Month: June 2011

Electric Cars in Israel

In 2009 Shai Agassi made a splash at TED with his plans for electic cars. Agassi’s innovative idea was to make the batteries swappable; swappable  batteries and swap-station infrastructure mean that electric cars are as mobile as gas. Even more importantly, it makes possible a pure electric car which is much cheaper to make than a hybrid. The news out of Israel is that Agassi’s company BetterPlace is within months of rolling this out in Israel and in Denmark just months after that. Indeed, you can see charge stations like this around Jerusalem.

In addition, some gas stations are geared up to be swap stations. A swap is entirely automatic and takes 3 minutes, less than the time to fill up. Without swapping you can travel 100 miles, so for most people on most days they won’t even need a swap since they will charge at home and and at work.

I am told that there are already 90,000 pre-orders for the vehicles, a huge number for Israel. Are Israeli’s super-green? No, the big selling point is that the cars are not expensive to buy and, of course, cheap to run.

Here is the battery swap in action:

I learned some of this talking with a betterplace executive so take it with a grain of salt. Nevertheless, I expect this will be big news a few months from now.

Prison estimate of the day

The U.S. Department of Justice recently released its first-ever estimate of the number of inmates who are sexually abused in America each year. According to the department’s data, which are based on nationwide surveys of prison and jail inmates as well as young people in juvenile detention centers, at least 216,600 inmates were victimized in 2008 alone. Contrary to popular belief, most of the perpetrators were not other prisoners but staff members—corrections officials whose job it is to keep inmates safe. On average, each victim was abused between three and five times over the course of the year. The vast majority were too fearful of reprisals to seek help or file a formal complaint.

The emphasis is added, the link is here.

Good anecdote for progressives (conservatives?)

A couple of months ago Verone started weighing his options.

He considered turning to a homeless shelter and seeking medical help through charitable organizations.

Then he had another idea: commit a crime and get set up with a place to stay, food and doctors.

He started planning.

As his bank account depleted and the day of execution got closer, Verone sold and donated his furniture. He paid his last month’s rent and gave his notice.

He moved into the Hampton Inn for the last couple of days. Then on June 9 he followed his typical morning routine of getting ready for the day.

He took a cab down New Hope Road and picked a bank at random — RBC Bank.

Verone didn’t want to scare anyone. He executed the robbery the most passive way he knew how.

He handed the teller a note demanding one dollar, and medical attention.

The story is interesting throughout, here is another bit:

The ideal scenario would include back and foot surgery and a diagnosis and treatment of the protrusion on his chest, he said. He would serve a few years in prison and get out in time to collect Social Security and move to the beach.

The link is here (could he have signed up for the high-risk pool?) and for the link I thank J.T. Kounelias.

Random Thoughts from Jerusalem

The first session of the Shimon Peres Presidential conference I am attending began strangely with a session featuring Dan Ariely, Sir Martin Sorrell, Jimmy Wales, Shakira and Sarah Silverman.

Ariely was fine, he gave his usual talk on self-control and temptation, cleverly labelled the “Adam and Eve” problem. Most interesting thing I had not heard. Just like people, rats and pigeons have a hard time resisting a short-term pleasure even at the expense of a much larger future pleasure. The interesting part is that just like people, rats and pigeons seem to know that they are making a mistake so they will pay to have the short-term choice taken away from them (like people locking their refrigerator.) Ariely,however, kept his insights on the “how to lose weight” level and didn’t attempt to address any larger issues.

Sorrell was a total bore.

Wales talked about Wikipedia, the power of voluntarism, and the Wikipedian assumption of good faith.

Shakira told us about the importance of early education. She was earnest and I’d rather hear it from her than Jim Heckman but it was still boring.

An incompetent interviewer tried to make jolly with Sarah Silverman. She was the only, however, to address real issues and was quite clever although she also told us that she really had to pee.

The opening acts over with, we then had Shimon Peres, Tony Blair, Bernard Henri-Levy and Amos Oz.

Peres at 87 is vigorous, optimistic and pro-science (“science cannot be contained by governments and flourishes most with peace.”) Impressive.

Tony Blair gave a very pro-Israel speech, even more than expected (“the model for the region”).

BHL said nothing wrong–indeed, he discussed a topic I would have discussed, democratic peace theory, albeit presented too strongly. He also noted that for decades the Libyans and Syrians have been taught that Israel is the great Satan but now the veil has been lifted and Satan is found closer to home. I find it difficult to take BHL seriously, however. No doubt the fault is mine.

The highlight of the evening was Israeli novelist Amos Oz. Oz gave a hard-hitting speech full of quotable moments (here are paraphrases but look for the speech online for a real sense). Many will disagree with the conclusions but it was still an excellent speech in delivery, allusion, and insight:

The suppression of the Palestinians is immoral and not in Israel’s genuine self-interest. The building of settlements is immoral and not in Israel’s genuine self-interest. The expansion into East Jerusalem is immoral and not in Israel’s genuine self-interest.

I love Israel even when I don’t like it.

I am not a hippy. I say make peace not love.

Why is it that the same Europeans who hate Hollywood treat the Israel/Palestine conflict with the subtlety of a Hollywood movie with bad guys and goods guys?

It’s going to be an amputation for both sides.

Oz’s speech was mostly well received by this audience of Israel’s secular/liberal elite but there was heckling especially when he said that there would have to be a two-state solution along the 67 lines (with modifications) and that Israel would have to give up biblical lands. Oddly Sarah Silverman had hit on this point earlier, “What do you want,” she asked, “acreage or values?”

Today we have Larry Summers, Dr. Ruth, and a course on game theory from Aumann. Strange but interesting.

P.S. The rugelah at the Marzipan bakery was excellent.

What I’ve been reading

1. Red April (Abril Rojo], by Santiago Roncagliolo, translated by Edith Grossman.  This Peruvian “Shining Path noir” tale is as good as the strongly positive reviews indicate and it has an excellent dark humor.  Here is an interview with the author.

2. Effi Briest, by Theodor Fontane.  Remarkably vivid and full of life, despite its reputation as a stodgy 19th century novel.  It also can be funny and very much to the point about human nature.

3. Made in Britain, by Evan Davis.  Too simple for my tastes, but this is nonetheless an effective accounting of where the British economy remains strong and also where the weaknesses are starting to bite.  The author has a good understanding of economics and he avoids the mercantilism that you might fear is implicit in such an enterprise.

4. Hart Crane, The Bridge.  Two-thirds of this is stunning, mostly the first half and most of what comes after “Three Songs.”  Plus it’s fairly short and easy to read, though difficult to comprehend at the highest levels.  Think of it as the next step after Leaves of Grass.

5. Popular Crime, by Bill James.  Silly idea, or self-recommending?  Perhaps a bit of both, because this is the Bill James, writing a 500-page treatise on popular crimes and also on other people’s books on popular crimes.  The classic error detection and pattern recognition skills are still there.  The bottom line is that a) I finished it (skimmed maybe a fifth, some of the cases I didn’t care about), and b) I liked it increasingly as my read progressed, and c) I have no trouble with books which fall outside of the usual “central narrative” structure but you might.  If you think you might like it, at the very least try it.  That said, if you’re looking to pick holes in it, you certainly can; here is one critical review.  Here is another review.

6. Javier Marias, A Heart so White.  Loved it, a modern classic by Spain’s leading writer.

In rebellion against regulatory capture

An economist on leave from the federal agency that insures bank deposits was indicted Tuesday for allegedly attempting to rob a bank in Independence, Mo., last month.

Jeff W. Walser, 51, worked as regional economist for the Kansas City office of the Federal Deposit Insurance Corp., which protects bank depositors against losses, though not those from robbery. He was on leave at the time of the robbery and will remain on leave until his case his is resolved, said FDIC spokesman Andrew Gray.

More is here, and the pointer is from Malcolm Edwards.  How else might I have titled this blog post?

It took me a while to realize this is not satire

I usually don’t link to bad pieces, or enjoy criticizing them, but there is an exception to every rule.  Excerpt:

Rational choice philosophy thus promulgates a clear and compelling moral imperative: increase your wealth and power!

Today, institutions which help individuals do that (corporations, lobbyists) are flourishing; the others (public hospitals, schools) are basically left to rot. Business and law schools prosper; philosophy departments are threatened with closure.

Or this:

The neat causality of rational choice ontology, always at odds with quantum physics, was further jumbled by the environmental crisis, exposed by Rachel Carson’s 1962 book “The Silent Spring”…

The author is a professor of Germanic languages.

I agree with Reihan that the recent web critique of Nozick, which I will not link to, was just awful.  David Gordon should write a critique of it and send me the link.

We now return to your regularly scheduled programming.

From the Richmond Fed, on structural unemployment

These results are related to what I sometimes call Zero Marginal Product workers:

…a significant part of the increase in long-term unemployment is indeed due to the inflow into unemployment of workers with relatively low job finding rates. We conclude by arguing that given the increased contribution to overall unemployment of unemployed workers with inherently low job finding rates, monetary policymakers may want to exercise caution in the use of policy to respond to the level of unemployment.

The authors are Andreas Hornstein and Thomas A. Lubik.  The entire study — full of useful information — is here, and for the pointer I thank Alex in Jerusalem (we await a report).

Via Scott Sumner, while this is not my favorite structural explanation, I read of this from Siemens:

Siemens had been forced to use more than 30 recruiters and hire staff from other companies to find the workers it needed for its expansion plans, even amid an unemployment rate of 9.1 percent

…a recent survey from Manpower, the employment agency, found that 52 percent of leading US companies reported difficulties in recruiting essential staff, up from 14 percent in 2010.

In manufacturing in particular there is evidence of a mismatch between workforce skills and available jobs: while employment has fallen since January 2009, the number of available job openings has risen from 98,000 to 230,000.

Via Felix Salmon (he pulls out excellent pictures), from the IMF, using cross-country data:

For U.S. long-term unemployment the split between cyclical and structural factors is closer to 60-40, including during the Great Recession.

How would a Greek transition out of the euro go?

Forget about the macroeconomics for now, I am thinking about the sheer mechanics of it.

If Greece announced it was leaving the euro, it might declare a bank holiday.  For some number of days, no one can pull their euros out of the bank (otherwise all euros leave the Greek banking system).  The government would have to put a money stamping technology in place fairly rapidly.  Once the banks are reopened, withdrawn money gets a stamp and it is now a “Greek euro” or “drachma euro,” trading at a lower value of course.  Is there an indelible, irreversible money stamping technology and how long would it take to distribute it  to every Greek bank?  How about ripping off one corner of the bill?  That wouldn’t take long.  Would corrupt bank tellers, handing out notes but refusing to rip them, undercut such a plan?

There would be a relative windfall for those who held their wealth in the form of currency rather than bank accounts.  It is impractical to “round up” these cash balances and stamp them.

Alternatively, there are already “Greek euro notes” with the stamp on them of a Greek letter.  The Greek government could simply announce that such notes are now “drachmas.”  Would the market believe them and would the ECB have to make a counter-announcement, promising they are no longer full legal tender at par?  Par acceptance of these notes in Italy would mean massive arbitrage and also would impose further deflation on Greece.  I don’t know how many of the euros circulating in Greece are in fact stamped this way.  If most of them are, the problem of how to get out of the euro would be easier to solve.  The bank holiday could be quite short because there is already a “new currency” with a physical existence in place.  (But what would happen to a German citizen, in Germany, who held a lot of such notes after a vacation in Greece?  Would the German government make that person whole, while limiting arbitrage from Greek citizens?  Perhaps that could work, but of course Greeks would try to trade their notes to Germans.  Note that non-Greek merchants would have to scrutinize accepted notes fairly closely for a while; eventually the Greek government would sub in a currency with a more distinct appearance.)

At first prices would be posted in terms of (old) euros, then in terms of both currencies (as they do in Hungary), and sooner or later in the new currency only.  That shouldn’t be a big problem.

It’s the money stamping that is tough, or whether “Greek euro notes” are a satisfactory stand-in for the current currency of the geographical territory of Greece.  Can anyone speak to this?

Here is some research on the previous dissolutions of currency unions.

*How U.S. Economists Won World War II*

That is the subtitle, the title is Keep from All Thoughtful Men and the author is Jim Lacey.  Excerpt:

Just fifty years before World War II there had been only one individual in the government with the title of economist, and that person was listed as an “economic ornithologist.”  World War I saw a few trained economists brought to Washington in policy positions, but their influence remained constrained to providing advice on price administration and shipping.  They had little impact on mobilization planning.  It was the Great Depression that brought economists into Washington policy circles, first by the hundreds and then by the thousands.  By the time World War II began, the federal government employed an estimated five thousand economists.

David Warsh reviews the book here.  I found some parts boring, some parts very valuable, overall worthwhile.  Contra Higgs, Lacey argues that wartime mobilization proceeded with a surprisingly low sacrifice from U.S. consumers, with most of the impact coming on postponed purchases of durables.

Here is an essay (pdf) on early pioneers of economic ornithology.  I’ve never heard of a field exam in that area.