Month: February 2004

Haiti, continued…

Remember the Haitian embargo? One group of bad guys took over from another group of bad guys (i.e., Aristide and his cronies), so we stopped trading with them?

Georgie Anne Geyer offered some apt words on why this embargo was a disaster:

The economic part of the Haitian disaster was laid down in 1991, all with the best of intentions…The U.S. and other countries had imposed a severe embargo upon Haiti. This had the not-unexpected effect of (1) turning the military to smuggling, their first love anyway, and (2) utterly and tragically destroying the small businesses of Haiti.
“In the 1980s, we were planting up to 10 million trees a year in reforestation,” the ambassador to Haiti in that era, Ernest Preeg, reminisced sadly with me this week. “We had an anti-malaria program, secondary road programs and a brand-new container port. Haiti made textiles, footwear, toys, and baseballs. Three years of the embargo destroyed all the job-creating programs, and then Aristide destroyed the rest. After that, most of the aid went strictly to ‘democracy projects.’ In short, we took everything away from the long-term; we sacrificed the long-term for the short.”

Colin Powell has pledged, albeit in ambiguous words, that the U.S. will not intervene in the current collapse of order. Observers speculate that the prospect of Haitian refugees, mostly arriving in the electoral swing state of Florida, may change this calculus.

My view: The U.S. government built some valuable roads for Haiti in the 1920s, during our failed nation-building episode there. Otherwise our government has done many things to harm the Haitians, and few things to help. I’m all for greater free trade, but we are past the point where this would be very useful. Here is a previous post on Haiti, here is another.

The family as a source of inequality

Forthcoming research suggests that the family is a significant source of inequality:

differences between families explain only 25 percent of the nation’s income inequality; the remaining 75 percent is explained by differences between siblings. More typical of the United States than President Bush and his brother Jeb, the governor of Florida, he suggests, are the White House’s previous tenant, Bill Clinton, and his half-brother, Roger, a college dropout, onetime cocaine dealer and failed musician. Or, for that matter, Jimmy Carter and his ne’er-do-well brother, Billy (emphasis added).

So what in the family matters? It is not birth order, here the analysis become quite intricate:

…his conclusions – that everything from parental job loss or divorce to race and family size can affect siblings differently – don’t lend themselves to catchy headlines, they arguably provide a more nuanced portrait of internal family dynamics than all-purpose explanations like birth order.

Some of his more provocative findings concern middle-borns. In families with three or more children, Mr. Conley says, middle offspring are less likely to receive financial support for their education and may do less well in school than their older and younger siblings. The chances that a second child will attend private school drop by 25 percent with the birth of a third, Mr. Conley found, and the likelihood that he or she will be held back a year increased severalfold. Unlike typical first- and last-borns, he reasons, middle children never experience family life as an only child; instead, they are forced to compete with their siblings for money and attention. (In this sense, he concedes, birth order does matter: not as a psychological variable but as a constraint on family resources.)

Other findings seem to confirm common-sense intuitions. According to Mr. Conley’s analysis, for example, women are more likely to be as successful as their brothers if their mothers worked outside the home. And, like the long-suffering George Bailey in “It’s a Wonderful Life,” the oldest child still at home at the time of a parental death or divorce is more likely than younger siblings to endure negative socioeconomic consequences as a result. Brothers and sisters may even experience race differently, he argues, since skin color can vary considerably within the same family.

So far it seems that the work is well-received. Here is the home page of the researcher, Dalton Conley, a remarkably prolific and rigorous scholar. Here is an earlier MR post on Horatio Alger and intergenerational mobility.

The (provisional) bottom line: Unhappy with your lot in life? It’s not the capitalist system or the Bush tax cuts, blame Mom and Dad. I’ll let you know more once the book arrives and I’ve read the whole thing.

How to stay together

What best predicts whether a marriage will last?

The crucial predictors, say the researchers, are the presence of facial expressions that accompany emotions such as contempt. Gottman says that just watching a couple and looking for this expression, described as a sideways pull of a corner of the mouth accompanied by rolling eyes, is enough to make a good guess about a couple’s suitability. “This is our best predictor,” he says. “Contempt is the sulphuric acid of love.”

We are told that the entire model has a 94 percent success rate in predicting divorce.

Here is some positive advice for Valentine’s Day:

Gottman may also have stumbled across the secret of a lasting relationship – simply ignore the nasty comments from your partner. He says that courting couples tend to ignore negative statements and pay more attention to positive remarks. Once married, this trend often reverses, although couples that remain together into their sixties retain this outlook.

How about gay couples?

…gay and lesbian couples, as well as heterosexual couples that do not marry, hold on to the positive value of courtship better than straight partners who get hitched, he says.

For more information, read The Mathematics of Marriage: Dynamic Nonlinear Models. Are they joking with that title?

Can the U.S. government manipulate the real exchange rate for the dollar?

Exchange rates today respond in large part to capital flows–not to the utterances of central bankers and finance ministers. And the vast structural forces affecting those flows–the comparative economic strength of the United States vs. the Eurozone, the insatiable desire by U.S. businesses and consumers for imports–are far beyond the reach of this, or any, administration.

The argument goes through a variety of detailed cases, click here for the full account.

You lie more over the phone

Relative to email, that is. Why? Email leaves a permanent record and you are afraid of getting caught in your lies.

Jeff Hancock of Cornell University in Ithaca, New York, asked 30 students to keep a communications diary for a week. In it they noted the number of conversations or email exchanges they had lasting more than 10 minutes, and confessed to how many lies they told.

Hancock then worked out the number of lies per conversation for each medium. He found that lies made up 14 per cent of emails, 21 per cent of instant messages, 27 per cent of face-to-face interactions and a whopping 37 per cent of phone calls.

That’s a lot of lying. Here is the full story.

North Korea on the Web

Check out the website of the Democratic People’s Republic of Korea. From the opening image of electrification to the leader worship and slogans (“The Great Leader Kim Il Sung Will Be Always With Us!”) the website looks and feels like an ironic museum piece. The fact that it is not, is an eerie if useful reminder of things too often taken for granted.

Thanks to Curtis Melvin for the link.

Rewards for Justice

The State Department’s Rewards for Justice program has been quite successful. At the twenty five million dollar level we captured one ourselves (Saddam) but paid a reward for the capture of Al Qaeda leader Khalid Sheikh Mohammed. Qusay and Uday Hussein were located due to a reward as was Ramzi Yousef and the terrorists responsible for the destruction of Pan Am 103. Know where a terrorist is located? The Rewards for Justice homepage is available in Arabic, Hindi, Pashtu, and Swahili among other languages.

No baby, you really ARE beautiful…

Carry a lie detector in your pocket:

The Love Detector is based on layered voice analysis, a system that was developed for security work by Nemesysco, an Israeli company, and adapted for personal use by V Worldwide, the international distributor.

The Love Detector relies on a simplified form of the technology, said Richard Parton, chief executive of V Worldwide. The security version applies 8,000 algorithms to 129 parameters of a speaking voice, assessing, among other things, levels of emotion, embarrassment and concentration as well as whether what is said reflects certainty, uncertainty or outright lies.

When this reporter tried it informally, both in person and over the phone, the results were arguably accurate; the software detected the split in my attention as I took notes, though it misinterpreted my skepticism about the product as condescension.

Buy one here.

Some versions of the new product will put James Bond to shame:

Later this year V plans to introduce a simplified version built into sunglasses, with light-emitting diodes to signal emotional intensity and truth or falsehood.

Here is one article about the product. Here is the whole story. The article notes that many people will use the product to assess their own emotions, not just the person they are trying to court.

Stuck with that gift certificate?

Swap it in for a gift certificate from a different store. Tens of thousands of people have used, a central clearinghouse for such exchanges.

Here is the full story.

There is, of course, a bid-ask spread for such swaps. So a $25.00 certificate from The Gap brings you $23.00 of value at the clearinghouse. For Walden Books you can the lesser sum of $22.00. The discount on Sears certificates is especially noticeable, you get only $40 in value for a $50 certificate. Who needs another lawnmower anyway? Here is a fuller list of prices. My perusal suggests that Niketown has the biggest percentage discount, Bath & Body Works has the smallest, I suppose everyone needs soap.

Thanks to Daniel Akst for the pointer.

Don’t miss the gorilla

Picture yourself watching a one-minute video of two teams of three players each. One team wears white shirts and the other black shirts, and the members move around one another in a small room tossing two basketballs. Your task is to count the number of passes made by the white team – not easy given the weaving movement of the players. Unexpectedly, after 35 seconds a gorilla enteres the room, walks directly through the farrago of bodies, thumps his chest and, nine seconds later, exits. Would you see the gorilla?

Fifty percent of all observers do not see the gorilla.

This is called inattentional blindness, the link offers some further examples and tests. The bottom line: if you are concentrating on one static task, you often fail to notice dynamic movement. This is one reason why you should not drive and talk on your cell phone at the same time.

The quotation is from the March issue of Scientific American. Here is the the original research. Here are some additional studies, also look here. Here is a page of video exercises, although now you know what and who to look for.

The bottom line for economics? Neither investors nor voters need be rational in procedural terms. Searching more does not guarantee a better outcome. An “obvious” bubble can catch large numbers of investors unaware. And we, as voters, can fixate on some aspects of candidates and miss entirely their most important qualities.

British national patrimony

Thirty years ago the British government drew up a list of 35 privately-owned paintings, on British territory, that should be kept in Britain for reasons of national heritage. The pictures were deemed “of such outstanding quality that they should not under any circumstances be allowed to leave the country.” Many were hanging in country homes, and many have since been acquired by British public sector museums. The British government will help institutions bid more heavily for such pictures, to keep them in the country.

N.B.: Not a single British work is on the list.

Here is the full story.

My take: On one hand, the cosmopolitan British perspective is to be applauded. But why oh why does the British government feel it is a superior artistic investor? Taxpayers never see this money again and most of them never go see the pictures. Don’t cite museum visitorship statistics to me, most people never see the pictures or would know if they are gone. And with the Louvre just a few hours across the Chunnel, it is really necessary to stop a Poussin from going to the United States? Odd that a national patrimony policy should grant its biggest subsidy to foreign tourists and to the reputations of foreign artists.

Libertarians for tax increases?

We now have two parties in Congress, the tax and spenders and the no-tax and spenders. What’s a libertarian to do? Julian Sanchez, associate editor of Reason, reminds us that,

A tax cut financed by deficits is ultimately no more responsible than a spending program financed the same way.

What about the starve the beast argument? Well, the beast isn’t starving. Furthermore, as Sanchez writes,

The logic behind this “starve leviathan” theory is not totally mad, though it bears a creepy resemblance to the Marxist revolutionary slogan that things “have to get worse before they get better.”… And just as plausible as the “starve leviathan” hypothesis is the theory that combining spending growth with tax cuts hides the true cost of burgeoning programs, creating a political culture in which there’s no will to restrain appropriations.

Like Sanchez, I today would take a deal combining tax increases with serious cuts in entitlement spending.

Addendum: Alan Greenspan agrees. See Brad DeLong’s comments.