Month: February 2012

China fact of the day

The richest 70 members of China’s legislature added more to their wealth last year than the combined net worth of all 535 members of the U.S. Congress, the president and his Cabinet, and the nine Supreme Court justices.The net worth of the 70 richest delegates in China’s National People’s Congress, which opens its annual session on March 5, rose to 565.8 billion yuan ($89.8 billion) in 2011, a gain of $11.5 billion from 2010, according to figures from the Hurun Report, which tracks the country’s wealthy. That compares to the $7.5 billion net worth of all 660 top officials in the three branches of the U.S. government.

The wealth gap between legislatures holds with statistically comparable samples. The richest 2 percent of the NPC — 60 people — had an average wealth of $1.44 billion per person. The richest 2 percent of Congress — 11 members — had an average wealth of $323 million.

The wealthiest member of the U.S. Congress is Representative Darrell Issa, the California Republican who had a maximum wealth of $700.9 million in 2010, according to the center. If he were in China’s NPC, he would be ranked 40th. Per capita income in China is about one-sixth the U.S. level when adjusted for differences in purchasing power.

That is via Shanghaiist, via @AlbertoNardelli via @AnnieLowrey.

Is unemployment better than Canada?

Or do the Canadians simply do not want us?

They are a projected 335,000 job opportunities arising in British Columbia and Alberta between now and 2014, especially in construction. The biggest demand relates to carpenters, electricians, welders, plumbers, heavy equipment operators and millwrights.

Canada differs from many countries seeking workers abroad in that it encourages long term inward migration by specified groups and facilitates family settlement.

Most of all they are searching in Ireland, it seems.

What is the oddest book title of the year (markets in everything)?

As in most years, there is some serious competition, here is the short list of contenders:

A Century of Sand Dredging in the Bristol Channel: Volume Two by Peter Gosson (Amberley). A book that documents the sand trade from its inception in 1912 to the present day, focusing on the Welsh coast.

Cooking with Poo by Saiyuud Diwong (Urban Neighbours of Hope). Thai cookbook. “Poo” is Thai for “crab” and is Diwong’s nickname.

Estonian Sock Patterns All Around the World by Aino Praakli (Kirjastus Elmatar). Covers styles of socks and stockings found in Estonian knitting.

The Great Singapore Penis Panic: And the Future of American Mass Hysteria by Scott D Mendelson (Createspace). An analysis of the “Koro” psychiatric epidemic that hit the island of Singapore in 1967.

Mr Andoh’s Pennine Diary: Memoirs of a Japanese Chicken Sexer in 1935 Hebden Bridge by Stephen Curry and Takayoshi Andoh (Royd Press). The story of Koichi Andoh, who travelled from Japan to Yorkshire in the 1930s to train workers at a hatchery business the art of determining the sex of one-day-old chicks.

A Taxonomy of Office Chairs by Jonathan Olivares (Phaidon). Exhaustive overview of the evolution of the modern office chair.

The Mushroom in Christian Art by John A Rush (North Atlantic Books). In which the author reveals that Jesus is a personification of the Holy Mushroom, Amanita Muscaria.

The story of the prize is here, and for the pointer I thank  Sadly, only one of these books can be bought in digital format, can you guess which one?

More on *Fairness and Freedom*, by David Hackett Fischer

I very much liked this book, which compares the histories of New Zealand and the United States, and in particular I liked:

1. The discussion of how the New Zealand government encouraged smaller land holdings through some deliberate policy decisions in the late 19th century (p.165).

2. The discussion of how New Zealand abolished its provinces in 1875 (circa p.193), and the importance of that decision (passim).

3. The near-uniformity of the crime rate throughout New Zealand (p.198).

4. The comparison between labor movements in the two countries and the possibly differing history of labor-saving devices (circa p.328).

5. The comparison between Bills of Rights; New Zealand for instance has a right not to be subjected to medical experiments and a right to refuse medical treatment, but no right to a jury trial (circa p. 464).

It is probably the best introduction to New Zealand history for an American, even though much of the book is not about New Zealand history at all.  That said, while I found this a very good book, and certainly a book to recommend and to make the year’s “best of” list, it did not for me quite live up to its full potential.  I have high standards in this particular area, so I would have liked:

6. A discussion of “cutting down tall poppies” before p.487.

7. A deeper discussion of the differences in role models in the two countries.  New Zealanders admire Sir Edmund Hillary more than a successful businessman, though this has changed somewhat.

8. A comparison between American social conformism, as outlined brilliantly by Tocqueville, with the more outwardly conformist New Zealand working class variety.

9. A discussion of why New Zealanders are less prone to extreme thought and explicit missionary dedication; can you imagine a Kiwi version of Whittaker Chambers?

10. More attention to the commodities dependence in the New Zealand economy, and the importance of the UK abolishing NZ trade preferences in 1972-3, and the ongoing struggles to suss out a coherent vision for a relationship with Asia and China.

11. More discussion of how it mattered for New Zealand as many centres of activity shifted over time from the South Island to the North Island, culminating in the centralization of so much activity in or near Auckland.

12. Much more discussion of religion, and of the extreme enthusiasms which are bred in the United States.

13. A greater understanding of how Americans would not necessarily regard their society as “less fair,” but rather that some benefits are to be portioned out in accordance with a peculiarly American notion of what a person deserves.

14. A discussion of Upper Hutt or Lower Hutt, ideally both.

15. Why are New Zealanders perhaps the most polite people in the Western world?

16. The importance of having so many people living so close to the water, and (in some parts of the country) being surrounded by relatively few trees, and the much lower productivity of hunting in New Zealand, as there is not so much to hunt.

17. A more explicit discussion of economies of scale, and of why New Zealand is sometimes accused of being boring.  There is one quotation offered from an outside visitor: “”I suppose they are happy,” she wrote in her contemptuous way. “I couldn’t bear it.”” (p.xix).

What are the best sources on how to be a good teacher?

Charlie Clarke, a Finance PhD student at UConn, and a loyal MR reader, writes to me:

Hi Tyler,

I’m a grad student teaching for the first time, and I was wondering if  you had any recommendations for a book relaying evidence based advice for teaching methods.  I know Cowen’s law, “There is a literature on everything.”  Just hoping there is a good book or two synthesizing that literature so that I can use it to improve my teaching.

Love the blog.

The most important lesson is to use the right textbook.  Beyond that:

1. Give a damn.

2. Get to the point when you speak.

3. Expect something from them.

4. Teach to the students who are interested in learning.

5. At all levels, do not overestimate the attention span of your audience.

6. Do not be afraid to be idiosyncratic, provided you adhere strictly to #2.

Those are my tips.  But to be honest, I do not consider them RCT-tested and I am not sure they maximize social welfare.  They instead start from the premise that the key question is what kind of person do I want to be, and then the method asks the students to conform to that vision.  Some or all of them might prove RCT-neutral, or worse.  Nonetheless, the approach is a good way to motivate me and that is part of the problem.

Doesn’t Bryan Caplan have a post on this?  Here is John Baez on how to teach.  Peoples, what can you recommend from the literature?

John Brown Smokehouse

25-08 37th Avenue (Crescent Avenue), Long Island City, Queens; (718) 361-0085.  Set in the middle of nowhere, these are the best burnt ends I’ve had, including Kansas City, and the best lamb sausage I’ve had, ever.  The pastrami is the other winner.  Quite possibly this is the best barbecue on the entire East Coast and it is one of the better barbecue experiences in the country.  Here is one review.

They let me sample about five other dishes, and while they were very tasty they did not compare to the absolute winners cited above.

Me: “I know this is a stupid question, but how come the food here is so good?”

The Pitmaster: “That’s how we make it.”

The balance sheet recession and The Great Stagnation

Many people point out that we are in a balance sheet recession.  I agree with this view but wish to push it one step deeper.  The negative wealth and income effects on debtors are positive wealth and income effects for the creditors.  If the creditors were keener to invest that money in useful, productive activities the economy would be much stronger.  Balance sheet recessions are most problematic when the investment channel is for some reason broken or especially weak.

You might think “Ah, the weak investment channel is due to weak AD.”  And in part it is.  But, if I may quote the Austrians, production takes time and recoveries do not take forever.  Investors are often keen to invest into the swoosh of a future, not too far away, post-recession boom.  But this desire has been much weaker than in many times past.  A lot of the weakness of AD comes from the investment side, and in fact it predated the recession.

From the comments, on the UK

This is from a loyal reader named “a”:

How high are marginal rates of deductions in the UK?:

Consider an employee paid £50,000 gross who gets a £1,000 pay rise.

Let’s assume they are yet to pay off their student loan and contribute 7.5% to a (underfunded*) pension scheme and get 8% employer contributions to their pension.

Our employee’s employer will also pay the government an extra £218 pension contributions and national insurance (payroll) contributions, 8% and 13.8% of gross earnings respectively.

So the total increase in cost to the employer is £1,218.

Of their pay rise our employee pays £75 pension contributions, £90 student loan repayments, and £370 in income tax, giving total employee deductions £555.

This gives a marginal deduction rate of 63.46% (£445/£1,218).

If our employee buys goods which are liable for VAT they will lose a further 20%, resulting in a 70.77% marginal rate of deductions.

Oh and our employee must pay a local government lump sum tax of around £1,500 from their net wages.

So our employee faces a marginal rate of deductions 63.46% on non-VAT items, 70.77% on VAT items, and an average rate of deduction of 52% of pre-deduction earnings.

A similar analysis on a worker paid the minimum wage (around £12,500 a year), or £1000 above the minimum wage results in a marginal rate of deduction of 32% and an average rate of deduction of 52%. This ignores the withdrawal of means tested benefits.

Might this be the supply side explanation Scott Sumner has been looking for?

* UK private pension schemes currently have a £265bn deficit.

China Fact of the Day: China Outsources to Europe

Spiegel: Great Wall this week became the first Chinese automobile manufacturer to open an automobile assembly plant inside the European Union…

…Bulgaria, the EU’s poorest country, is attractive as a labor market because it is an oasis of cheap wages and low taxes. Workers are considered well educated and the country is ideal as the site for a company like Great Wall to launch. Given that wages for factory workers have risen considerably in China in recent years, assembly sites abroad have become increasingly attractive for some manufacturers.

Expect to see a lot more of this in coming years.. As wealth and consumption increases, China will also begin to import more from developed countries, including more finished goods.

Markets in everything, Friday cat blogging edition

Jordana Serebrenik may be New York City’s only for-hire pet-cat catcher. Her service, Catch Your Cat, Etc., does what it suggests: Ms. Serebrenik, a Murray Hill resident, will go to your home and corral your cat in situations when you cannot do so or prefer not to.

Her clients range from the old or physically impaired to those distraught at the idea of having to force their cat to go somewhere they do not want to go: the vet, for example.

“Some people just need someone who isn’t emotionally attached,” Ms. Serebrenik said.

Her business card — which asks, “Can’t get Fluffy into a carrier?” — is in veterinarians’ waiting rooms and pet supply stores around the city. Testimonials on her Facebook page are effusive.

A catch goes for about $80, and the video at the beginning is good.  Here is more, and for the pointer I thank Richard Herron.