Month: August 2009

The value of the Beatles

by  Tyler Cowen in

Don Boudreaux offers a simple calculation:

If each viewer of only The Beatles' first two "Sullivan" appearances
deposited $1 into an account in return for watching The Beatles on
these telecasts, this account would have had in it, on Feb. 16, 1964,
$143.7 million. If this money had been invested at the historical rate
of return earned by U.S. stocks, it would have earned an annual return,
on average, of 8 percent. Today, this account would be worth about $4.4
billion.

Divided equally among John, Paul, George and Ringo, Paul's share
today would be $1.1 billion — his approximate current net worth. And
this from only a small payment made 45 years ago by each viewer of a
mere two episodes of an American television show.

Adam Phillips on moderation and balance

by  Tyler Cowen in

Here is the closing bit of the essay:

There is, though, a third possibility, the one that I want to end on because it seems to me potentially the most interesting, though perhaps the most daunting. This is that the religious fanatic is someone for whom something about themselves and their lives is too much; and because not knowing what that is is so disturbing they need to locate it as soon as possible. Because the state of frustration cannot be borne – because it is literally unbearable, as long-term personal and political injustice always is – it requires an extreme solution.

In this account our excessive behaviour shows us how obscure we are to ourselves or how we obscure ourselves; how our frustrations, odd as this may seem, are excessively difficult to locate, to formulate. Wherever and whenever we are excessive in our lives it is the sign of an as yet unknown deprivation. Our excesses are the best clue we have to our own poverty, and our best way of concealing it from ourselves.

Bill Maher unleashes his inner Bryan Caplan

by  Alex Tabarrok in

Bill Maher at the Huffington Post:

Or take the health care debate we're presently having: members of Congress have recessed now so they can go home and "listen to their constituents." An urge they should resist because their constituents don't know anything. At a recent town-hall meeting in South Carolina, a man stood up and told his Congressman to "keep your government hands off my Medicare," which is kind of like driving cross country to protest highways.

I'm the bad guy for saying it's a stupid country, yet polls show that a majority of Americans cannot name a single branch of government, or explain what the Bill of Rights is….

Nearly half of Americans don't know that states have two senators and more than half can't name their congressman. And among Republican governors, only 30% got their wife's name right on the first try.

Sarah Palin says she would never apologize for America. Even though a Gallup poll says 18% of Americans think the sun revolves around the earth. No, they're not stupid. They're interplanetary mavericks….

People bitch and moan about taxes and spending, but they have no idea what their government spends money on. The average voter thinks foreign aid consumes 24% of our federal budget. It's actually less than 1%….

And I haven't even brought up America's religious beliefs. But here's one fun fact you can take away: did you know only about half of Americans are aware that Judaism is an older religion than Christianity? That's right, half of America looks at books called the Old Testament and the New Testament and cannot figure out which one came first.

And these are the idiots we want to weigh in on the minutia of health care policy?

Very funny. If only it were not true.

What I’ve been reading

by  Tyler Cowen in

1. Methland: The Death and Life of an American Small Town, by Nick Reding.  Maybe I should define a new category: "Good enough to finish."  This is one of the better recent books on the economics of culture.

2. The Great Contraction, Friedman and Schwartz.  Classic economics books like this are almost always worth a reread.  I had forgotten just how bad was the year 1931.

3. Chop Suey: A Cultural History of Chinese Food in the United States, by Andrew Coe.  There is way too much well-known diplomatic history in this book, but the best fifty pages are good enough to make it worthwhile.  That said, I could have saved a lot of time, by flipping rapidly through the boring pages. had I not been reading it on my Kindle.

4. A Schoolteacher in Old Alaska: The Story of Hannah Breece, collated and edited by Jane Jacobs.  A reasonably interesting look at Alaskan, Aleut, and Russian culture around the turn of the century, as told through the eyes of a settler woman and edited by Jacobs (with how much intervention I am not sure).  This makes for a good contrast with Jacob's work on urban economies.  It's not thrilling all the time but overall I would recommend it.

5. Middlemarch, by George Eliot.  No other book I have tried so profits by a reread on Kindle.  Given its density of information, it's simply much better when there is less on each page.

The path dependence of health care institutions

by  Tyler Cowen in

Let's say you favor one of the health care plans currently under consideration.  Should you believe it would have been easier to switch to your favored plan in, say, 1972 rather than today?  I suspect the answer is yes or maybe even "very yes."  And probably you are stressing the imperative for change now rather than ten years from now.  That strikes me as an internally consistent set of views.

Yet I worry.  The implication is that the reform in the U.S. won't work nearly as well as in Europe, which made the switch to a different system much earlier on.  How much less well would a U.S. switch work?  I haven't seen useful estimates of this. 

Are there any data for the null hypothesis that past some point countries — for better or worse — simply cannot or will not change the basics of their health care institutions?

Almost everyone thinks that the French health care system is better than the British health care system.  What is the chance that the British could be persuaded to switch?  (Although I cannot imagine the rhetoric: "under the French health care system, Jean-Dominique Bauby would have been put to death.")  What does this say about health care reform more generally?

One unintended byproduct of the current U.S. debate is that the British will dally in reforming their NHS.  It is now harder for them to admit they have a relatively bad system.

Paul Romer, ask and ye shall receive

by  Tyler Cowen in

For a man who likes the Kentucky Colonels, is that not how it ought to be?  Reality now brings Caribbean Charter Islands:

The UK has resumed day-to-day control of the Turks and Caicos
islands amid ongoing allegations of widespread corruption in the
British overseas territory, the Foreign Office said tonight.

Local
government in the islands, which lie 500 miles south-east of Florida in
the Atlantic, will be suspended for up to two years while their affairs
are put back in "good order", according to the FCO.

The Islanders themselves are divided over the idea.

Mathematics of a Zombie Attack

by  Alex Tabarrok in

Here is the abstract of a new paper in Infectious Disease Modelling Research Progress.

Zombies are a popular figure in pop culture/entertainment and they are usually portrayed as being brought about through an outbreak or epidemic. Consequently, we model a zombie attack, using biological assumptions based on popular zombie movies. We introduce a basic model for zombie infection, determine equilibria and their stability, and illustrate the outcome with numerical solutions. We then refine the model to introduce a latent period of zombification, whereby humans are infected, but not infectious, before becoming undead. We then modify the model to include the effects of possible quarantine or a cure. Finally, we examine the impact of regular, impulsive reductions in the number of zombies and derive conditions under which eradication can occur. We show that only quick, aggressive attacks can stave off the doomsday scenario: the collapse of society as zombies overtake us all.

Hat tip to Cory Doctorow at Boing Boing.

The economics of Legoland and the revelation principle

by  Tyler Cowen in

At Legoland, admission is discounted for two-year-olds. But a child must be at least three for most of the fun attractions.

At the ticket window the parents are asked how old the child is. But
at the ride entrance the attendants ask the children directly.

The parents lie. The children tell the truth.

That is again Jeff Ely, from cheeptalk.wordpress.com

A very good article on health care economics

by  Tyler Cowen in

By David Goldhill, here is one bit:

How am I supposed to be able to afford health care in this system?
Well, what if I gave you $1.77 million? Recall, that’s how much an
insured 22-year-old at my company could expect to pay–and to have paid
on his and his family’s behalf–over his lifetime, assuming health-care
costs are tamed. Sure, most of that money doesn’t pass through your
hands now. It’s hidden in company payments for premiums, or in Medicare
taxes and premiums. But think about it: If you had access to those
funds over your lifetime, wouldn’t you be able to afford your own care?
And wouldn’t you consume health care differently if you and your family
didn’t have to spend that money only on care?

Here is another:

From 2000 to 2005, per capita health-care spending in Canada grew by 33
percent, in France by 37 percent, in the U.K. by 47 percent–all
comparable to the 40 percent growth experienced by the U.S. in that
period. Cost control by way of bureaucratic price controls has its
limits.

His preferred reform reminds me of Brad DeLong's plan, namely universal catastrophic care combined with required HSAs at lower levels of expenditure.

Assorted Links

by  Alex Tabarrok in
  • Contrary to popular belief (e.g. here) there is only weak evidence that the implicit association test has good predictive ability.
  • The economics of being a Hefner Girlfriend.  One key sentence “In fact, Girlfriends were not allowed to become Playmates because Hef had found that they tended to flee the Mansion as soon as they collected their $25,000 Playmate cheque.”

My favorite things Sweden

by  Tyler Cowen in

Most of the answers seem too obvious to list.  I will say only that there is more to Swedish detective fiction than Stieg Larsson (start with Henning Mankell), lingonberries are usually a good idea in a meal, "Honey Honey" is the most underrated Abba song (it didn't make Greatest Hits I), there are more excellent Bergman movies than most people think even if you don't like the stereotypical ones, Carl Milles's greatest work is in a Fairfax/Merrifield cemetary on Rt.29 in Virginia, Emanuel Swedenborg is unreadable, and the world music group Simbi really does make note-perfect copies of native Haitian musical styles.  The Cardigans are better than their reputation and Knut Wicksell's 1898 Interest and Prices still has unmined insights.  The pizza is surprisingly good.  Robert V. Eagly's book on the 18th century Swedish bullionist controversies is excellent and neglected.  Everyone should read Staffan Burenstam Linder's The Harried Leisure Class.  The country has long appreciated the merits of floating exchange rates.  Ann Margret was from Sweden too.

The worst health care reform ever?

by  Tyler Cowen in

Perhaps Turkmenistan takes the prize:

In 2003, "President for Life" Saparmurat Niyazov decided that poor,
landlocked Turkmenistan's medical costs were too high and that its
healthcare system urgently needed reform. The country had already
suffered from a shortage of doctors, and the only qualified ones were
in cities, Niyazov said on a public radio address.

So, in a
frankly insane healthcare reform effort, he restricted the public's
access to care by replacing up to 15,000 doctors and nurses with
unqualified military conscripts. The next year, he ordered hospitals
and clinics outside of the capital, Ashgabat, to close — even though
the vast proportion of Turkmenistan's population lives in rural areas.
The BBC quoted him as saying, "Why do we need such hospitals? If people
are ill, they can come to Ashgabat." He also implemented fees and
created an "unofficial" ban on the diagnosis of certain communicable
diseases, like hepatitis.

As a result, an epidemic of the bubonic
plague reportedly broke out (Turkmenistan's highly secretive government
does not allow in organizations like the WHO) and existing rashes of
AIDS, hepatitis, and tuberculosis worsened. At the time of Niyazov's
death from a cardiac infarction in 2006, Turkmenistan had one of the
lowest life expectancies in Asia — less than 60 years.

The full story is here and it lists some other very bad health care reforms.