Month: January 2014
In defense of Los Angeles as a superb walking city
I am shocked that so many people in the comments, and on Twitter, scoffed at this notion which I put forward the other day.
First, in Los Angeles the weather is almost always very good for walking. That is a big plus, to say the least. It is not just that the average quality of experience is high, but you can make advance plans to be walking and arrange your life accordingly.
To be concrete, here are a few of the many splendid walks in the greater Los Angeles area: Almost anywhere in mid-Wilshire, downtown Santa Monica, Melrose, central Westwood, Beverly Hills, a blossoming Downtown (just don’t jaywalk), Pasadena and Glendale, most residential parts of Hollywood, almost any beach locale (and there are many), and even (limited) parts of Sunset. How many cities have great walks where you can be on the beach and/or see the mountains? Or where you can stop for first-rate ethnic food almost anywhere?
I will grant that Santa Monica Boulevard is not ideal for walking on many of its parts, nor is all of Culver City. Is Manhattan’s Park Ave. always so fascinating?
My personal favorite walk is to start somewhere such as Olympic and walk up Vermont, exploring side streets along the way and stopping for Asian food or pupusas. My two favorites car drives are Sunset and then Griffith Park all the way down to the bottom of Western, or vice versa, stopping for Belizean food along the way.
Here is my earlier post on which are good walking cities, London wins the overall #1.
*Duty: Memoirs of a Secretary at War*
That is the new Robert M. Gates book, which of course has been widely reviewed. I was very impressed with this work. I read it as a meditation on the question of what kinds of martial virtue (or lack thereof) are possible in our contemporary age, updating Herodotus, Thucydides, and Plutarch through the medium of the reigns and rules of the two Bushes, Cheney, Rice, Obama (most of all), Hillary, Biden, and of course Gates himself with a bit of Petraeus tossed in.
Here is one excerpt:
I was put off by the way the president closed the meeting. To his very closest advisers, he said, “For the record, and for those of you writing your memoirs, I am not making any decisions about Israel or Iran, Joe [Biden], you be my witness.” I was offended by his suspicion that any of us would ever write about such sensitive matters.
And this:
As is usual when the president makes a momentous decision, the White House wanted key cabinet members blanketing the Sunday talk shows…As I was flying back to Washington on March 25, the White House communications gurus proposed I go on all three network shows the next Sunday to defend the president’s decision on Libya. Exhausted by the trip, I agreed to do two of the three. then I took a call from Bill Daley, who pushed me hard to do the third show. I told Daley I’d make him a deal — I would do the third show if he’s agree to get funding for the Libya operation included in the Overseas Contingency Operations (OCO) appropriation (the war supplemental). I said, “I’ll do Jake Tapper if you’ll do OMB.” Daley whined, “I thought it would cost me a bottle of vodka.” I shot back, “Bullshit. It’s going to cost you $1 billion.” Daley had the last laugh. The president and OMB director Jack Lew refused to approve moving the Libya funding into the OCO. The Defense Department had to eat the entire cost of the Libya operation.
And finally, this:
As I had told President Bush and Condi Rice early in 2007, the challenge of the early twenty-first century is that crises don’t come and go — they seem to come and stay.
The book has come under a good deal of criticism for its revelations about a sitting president and commander-in-chief and for its communication of inside discussions, which presumably at the time were considered to be confidential. I am not sufficiently informed about the appropriate norms to make a final judgment here, but I can readily imagine that Gates is in this regard quite in the wrong. Good books are not always based on good behavior. Furthermore, the overall portrait of Obama is, in my view, quite a favorable one and indeed I would say a profound one (the same cannot be said for Biden or for Congress).
Assorted links
1. Good slides on emerging markets and liquidity, by Hyun Song Shin (pdf).
2. How to make people feel comfortable with driverless cars.
3. Is it the elites who drive polarization?
4. The Great Language Game. I did very well at this, so well that I got bored and stopped playing.
5. The world’s first robot theme park.
6. Ross Douthat tweet on social mobility.
7. Placebo sleep?
Harford (and Tabarrok) on Macroeconomics
Tim Harford gave an excellent talk at Cato on his new book The Undercover Economist Strikes Back.
You may have heard recently that the richest 85 people in the world have more wealth than the bottom 3.5 billion. Tim began by pointing out that his 2 year old also has more wealth than the bottom 2 billion since his 2-year old has no debt. Later in the talk Tim gave a brilliant explanation for how and why economists began to treat data like an unfaithful spouse. Watch for that!
Tim’s talk begins around the 7:20 mark. I come in around the 34:00 mark and after saying some more nice things about Tim’s book I have some critiques focusing on how long can wages and prices really be sticky and also giving a brief introduction and defense to “Real Business Cycle” theory especially the recent sectoral approaches of Gabaix and also Acemoglu et al.
At the link you can also find links for iTunes and downloadable formats. CSpan also covered the event.
Where is the licensing burden heaviest?
Adam Ozimek reports:
…consider the Institute for Justice’s excellent report on occupational licensing. The top 10 worst ranked jobs in terms of average licensing burden are as follows:
1. Preschool teacher
2. Athletic trainer
3. Earth driller
4. Cosmetologist
5. Barber
6. School bus driver
7. HVAC Contractor
8. Skin Care Specialist
9. Pest Control Applicator
10. Bus Driver
And from Virginia Postrel on Twitter:
Sting catches Charleston rickshaw driver giving illegal tour, $1,092 fine for talking history w/o a license http://buff.ly/1cTeo02
@ij
Unified China and Divided Europe
There is a new paper on economic development by Chiu Yu Ko, Mark Koyama, and Tuan-Hwee Sng, the abstract is this:
This paper studies the persistence and consequences of political centralization and fragmentation in China and Europe. We argue that the severe and unidirectional threat of external invasion fostered political centralization in China while Europe faced a wider variety of external threats and remained politically fragmented. Our model allows us to explore the economic consequences of political centralization and fragmentation. Political centralization in China led to lower taxation and hence faster population growth during peacetime than in Europe. But it also meant that China was relatively fragile in the event of an external invasion. We argue that the greater volatility in population growth during the Malthusian era in China can help explain the divergence in economic development that had opened up between China and Europe at the onset of the Industrial Revolution.
Money Laundering
From a new paper that caught my eye in the journal Industrial and Engineering Chemistry Research:
With nearly 150 billion new banknotes being manufactured and printed every year around the world, the replacing of unfit currency is approaching $10 billion annually. In addition, central banks must also deal with the environmental challenge of annually disposing of nearly 150,000 tons worth of notes unfit for recirculation. Seminal work by the De Nederlandsche Bank (DNB) has identified that soiling is primarily a yellowing of the notes due to the accumulation of oxidized sebum. We show that supercritical CO2 (SCCO2) can be effectively utilized to remove sebum and other oils and contaminants, including common bacterial colonies, from both paper and polymer banknotes without destroying the costly and sophisticated security features employed by central banks to prevent counterfeiting. SCCO2 cleaning at 60°C and 5000 psi was shown to be effective in cleaning conventional straps of 100 banknotes, extracting nearly 4% of the initial strap weight. Measurements of note soiling distributions on a banknote sorting machine running at 10 banknotes per second showed a significant shift in soiling levels after cleaning, supporting the claim that processing of SCCO2-cleaned notes would result in significantly fewer notes being classified as unfit due to soiling and shredded.
Hat tip: Fast Company.
Assorted links
1. Japanese macaque monkeys optimizing (not just satisficing) in hot springs.
2. First issue of Review of Behavioral Economics, a new journal edited by J. Barkley Rosser and Morris Altman.
3. The guy who hacked OKCupid.
4. Norwegian geoengineering, sort of.
5. Predicting the popularity of the obvious method. And the classic jam experiment does not replicate.
6. The hurdle model and what makes for a good paper.
7. Further interpretation of the new Chetty mobility results.
From the comments
A knocking at the door.
“Who’s there?” I asked. “Amazon drone,” came a polite but firm bass voice.
I opened the door to find box on the step as the hexacopter retracted its delivery arm and spun up its rotors. An invoice icon appeared on my Amazon eyeglasses. What wonders had I been brought today and how much would they cost?
But then, I thought, which of the two of us was truly an Amazon drone?
The economic value of a law degree
Michael Simkovic and Frank McIntyre have a new paper on this topic:
Legal academics and journalists have marshaled statistics purporting to show that enrolling in law school is irrational. We investigate the economic value of a law degree and find the opposite: given current tuition levels, the median and even 25th percentile annual earnings premiums justify enrollment. For most law school graduates, the present value of a law degree typically exceeds its cost by hundreds of thousands of dollars. We improve upon previous studies by tracking lifetime earnings of a large sample of law degree holders. Previous studies focused on starting salaries, generic professional degree holders, or the subset of law degree holders who practice law. We also include unemployment and disability risk rather than assume continuous full time employment. After controlling for observable ability sorting, we find that a law degree is associated with a 73 percent median increase in monthly earnings and 60 percent increase in median hourly wages. The mean annual earnings premium of a law degree is approximately $57,200 in 2013 dollars. The law degree earnings premium is cyclical and recent years are within historical norms. We estimate the mean pre-tax lifetime value of a law degree as approximately $1,000,000.
For the pointer I thank the excellent Andres Marroquin.
Global austerity?
There is a new UBS study which among other things covers the fiscal stance of the world as a whole. Please do not misinterpret me as suggesting this implies anything particular for the policy of any individual nation, still the aggregate numbers are interesting to ponder. Here is part of an FTAlphaville summary:
- Government consumption’s share of global GDP has risen from 11 per cent to 14 per cent over the past 15 years. In 2013, it hit its highest level since 1980.
- At the same time, government debt-to-GDP ratios have hit record highs in many countries.
- Working-age populations are growing more slowly, or in some countries, such as Japan, beginning to decline.
- Accordingly, the window of opportunity for mature economies to bring government debt levels down to sustainable levels is narrowing, owing to demographic shifts.
- Given the situation in the government sector, private consumption needs to make a bigger contribution to the next phase of the recovery. Its share of GDP continues to hit multi-decade lows. Fixed investment is also making a smaller contribution to global growth than it did in the pre-crisis years.
And this:
Since the start of 2008, government consumption at the global level has risen by 20 per cent in real terms, whereas private consumption and fixed investment have risen just 8 per cent and 5 per cent respectively. Despite talk of austerity, government spending continues to run ahead of spending in the private sector.
While I have not looked into this particular estimate, China is likely playing a big role in this effect.
Hugo Lindgren asked me to explain to him why I think Los Angeles is the best city in the world
I wrote this email, which in the interests of varying the “voice” on this blog I have not in the meantime edited:
Best food in the US, no real comparison especially adjusting for price.
Best driving for classic routes and views and also availability of parking along the way (NYC is awful for the latter).
Best walking city in the US (really), and year round.
The city has its own excellent musical soundtrack, Beach Boys, Byrds, Nilsson, etc., has aged better than the SF groups I think.
Incredible architecture and neighborhoods, almost everywhere.
Everyone goes to the movies.
First-rate concert life, including classical and contemporary classical.
Very interesting art galleries.
Few book stores (though disappearing everywhere, these days) and the people have no real sense of humor, but nowhere is perfect!
Claims about coal
Counterfactual estimates of city population sizes indicate that our estimated coal effect explains at least 60% of the growth in European city populations from 1750 to 19o0.
That is from a new NBER working paper by Alan Fernihough and Kevin Kevin Hjortshøj O’Rourke. There is an ungated version of the paper here.
Assorted links
The North Carolina unemployment insurance experiment may be looking up
The benefits have been stopped, and there has been much recent debate over how well this is working to stimulate reemployment. This new study is from Kurt Mitman, who is a doctoral candidate at U. Penn and an NBER research associate, here is his summary:
1. Evidence from the establishment survey confirms a substantial increase in employment in North Carolina following the unemployment insurance reform.
2. The increase in payroll employment reported by the sample of North Carolina employers is smaller than the increase in employment reported by workers in the household survey.
3. The increase in employment [is] driven by the private service sector.
4. A comparison of the growth in employment between North Carolina and the adjacent states in Figure 5 reveals a similar growth in the post-reform period between the two Carolinas, which is much faster growth than in Virginia.
5. Results in Table 3 reveal a mild tendency toward higher weekly hours post reform and little change in wages and earnings.
The full piece is here (pdf). This seems to me our best understanding of the admittedly limited data to date.