Month: July 2005

The continuing rise of religious publishing

Yes the new Harry Potter will be a big hit, but the real growth in publishing revenue is coming elsewhere:

In 2004, religious books represented 7 percent of all book sales, with $1.95 billion in net revenues. The book industry overall totaled $26.45 billion in net revenues, according to the Book Industry Study Group. Translated into consumer spending, readers spent $3.7 billion on religious books, a category that includes Christian books. That is an increase of nearly 285 percent from 1983.  "It is the only book category where we’ve seen that kind of growth rate," Greco said.

Here is the full story.

Rogue Economist!

A famous economist is trying to capture terrorists by combing through data on banking records.  Wimpy. Wimpy. Wimpy.  A real rogue economist would go after them with his bare hands.  Grrrrr! 🙂

Today, I am in Baltimore, one of the roughest cities in the United States.  Not content to study bounty hunters from the safe confines of my desk I am going hunting with the real thing.  Is this my dangerous summer?  Nah, that is next summer!

I am really going to Baltimore to learn.  Tyler writes on development and globalization and spends a lot of time traveling and living in poor countries.  It’s a good model to emulate.  Blackboard economics can only get you so far.  I am working on a book about bounty hunting but also about bounties and prizes more generally.  I figure one less equation and one more story about Doc Rock and the Fugitive will double my sales.    

The Dogs of Peace

Last night as I was trying to sleep, something strange happened: a dog barked, and then another replied.  When I was in Liberia last year, just after the siege of Monrovia, I never heard or saw dogs.  At that time, the residents had been so poor and desperate that most of the dogs had been eaten.

Driving around yesterday, I also saw goats and chickens, lots of chickens (I awoke this morning to the call of a rooster). Another member of our team saw cows. This is a significant change from one year ago.  Farm animals require food, i.e. foregone current consumption.  Farm animals are the capital of pre-capitalist societies, they represent savings and property rights and are a sign that people have some hope for the future. 

The return of the dogs is a small beginning for a ravaged land but it is a beginning.

Markets in Everything: Secret Lovers

The SecretLover collection of cards is "the first
line exclusively for people having affairs."  There are cards to give to your secret lover on birthdays, special occasions, even anniversaries!

I want to go on record as saying that I am totally opposed to this depraved idea.  I hope that this business fails utterly.  It’s hard enough to remember my wife’s birthday, Valentine’s day, our anniversary etc.  And now I’m supposed to send my secret lover cards as well?  Outrageous.

Thanks to Avery Katz for the pointer.

Alfonso Lorenzo in The Wall Street Journal

See the front page of today’s Wall Street Journal:

Since his schizophrenia was diagnosed in 1991, Alfonso Lorenzo Santos has divided his time between a psychiatric clinic in Cuernavaca and his tiny lime-green house in this remote mountain village. At home, he often gets so violent his neighbors chain him to a wall.  Yet despite his anger and terrifying delusions, Mr. Lorenzo has become one of Mexico’s most innovative folk painters, piling points upon points of paint on paper, like tiny tiles in a mosaic.

Mr. Lorenzo, now around 54 years old — he was orphaned and doesn’t know his age exactly — is part of a generation of Mexican-Indian artists from the Balsas river region, about 75 miles from Acapulco. These artists started painting in the 1960s for tourist dollars on bark paper, called amate in the Nahuatl language.

One group of amate painters moved to Cuernavaca in the 1970s to live with Edmond Rabkin, a New York expatriate who introduced them to Western literature and music. Those artists, especially Marcial Camilo Ayala, whose work is now displayed at the Smithsonian’s National Museum of the American Indian in Washington, often paint romantic visions of village life.

Some Ameyaltepec artists developed a harder edge, especially Mr. Lorenzo, whose figures rarely smile and whose birds have menacing claws. In the 1970s, Mr. Lorenzo moved to Mexico City, where an art dealer promoted him as the descendant of Aztec princes, and where he had his first psychotic episode, says Gobi Stromberg, a Cuernavaca art patron. Complaining to friends that his heart was exploding, he returned to Ameyaltepec around 1980, wandered the arid mountains, cursed at neighbors and flung stones at them. Barely 5 feet tall, but stocky, Mr. Lorenzo became a threatening figure. After villagers decided he had to be restrained, several volunteers wrestled him to the ground and chained him to a wall in his house, where he remained for several years…

"He likes the goriness of Catholicism because it depicts a kind of scary world he lives in," says George Mason University professor Tyler Cowen, who has written a book on amate paintings.

Here is the story (WSJ password required, so just buy the paper, and note that the above links are mine, not theirs).  I am pleased to have served as translator for much of the work behind this article.  Here is my previous post on Alfonso, and an extensive link to photos.

More evidence for a housing bubble?

At least 70,800 apartment units were sold to condominium developers nationwide in 2004, up from 7,800 in 2002, according to Real Capital Analytics, a New York consulting firm.

As of June 1, at least 43,900 units have been sold to developers this year, says Dan Fasulo, director of market analysis for the firm. There are about 19 million rental apartments in the USA.

The conversions are occurring most rapidly in Southern California, Northern Virginia and the Miami and Las Vegas areas.

Here is the full story.  Might this suggest that rentals are underpriced relative to ownership?  Well…many of these condos end up back on the rental market.  What are the belief options? 

1. The condo market (does it have more fools?) is more bubbly than the market for rentable real estate, and entrepreneurs are arbitraging this difference.  Stupid people are holding condos and renting them out, rather than flipping them, under the belief that prices will rise for the indefinite future. 

2. The tax benefits of owning are higher in the condo market, but there is a fixed cost to conversion.  As real estate prices rise, it becomes more worthwhile to pursue these tax benefits, and thus we see more conversions.

Stay tuned…

Social Morass

I am lecturing this week in Liberia on the importance of economic institutions that foster growth.  I’ll talk about property rights, free trade, monetary stability, etc. However, there is a significant issue that Liberia (and most developing nations) need to overcome before these institutions can be effective: corruption.

In Liberia, there seems to be no stigma attached to bribe solicitation, even of the most heinous variety.  For example, customs agents at Roberts International Airport showed no shame whatsoever in extorting bribes from us upon our arrival into Liberia last year.  I explained to the agent that our (legal) cache of baby formula and Pepto-Bismol was for orphaned children, and that it had the potential to save the lives of children.  I did this in a loud voice, in broad daylight, with many onlookers.  The (male and female) agents were absolutely unfazed by any potential embarrassment.  This was truly shocking to me.

Without any moral stigma attached to corruption, it will be nearly impossible to achieve any real economic growth.  In addition, the incentives for creative and intelligent individuals are to vie for government employment.  The ones that are particularly good will move up from $20 airport bribes to lobbying for international aid.

Global Warming and the US Economy

Laurie David, comedy developer turned environmental activist, writes in the Huffington Post:

Last week at the G8, President Bush restated his favorite global
warming canard: that mandatory curbs on fossil fuel pollution will “cripple the U.S. economy.”

I wish there was an even bolder bold on this computer to emphasize how
insane this logic is. Non-stop flooding, killer heat waves, energy and
food shortages: what will these do to the economy?

Actually Laurie, and PGL of Angry Bear who links to David, the best study of the issue indicates that global warming is most likely a net benefit to the US economy.  Carbon dioxide and greater temperature makes plants grow faster.  The author, Yale economist Robert Mendelsohn writes:

Climate change is likely to result in small net benefits for the United States over the next century. The primary sector that will benefit is agriculture. The large gains in this sector will more than compensate for damages expected in the coastal, energy, and water sectors, unless warming is unexpectedly severe. Forestry is also expected to enjoy small gains. Added together, the United States will likely enjoy small benefits of between $14 and $23 billion a year and will only suffer damages in the neighborhood of
$13 billion if warming reaches 5C over the next century. Recent predictions of warming by 2100 suggest temperature increases of between 1.5 and 4C, suggesting that impacts are likely to be beneficial in the US.

Speaking personally, I have undergone a greater shift in mean temperature by moving from Canada to the US than will occur in 100 years of global warming and I like it!  My fellow Canadians, still stuck in the frozen north, will be glad to know that in the future they too can have warmer temperatures without giving up their prized health care system.

For the developing world the effects of climate change are most likely negative but not so negative that further development – combined with some modest changes in first-world technology, such as greater use of nuclear power – is not the best solution.

The evolution of Southern American English

SAE also modifies the English auxiliary system by allowing for the use of more than one modal in a verb phrase. For instance, for most Southerners “I might could leave work early today” is a grammatically acceptable sentence. It translates roughly as “I might be able to leave work early,” but might could conveys a greater sense of tentativeness than might be able does. The use of multiple modals provides Southerners with a politeness strategy not available in other regional dialects. Although no generally agreed upon list of acceptable multiple modals exists, the first modal in the sequence must be might or may, while the second is usually could, can, would, will,should, or oughta. In addition, SAE allows at least one triple modal option (might shouldoughta) and permits useta to precede a modal as well (e.g., “I useta could do that”).

Read more here, and thanks to the ever-excellent for the pointer.  The comments are open for other good examples.

Guns, Germs, and Steel on TV tonight

An adaptation of Jared Diamond’s renowned Guns, Germs, and Steel will be shown on PBS tonight, I believe at 10 p.m. but check it may depend upon your area.  Thanks to Ed Lopez for the pointer.  I must now run to give a talk (yes, it is intimidating to have both Jane Galt and Daniel Drezner in the audience), but I’ve opened comments for those of you who know more about this, and perhaps know about future showings as well.

Markets in everything

Sherry Shumaker has grooved to "Dancing Queen," "Wild Thing" and "Doo Wah Diddy" with her dancing partner Heidi — a Doberman pinscher.

At a Woodbridge studio, Heidi has taken lessons in standing on her hind legs, walking backwards and spinning, all in time to music and in sync to Shumaker’s dance steps.

Here is the rest, and no I didn’t know that dogs could take swimming lessons (silly me), or that you could arrange for them to watch back episodes of Lassie on satellite TV.

Is there “vanity sizing” in clothing markets?

Imagine the temptation to sell nominally-marked small sizes (but the clothes are still large) to those who do not "deserve" them.  Does this appeal to self-deception — also known as vanity sizing — occur on a wide scale?   Do we observe ongoing private sector inflation when it comes to clothes sizes? Kathleen Fasanella, a successful apparel pattern maker, says no, it only looks that way sometimes:

Sizes are not created equally; not all mediums from company to company are identical and nor should they be! Manufacturers necessarily target a given consumer profile -even push manufacturers have target demography- and it is more common for consumers of a given profile to share anthropometric characteristics than it is that they not. A medium simply indicates the middle size of a given manufacturer’s size run; that’s it.

…let’s say that everybody had to use the same sizes, can you imagine the number of sizes the western wear company would be forced to carry as compared to the tutu maker? …consumer expectation that they should be able to walk into any store, anywhere and pick out a medium and expect it to fit them but that’s just not reasonable.

Read Kathleen’s whole post, and here are some rough data.  Here is a typical charge, which also names some (supposed) culprits, such as The Gap, Ralph Lauren, and Banana Republic.  I do not have the expertise to evaluate this debate, but I am more generally intrigued by claims that non-uniform, heterogeneous standards are more efficient than pure uniformity.  Note that the fashion industry has never tried "hard enough" to create uniform standards.  I’ve opened up the comments for those who are more sartorially minded than I am.  A related but not identical question is whether movie critics suffer from "praise inflation" over time.

Books for Africans

Last year before leaving for Liberia, I solicited book recommendations from a few friends (including Alex).  I wanted to come up with a fairly short list of books that Liberian leaders should read if they were interested in building an economic system that would be conducive to economic growth.

Here is the list of books that I took and donated to a college library:

  1. The Birth of Plenty, by William Bernstein
  2. The Noblest Triumph, by Tom Bethell
  3. The Mystery of Capital, by Hernando De Soto
  4. The Elusive Quest for Growth, by William Easterly
  5. The Wealth and Poverty of Nations, by David Landes
  6. How the West Grew Rich, by Nathan Rosenberg and L.E. Birdzell

My lectures last year were essentially built around the material in Easterly’s book.  This year, I’ll be lecturing from Common Sense Economics: What Everyone Should Know About Wealth and Prosperity, by James Gwartney, et al.  In fact, Jim Gwartney personally donated twenty-five copies of this book for me to take along for the Liberians!

So what books would you take if you were headed off to sub-Saharan Africa, with the chance to lecture to academicians and policy makers?  I have opened up the comments section for you to post your suggestions.

Reason Papers are now on-line

Remember Reason Papers?  Starting in 1974, they provided serious discussions of "nutty" libertarian issues before the mainstream took notice.  Here is the link.  Here are the archives.  Here is Jeff Hummel’s excellent Problems with Austrian Business Cycle Theory, circa 1979.  Here is Loren Lomasky’s review of Nozick’s Philosophical Explanations, plus his review of Derek Parfit.  Or try this familiar guy on the economics of epistemology.