Month: August 2006

Where you vote matters

…the polling places used by voters may influence their choices. One study showed voters in Arizona in 2000 were more likely to support a measure to increase the state sales tax, with the proceeds going to public education, if they voted in a school. Following up, the authors showed subjects images of a church, a school, or a generic building and asked them to “vote” on certain measures. Not only were the respondents more likely to support education measures if they had been shown pictures of schools, but they were also more likely to vote against stem-cell research if they had been shown pictures of churches. American polling places have usually been assigned by state officials on the basis of convenience; this research suggests they could become political battlegrounds in a whole new manner.

Here is more.  So if you are a libertarian, where do you want people to vote?  In front of H&R Block?

WashingtonWatch

WashingtonWatch.com is a new website that presents estimates of the costs or savings per family or person for a variety of bills.  Here’s the latest DOD budget cost:

S. 2766 would authorize appropriations for fiscal year 2007 for the
military functions of the Department of Defense (DoD), for activities
of the Department of Energy (DOE), and for other purposes, including
operations in Iraq and Afghanistan.

Cost Per Family: $5535.19

The website is a useful collection but be aware that there is no attempt to do any cost-benefit or incidence analysis.  The numbers are just brute government estimates of the total program spending or tax reduction divided by the number of families or persons.  I can guarantee you, for example, that the following calculation for the "average family" is way, way off the mark.

H.R. 5638 makes the estate and gift tax permanent; increases the
estate and gift tax credit to a $5 million effective exclusion amount,
making any unused effective exclusion amount portable between spouses;
and reduces rates, as well as making other changes in tax law.

Savings per average family: $1896.79

China market of the day

A bar in eastern China has come up with a novel way of attracting clients – they are allowed to beat up the staff.

The Rising Sun Anger Release Bar in Nanjing lets customers smash glasses, rant and even hit specially trained workers, state media reported. The owner, Wu Gong, told China Daily that he was inspired to open the bar by his experiences as a migrant worker.

Most of his customers were women working in the service or entertainment industries, he said.  The bar employs 20 men who have been given protective gear and physical training to prepare them for the job.  Clients can ask the men to dress as the character they wish to attack.

Here is the full story, and thanks to Jordan Lampe for the pointer.  Nanjing must be quite a place.  Here is my previous post on The Crying Bar in Nanjing.

The economics of micro-finance

This column is based on my trip to Hyderabad, earlier this year.  Here is part of the introduction:

Microfinance is not actually “micro” in scale. It is far more
organized than the individual moneylenders in poor communities, the
traditional source of finance. Spandana borrows from banks, has about
2,000 employees and deals with about 800,000 loan recipients. The
resulting economies of scale make possible lower interest rates.
Spandana has been lending at interest rates of 10 to 15 percent a year,
while other Indian microlenders may have rates ranging up to about 30
percent a year. Traditional moneylenders receive 5 or 10 percent a
month or more. It is no wonder that Spandana has grown.

Spandana
seeks to earn a profit through higher repayment rates. Unlike the
moneylenders, Spandana lends to small groups of 5 to 10 people rather
than to individuals; each member is liable if other group borrowers do
not repay. The carrot is that good borrowers become eligible to receive
higher sums.

Yes I am a fan of micro-finance.  One overlooked benefit is that the weekly repayments enforce fiscal discipline and responsibility on the borrowing families.  Otherwise the money often goes to deadbeat relatives.  Here is the full article.

Econospinning

Econospinning: How to Read Between the Lines When the Media Manipulate the Numbers, by Gene Epstein, economics editor at Barron’s.

Imagine lengthy polemics against the use of numbers in the work of Paul Krugman (most of all), the Op-Ed page of The Wall Street Journal, Brad DeLong, Steve Levitt, and Barbara Ehrenreich, among others.  Except the vehicle isn’t the blogosphere, it is a book!

This one is guaranteed to ruffle feathers.  Here is the book’s home page.

I love lefties

Highly educated people earn more if they are left-handed.  The pay gap, relative to right-handers, is especially strong for those with low earnings relative to their level of education (e.g., academics).  If they are men they earn 15 percent more.  Here is the paper.

This earnings result appears ungrounded but it does not surprise me.  Left-handers have idiosyncrasies, obsessions, and downright insanities which lift some of them into productivity heaven.  If they are not earning a lot they probably love what they do.

I like other left-handers (yes I am one) at a disproportionately high rate and they fit disproportionately into the right-hand-tail of the distribution of my liking.  One of my absurd beliefs is that I can tell which people are
left-handers simply by observing their personalities and their charming bits of ever so slight yet always on the surface awkwardness.

Did you know that lefties also have higher rates of irritable bowel syndrome? 

For some odd reason, I play all sports but basketball with my right hand.

What do CEOs and other notables pay attention to?

Janine Benyus, author of Biomimicry, has a good answer:

"As far as my media diet, I’m a hoover for print and will read whatever blows my way … I find New Scientist to be the best sci mag. Also subscribe to Wired, Onion and Resurgence. I use a feedreader to keep up with about 35 sources (news digests and blogs). We have an extensive, active backchannel portfolio of blogs for the Biomimicry Ravalli Republic.
POV: Nightline, Daily Show, NOW, Comedy Channel Presents, couple of
Showtime dramas. Love stand up comedy for its honesty and pathos about
the current state of things. And, of course, I can waste away my youth
surfing the web. Love living in this era."

Joe Tripodi of Allstate has another good response:

"I’d summarize as: Read about it; experience it; observe it. I get a ton of e-mails every day from Media Post, Brand Week, Ad Week, NYT,
etc, etc. I try reading books about the ‘new world order,’ but find
they are virtually obsolete before I finish them. Experience it! You
have to walk the talk. I have iPods (regular, Nano and Shuffle), three
TiVos (sacrilege, I know, but time is too short to watch all the
commercials), 8700c Blackberry, DirecTV, HDTV, etc. I try to spend time
regularly on new web destinations, especially those generating some
buzz. Observe it! I have three young children (10, 8, 6) and learn more
from them than any new-media ‘guru.’ They sit near the epicenter of
this ADD economy. Recently they’ve been swept away by the cultural
Tsunami called "American Idol." Lots of gaming, surfing, texting, etc.

Remember Barry Schwartz?  He is the guy who wrote The Paradox of Choice: Why Less is More.  Here is his answer:

"Frankly, what I do is ignore new stuff as long as I possibly can. I
let the rest of the world force me to do new things just to be
compatible with them. My view is that anything that doesn’t last at
least three years after its initial appearance isn’t worth knowing
about. But I’m an old-fashioned guy."

Puts the whole book in perspective, doesn’t it?

Here is the whole story.  Thanks to Tim Sullivan for the pointer.

Does the Sugar Quota make you Fat?

I don’t know whether High Fructose Corn Syrup (HFCS) acts more like fat than does sugar (compare here and here) but it’s worthwhile pointing out that HFCS is a child of the sugar quota.  The import quotas raise the US price of sugar well above the world price (~24 cents per pound compared to ~9 cents per pound) and encourage consumption of HFCS.  Reflecting this fact, the main defenders of the sugar quota are no longer Florida sugar growers but rather mid-West corn growers.

Strategies of silence and retreat

For a political leader, not appearing in public can mean:

1. You hate attention.  You are a recluse, like Thomas Pynchon or J.D. Salinger.

2. You are countersignalling.  Your political position (or health) is so secure that you don’t need to show your face.  Was Reagan at times an example?

3. Sheer random noise.  Maybe you are playing chess and haven’t given it much thought.

4. You are dead or dying.

5. Someone else is in charge, and they have yet to figure out the correct message.  Or groups of agents are fighting for control and no one is staging the appearances one way or the other.

6. No one is in charge, and everyone is afraid to appear to be in charge, for fear that the sick guy will recover and come back and squash them.

7. One guy used to run PR, and until he gets better everyone else is clueless and paralyzed.

We can rule out #1, #2, and #3.  Right now I will bet on some mix of #6 and #7.  But is there any point at which the sheer passage of time should push us to believe in #4 and #5?  Note that Raul has not shown his face either.  Are there alternative hypotheses?  The desire for a grand reentrance?  After all, a growing number of Cuban officials are talking of Castro’s return

Why we will not see convergence

Here is the best explanation I have heard:

McCracken says most homes are consolidating around a two-hub model. A
PC (or Mac) with some multimedia features anchors the home office,
while a TV with some computerized gear–think TiVo, not desktop
computer–owns the living room. Tech marketers talk about the "2-foot interface"
of the PC versus the "10-foot interface" of the TV. When you use a
computer, you want to lean forward and engage with the thing, typing
and clicking and multitasking. When you watch Lost, you want
to sit back and put your feet up on the couch. My tech-savvy friends
who can afford anything they want set up a huge HDTV with TiVo, cable,
and DVD players–then sit in front of it with a laptop on their knees.
They use Google and AIM while watching TV, but they keep their 2-foot
and 10-foot gadgets separate.

Lean forward, lean back.  They are two pretty different angles.  Imagine if that distinction were to drive the development of entertainment media over the next century.  Here is the full argument.  By the way, when I lie in bed I find I have completely different thoughts depending on whether I am on my side or on my back.  And I hate to read when I am leaning on my elbows.

An interesting bit I read today

…we love identity — because we don’t love class.  We love thinking that the differences that divide us are not the difference between those of us who have money and those who don’t but are instead the differences between those of us who are black and those who are white or Asian or Latino or whatever.  A world where some of us don’t have enough money is a world where the differences between us present a problem: the need to get rid of inequality or to justify it.  A world where some of us are black and some of us are white — or biracial or Native American or transgendered — is a world where the differences between us present a solution: appreciating our diversity.

That is from Walter Benn Michaels’s forthcoming The Trouble with Diversity: How We Learned to Love Identity and Ignore Inequality.

Neue Zürcher Zeitung article

von Gerhard Schwartz:

Das Faszinosum der Vielfalt

Die verschiedenen Welten des Ökonomieprofessors Tyler Cowen

S. Es ist nicht ungewöhnlich, aber doch immer wieder wohltuend überraschend, wenn man feststellt, dass die grössten Bewunderer der Schweiz Ausländer sind. Einer davon ist Tyler Cowen. Er ist zumindest in einschlägigen Kreisen bekannt als ein Experte in Sachen Kunstökonomie (oder wohl eher: Kulturökonomie). Der 44-Jährige unterrichtet Wirtschaftswissenschaften an der renommierten George Mason University und hat bei den besten Verlagen insgesamt elf Bücher veröffentlicht, darunter «Good & Plenty: The Creative Successes of American Arts Funding», das dieses Jahr bei Princeton University Press erscheint, «Creative Destruction: How Globalization is Changing the World’s Cultures» (2002) oder «In Praise of Commercial Culture» (1998).

Sein Besuch in der Schweiz verdankt sich einer Einladung der Zürcher Progress Foundation, an deren «Economic Conference» vom Juni er über Kulturförderung aus amerikanischer Perspektive spricht. Cowen tut dies zwar mit viel Detailkenntnis, er nutzt aber seinen Auftritt zugleich, um der Schweiz ans Herz zu legen, doch ja ihre Eigenarten in allen Belangen, auch im Kulturellen, zu bewahren, und sich deshalb ja nicht der EU anzuschliessen. Dass dies nicht romantische Verklärung einer Schweiz, die es so gar nicht mehr gibt, ist, zeigt sich im Laufe des Vortrages und im anschliessenden Gespräch. Cowen wechselt zum Schluss auf Deutsch, das er bemerkenswert gut spricht, und er gibt zu erkennen, dass er in den meisten Kantonen der Schweiz schon mehrmals war, und zwar auch an durchaus abgelegenen und unspektakulären Orten.

Die Begeisterung und Kenntnis geht nicht zuletzt auf einen einjährigen Studienaufenthalt an der Universität Freiburg im Breisgau 1985–86 zurück. Er hat dort, wie er etwas schelmisch gesteht, nicht in erster Linie Ökonomie studiert, sondern Deutsch gelernt und sich mit europäischer, vor allem deutschsprachiger Kultur beschäftigt.  Cowen scheint denn auch kleinere Museen, die Spielpläne der grossen Opernhäuser oder weniger bekannte Künstler aus Deutschland, Österreich und der Schweiz wie selbstverständlich aus dem Gedächtnis abrufen zu können, so, als ob sein Fach nicht die «dismal science» der Ökonomie wäre, sondern Musik oder Kunstgeschichte.

Noch begeisterter als von seinem Fach und von Kultur – unser Gesprächspartner, der auch Spanisch spricht, sammelt unter anderem mexikanische sowie haitianische Volkskunst und besitzt Tausende von CD – ist er aber von seinem Blog, www.marginalrevolution.com. Das «Wall Street Journal» nannte diesen 2004 einen der vier besten ökonomischen Blogs im Netz. Cowen hat ihn vor rund drei Jahren gestartet und betreibt ihn zusammen mit seinem Kollegen Alex Tabarrok täglich – 365 Tage im Jahr –, er schreibt Texte, weist auf neue Publikationen hin, stellt Links zu anderen Anbietern von Informationen her. Mit 5,5 Millionen verschiedenen Besuchern seit der Gründung und 20 000 bis 30 000 Besuchern täglich ist er im Urteil Cowens auch der grösste ökonomische Blog in den USA. Da er naturgemäss viele Reaktionen erhält, investiert er täglich ein bis zwei Stunden in dieses «Hobby». Die Reaktion seiner Frau, einer gebürtigen Russin, auf die Zeitangabe lässt allerdings vermuten, dass die Zeit wohl etwas höher anzusetzen ist.

Die Spannbreite der Themen ist enorm, da finden sich Betrachtungen über den Krieg im Nahen Osten, über Frankreichs Reichensteuer oder über die Ursachen der landwirtschaftlichen Revolution ebenso wie eine ökonomische Interpretation von Dürrenmatts «Besuch der alten Dame», eine Aufzählung schwieriger Fragen, die Cowen gerne seinen Gesprächspartnern beim Mittagessen stellt, eine Analyse der Flugpreise bei Internet-Buchung oder Überlegungen zu Freundschaft und Erotik. Als roter Faden zieht sich durch alle Texte, Hinweise und Links die ökonomische und liberale Perspektive. Daneben betreibt der vielseitige Professor auch noch einen Restaurantführer für Washington auf dem Internet. Doch dahinter steckt durchaus ein tieferer Sinn: Die Die Küche zählt für ihn, als wäre er ein Franzose, ganz selbstverständlich zur Kultur, und die Globalisierung, die die ethnischen Küchen auf der ganzen Welt verbreitet hat, empfindet er auch von daher als kulturelle Bereicherung.