Wednesday assorted links

1. The infrastructure that is China, Stephon Marbury edition.

2. Price differences across gendered but otherwise highly similar toys.  On Twitter Robin Hanson wrote: “My guess: women more infer quality/status from price…An obvious other theory of higher prices for women: their products more varied, & so fixed costs are spread over fewer items.”

3. Has the time come for a Pigouvian state? (pdf)

4. The Drone Wars have shifted to the ski front.  And comet strikes too.

5. Neil Irwin on The Big Short.

6. Why is the author of The Revenant obsessed with trade disputes?

Comments

1. The infrastructure that is China, Stephon Marbury edition.

This museum is just the tip of the iceberg because the Chinese have had an odd thing about basketball for a long time. The Communists encouraged people to play it. The question is why.

I would guess it is aspirational. Chinese boys want to be tall. Basketball players are, obviously. But they are also not restrained by teammates or rules much. The NBA has become much more confrontational. All things Chinese boys cannot do in their ordinary lives. So I think it is a dream of freedom.

(By the way, I have not heard of almost half the people on the Most Hated list. Which is fair enough. Not a cause for pride or shame. But I wonder how many other people have? Especially as some of them do not belong in the same category as, say, Belle Gibson. In fact the vitriol directed at Kim Wilson suggests her critics have some issues)

More practical than that. Communist govt was big on public health and moral virtues of exercise. Basketball courts are relatively small and require little upkeep and easy to standardise as part of urban planning projects yet provide a lot of opportunity for young people to exercise as a team. As a result of decision on urban planning a lot of Chinese have grown up playing and watching basketball

Taiwan also likes basketball, probably for the same reason.

You also don't need a lot of equipment - no special shoes, hat, etc.

This is also why the NBA is dominated by African-Americans, easiest and cheapest sport to facilitate and play in urban areas. You can even practice alone, can't really see how in any other sport (without expensive equipment like pitching machines). I'm sure some here think it's all that sweet sweet black DNA of course.

It, uh, definitely is. You need teams and equipment to practice football, but look at the distribution in the most explosive athletic positions (safety, CB, RB, WR). Tons of white American shooters in the NBA (i.e. not an issue of repetition/skill) but almost no PGs and few wing defensive specialists. Obviously there are social factors (wealth is correlated with athletic success for every race), but no reason to deny the obvious here.

Niall December 23, 2015 at 7:12 am

More practical than that. Communist govt was big on public health and moral virtues of exercise.

The Communist Party wants boys to do a lot of things. I doubt they do. There has to be a reason why boys like basketball specifically. It is not an immediately obvious sport for them to be playing. And there needs to be a better reason for boys to play than their President wants to them to stop abusing themselves.

Harun December 23, 2015 at 12:27 pm

Taiwan also likes basketball, probably for the same reason.

The more interesting one in Taiwan is baseball. As you do need a lot of expensive things. The Japanese presumably brought it, or the post-War American Army brought it to both. The Taiwanese got kicked out of the Youth competition for persistently cheating by playing adults. I am not sure they have been allowed back in.

msgkings December 23, 2015 at 3:01 pm

This is also why the NBA is dominated by African-Americans, easiest and cheapest sport to facilitate and play in urban areas.

The rest of the world gets by with soccer. Which needs even less in the way of facilities. Less so than basketball. But I don't think it is a Black sport in the US. Not by a long shot. Blacks seem to be turning away from baseball which is odd. It can't be because the facilities are getting worse.

I’m sure some here think it’s all that sweet sweet black DNA of course.

As the first thing in basketball is height, there must be a DNA factor. It is one reason why the occasional African ends up playing in the NBA.

@So Much for Subtlety: "The Taiwanese got kicked out of the Youth competition for persistently cheating by playing adults. I am not sure they have been allowed back in."

There is this thing called Google, you know. It took about three seconds to find out that:

"Forget the often-cited and baseless accusation that Taiwan once used overage players to achieve its feat. That was never the case." -- http://thediplomat.com/2013/08/what-happened-to-taiwans-little-league-champs/

In 2006, I observed basketball courts going up all over the country and predicted that they would probably win gold for the Olympics by 2020 given the sheer volume of people in the sport.

But while quite a lot of youth play basketball in the country, it seems quite rare for them to take enough time away from their studies to seriously develop their talent.

" it seems quite rare for them to take enough time away from their studies to seriously develop their talent."

If true, what does that imply in regard to US college basketball players?

Probably they take a lot of time away from their studies.

#2 for a long time women as a group had lower education level and work negotiation experience. Until today's 20-30 years old generation of women. If the gap is driven by relatively uneducated older women, it will take some years to disappear even if the right actions against inequality are taken.

3) I think Pigouvian taxes often make a lot of sense, and are certainly more sensible as a means of raising revenue than taxing income/profits. But for some reason, as the authors point out, the presence of the word "tax" makes it immediately toxic to many in political realms, making it very hard to promote.

Perhaps people can be persuaded to distinguish between "smart taxes" (taxes on stuff with negative externalities), "dumb taxes" (taxes on stuff with positive externalities) and just plain old taxes (because revenues need to come from somewhere to provide the services generally demanded in a democratic state).

" The Obama Administration’s 2014 proposal that states regulate greenhouse gases using cap-and-trade was spurred in part by a Natural Resources Defense Council argument that EPA possessed such authority under section 111(d) of the Clean Air Act."

As Nancy Pelosi said, " But we have to pass the bill so that you can find out what is in it...." Thus the NRDC discovers, after exploring the law, much like Magellan explored the unknown expanse of the Pacific Ocean, that such authority indeed does exist, This is what the legal profession does, initiate legislative proceedings, secure the passage of bills, and then "discover" what they really mean later. Such is the process of the faux democracy.

One man's negative externality is another man's positive externality.

For example, I believe we should find a way to tax leisure time. Its quote obvious to me that many people have far more than their fair share of leisure. We could tax this time, by putting them to work at the homes of people with less leisure.

Basically, those without children should have to pay a tax in kind (time) or money to those with children.

Its a Pigouvian tax for those that refuse to have children in order to hog a bunch of leisure time instead of being productive assets for society and the state.

My leisure does not impose costs on others.

Commenting on blogs (idle waste of time) needs to be taxed too.

2) Let's do the microeconomics:
the supply curve ist supposedly the same for both versions.
So different prices must be due to different demand curves.
Why demand curves are different is open to speculation. My guess would be that men shop less. And they care less: when a man just doesn't care about the specific ingredients of a soap, he will focuse more on price and his overall demand curve will be more elastic then the demand curve of a woman who might be more eager to get that one soap with that special ingredient.

and in particular concerning toys:
it seems obvious, doesn't it?
A typical boy won't much care about the colour of his toy scooter (he might not want a particularly "girlish" colour. Apart from that, he won't care).
A typical girl however will care greatly, in my experience: "it just HAS to be that beautiful pink one." => different demand curves.

Playing devil's advocate: While possibly true, different demand curves do not suggest price regulations are improper. The retailer (or producer) clearly has some form of pricing power that's resulting in economic rent. They are still extracting consumer surplus from little girls, even in the generous scenarios.

Producers gaining some share of consumer surplus doesn't necessarily mean consumers are worse off. It's entirely possible that segmenting the market like this is maximizing total consumer surplus and regulations to prevent producers from sharing the consumer surplus would end up with less consumer surplus for the consumers.

Well, my argument implies that women/girls (being more sophisticated shoppers on average) DO in fact draw more pleasure from an increase in choice than men do.
So offering that choice increases women/girl consumer surplus, even if part of that surplus is skimmed off by price-disciriminating producers.
Regulation would therefore likely DECREASE women/girls consumer surplus:
when a producer won't be allowed to charge extra for all those special soap varieties, he might just produce a few plain vanilla varieties. That would be fine for most men. But not for most women, who would feel worse off by being denied that extra choice.
(Apart from that: restricting gender-based price discrimination would be a regulation nightmare in practice.)

I guess 'whatever the market will bear' is just a bit too subtle for someone to tweet.

Even more interesting are examples of where the pricing has shifted in the other direction - pink disposable razors were considerably cheaper than other colors a couple of decades ago, for example.

3) Regulators already do to some extent. FDIC fees depend on a banks' risk level, the largest financial institutions are required to hold more capital, and capital requirements depend on the level of risk. These impose a form of Pigouvian tax.

6. I'd say it's probably either because he works in the field of internatonal trade negotiations or because he's a big fan of The Phantom Menace.

#2. "“Many men's products are not seen as men's products,” he said. “They might just be seen as products in the category.” Which makes the “pink” version a specialty product, he said.

Which, of course, is true. Many women ride unisex/men's bikes, but no men ride women's bikes. Basic black/gray/silver electronic gadgets are used by men and women alike, while some women (but no men) insist on pink ones.

Robin Hanson's point applies in other domains -- hair care products, for example. I know some women (not my wife thankfully) who spend a truly insane amount of money on hair-care products. I seriously doubt that they could tell the difference in a blind trial after their hair was treated by their 'salon quality' products infused with exotic-sounding ingredients vs bargain brands. But that isn't a result that they'd even welcome -- I'm quite sure they'd be disappointed rather than pleased to find that the bargain brand performed equally well. Was there ever a more insightful advertising slogan than L'Oreal's "Because I'm Worth It?"

#4. That was a professional camera drone operated by the broadcaster covering the event -- but most of the coverage hasn't pointed that out (implying, instead, that it was just some random slope-side yahoo getting in the way and almost taking down a skier). But that omission makes it easier to use the incident as yet another pretext for restricting/registering private camera drones.

My handy rule of thumb: If it has to say "For Men" on the packaging, it isn't.

Even Men's Pocky?

Men's Pocky was created specifically because Pocky was seen as for women.

***FLOW CHART***
HOW TO TELL IF A TOY IS FOR A GIRL OR A BOY

Do you operate the toy with your genitalia?
(YES)-> This toy is for neither girls nor boys.
(NO)-> This toy is for either girls or boys.

I am assuming you don't get out in the real world much.

I am assuming you've never played with your sisters.

I'm assuming he's in jail for not knowing that certain toys are for neither girls or boys.

5. Irwin believes all roads (to the financial crisis) lead to housing and questionable lending practices: "A lot of people thought a decade ago that there might be a housing bubble. Few of them understood the connections between housing prices and poor lending practices; the connection from poor lending practices to complex, highly rated securities; the connection between those securities to the balance sheets of major banks; and the peril to the economy if just a few of them faltered." It's a common mistake, leading many to conclude that it's all the government's fault (for the questionable lending practices), sometimes referred to as the Big Lie. It's convenient because it offers both a simple explanation and an anti-government explanation. The better explanation is that both investors in housing and investors in those complex financial instruments were after the same thing: easy money. And it's happening again in housing: in one Florida county that was hit hard by the housing bubble collapse, housing prices jumped 20% in November alone. Here we go again! Except in unusual cases (NYC, San Francisco) where supply is limited, housing prices will equal housing costs; anything more is a bubble. But today's nascent housing bubble isn't the only bubble, as the extraordinary prices of many financial assets can't be explained by the fundamentals for valuing them (i.e., the present value of future cash flow) but depend on either magic dust or the greater fool. Why are otherwise rational people making the same mistake? Because the rate of return on productive capital has been depressed, and falling, for decades, and owners of capital have sought a higher rate of return, a higher rate of return that is possible only from bubbles. Why is the rate of return on capital depressed? That's a question for economists who make the big money to answer, an answer other than the government did it.

No. You and Irwin are both wrong.

Here's Scott Sumner, writing in February of 2009:

"Many economists simply assume that the current contraction has been caused by the financial crisis. After all, isn’t that obvious? Actually, no. For nearly a year after the onset of the financial crisis nominal GDP continued growing at better than a 3% clip. Now it is plunging. Most seem to assume that this new state of affairs was somehow caused by the Lehman failure, and the subsequent loss of confidence in the entire financial system. My view is that this reverses the causality; it seems much more plausible that the current problems in the financial system are being caused by the recent (and expected future) sharp fall in nominal GDP."

I appreciate your "Here we go again", though. Now that's a testable hypothesis. Huzzah for science. Stay tuned.

5 seemed to tell a simple truth, that it is much easier to see a bubble than to know when it will pop, or how to profit.

The Sumner quote doesn't relate to that part of the story, but I think it is clear that a mere fall in private housing did wound the economy more than expected.

It is the widely accepted difference between a dot com and a housing crash.

You can't get away with folksy reasoning like "to tell a simple truth, that it is much easier to see a bubble...".

If you think about it, REALLY think about it, it is not at all easy to see a bubble. It's easy to see things that you naively think are bubbles. Most of the time, though, this is likely faulty human pattern-recognition software.

And all the bubbleologists seem to have some kind of odd asymmetry bias. March 2009: was that a 'negative bubble'?

I mean, tell me about the 1987 stock market bubble. It popped, right? Then it unpopped.

I will say that, even on a stringent definition of bubbles, 1999 dot com may qualify. Also, Japan circa 1989.

But the idea that you see a bubble is actually a pretty hubristic comment.

What I really think?

Markets and traders understood bubbles for a couple thousand years, before someone invented a political reason to deny them.

Oh dear. You've got a bigger faulty pattern-recognition problem than I thought.

Two things:

- "easier" does not mean "easy"

- a market is made up of traders who often disagree

Though interestingly, some surveys of market buyers say that they too see a bubble, but plan on getting out in time.

It is really strange. I don't think what I am saying would surprise working traders at all. I am not putting any of my values upon them.

What does my pattern recognition even have to do with it?

Do you ever talk to traders? They have a million bromides ("sell in May, walk away" , "buy the rumor, sell the fact") almost all of which are partial truths.

Bruce Bartlett at Forbes called the housing bubble way back in 2001! Shiller was in on the act by 2003!

If you don't understand why this is funny, think harder.

Brian, I think you are in the super weird position of defending free markets by denying the things participants actually believe.

Simple and should be final argument:

In a free market, we are free to see bubbles.

You can't STOP participants from seeing them, and betting them one way or another. In some cases they get rich. As we started, with this movie.

Look, you've admitted to not knowing a lot about economics. This is a tricky issue. I fully understand that my view bucks conventional wisdom.

http://www.themoneyillusion.com/?p=29826

Please don't reply. Just go away and think about it for a while.

Why on earth would "people see more bubbles than there are" (even if it were true) be a proof that there are no bubbles, or that they produce no winners or losers?

When I hike I sometimes see rattlesnakes. For a little while after that many tree roots look like snakes. My calibration is off. That does not mean there are no snakes. Indeed, I will see them as roots again after a time. I will become lulled by the recent experience of no snakes.

Similarly, after repeated cycles in the gold market ...

I am tired of this hodge-podge argument.

Feel free to buy gold at $2000, because bubbles are for suckers.

I never said there were no bubbles. I even offered a couple examples of what might be considered genuine bubbles.

But there are those who see bubbles everywhere. Perhaps they are seeing the bubble inside their head.

More evidence of how overerrated Sumner is.

So, Dean Baker, widely thought of as seeing the full story earlier than anybody, along with Nouriel Roubini, forecast recession to begin early 2007 after the housing bubble peaked in mid-2006 and began falling, with the immediate mechanism being a decline of housing construction activity, although he was also warning of broader financial market repercussions as well. At the time I warned him that the recession might be delayed due to the low value of the dollar, something he usually pays a lot of attention to. As it was indeed we saw strongly rising exports throughout 2007 thanks to the undervalued dollar which effectively offset the decline in construction activity, putting the actual recession off by quite a bit even as the financial market got increasingly spooked from mid-2007 onwards. And indeed the recession was pretty odd as unemployment began to rise at the end of 2007, but GDP was still rising well into 2008.

For the record, Dean has since agreed with my analysis of what went down in 2006-08, which includes having called that there would be serious financial systemic repercussions of the collapse of housing bubble, although I did not short it.

For the record, Dean Baker began beating the real estate bubble idea in 2002, and he still considers himself prescient for getting in so early on the call, lol.

BD,

You do not get it that Dean was right? The housing bubble actually started in 1998, in case you do not know. You have been very full of yourself on this thread, although without providing a shred of evidence that you know anything about this or called any of it yourself. Pathetic.

It's a movie. It's entertainment.

That being said, piss-poor underwriting (over-reliance on appraisal value and the cultish belief that RE prices always soar; and ignoring the other four C' or P's in loan underwriting) of the loans was a small part. If the originators didn't sell, securitize or slice and dice (myriads of tranches that were poorly credit-rated, in turned out) the crisis would have been limited to originating banks and mortgage brokers.

The many additional factors that caused the global debacle are too numerous and far too technically complex to be adequately presented in a movie or a book meant for popular distribution. Sadly, I think the government (Congress, Fed, SEC, OCC, FHLB's, FDIC, FHLMC, FNMA, etc.) hasn't done the definitive post-mortem, either.

You can find a lot of plausible causes.

I suspect that it was so big, because indeed multiple causes were reinforcing each other, then add on momentum thinking.

I wonder if you could get a few small markets to agree to some economic testing.

Maybe some areas in Africa, where you could run various policies, etc. and try to create a bubble.

Faulty mark to market accounting rules established in 2006 (coincidence?) turned what would have been a S&L crisis-type problem into the Mess of 2008/9. The market bottomed literally the day Barney Frank said he'd lean on FASB to fix their mistake. Brian Wesbury at First Trust writes well about this.

https://en.wikipedia.org/wiki/Fair_value_accounting_and_the_subprime_mortgage_crisis

Bullshit. Dodd and Frank and the banksters tried to use this hysteria (no market for the bad assets so let's not mark to market) in order not to recognize actual, market losses. It was after the crash and is unadulterated bullshit: most banks didn't take the write-downs. Most of the securities were not paying interest or principal ergo despite hiding market losses, banks were dying slow deaths making payments on liabilities while not receiving payments on book (inflated) impaired securities. Which is the Tier III Fas !%& measure: do a discounted cash flow on the expected cash flow s and mark down as appropriate.

Wrong again, T. Shaw, you obviously didn't read the link. Might be hard with all of your spittle on your monitor.

The link is bullshit. I was there.

I was on the other side of that lying liar's crappy meme to hide losses in publicly traded companies.

Like the media, if you read Wikipedia you are misinformed.

I'm retired and do not have quick access to the new ASC numbers, the standards are the same. Until FASB promulgated FAS 157 and 159, assets and liabilities were accounted for at historical cost unless they were deemed impaired per FAS 114. So, the impairment standard FAS 114 would need to be applied regardless of the FV option and this FV measurement canard. An honest FV option accounting would result in impairment as well.

So, if the security was in default and/or there was reasonable expectation (more likely than not) that all contractual cash flows/payments will not be recovered the asset would be impaired and the impairment would need to be measured and recognized in operating income statements.

Again, the FASB uses a different numbering system, Accounting Standard Codification. I will use the old system. FAS 157 was Fair Value Measurements. FAS 159 was the Fair Value Option. Companies had the option after adoption of FAS 159 to account for assets using FV. It was a one-time option for all owned assets on adoption of the standard. After that, whenever an asset was acquired the option could be chosen. The choice was irrevocable. In 2006, (I handled many) early FAS 159 adopters that adopted FV option for book securities because the securities had unrealized gains- numerous advisory firms pushed this ploy. Then, things turned against them.

To cut this short, the FAS 157 disclosure mainly detailes the amounts ofd assets/liabilities whose FV were measured in each of the three level. Level I is from a liquid bond market or stock exchange - most reliable; Level II is an extrapolation of a market price for a security not in the market but closely related - second most reliable. Level III -is like an RE or going concern business appraisal: comp sales, discounted cash flows or construction - least reliable and most subject to what we used to call "abuse."

I could go on, but it's Dewar's time and the whole thing was bullshit when Wesport and first trust spewed it. .

"Researchers for the New York City Department of Consumer Affairs pored over toys, children’s clothing, adult apparel, personal care products and home goods sold in the city."

What's the educational requirement to fill that position? How much is the pay? Can some one let me know when there's an opening?

"Another analysis from the University of Central Florida found women’s deodorants typically cost 30 cents more than the same product for men. Wrote the authors,“The only discernible difference was scent.”

That's what deodorants are all about, scent, different.

"The pricing differences extend beyond basic services and goods. Until courts knocked the practice down, insurance companies in Europe charged women more because women live longer. Under the Affordable Care Act, insurance companies in the United States cannot factor gender into cost."

That means that shorter-lived men must pay a portion of the insurance premiums for the opposite sex, in the interest of "fairness", I suppose.

"That means that shorter-lived men must pay a portion of the insurance premiums for the opposite sex, in the interest of “fairness”, I suppose."

Right. On average, men work more hours for more years, retire later, and die younger -- paying more in SS and Medicare taxes and receiving less in benefits. But women being charged more for 'equal' deodorants? Clearly an outrage that requires government investigation ;)

>> What’s the educational requirement to fill that position?
1. A baccalaureate degree from an accredited college and two years of experience in community work or community centered activities in an area related to the duties described above; or
2. High school graduation or equivalent and six years of experience in community work or community centered activities in an area related to the duties as described above; or
3. Education and/or experience which is equivalent to "1" or "2" above. However, all candidates must have at least one year of experience as described in "1" above.

>>How much is the pay?
$ 48,895.00 - $ 75,900.00 (Annual)

>>Can some one let me know when there’s an opening?
It'll be posted here:
https://a127-jobs.nyc.gov/index_new.html?agency=866

This explains the disparity:

http://the9gag.com/shopping-center/men-vs-women-in-choosing-shampoo-1628

I suspect any man who has been sent on an errand to pick up a personal product for a woman will find the exact same thing- a precisely worded request. And if he instead chooses another brand because it is cheaper, may the Lord have mercy on his soul.

Ugh - bad memories

They should just declare open hunting season on those idiot drones. Problem solved.

Regarding a Pigovian state, I think taxing antibiotic (ab)use in farming would be a good thing to tax - http://www.theguardian.com/society/2015/dec/22/almost-too-late-fears-of-global-superbug-crisis-in-wake-of-antibiotic-misuse. I suggest that the appropriate thing to spend the money on would be developing new antibiotics, and the appropriate tax would be whatever the estimated annual lost economic activity would be if we lacked usable antibiotics.

#6 Reminds me of the Japanese guy Kotaro Ikeguchi aka Taichi Sakaiya
http://www.mahalo.com/taichi-sakaiya/

Regarding the Pigouvian state article, they address the cap and trade alternative in only one paragraph and admit that it may be superior in some cases, falling back on an ultimate claim that "most economists" tend to at least "vaguely" favor price policies. It is funny that they cite both Tom Tietenberg, who was the main figure behind establishing the US cap and trade systems in lead and SO2 at the national level, as well as the first one of all for BOD in water in the state of Wisconsin in the mid-70s, which I was involved with also at the time.

They also cite Weitzman's famous 74 RES paper, and note that taxes are preferred if costs are unknown. But they leave out that Weitzman also argued that quantity control (improved with trade) is preferred if benefits are unknown, and given his more recent work on fat tails in benefits, it is clear that this is more likely his view, although he has not publicly spoken up in connection with the more general debate over this accompanying the Paris accord discussions.

#4...I suspect comets, like asteroids, won't have the stones to actually take on the Earth..http://www.theonion.com/article/chicken-shit-asteroid-veers-away-at-last-minute-2722

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