Month: April 2007

Who do you want for the GOP ticket in ’08 Dr. Cowen?

So asks Chris in the comments.  Right now I don’t have favored candidates in any of the parties, either here or abroad.  Furthermore I will deliberately resist developing such favorites, and insofar as I can’t help having them, I won’t tell you who they are.  I don’t mean this in a libertarian "they are all crooks" sort of way, though that may be true.  It still really does matter who governs, and so we should take this process of candidate evaluation seriously.  It is just that I don’t want to be part of it.

As a blogger rather than decision-maker I am allowed my small space for protest.  I wish to protest our excessive tendency to choose sides with one group of people rather than another.  I wish to protest excess partisanship, and in particular excess partisanship motivated by the construction of "imaginary good" and "imaginary bad" political personalities.

As biological creatures we are programmed to respond to faces, voices, names, and identities.  We praise them, follow them, condemn them, figure out what side they are on, just like good ol’ East African Plains Apes.  Who is not excited to see a President of the United States attending a Wizards game in a nearby box?  I know I was, and I didn’t even vote for him.  Chimps will give up bananas, just to be able to gaze at photos of high-status other chimps.

I would like for my posts on MR to be one small space where these necessary but ignoble human tendencies toward personalization are resisted and sometimes even criticized.  I am biased, just as you are.  But for aesthetic reasons I would rather my biases be played out in the realm of ideas, rather than directed at people.  And at the margin, some of you should be just a little more like me.

Interview with Robert Fogel

When I graduated from college, I had two job offers.  One was from my father, to join him in the meat-packing business.  That would have been quite lucrative. The other was as an activist for a left-wing youth organization.  I chose the latter and worked as an activist from 1948 to 1956.  At the time I was making that decision, my father told me: “If you really believe in that cause, come work with me.  You will make a much higher wage and you could give your extra income to hire several people instead of just yourself.”  I thought, well, that makes some sense.  But I was convinced that this was a way to get me to change my views or at least lessen my commitment to an ideological cause that I found very important.  Yes, the first year, I might give all of my extra money to the movement, but every year I would probably give less, and finally reach the point when I was giving nothing at all.  I feared I would be co-opted. I thought this was my father’s way of indoctrinating me.

Here is much more; he mentions Simon Kuznets as the economist who influenced him most and talks of his forthcoming book of interviews with economists.

Larry Kotlikoff’s plan to stabilize Iraq

Here goes:

The Iraqi government should institute a draft of all Iraqi men between the
ages of 18 and 35.  This is the demographic most responsible for the violence. 
The removal of these 3 million men from the cities and countryside to army
barracks would likely bring an immediate end to Iraq’s horrific nightmare.  Any
men older than 35 suspected of involvement in terrorist or insurgent acts would
also be enlisted…The role of the enlarged Iraqi army would not involve bearing arms or
training in the use of arms. Rather the role would be to reconstruct the

Were the United States to pay 3 million Iraqi soldiers $10,000 yearly, the
bill would be $30 billion.  This is a small amount relative to the savings it
would accrue from leaving the country.  It would also make service in the Iraqi
army highly desirable…

It is called a draft, but I think of it as an allowance to go play in the sand, a’la Coase.  Here is more.

Jason Furman has an interesting health care plan

Make people pay more:

This paper proposes a template for a progressive cost sharing plan that would require typical families to pay half of their health costs until they reached 7.5 percent of their income; low-income families would not have any cost sharing.  The analysis shows that this template could reduce total health spending by 13 to 30 percent, reducing premiums by 22 to 34 percent without hurting health outcomes.  Moreover, low- and moderate-income families would face less cost sharing than they do under typical plans today while the premium savings would be more than enough to compensate middle- and upper-income families for the modest increase in their exposure to small risks.  Every family would have an affordable limit on their out-of-pocket payments, in contrast to the situation today, where many families have insurance policies that expose them to unlimited cost sharing.  In addition, the paper suggests the potential inclusion of evidence-based exceptions for highly valuable preventive care and chronic disease treatments as well as other mechanisms to protect the chronically ill.

This plan, of course, can be applied to either markets or government provision.  It finesses the problems with Bush health savings accounts, including the distributional issues and the lack of directness in achieving first-party payment.  It also assumes that the individual desire for comprehensive insulation from risk — clearly the market tendency where markets are present — is the fundamental problem in the health care sector.  If I protect myself from risk, I don’t take into account my diminished incentive to monitor health care costs, which creates larger dilemmas for the market as a whole.

An alternative plan is simply to tax the health insurance purchases of the relatively wealthy.  But if people overestimate anxiety costs of non-comprehensive coverage, they’ll be too ready to pay the tax and we might prefer Furman’s method of allocating health insurance according to a formula.  How easily supplemental insurance can be prevented remains an open question.

Addendum: Matt Yglesias comments.

Why do women like cads?

A loyal MR reader asks:

Explore the economics of the Tom Leykis model of human behavior: under a surprisingly broad set of conditions, women are more attracted to men who treat them poorly, don’t spend money on them, etc., while nice guys finish last.

Here is a very early MR post on that topic, and anotherAmber offers salacious commentary.  I’ll add that a lot of the so-called nice guys aren’t actually nicer than average, once you get past the surface.

41 in a series of 50.

Markets in everything, dining edition

Don’t take no for an answer:

New services that sell reservations are also cropping up., for example, books tables at top Manhattan restaurants and resells them.  Buyers pay a $450 annual membership fee plus about $30 per reservation.  The site, which specializes in last-minute reservations, was launched last year by Pascal Riffaud, a former concierge at the St. Regis in New York and the Ritz in Paris.  Mr. Riffaud says he won’t reveal his technique for getting tables.  When diners sign up they get a welcome email explaining that reservations are made under fake names.  This is so they can be secured in advance.

Here is the story, which also claims that four weeks’ out is the best time to get a table at a popular restaurant. 

Reservations are hard to get at top restaurants for at least two reasons: restaurant owners want a table to be seen as a status good, and the restaurant knows that who gets a table affects the long-run reputation of a restaurant.  Many restaurants, for instance, don’t want too many tourists, or too many ugly people.

Do non-market-clearing prices, in this instance, boost social welfare?  The reservations market, by allowing people to buy themselves into the queue, lowers the overall ability of restaurants to build up their images.  On the other hand, the queue-breaking may be limiting what is otherwise excess product differentiation for the purposes of increasing market power.

Or we could fall back on a simple libertarian rule: if the restaurants consider the practice (obtaining a reservation under false pretenses) fraudulent, don’t allow it.

Speaking of reservations, here is a new underwater restaurant.

Optimistic claim of the day

…instead of the 28 percent depreciation [of the U.S. dollar] needed to induce a 1 percentage point improvement in the trade balance to GDP ratio, only about a 15 percent depreciation is required once on takes into account vertical specialization in the manner the WEO authors do.

If this is right, paying off America’s ongoing trade deficit won’t be nearly as hard as we used to think.  Here is more.

Russia fact of the day

Russia’s average annual alcohol consumption has reached 15 litres (26 pints) per person, nearly tripling the 1990 average of 5.4 litres, the country’s consumer protection agency said Monday.

Of course that’s both good news and bad news.  Here is the link, which reports that 12 percent of all deaths in Russia are alcohol-related.

What I’ve been reading

1. Bourdieu’s Secret Admirer in the Caucasus: A World-System Biography, by Georgi Derluguian.  How did the Soviet Union come to be, come to collapse, and was the ethnic trouble in the Caucasus brought on by globalization?  This book has a unique narrative style, while the content draws upon Wallerstein, Tilly, Randall Collins, and others.  There is wisdom and analysis on virtually every page.

2. Twice a Stranger: The Mass Expulsions that Forged Modern Greece and Turkey, by Bruce Clark.  The sad story of how murder and population exchanges have made the nations of the modern Mediterranean more monocultural; someone needs to write on Egypt as well.

3. Good Bread is Back, by Steven Kaplan; the subtitle says it all: A Contemporary History of French bread, the way it is made, and the people who make it.  Here is Alex’s earlier post on French bread.

4. On Chesil Beach, by Ian McEwan.  This short novel is about young British newlyweds trying to have/trying to not have sex in 1962.  Critics are calling it a return to form, but it feels slightly overwrought to me.  Can the British really be like that?  If so, do I have to read about it?  I did find the last ten pages strikingly beautiful.  I got my copy early on, the American edition is out in June.

You can’t fool MR readers

You may remember that a month or so ago I pledged, as an experiment in innovative consumption, not to buy a new CD for an entire year.  Some of you — agnotheists I suppose — said I wouldn’t last three weeks but you were wrong.  I lasted three weeks and two days.  As I carried my CD up to the counter at Borders, the sales clerk smiled gently.  He then announced that he was a loyal MR reader who visits the blog twice a day.  I didn’t even have to agonize over whether I was obliged to report my weakness to you all.   

I haven’t unwrapped it yet.

Joshua Bell plays the Washington Metro

Never have I had so many reader requests for commentary on a current topic.  In case you didn’t know, violin maestro Joshua Bell pulled out his $3.5 million violin in the Metro and started playing world class, beautiful music (reader comments here).  Hardly anyone noticed and he pulled in about $37 in donations; here is commentary from Levitt.

The first lesson is that most people are ninnies, with little or no taste in randomly presented cultural fields.  But that’s OK, I can’t tell a good computer game from a bad one, or even figure out how to turn them on. 

The second lesson is that most people don’t actually like the violin.  The register is simply too high for them.  Bach’s Sonatas and Partitas for Solo Violin (get Milstein) are among the most splendid pieces of classical music ever composed and they repay many repeated listenings without growing stale or tired.  They are underheard, even among Bach lovers.

Most people also don’t like the squawking of John Coltrane; for a treat, try Ascension.  I am convinced these are matters of cognition rather than of taste.

For the pointer, thanks to um..almost all of you.

Addendum: A fellow blogger and I once wondered if James Joyce were blogging today, without benefit of celebrity, and producing prose of the highest order, how many hits would he get a day?