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.

Friday assorted links

by on August 19, 2016 at 12:10 pm in Uncategorized | Permalink

The Japanese Zoning System

by on August 19, 2016 at 12:04 pm in Economics, Law | Permalink

In Laissez-Faire in Tokyo Land Use I pointed to Japan’s constitutional protection of property rights and it’s relatively laissez-faire approach to land use to explain why housing prices in Japan have not risen in past decades, as they have elsewhere in the developed world. A very useful post at Urban kchoze offers more detail on Japan’s zoning system. Here are some of the key points.

Japan has 12 basic zones, far fewer than is typical in an American city. The zones can be ordered in terms of nuisance or potential externality from low-rise residential to high-rise residential to commercial zone on through to light industrial and industrial. But, and this is key, in the US zones tend to be exclusive but in Japan the zones limit the maximum nuisance in a zone. So, for example, a factory can’t be built in a residential neighborhood but housing can be built in a light industrial zone.

…[the] Japanese do not impose one or two exclusive uses for every zone. They tend to view things more as the maximum nuisance level to tolerate in each zone, but every use that is considered to be less of a nuisance is still allowed. So low-nuisance uses are allowed essentially everywhere. That means that almost all Japanese zones allow mixed use developments, which is far from true in North American zoning.

…[The] great rigidity in allowed uses per zone in North American zoning means that urban planing departments must really micromanage to the smallest detail everything to have a decent city. Because if they forget to zone for enough commercial zones or schools, people can’t simply build what is lacking, they’d need to change the zoning, and therefore confront the NIMBYs. And since urban planning departments, especially in small cities, are largely awful, a lot of needed uses are forgotten in neighborhoods, leading to them being built on the outskirts of the city, requiring car travel to get to them from residential areas.

Meanwhile, Japanese zoning gives much more flexibility to builders, private promoters but also school boards and the cities themselves. So the need for hyper-competent planning is much reduced, as Japanese planning departments can simply zone large higher-use zones in the center of neighborhoods, since the lower-uses are still allowed. If there is more land than needed for commercial uses in a commercial zone, for example, then you can still build residential uses there, until commercial promoters actually come to need the space and buy the buildings from current residents.

In addition, residential means residential without discrimination as to the type or form of resident:

…In Japan…residential is residential. If  a building is used to provide a place to live to people, it’s residential, that’s all. Whether it’s rented, owned, houses one or many households, it doesn’t matter.
This doesn’t mean that people can build 10-story apartment blocs in the middle of single-family houses (at least, not normally). As I mentioned, there are maximum ratios of building to land areas and FAR that restricts how high and how dense residential buildings may be. So in low-rise zones, these ratios mean that multifamily homes must also have only one to three stories, like the single-family homes around them. So in neighborhoods full of small single-family homes, you will often see small apartment buildings full of what we would call small studio apartments: one room with a toilet.>

In short, as the author concludes, Japan’s zoning laws are more rational, more efficient and fairer than those used in the United States.

More details in the post. Hat tip: Sandy Ikeda.

From Scott Sumner:

…what’s happened since 2009 involves not just one, but at least five new types of voodoo:

1. The claim that artificial attempts to force wages higher will boost employment, by boosting AD.

2. The claim that extended unemployment benefits—paying people not to work—will lead to more employment, by boosting AD.

3. The claim that more government spending can actually reduce the budget deficit, by boosting AD and growth. Note that in the simple Keynesian model, even with no crowding out, monetary offset, etc., this is impossible.

4. More aggregate demand will lead to higher productivity. In the old Keynesian model, more AD boosted growth by increasing employment, not productivity.

5. Fiscal stimulus can boost AD when not at the zero bound, because . . . ?

In all five cases there is almost no theoretical or empirical support for the new voodoo claims, and lots of evidence against. There were 5 attempts to push wages higher in the 1930s, and all 5 failed to spur recovery. Job creation sped up when the extended UI benefits ended at the beginning of 2014, contrary to the prediction of Keynesians. The austerity of 2013 failed to slow growth, contrary to the predictions of Keynesians. Britain had perhaps the biggest budget deficits of any major economy during the Great Recession, job growth has been robust, and yet productivity is now actually lower than in the 4th quarter of 2007.

There is more at the link. And here is Scott from the comments:

As I recall, productivity did well during the 1930s. Why? If falling AD hurts productivity, then shouldn’t productivity have done very poorly during the 1930s?

See also my earlier post “Not all complaints can be true at the same time.

My current pet peeve is advocacy of fiscal stimulus without even bothering to consider whether the economy might be at or very close to full employment, much less considering whether the stimulus will target unemployed resources.

We do in fact need a good aggregate demand-based macroeconomics; the topic is far too important to allow it to become so politicized.

The author is Nancy Tomes and the subtitle is How Madison Avenue and Modern Medicine Turned Patients into Consumers.  Here is one excerpt:

While unwilling to pass any kind of national insurance program, the U.S. Congress strove to advance the cause of “medical democracy” by other means.  Instead of guaranteeing a right to medical care, legislators voted to spend public funds on hospital construction and basic medical research as a means to yield more and better treatment.  To make that treatment affordable, the federal government looked to the private sector for help, using tax policy to encourage the growth of employee insurance plans.  In this fashion, postwar political and business leaders hoped to create a free enterprise alternative to “socialized” medicine.

The first step toward expansion came in 1946 when Congress passed the Hill-Burton Act, which funneled federal funds into hospital construction and expansion.  Over the next two decades, Hill-Burton funds would be used on almost 5,000 projects, many of them in rural areas that previously had had no hospitals.  The program proved very popular, giving local communities a new institution to be proud of while creating more “doctors’ workshops” for medical education and private practice.  At the same time, Congress vastly increased funding for medical research, from about $4 million in 1947 to $100 million by 1957.  Postwar political leaders found appealing the idea of tackling cancer, mental illness, and other dread diseases through “a medical research program equal to the Manhattan Project,” as the National Health Education Research Committee urged in 1958.  Taxpayer dollars helped to build up the National Institutes of Health (NIH) in Bethesda, Maryland, as the hub of what a later generation would christen the “medical-industrial complex”: a network of researchers located in American universities and scientific institutes whose careers depended on the generation of medical innovations.

I found this book extremely useful for understanding the evolution of American health care policy and institutions before 1965.

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:

That is from Jason Bayz.

Thursday assorted links

by on August 18, 2016 at 12:24 pm in Uncategorized | Permalink

While only 25% of the Swiss population hiked regularly in 2000, today the figure is 44%.

That is from Dina Pomeranz, original source here.

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.


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.

I am told KOKS is a Faroese word for “adding something excellent,” though there are varying accounts of the translation.  In any case, in terms of originality, purity of concept and vision, execution, service, and also view — taken as an integrated whole — I can’t think of any restaurant experience that comes close to this one.  Noma in Copenhagen is a pale memory in contrast, as are the Michelin three-stars in San Sebastian.  KOKS is still unspoilt and on the way up, and the guiding star is the very young and extremely personable Poul Andrias Ziska.

It has been written up in the New York Times and Guardian for its innovative take on Faroese cuisine, though both articles are now out of date.   The dining room seats only 20, and Ziska is also the pastry chef, with no loss of quality.  You’ll find photos and food descriptions on their Facebook page.  Here is the shaved horsemussel on dried cod skin:


Here is one recent review:

Its cuisine style is earthy and refined, ancient and modern. Instead of the new, it emphasizes the old (drying, fermenting, pickling, curing and smoking) with a larger goal of returning balance to earth itself. At KOKS, the cuisine is about seasonality, seriously engaging with agriculture and history and of making age-old food delightful to modern palates…

Poul continues to simply enjoy the uniqueness and richness of the Faroe Islands. Fan of ræst, (local preservation method) he supports and defends this technique that captures and boosts flavour.

I can agree with this assessment:

And finally (and I have to say the best dessert I’ve ever had), dulse seaweed served with chocolate crumble, fermented blueberries and dulse mousse. Sweet, a bit tangy, a bit crunchy, silky-smooth on the mouth and simple heavenly. My marathon reward ended on a very special note.

I am willing to go out on a limb here: it is probably the best restaurant in the world right now.  It alone justifies a trip to the Faroe Islands.

Addendum: Ethika, also in the Faroes, has some of the best sashimi I’ve eaten, recommended as well.


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.

Wednesday assorted links

by on August 17, 2016 at 11:52 am in Uncategorized | Permalink

1. “…the slowdown in TFP during and after the great recession is due to the decline in the speed of adoption of new technologies in response to the credit disruptions that shocked the US economy since the end of 2007 and that have affected the cost and availability of funds for companies until the end of 2013.”  Short paper here (pdf).

2. This piece takes too long to get going, it is nonetheless an interesting take on how tourism is transforming Iceland.

3. Aetna’s retreat from Obamacare.

4. A mathematical history of taffy pullers.

5. Myths about Sunnis and Shias.  Good piece, useful corrective.

I can think of a few reasons:

1. Many of the structures in places are perceived as failing, even though in absolute terms they are not obviously doing worse than previous times.

2. There is a rise in nationalist sentiment and a semi-cosmopolitan ethic is starting to lose influence.

3. The chance of violent conflict is rising.

4. Dialogue is becoming more polarized and bigoted, and at some margins stupider.

5. Tales of gruesome torture are being spread by new publishing and communications media.

6. The world may nonetheless end up much better off, but the ride to get there will be rocky iindeed.

I have been reading Carlos M.N. Eire, Reformations: The Early Modern World, 1450-1650.  Yes I know it is 893 pp., but it is actually one of the most readable books I have had in my hands all year.

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.

Do you ever read someone and find you are too addled to tell when the author is being funny or not, and then perhaps some of you have the temerity to suggest your confusion is the fault of the author?

Well, imagine a whole novel like that, and about the hot-button topics of sex and above all power and power in the workplace and yes race too.  Helen DeWitt can in fact get away with writing sentences such as:

One man said he was not exactly disputing the points made but he did not think he could reward his top earners with titless sex.

So yes, buy this book but do not read it, for the temerity will rise in your soul.

Helen DeWitt is a national treasure, yet collectively we have driven her to Berlin.  We do not deserve whatever she plans on serving up next.

Here is my previous post on Helen DeWitt.