Tuesday assorted links

1. Psychologist Robert Levine has passed away (NYT).

2. Xi, the great deglobalizer.

3. “This is what spending almost half of national income on investment looks like. And that is not an experience you can have anywhere else.

4. Claims about Andalusian donkeys.

5. The tech culture that is China: “Bedding equipped with QR codes will allow hotel guests to verify that they are not sleeping in unclean sheets, says the technology’s developer.”

Comments

#2 Maybe Red China is not so great after all.

#5 "several five-star hotels in Beijing didn’t change their bed linens between guest bookings."

we reckon that's the sorta stuff that spreads the red measles

Actually, I am thinking more about Red Chinese aggression against the West.

Naked aggression from a country with no ability to assert power across blue water against countries that include the United States which could absolutely crush China militarily is the worst kind of aggression of all.

It is not that simple! First, they have NUCLEAR WEAPONS. Second, they are using SUBVERSION to DESTROY America.

If they use their nukes against the US which has vastly more nukes, nobody wins, but they will REALLY lose. And the USSR failed to subvert the United States, so how will China destroy America with subversion? D they have some super advanced subversion technology the KGB didn't have? Like extra sexy spies?

I hope they give the extra sexy spies angle a shot.

So if Trump simply deglobalizes less than Xi he will win!

#4 "According to our results, IQ may explain over 62% of the cognitive variance..."

Isn't this practically a tautology?

Very true, but it's still interesting research, to connect variations in "IQ" (perhaps better thought of as a weighted average of each ass's performance) to genes.

But from the abstract it sounds like they only measured "nature" not "nurture". What sort of education did the asses receive before they were tested? Can an ass be trained to perform better on the tests, compared to an untrained one? I'd have to think the answer is yes, probably within limits -- you can lead an ass to school but you can't make it think. Tests for human IQ attempt to measure capabilities that are inherent rather than reflecting upbringing, environment, and training, but their success at this is controversial.

Also, the paper has one of the better titles that we'll ever see.

#4 - Who paid for that?

I vicariously come here to experience, second-hand, Orwell's dictum, “One has to belong to the intelligentsia to believe things like that, no ordinary man could be such a fool.”

While it's mainly a measurable matter of degrees, Andalusian asses and American democrats are not cognitive, rational beings.

Asses "run" on instinct and conditioned responses. Democrats roll on ideology and emotions.

#2 Blah blah blah I have literally heard this song and dance about China's economic transition to a consumer and services economy for 20 years. I have done business in that country for almost as long. Feel free to quote me, "Not. Going. To. Happen."...at least not in the sense people in Europe and America are familiar with. Chinese families Top 4 priorities (not in order) are:

1) Healthcare and Food Safety
2) Education
3) Housing
4) Getting any money they make out of China

Never forget, actions at the micro and macro level you can observe in that country fundamentally are not market based. They simply are not.

#3 See comment above. Infrastructure development and investment for an economic model that is fundamentally changed and based on 5-year plans and assumptions that will not come to fruition. China's economy is reactive.

Let us be blunt: Red China wants to enslave the West and it won't allow anything, much less consumption considerations ro stop it. They believe the strong do what they want and the weak endure what they must!!

Brazil is full of weak and servile people who worship the Yellow Spectre.

It is not true at all. Quite the opposite. I can assure Brazil opposes Red China.

Thiago, I mean Thomas, I don't hear you or Brazil supporting the cries for democracy in Hong Kong. If anybody knows firsthand the problems that Beijing poses for the rest of the world, it would be HK.

The list seems accurate to me. I have some (not 22 years) experience with China. Watch what people actually do. They have thousands of years of experience with political turbulence and don't trust any government at all. So where would you put your focus? On those four things - exactly right.

What does it mean to say that no actions -- micro or macro -- are market based? People don't go to work and make their own money? Help me understand this perspective.

#5: more details are needed. There will be water- and temperature-resistant chips sewn into the sheets, but the article doesn't say what those chips do. If they have sensors to tell us how long, how recently, and at what temperature the sheet was exposed to water, that's one thing (although I still wonder if a corner-cutting laundry will just soak the corner of the sheet with the chip in some hot water for awhile and call it good).

But if the chips don't have sensors (which seems more likely, and much less costly) then we're in a GIGO situation: data about the sheet has to be entered by some device or person. And those data may or may not reflect what was actually done to the sheet.

No, the chips won't collect data about how they are washed, they will communicate with some short-range RFID/NFC at the washing facility that timestamps them relevant info. Of course it is spoofable but would require more overt fraud which might be enough to prevent them from doing so.

Surprised blockchain isn't shoved in here, TBH.

Thanks, that makes a ton of sense. A device at say the doorway of the facility -- or even at the rim of a washing machine -- to track the comings and goings of a load of laundry. The hotel and even more so the laundry might like to have that information to monitor their internal operations, and the "consumer reassurance" aspect of it might be more of a side benefit.

You also make a good point about overt fraud; if the system makes fraud more costly then it will reduce it even without providing ironclad prevention. OTOH a laundry could still throw the sheets into a washing machine and take them out 30 minutes later and have these operations recorded -- but not bother to run the machine.

(Or would the machine's water usage, temperature, time, etc. be recorded too? The laundry might very well want accurate measurement of those variables, and then it'd be more work to create fake statistics than to simply report the accurate ones that they're already collecting. On yet another hand, probably the easiest way to cut corners, and it wouldn't be outright fraud, would be to truly wash each and every sheet, but with less water and less detergent and at a lower temperature than what's needed to get it really really clean.)

The most likely result is that any cleaner will ensure that all the sheets are registered as clean whether they are cleaned or not.

That's OK I think. Most of the work in changing bed sheets is the act of changing sheets, not washing them. It's a control for the hotel, not the laundry place.

And, just like every blockchain use on physical goods, fails as there is no guarantee that the things that are written in the database are actually happening.

We have the very same problems in simple physical inventory applications with barcodes: It's not uncommon for a store with no fraud, and nobody in the store's employment trying to actively subvert anything, for the inventory numbers to be off by 1-2% by human mistake. Imagine in a world where people have a lot to win by cheating the system.

The business model for the washing company is to ensure that the hotels use their service and that the hotels cannot fake the data. Thus it is pointless that the chip will have sensors with data fakeable by the hotels. In fact the washing company is acting like a notary or a certification authority, they can put any data on the chip and only they can signed and certified that with their secret digital private key and that data are verifiable only from their public digital certificate.

The hotel guest apps is best from a third party developers, just like the web browsers developers are independent from the certification authorities. If the washing company cheats and looses their reputation, the third party app developers can drop the verification from them. If the third party developers cheat or incompetent, then the hotel guests (if they are knowledgeable enough) can stop using their apps.

Similarly if the hotels own the washing machine and able to certify the data, their reputation is on the line with respect to the third party developers.

The weak links is between the chip and the QR code which is applied only by the washing company. The QR code has to be destroyed during normal use by the hotel guests but it will not stain the guests' clothing or naked bodies.

In fact a much cheaper implementation is to forget about the chip and put the certified data on the QR code / Bar codes directly. The QR/Bar codes are protected by opaque covers with instruction which when peeled off the light sensitive ink will fake or darken in say 15 minutes (less than a quickie visit :) ).

Blockchain is needed when there are no designated authority. In this case the washing company is the central authority to be trusted/untrusted and so blockchain is not needed.

I should have patented this. This is different from this published patent https://patents.google.com/patent/US20100082457A1/en

"Method and System of Tracking Hotel Linen Products"

Oh. On the underside of the opaque cover is another used once unique QR code that gives the hotel guests royalty points from the washing company to encourage the guests or the hotel cleaners to remove the covers.

#2. I liked Brad Setser's article, but I think he is missing an important alternative explanation. And that is that China's GDP figures are simply overstated. If one were to make the assumption that GDP is overstated by about 2% per year since 2008, the relative decline in imports described by Setser goes away. My suspicion is that the quality of GDP data coming from China is pretty bad, and also upwardly biased.

#3: a good basic observation, but from his photos and what he wrote, I think I got the same experience just by wandering around any one of China's big cities (Shanghai, Wuhan, ChongQing; Shanghai offered the most sights and sounds because it's so massive).

3. You can't get there from here. Unfortunately, that's becoming more common in America. An interconnected economy produces an interconnected polity. Cowen isn't much impressed with transit, including the high speed rail variety, but that's understandable: he probably doesn't need it for his many domestic and foreign travels. But I digress. When one lives in the "frontier" as I do, getting from there to most anywhere is a big problem. So should I and everyone else move to where there's a there there, including transportation that can get you from there to anywhere with relative ease? That's a question. America was blessed with vast resources, including raw materials and labor, spread about everywhere. That worked okay in the past. Not so much today. A strong central government in China plans the both the direction and rate of growth of China's domestic economy and its connection to its trading partners, the direction a function of the location of the high speed rail system that provides the connectedness. America? A strong central government in America plans both the direction and rate of growth of America's worldwide commitments. I'd just like to get there from here. China is racing past America, and not only via high speed rail.

"3. “This is what spending almost half of national income on investment looks like. And that is not an experience you can have anywhere else.”"

Rampant smog? The smog in the last two pictures looks pretty thick.

Is this what environmental collapse looks like?

#4: The only article to use the tags "genetic parameters", "intelligence quotient", and "asses".

#3

Fix the regulatory costs associated with constructing rail in the US and maybe we'll do it.

Right now it costs more than 100 million per mile to construct high speed rail. If that number was more in line with other countries we would have more rail. It is that simple.

+1, Of course the issue is that the people that most want rail are also most likely to support rules and regulations that drive up the cost of rail.

So, this is just an example of revealed preferences.

Exactly.

Watch interviews with supporters of rail. When the costs of rail in the US are brought up they simply respond with "spend the money" completely ignoring that as the reason why we don't build. The cognitive dissonance on display is amazing.

Well maybe it's good that it's so expensive to build because operating trains results in huge losses even when construction and land acquisition costs are eliminated. It would be a bad deal to run more trains even if they were built for free.

Fascists like trains, so trains are bad. Be woke and #resist trains!

For comparison, take the train from New York to DC. Be sure to check out Baltimore.

#2: Refers to China's openly import substituting, closed, tendencies, which leads me to link an on topic set of tweets by Pseudoerasmus (presented, as he always does, without polemic or bias) - https://twitter.com/pseudoerasmus/status/1125374662295339008:

"Another reason the “Chinese model” is actually the E Asian model writ large: instead of increasingly “plugging into the global supply chain” like other developing countries (as recently argued by Baldwin), the Chinese trend is toward building up its own domestic input suppliers"

"China’s growing domestic content in exports is due to its exporting firms gradually replacing imported inputs with domestic products”: a classic “big push” industrialisation based on both forward & backward linkages, much more like Japan or Korea"

A reason for reasonably pragmatic free trade types to be careful about considering China Hawks who propose reversing integration with China as their enemies.

If China becomes a more economically closed world unto itself, while remaining a hostile power, you're gonna want to be on the side of the folk who called it out before it was obvious and whose political star will rise, to seize the remaining free trade gains.

Force them into an alliance with the pro-working class protectionists, whose goals and sentiments are admirable* but who propose a reverse of history on manufacturing employment that isn't possible... big opportunity cost.

*Certainly more admirable than the "Learn to code" brigade or the "It would be, like, racist and unfair for me to back anything actively making an American citizen more prosperous than his skill level equivalent in another country" set.

What is wrong with the East Asian model writ large? None of the other East Asian countries following that model have become economically closed. They used industrial policy to develop specializations in some products, but they still import other products. They did not try import substitution across their entire economies--the countries that did that in India, the Middle East, Africa, and Latin America all failed. China is also not trying to implement autarky and create a closed economy, and if it did, it wouldn't be successful. In fact, China imports a higher % of its GDP than the United States, and its current account surplus has virtually disappeared largely because of rapidly increasing imports of tourism and other services. https://www.economist.com/finance-and-economics/2019/03/14/chinas-current-account-surplus-has-vanished

Regarding your last sentence, do you think it was admirable in the recent college admissions scandal for well-connected parents tried to corruptly get their kids admitted into schools over others who were equally qualified? And if it's not admirable for rich people to tilt the playing field in favor of their own kids, then why would it be admirable for them to tilt the playing field in favor of their countrymen?

"do you think it was admirable in the recent college admissions scandal for well-connected parents tried to corruptly "

That was illegal and involved cutting the line for the normal process.

"why would it be admirable for them to tilt the playing field in favor of their countrymen?"

As long as it's not illegal, I have no strong objections.

@Zaua, Your second point first, as it is shorter to argue with.

First off, that seems a pretty reaching analogy. If you're even going to analogize to parental love and loyalty, why not some other form of parental love which are openly accepted with society, like buying a private school education for a child or paying their college education? Chinese immigrant parents in the US, to no one's disapproval, largely send their own children to cram school (however dopey the child, and however the dubious the benefit). They don't crowdfund some smart local Hispanic kid to.

Second off, the normal moral compass generally allows for citizens of a country to benefit more from its institutions (whether they are net tax payers or not). Certainly the normal compass is such in China. That's not analogous to rich people jumping the queue over their fellow citizens. (Normal people object to the rich buying college access for their kids on the basis of egalitarian and fair relations between citizens with the state, not on the basis that it is unfair to immigrants who have fewer resources and connections or suchlike.)

What is wrong with the East Asian model writ large?

Is there anything morally wrong with it? I can't say as it seems necessarily wrong to me. Concentrating development and "living standards" within your nation by adopting import substitution isn't necessarily wrong, if it works. It may be wrong in that it is done in this case by an authoritarian leadership concerned with protecting their own power, but beyond that?

Still, many free traders do seem to believe it is morally wrong for the United States to adopt industrial policies that concentrate production within the United States at the expense of world development and overall world market efficiency.

It would be hard to imagine both believing that and that the "East Asian model writ large" is somehow acceptable, but only for China. That would be peak "China is always free pro-open and free market and moral, no matter what it does; the United States must always open more, no matter what it does".

However, my point wasn't about its morality but likelihoods of what an "East Asian model writ large" may mean for the West.

It may likely mean an economy that closes to imports of high tech and high value manufactures far more than Japan and South Korea, who were constrained by lower size of their markets and their need to remain allies of the United States for both export-led industrialisation and security reasons. China is simply not Japan and South Korea writ large, in proportion, but with very different scaling effects and a different political environment. (There's some more discussion of this somewhere in pseudoerasmus and Branko Milanovic twitter feeds, if you are interested).

Those who want to further free trade in relations with non-China countries may want to think about this, and whether it is best to consider allying with the China Hawks before they end up in some form of alliance with pro-working class protectionists (from the Left and from the Right).

Certainly it is in contrast to the breezy assertions from the likes of rayward that any day now the Chinese are keen to buy American, European, Japanese and Korean manufactures and become a net consumers in trade, and they are prevented only by the perfidy and short termism of big business which is controlling politics to close Western markets.

4. Claims about Andalusian donkeys.
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The site was locked, I couldn't read it. I also note the ag value of this research, the ability to get smarter donkeys. Also the donkey pet market find value. Article was from a vet research group.

#2. Looking at China's manufacturing goods imports is misleading, because it ignores one of China's biggest imports: tourism. Chinese spend over $250 billion annually on international tourism now, compared to only about $50 billion in 2010: https://data.worldbank.org/indicator/ST.INT.XPND.CD?locations=CN

If you add in the rapid growth in tourism, I highly doubt China's imports have grown slower than GDP--in fact, given China's shrinking current account surplus, I suspect the opposite to be the case.

Reading these stories on China, I have to think that Western macroeconomists need to reassess what is a successful development scheme.

Is it not obvious? The China model will flatten the US model.

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