investigate whether the introduction of the ride-sharing service, Uber, is associated with changes in vehicle accidents and crime. We find that Uber’s entry lowers the rate of DUIs and fatal accidents. For most specifications, we also find declines in arrests for assault and disorderly conduct. Conversely, we observe an increase in vehicle thefts.

For the pointer I thank the excellent Kevin Lewis.

Perhaps the most incredible thing about the New York City Subway has been its utter dominance of the well-publicized national transit ridership increases of the last decade. According to annual data published by the American Public Transportation Association (APTA), ridership on the New York City Subway accounts for all of the transit increase since 2005. Between 2005 and 2015, ridership on the New York City Subway increased nearly 1 billion trips. By contrast, all of the transit services in the United States, including the New York City Subway, increased only 800 million over the same period. On services outside the New York City subway, three was a loss of nearly 200 million riders between 2005 and 2015…

That is from Wendell Cox.  And note that use of the NYC system peaked in the late 1940s!

subway

For the pointer I thank the estimable Chug.

Changsha is the ugliest and most ungainly Chinese city I have seen, which is saying something.  Nonetheless for a food pilgrimage it is a serious rival for #1 spot in the world, perhaps surpassing Chengdu for the quality and novelty of its dishes.  Very little effort is required to do well, and some of my best courses I had at the Hunan restaurant in the Sheraton, also the only time I saw an English-language menu.

Even at major hotels, hardly anyone speaks passable English, much less good English.  But you can find many hanging portraits of Chairman Mao, who converted to communism in this city.

Carry an iPad, so you can look up and communicate the Chinese characters for “eggplant with orange chilies on top.”

There were plans to erect the world’s tallest building, and ground was broken, but the foundations were not extended and they have since been repurposed as a fish farm, hail Friedrich Hayek.

When they set their minds to it, they can build towers at the rate of three stories a day.

Changsha

The marginal value of entering a park here is high, as I stumbled upon card games, group exercise sessions, dance clubs, and performances of traditional music, all at higher rates than in most other Chinese cities I have visited.  At the entrance to one I read on the sign: “Don’t sneeze into the face of others,” and also I was ordered to reject “feudal superstitious practices.”

The people seem…different.  I feel the cab drivers often are on the verge of cackling, except when they are cackling.  Then the verge disappears.  The word “rollicking” frequently comes to mind, which of course is a sign you would not want to be governed by this province.

Kind of like New York.