Thursday assorted links

1. What if Canada can’t become a major tech cluster?  And what does the Canadian trade balance look like without oil?

2. Broken windows theory tests.

3. “Austerity evidently killed GDP, but not the labor market. That’s a very interesting hypothesis, but I’m wondering which textbook theory is consistent with it?”  That’s the UK, folks.

4. Does hiking cigarette taxes drive poor people to enroll in food stamps (pdf)?  And which colleges have the best food?

5. Not a surprise, but a clarification: the U.S. won’t give up what is in effect its IMF veto.

6. Olivier Blanchard is leaving the IMF for the Peterson Institute.  And Piketty will be joining LSE, it seems.

7. UberCopter, pretty cheap, considering…

Comments

Form the only comment on #2: "...many police are much more inclined to believe that minority citizens are petty criminals"

So it's just something they choose to believe?

Does this also apply to the large numbers of police officers who are members of ethnic minorities themselves?

Peter Jackson and Fran Walsh turned New Zealand into a mid-major tech cluster all by themselves. Don't underestimate the impact of outsized talent on smaller economies ...

@CMOT - lol, you must be joking shirley. This filmmaker duo's activities regarding science in NZ is classified correctly in the Wikipedia entry as "charity": http://en.wikipedia.org/wiki/Peter_Jackson#Charitable_activities ("Jackson has given NZ$500,000 to stem cell research.[56] He purchased a church in the Wellington suburb of Seatoun for about $10 million, saving it from demolition") - notice he gave 20x more for historical conservation than for science.

Weta Digital.

Weta Digital is much more a VFX production house than it is a tech innovator/originator. It will disappear as soon as the NZ government stops the subsidies/tax credits on which the Weta's business model depends. Most of the people who work at Weta are trained outside of NZ and come from other countries. And they leave when they get burned out at Weta, which is known for horrendous hours and low pay.

Weta makes NZ a mid-major tech cluster as much as Digital Domain made Florida a mid-major tech cluster.

Let me put it another way. The tax subsidies available to the animation and VFX industries in Canada have brought far more VFX work to Vancouver and Toronto than Weta has brought to NZ. So if Weta Digital has made NZ a mid-major tech cluster by itself, then Canada already has a couple of major tech clusters.

4. Dining food: Stupid college students argue over which Aramark outlet is better.

Was going to say, it would be interesting to see this list vs. who actually serves the food -- Sodexho, Aramark, Independent.

College food is much much better than it was say 20 years ago. Occidental College does not outsource its campus dining; Lewis and Clark College uses Bon Appetit and is I would say about as good as Oxy food-wise.

It's been almost 40 years, but in those days Washington University had by far the best campus food of any college or university that I ate at. Campus dining was completely different back then, the bad old days. But it's interesting to see that Wash U is still rated #1 in this article.

#2. Broken windows theory tests. - this chick says: "Bikes are parked in a row next to a fence with a conspicuous "no graffiti" sign, and flyers are attached to each bicycle such that they must be removed to use the bike. If no graffiti is on the fence, 33% of subjects will litter their flyers. If graffiti is on the fence, 69% will. ... . The finding replicated very closely, and now the Netherlands requires immediate removal of graffiti."

But did we not learn this finding is 2011 was false: "Science published a study by [disgraced Dutch social researcher Diederik Stapel, a psychologist working at Tilburg University in the Netherlands] Stapel and colleague Siegwart Lindenberg in April which found that people are more likely to discriminate against others when their surroundings are disordered and messy."

If we take the (small) step of defining "discrimination" as a "crime" (or anti-social behavior), which I think many would find reasonable, then it follows that Stapel was unjustly disgraced and driven from his profession, based on the first paragraph. After all, in law, in most jurisdictions if you shoot a strawman thinking you are shooting at a actual human, you commit no crime (since it's a strawman).

Strawman argument? You decide.

When someone fabricates data, we don't know if the conclusions they draw from it are valid or not. It isn't OK to fake data, even if the fraudulent conclusions you draw from it turn out to be true.

@Curt F. - aghh, I hit the wrong key and deleted my rebuttal. Well in a nutshell it's this: good researchers always 'smooth' the data to fit reality. Done all the time. So perhaps disgraced Dutch social researcher Diederik Stapel was 'smoothing' the voluminous research that shows broken windows promote unruly behavior? Another analogy: in Grey's Anatomy textbooks the human bodies depicted are completely symmetrical, which is unrealistic (no such body exists in nature) yet doctors use these textbooks without qualms (though there was actually a mild protest over this I read once). Ball back in your court for the surrebutter.

I don't know what you mean by "smooth". Can you elaborate?

Smooth means fill in the blanks. Analogy: if it's proven that the sequence {1,3,5...} exists, then Stapel hypothesized it's an odd number sequence so he fabricated data {7,9,11}. He was 'right' even though his data was fabricated. A simple retraction and apology should have been sufficient, but instead the public turned on him like a pack of wild animals. It's not that his fabricated data was completely wrong and mislead the public (LIKE GRANDMASTER'S K. ROGOFF ERRONEOUS EXCEL SPREADSHEET DATA WAS BTW). Also, at the time I got the impression Stapel was having a mid-life crisis, he was just crying out for help that's why he was so willing not to fight back. All in all much ado about nothing, since, as I say, he was just smoothing data. Lots of social studies btw are not reproducible, it's common. In this case, the bogus Stapel study was ironically true and probably reproducible.

Every day you manage to generate a new worst comment of all time

@#1 - what does Canada's trade balance look like without oil? A mess. It reminds me of what Greece's exports look like without tourism (which properly should be classified as an export) or what Chile's supposed economic miracle (a lie) looks like without copper (it's a shambles, and no credit to the Chicago Boys).

Canada has had a reasonable tech sector with companies like RIM and Corel. Either labor comes to capital or vice-versa and in Silicon Valley's case it is mostly the former. Adequately funded tech companies have succeeded everywhere. If Canadians inject enough tech capital they will get people to administer their business from there.

And yet countless cities have poured billions of dollars into building a "tech cluster" without much success. It's not just a question of money.

Nortel would seem to contradict your thesis. Utterly pathetic management threw away a market lead, and defrauded to boot.

#1 - there will be only one "tech cluster" in the world. What good potential and ambitious, but inexperienced tech guy would say to themselves that they should base themselves in the number 2 or number 3 tech centre? Then network effects start to kick in, then you get even more distance between number 1 and number 2. Most industries have a bit of this dynamic, but the tech industry with its low capital investment, and dependence on continuous stream of new products, is the industry with the most tendency for this. But don't despair Canada (or any other country) there are still a million other industries and the tech guys can't just sell to themselves.

On the trade balance without oil, that's just silly. If there were no oil in Canada the trade balance would adjust pretty quickly by currency movements and the capital not employed in oil would be used somewhere else.

What good potential and ambitious, but inexperienced tech guy would say to themselves that they should base themselves in the number 2 or number 3 tech centre? Tech guys or gals might not want to be in the "#1" center for many reasons. Say they were married to a spouse with a different career. Or had sick parents in their home town and a desire to care for them. Or grew up in the #2 or #3 center and doesn't want to move. Or someone interested in frugal living in a LCOL area. Or they might disupte which center is #1. Or any number of reasons.

A similar line of reasoning is frequently employed to make the argument that a single company or platform will get first mover advantage in some new tech field and end up controlling the ecosystem. Yet somehow in the long-run this never seems to be the case. It seems like being "#1" in an industry founded on the mantra of "disruption" is particularly precipitous.

there will be only one “tech cluster” in the world.

This is just wrong. NYC has its niches. Austin is respectable. Globally: Tel Aviv, Dublin, Shanghai, Bangalore, even the south of France and East Anglia have serious tech companies.

Because there are a ton of reasons to not like the Bay area.

>the capital not employed in oil would be used somewhere else

Somewhere outside of Canada. Canada would simply be poorer.

My favourite from #2:

"I can't find the numbers for this one, but in a mall where you have to walk down a hallway to get to a smoking zone, a certain percentage of people will start smoking before they reach the zone. If a group of typical looking Germans are standing around smoking prior to the zone, though, more passersby will light up early. If a group of goth teens are smoking prior to the zone, though, a higher than normal percentage of passersby will wait until they get to the smoking zone to light up."

I recently observed another interesting smoking behavior. A smoking area was designated about 100 feet from the nearest building but not marked or equipped with ashtrays. Over about two weeks the smokers moved closer at a steady rate until they were gathering next to the building.

Yes I noticed that one too. Perhaps the Netherlands will now mandate immediate recruitment of delinquent goth teens in order to induce law abiding behavior.

1. Notice that before the run-up in oil (and other commodity) prices, but post-NAFTA, Canadian did have a trade surplus net of energy. With high oil prices it made more sense to export oil and import other things.

Also note it took the non-energy trade balance ten years to get to where it is now. Expecting a snap back to the status quo ante is expecting quite a lot---you probably couldn't do it short of a collapse in consumption (or the housing market!). The real question is how long it really will take Canada to return to the status quo.

It would be nice to see how net foreign assets as a share of GDP or consumption evolved over the period. At last report we were boasting of having reached net creditor status...

It's a bit sad that when you think of Canadian hi-tech, you automatically think about its biggest train wrecks ie. Nortel and RIM.

#2 There is another experimental study by two sociologists in Rationality and Society that reaches a somewhat more cautious conclusion:

http://rss.sagepub.com/content/27/1/96.short?rss=1&ssource=mfr

#3
Austerity didn't kill the UK GDP growth. Lack of bank credit growth did.
http://www.devilsdictionaries.com/blog/why-the-british-economy-has-grown-so-slowly

Corollary to the Broken windows theory: It is important to root out corruption early and often in an organization. If people know other people are getting away with stuff, they think "why not me?"

Corruption has a triple impact. It drives away good people, encourages corrupt people to stay and encourages them to hire their corrupt friends.

A deeply corrupt private organization will eventually start losing money and go out of business. There's a hard limit on how bad a private corporation can be managed before investors finally pull the plug. Government doesn't have that problem.

Without proper oversight, it's quite easy for a government agency to be completely overrun by scoundrels in a decade or two. They don't need to be numerically dominant, just a large enough minority to wipe out any chance of reform.

Department of veteran affairs is still struggling to determine how to enforce compliance to regulations by its employees. Hmm, golly that's a tough one. ..

Corruption is now and probably has always been a major feature of human society. It's endemic everywhere, in government, politics, the legal system, business, sports and even the arts. It's something that you can depend on.

Yes, but don't you think there are vast differences in the levels of corruption, based on the culture of the group? I think the point is well taken that if petty corruption is readily tolerated or ignored, much more severe corruption will flourish.

Everywhere I've worked I've seen a small percentage of people cheating a bit about their hours, stealing copier paper for home use, wasting a little company time on the internet (as I'm doing now). But at companies where it's clear management is asleep at the wheel, people tend to start stealing and cheating and slacking off in major ways, sometimes to obscene levels. I've seen one or two orders of magnitude difference in the corruption level among otherwise similar companies.

#2
Australian professor offers that 'police abuse in NYC is completely out of control'. Sorry, not listening to a thing she says on any subject.

The airhead says in the comments to her post that, "Police abuse in NYC is completely out of control; that was the single worst aspect of living there even as a white woman. I've never had a single positive interaction with the NYPD."

LOL! Apparently NYPD cops weren't friendly enough to her or something so she infers that NYC police abuse is "out of control".

She doesn't give any examples from her life and, yet, you, Art Deco, and Taylor are ready to condemn her without any evidence about what may, may not have, happened.

There is something wrong with you two.

Austerity in Europe means raising taxes, not cuts in spending.

"3. “Austerity evidently killed GDP, but not the labor market. That’s a very interesting hypothesis, but I’m wondering which textbook theory is consistent with it?”"

Market monetarism.

Fiscal austerity does not matter (because of monetary offset). AD grew enough to keep NGDP high and the labour market working; supply side problems caused slower RGDP growth. There is no mystery.

#1. People commenting about Canada and tech have mentioned RIM, etc, but Canada's attempts to create tech clusters go back a very long way. In the Seventies the Ontario Government basically paid CDC - remember them? - to set up a "research and development centre" in Mississauga, just outside Toronto.
Of course, CDC did what any sensible business people would do. They took the Government's money, set up a computer manufacturing plant that had a few offices for software engineers labelled "R&D", and manufactured hardware for the next couple of years. Then, at the next recession, the majority of job cuts came from their Canadian operation.
Giving money to business people always smells of desperation, and business people have very good noses.

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