Month: August 2008

U.S. fact of the day

High school cheerleading accounted for 65.1 percent of all catastrophic
sports injuries among high school females over the past 25 years.

Here is the link, with a photo.  Loyal MR readers will know that I am a strong and genuine non-paternalist.  But if you are a paternalist, and you are looking for one place to start, well…it’s not just the injuries that should point your attention in this direction.  We have to raise tax revenue from somewhere, right?  Currently we are subsidizing cheerleading and, along the lines of Robert Frank’s column, that makes no more sense than subsidizing fuel

Obama insecurity

Obama has many good qualities but this does not prevent the circulation of massive amounts of "Obama insecurity," as evidenced by some of the comments on a recent post.  (It’s not about disagreeing; note how the tone changes.)  For some people no comment on Obama, other than the purely laudatory, is anything other than a hackish right-wing attempt to forge an alliance of lies with Karl Rove and his ilk.  But an election need not be framed as a war where all remarks must be strategically proper and in line with the objective of electing a preferred candidate; a blog is a discourse first and foremost.

The mood on Obama reminds me of the response of some MR commentators to Eric Lyon on Radiohead.

I cannot imagine how devastated and hopeless the Democratic left would feel if Obama loses.  That response would be a big mistake but in part it explains "Obama insecurity."  The left is uneasy that so many of their hopes are pinned on this man and as Paul Krugman points out he is somewhat unknown.  There is a secondary fear that Obama is in fact committed to the notion of America as a center-right country or at least is unwilling to challenge that idea. 

"Obama insecurity" hurts his electoral chances and hurts the intellectual future of the left as a corrective force in American politics.  There’s not a convincing or credible path toward painting his enemies as immoral, even if that is what you believe.  Some campaign lies are painting Obama as weak, inexperienced, and non-American or even anti-American.  Responding with a dose of "Obama insecurity" only plays into the hands of those who would turn this into a race of emotions and innuendo. 

Good sentences

The marriage between sport and broadcasters, though long and
successful, has been changing in a number of ways. First, the
fragmentation of audiences among hundreds of channels has given the
most popular sports enormous bargaining power. As the number of
channels has multiplied, large audiences have become much harder to
find, but sport has retained its ability to supply them.

Here is more.  Here are related articles on globalization and sports.

Why does India win so few Olympic medals?

A loyal MR reader writes to me:

Here’s an interesting fact: despite a
population of more than 1 billion, India has won a grand total of 18 Olympic medals (mostly in field hockey):

there are many obvious hypotheses, all of which may be partially
right, yet one would think these apply to zillions of other countries that
nevertheless have non-trivial Olympic presences.

So what is it?

My guess would be lack of government subsidies, combined with the possibility that non-democratic, authoritarian governments feel greater need to prove themselves on the international stage and to their people at home.  The subsidies matter for the infrastructure as much as for the athletes.  Throw in low social mobility, nutrition problems, and the relative lack of TV to inspire the young ‘uns and you’ve got my answer.  Bad roads don’t help any either.  Does this query have any other takers?

Here are some different yahoo attempts at an answer.  Here is a Guardian article.  Anirudh Krishna and Eric Haglund have a whole paper on the topic of social mobility.

Chile impressions

Santiago now feels like a huge city rather than a collection of neighborhoods.  The old center of town (Plaza de Armas) has become a bit of a dump but the outskirts are booming.  Parts of the city are even hip and trendy, a shock to anyone who knows the older Chile.  The variety of faces reminds me, oddly, of Oslo.  The "Dissidents Cemetery" in Valparaiso is full of Scottish and German names.  The seafood remains superb, most of all the clams and mussels and ceviche and shrimp and conch and abalone.  And the other stuff too.  Some restaurants, rather than giving you a lemon for your fish, offer you a small glass of lemon juice and a squeezer.  There are many more immigrants from the northern Andes than before and many more tourists from Brazil.

I was stunned by this, which is even more impressive when you are standing by it.  Some of the surrounding apartment blocks have a nice modern Art Deco style.  There remain deep pockets of poverty but overall the nation is pulling away from the other Latin American countries.  The Chileans basically need more of the same, rather than having to solve some deep structural problem.  Usually drivers stay in their lanes.  People don’t always dress that well.  It was a page 3 story in El Mercurio, with photo, that "Oprah won a million votes for Obama."

It is a common claim that Catholicism is bad for growth but in fact Chile is arguably the most seriously Catholic of the South American countries.

Tomorrow we head off to a remote place which I dare not reveal; I am surprising Yana and Natasha and perhaps you too.

Nationalism versus Peace

Paul Krugman has good column today on the threat of nationalism to globalization.

before World War I another British author, Norman Angell, published a
famous book titled “The Great Illusion,” in which he argued that war
had become obsolete, that in the modern industrial era even military
victors lose far more than they gain. He was right – but wars kept
happening anyway….

…the belief that economic rationality always prevents war is an
equally great illusion. And today’s high degree of global economic
interdependence, which can be sustained only if all major governments
act sensibly, is more fragile than we imagine.

Designing Monopoly

In Alabama it is illegal to recommend shades of paint without a license.  In Nevada it is illegal to move any large piece of furniture for purposes of design without a license.  In fact, hundreds of people have been prosecuted in Alabama and Nevada for practicing "interior design" without a license.  Getting a license is no easy task, typically requiring at least 4 years of education and 2 years of apprenticeship. Why do we need licenses laws for interior designers?  According to the American Society of Interior Designers (ASID) because,

Every decision an interior designer makes in one way or another affects the health, safety, and welfare of the public.

This hardly passes the laugh test.  Moreover as Carpenter and Ross point out in an excellent article in Regulation from which I have drawn:

In more than 30 years of advocating for regulation, the ASID and its ilk have yet to identify a single documented incident resulting in harm to anyone from the unlicensed practice of interior design…These laws simply have nothing to do with protecting the public.

Most states do not have license laws for interior designers but the unceasing lobbying efforts of the ASID have expanded such licenses.  Fortunately, unlicensed interior designers are fighting back!  I love that unlicensed designers in New Hampshire have formed a anti-license league, Live Free and DesignTuttle Lives!

John McCain’s proposed tax hike

Jason Furman and Austan Goolsbee write:

As even Sen. McCain’s advisers have acknowledged, his health-care plan
would impose a $3.6 trillion tax increase over 10 years on workers.
Sen. McCain’s plan will count the health care you get from your
employer as if it were taxable cash income. Even after accounting for
Sen. McCain’s proposed health-care tax credits, this plan would
eventually leave tens of millions of middle-class families paying
higher taxes. In addition, as the Congressional Budget Office has
shown, this kind of plan would push people into higher tax brackets and
increase the taxes people pay as their compensation rises, raising
marginal tax rates by even more than if we let the entire Bush tax-cut
plan expire tomorrow.

The piece is interesting throughout, for instance:

Overall, Sen. Obama’s middle-class tax cuts are larger than his partial
rollbacks for families earning over $250,000, making the proposal as a
whole a net tax cut and reducing revenues to less than 18.2% of GDP —
the level of taxes that prevailed under President Reagan.

I would look more closely at the implied structure of fiscal commitments over time and what each candidate is likely to actually do (as opposed to promise) when it comes to Medicare and other health care issues.

A reform proposal for Zimbabwean inflation

And thus I suggest that Zimbabwe might as well have a go with free banking.
One of the curios of the Zimbabwean economy is that it still has a
significant presence from UK commercial banks (Barclays Zimbabwe, a
subsidiary of Barclays plc is the largest, with Standard Chartered not
far behind). Not very well informed UK journalists often discover this
fact and then write ill-informed
articles about "propping up Mugabe" (the reality is that neither
company has made a cent in profit in Zimbabwe for about five years, but
both of them have correctly assessed that they would hardly be doing
the Zimbabweans a favour by destroying their domestic banking system.
They don’t "make loans to the Mugabe regime", they hold excess deposits
(which are substantial as there aren’t many viable commercial lending
propositions in Zimbabwe) in short term government bonds.

BBZ and SC have substantially better credit ratings than the Zimbabwean
state and justifiably so, and they have more of an interest in
maintaining sound money in the long term than the Zimbabwean state too.
They certainly don’t have any interest in printing a note with twelve
zeroes on it. Why not let them print banknotes and treat them as legal
tender? There’s my plan for monetary reform; doesn’t work for most
hyperinflationary countries as the local banking system is usually
about as weak as the state but Zimbabwe is a special case.

That’s from DSquared and right on the mark I would say.

Three indicators of cultural success

As distinct from happiness, of course:

1. If a kid does badly in school, does the parent genuinely get mad at the kid and withhold affection?

2. Can people wait in an orderly line?

3. Can people stay in their designated lane when driving a car?

I wonder how these variables, if measured, would fare in cross-country growth regressions.  I covered these points and others in my talk in Buenos Aires.  Going way back, here is my sushi test for minimal levels of social trust.

Vending machine markets in everything

Medical marijuana, and right here in our own California.  But it’s not so easy either:

…you can’t just walk in,
drop a few coins and roll out with a bag of weed. The machines are
situated in dispensaries, and surrounded by armed guards. We suspect
the latter is to stop the machines getting ripped off, not to harass
the legitimate users.

So how do you get your
fix? You need to be preapproved by your doctor and then give a
fingerprint. After that you get a card detailing your prescription.
Head to the machine, 24-7, and pick up your baggie.

The article details many other interesting vending machines, of course with an emphasis on Japan.  Here are my previous posts on vending machines.

The economics of tipping

Wayne, a loyal MR reader, writes to me:

I am going to start tipping based on an estimate of the number of checks
a waiter presents per hour divided into my estimate of what his services are
worth per hour without regard to the amount of the bill.

Of course the way it works now we tip as a percentage of the bill, paying a kind of flat tax unrelated to labor effort.  Was it really that hard to cover over the $100 bottle of wine?

Let’s assume everyone behaves that way.  In essence we would tipping on the basis of how many plates are carried and not how much value is on the plate.  The end result would be better service in poor restaurants and worse service in more expensive restaurants.  People who patronize lower-price restaurants, or order lower-price entrees, would pay more in percentage terms in the form of tips.  To some extent the price of food in these restaurants would fall to compensate and waiter wages in the restaurants would fall too.  Waiters in the fancy restaurants would become more like fixed-price servants and in fact this already has happened in some fancy resorts.

If I wanted to defend Wayne’s view, I would invoke the following claim: maybe we tip the fancy waiters to feel fancy ourselves but could there be a greater potency of tipping at lower price ranges, where waiter quality is harder to monitor?  Note also that more people eat in the lower price ranges, so shifting your tipping convention in that direction might bring a greater positive externality for society as a whole.