Friday assorted links

1. European identity and redistributive preferences.

2. More from Uwe Reinhardt on Korean drama and Kimchi (pdf).

3. Markets (hierarchies) in everything, IBM style.

4. Ian Bremmer on the Iran deal.  And Jeffrey Lewis.

5. China’s municipal debt problems (NB: boring link, pdf too).  And what is wrong with Chinese gdp and inflation measures?, by Christopher Balding, plus David Keohane on same here.  And more Keohane here, an overview, skip this stuff at your peril it is the most important economics in the world right now.  All are excellent pieces.

6. Stereotyping diners — “Southern dad is always a winner.”

Comments

Why are there no comments yet on these important links? If it was internet cats we'd have 100 comments by now.

My browser froze up when I tried to open #6. It was very disheartening.

I'm tired of your cattitude.

These articles helped me get through a boring Friday morning... thanks!

economista hard at work!

4) For whats its worth I thought both were good articles on the Iranian Agreement.

Sure, why would you want to go anywhere but Vox for analysis. It's like the Amazon of opinion.

Ian Bremmer doesn't work for Vox, but I can see how you would blindly dismiss the idea of reading an interview with a well-respected foreign policy expert because it was posted on a site that has ideological cooties.

Selection Bias, Jan, on the part of Ezra Klein.

Ian Bremmer ain't no liberal, bud.

So Tyler, Alex or anyone else from the Mercatus Center does not suffer from selection bias either?

6. When did the cultural standard for tipping move from 15% to 20%? I wasn't aware of that. Or is this just servers trying to push a higher percentage for obvious reasons?

It's the second. It's still 15%, but servers keep shrugging and talking about inflation and stuff. Say it often enough, and people believe it.

Which is why it's important to keep saying the opposite.

I suspect that the servers had little influence over it, and to the extent they did, that's something close to market-based anyway.

You could look at server wages adjusted for cost of living over time. I don't know for sure, but I bet increased tipping is helping to ameliorate a decline in their wages. But not in your case, of course.

Interesting question. I'm not that old and recall 15% when I was young -- hometown being rural -- then while working in the service industry / moving to a larger city being told 20% is standard, but for standard-to-good service. The stats cited in the polling mentioned in the article below align with my personal experience e.g. sometime between 2007 and 2012.

http://www.minnesotamonthly.com/July-2013/Tipping-is-20-percent-the-new-15/

I imagine the so called 'tip creep' works its way from metro-to-rural locales over time so there's likely quite a bit of regional variation in the US.

http://www.huffingtonpost.com/2012/09/20/tipping-15-percent-25-30_n_1900559.html

I usually tip about 40% or more. I see it as effective altruism. Most servers are poor. A large tip is a direct cash transfer. The worse the service I get, the more I tip, because poor servers are probably more in need of money than good servers.

My parents always said 15%. I've always done 20%. I'm the older end of Millennial.

"6. When did the cultural standard for tipping move from 15% to 20%? "

Agreed it's still a15% base from me. Basically, 10% for minimal table service, 15% for standard and 20% for exceptional. Well in reality I tend to take a 15% base and round to the nearest half dollar.

20% makes the math simple.

A couple of points about the Iran links:

1) In Ian Bremmer's model, in which everyone is following a script for effective signaling, it seems to me that Obama owes the credit for getting what he considers a good deal (given the circumstances) to Israel. That is, doesn't Bremmer essentially say that Israel's public hard line - and the credible threat to Iran that this represented - supply the U.S. with much of its leverage? This would fit with the picture in Wednesday's article in The Economist to the effect that, off-the-record, senior Israeli military and intelligence officials are at least tactically pleased with this deal, and are more concerned about its regional effects. http://www.economist.com/news/middle-east-and-africa/21657747-israels-military-hawks-deal-more-their-prime-minister-does-generals-demur

2) I'd be curious to hear from economists on Bremmer's optimism about the economic effects of this deal. I see Russia and China as complicating factors, rather than the other way around. Moreover, Bremmer's claim that Iranian theocrats (this is Bremmer's term, but by this does he mean Iranian leadership generally?) are afraid of sanctions relief does not comport with the widely reported claim that sanctions relief was the most important sticking point for the Iranians.

3) The Lewis interview is very useful in terms of putting this deal in historical perspective (e.g. 164 centrifuges vs. 5,000, etc.). But his premise seems to be that a deal is the best way to slow down a nuclear weapons program, and this is a reasonably good deal. But I think this elides the problem of what happens if there is non-compliance, or some other malfeasance, which even Bremmer suspects is a very real possibility. If Iran, say, is able to exploit the 30-day complaint period for cheating, and reach breakout capacity sometime soon, then what we have on our hands is a failed deal. And a failed deal, as I think Tyler alluded to the other day, has important consequences that a "no-deal" situation might not. Lewis' perspective suggests that his reaction to a failed deal will be "oh well, we tried our best." But I don't think most people will see it that way.

4) A related problem with Lewis' framework is his dismissiveness of the regional analysts. For Lewis, the most important issue at stake here is the nuclear program, and Shadi Hamid's analysis at Lawfare suggests that this was the U.S. negotiating team's attitude as well. http://www.lawfareblog.com/why-im-torn-about-iran-deal-was-it-worth-it . So to the extent that a decent solution was reached on this front, this deal goes in the book as a win. But I think this might ignore the signaling effect (to allies and non-allies in the Middle East, Europe and Asia) that even a "win" on this issue produces.

I suspect that Isaac Herzog's opposition to the Iran deal will matter more than either of these two approvals.

From what I've seen of the polls (and there's a nice one here, with more than just the interesting data point of how support for the TPP is correlated with support for defending Taiwan against a hypothetical PRC attack), the American public generally supports the agreement, strongly believes Iran will cheat, and strongly supports attacking Iran if Iran cheats. Sounds dangerous.

Why is it that US media is interviewing and reporting views out of Israel and Saudi Arabia about how the US is abandoning its "allies," while completely ignoring the views of the leaders of Britain, France, and Germany, who have aided the US to varying degrees in Afghanistan and Iraq and who are siding with the US against Daesh/IS/ISIS/ISIL, in contrast with both israel and Saudi Arabia who are effectively siding with that enty, which is currently the worst enemy of the US in the world?

Oh, and of course, UK, France, and Germany, along with the EU as a whole, participated in negotiating this agreement. Why are they not being interviewed by the US media? Except for Saudi Arabia and Israel, pretty much the entire rest of the world supports this deal.

Also why does my beard suddenly stop growing at my chin. Do I shave it on purpose? Do the ladies like the "space bar" look?

And did the why did the US side with the USSR against Finland, in contrast to the Third Reich, which was then the worst enemy of the US in the world?

"the Third Reich, which was then the worst enemy of the US in the world": no, Hitler didn't declare war on the US until 1941.

That England-firster Roosevelt was already conspiring with his cousin Churchill to involve the US in Europe's problems.

Daesh/IS/ISIS/ISIL, in contrast with both israel and Saudi Arabia who are effectively siding with that enty, which is currently the worst enemy of the US in the world

Barkley Rosser, ISIS has decided to stop posting execution videos online. It's only a matter of time until they develop a good publicity apparatus (like Hezbollah and Hamas), and soon the liberals will start to love ISIS just like they love Hezbollah, Hamas, and the Supreme Leader.

On the Iran deal:

With regards to pariah states: What is the historical evidence for the efficacy of promoting regime change through crippling sanctions vs. promoting gradual reforms through introduction of open trade and diplomatic communication?

I have to believe the latter has been FAR more effective historically, but that could be my own bias creeping in, so willing to hear the argument either way.

Another 50 years of crippling sanctions and the Castro Brothers would not be in power anymore. Obama ruined everything.

Thanks, Obama. And thanks be to you, Thiago.

With China there are so many theories

1) Could inflation be that low as their PPI has been negative. So input prcies are dropping enough to cover other rising expenses. So we will have to see if commodities stop falling what happens to CPI. (In other words like the US in the early 1970s.)

2) Your past note about the low profit growth tells me that they nearing their Lewis Point. (Since nobody buys a Chinese named brand their producer suprlus is small while say Apple gets 95% of the producer surplus of a purchase.) So we will see if the Chinese government will continue to do business to employee people or more focused healthy profitable corporations.

3) In terms of overbuilding...It is obvious they are overbuilding but there still several hundred millions people who can move into the cities. This model overbuilding will bust some day but could be 2022.

4) Anyway, I give the Chinese credit for the Iran nuclear deal timing. Because they thirst for Iranian oil on the market, they guarantee any Republican President breaking the deal will have minimal imapct to Iranian oil sales. (Can't wait to hear a Republican explain why Americans should pay higher gas prices for the Iranian deal.)

I still say China has a modest slowdown like the US 1990 S&L bust or 1907 Copper Panic and the big bust happens much later.

Even if/when they do have a 'big bust', it won't mean China disappears. It will reset and then keep growing. Or maybe it will have a slow Japan-like drift, which is also not the end of the world, let alone China itself.

Correct...In reality, the really big bust, Japan 89, US 1929, or US 200/08, came from stronger economies and certainly Japan or the USA has not disappeared or descended into collapse. My guess the Chinese bust is very big and they tend to have modest growth like US 2010-2015. The basic reality China has a lot of people.

Another interesting angle is this: "Is IAEA capable of monitoring Iran nuclear program?" http://www.al-monitor.com/pulse/originals/2015/07/iran-nuclear-deal-compliance.html

The answer seems to be, "In the past, no, but now, yes." The experts cited in the article provide arguments to back up this assertion, and they sound reasonable. That said, it is unsettling how much of this deal depends on an industry (nuclear monitoring) doing what, by its own account, it is only reasonably confident it can do, hasn't done yet, and, multiple times recently, has failed to do.

Regarding stereotyping diners, as a semi-Southern Dad, I note that while servers in big cities are pushing the 20% tip rate, it remains 15% in much of the nation, and in quite a few places what is emerging as the compromise is 18%.

I don't know how anyone hears about this anyway. It's not like the server tells you what a good tip is, and the "automatic gratuity for large parties" is, I assumed, always inflated just to cope with large parties.

For large parties, tip is often included. 18% is not unusual here.

Never mind. I should have read your comment.

Also, since tip scales up with bill size, it's not obvious to me that large parties need a higher percentage.

I'm semi-Southern like the NHL is semi-Southern.

What is a semi-Southern Dad? Kentucky? Florida? As a Southern Dad, I think the identification of Southern Dad as big spender and tipper is misplaced. The nouveau riche Southern Dad who made his money the easy way (real estate development, graft, etc.), he's a big spender because it's OPM. The true Southerner neither flaunts his wealth nor spends it freely. He's tipping 10% and isn't ordering any wine costing more than $30.

VA, I think. Although I know many in that state who would take issue with not being counted as 100% Southern.

He's a Southerner who has cats that he's really, really, really into and tells long boring stories about.

A New York college town brat who lives in the Shenandoah valley in a small city where town ignores and chuckles at gown.

The only way I've ever been "pushed" toward a particular level of tip is that some restaurants put the calculation at the bottom of the receipt. Usually I think it is 10, 15 and 20%. want to say I've also seen 15, 18 and 20%. So that is a nudge, but not from the servers themselves.

Oh my, this is rather amusing, trolls here questioning what it means for me to be identifying myself as a "semi-Southern Dad"? I should probably not bother, but as a long time commentator on Tyler's restaurant posts, I shall respond.

So, my roots are very Deep South, parents raised in Jacksonville, FL. I am related to General Thomas Lafayette Rosser, last commander of the Laurel Brigades, who broke through the federal lines at Appomattox, with them never officially surrendering, although his old Wes Point roommate, George Armstrong Custer, did track him down and made him personally surrender.

I was born in Ithaca , NY (not Greece, as parts of the internet say), where my deeply southern father was a math prof at Cornell. We moved to Madison, Wisconsin in 1963, where I entered high school and then attended undergrad and grad school, leaving for VA in 1976.

As for food, well, I have my semi-southern connections, and while I am a fan of Tyler's and always seek out the highest quality for the lowest cost, I also take seriously tipping norms. Abroad it is mostly zero, but it is up in the air in the US. I note the irony that those pushing the 20% rate are from the very most expensive restaurants in the biggest cities. They may yet achieve a national norm of 18%, but it is not quite there yet.

I hate to be "that guy", but the title of #3 appears wrong to me. Isn't IBM simply deciding to subsidize the shipment of breast milk?

Anything that weakens the Saudis is a plus. The Saudis have done more to spread Muslim fundamentalist ideology than Iran.

It can be very misleading to talk about "Muslim fundamentalism." The Saudis are Sunni and the Iranians are Shia. Kind of like what Protestants and Catholics were in the 1600s.

5: I wish you would give us a NB for a boring link more often, you've been lying down on the job.
6: Watching people dance around a touchy subject like this is always amusing.

#2 is very funny.

Isn't #2 old (i.e. has already made the rounds last year) ?

6: Meh. Googling customers? I rarely eat at a place where they even know my name, until I'm finished and pay for the meal with a credit card. So unless they're using face-recognition software, this behavior isn't happening at the restaurants that I usually go to.

Now, sizing up customers as they walk through the door, I can see that. But I've detected only minor differences in how I get treated at restaurants; the main one being that I'm likely to get better service if I'm part of a big group than if I eat alone, which is to be expected. But it's not a big enough difference that I ever worry or think about it.

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