Wichita fact of the day

by  Tyler Cowen in

It is, in percentage terms, the most export-oriented city in the United States.

According to a study published late last month by the Brookings Institution, a Washington think-tank, nearly 28 per cent of the city’s gross metropolitan product is sold abroad. That makes it the most export-oriented in the country, just ahead of Portland, Oregon – noted for its computer and electronics companies – and San Jose in California’s Silicon Valley.

Can you say "small aircraft"?

The Paul Ryan debates

by  Tyler Cowen in

I haven't followed the numerical specifics of his plan (see Krugman, McArdle, and Ezra), which will never be voted on, so at this point I'm more interested in the general problem motivating the reform.  We all know that health care spending has to be restrained in some manner.  There are (at least) two approaches:

1. Have the federal government take a more active role in shutting down or limiting some reimbursements, based on efficacy studies ("death panels").

2. Turn some or all of Medicare into a fixed voucher program and let individuals choose which set of restrictions they will accept from private suppliers ("grandma bangs on HMO door").

As I understand Ryan's approach, he is putting a great deal of emphasis on #2, whereas most Democrats favor #1.

Which mix of #1 and #2 is best is one question; which mix people will accept politically is another.  A third issue is which mix is time consistent and a fourth is which prevents "rationed" people from simply popping up somewhere else in the public health system.  I would start with those distinctions and see which policy direction people need to be nudged in, relative to the path we are on now.  That probably means greater acceptance of both #1 and #2, to some extent.

I believe that #2 works fine for a lot of health care, especially the less controversial and less emotional areas of care, such as laser eye surgery.  Neither #1 nor #2 work especially well, or are especially popular, for end of life issues.

Whatever problems the Ryan plan may have (should we dismiss all ideas from people with overly optimistic forecasts?), I take his contribution to be a nudge in the direction of #2, given the current political equilibrium.  Overall I see this as a healthy nudge, even if you think that relying fully or even mainly on #2 is undesirable, infeasible, and time inconsistent.

Very difficult questions

by  Tyler Cowen in

I have spoken at Jane St. Capital a few times and it is perhaps my favorite audience; everyone wants analytic content and everyone came prepared.  All of the questions were tough, but two in particular I was not prepared for.

First, I was asked "Which is the most underrated statistic for judging the value of an NBA player?"

My attempted answer was the player's presence on a very good, consistently winning team.  There are many players with impressive statistics, including unselfish statistics such as assists and rebounds, who are only of value on bad teams.  We overvalue such players.  Overall, really good teams don't keep bad players and really bad teams don't keep good players.  If a player has never been on a really good team, he might not be so good, with apologies to the earlier Kevin Garnett.

Second, I was asked who is most likely to write a novel about the financial crisis which will stand the test of time.  I do not see any such author around today, but if you have ideas leave them in the comments.  "DeLillo, if he were thirty years younger" was the best I came up with.  Or maybe something from genre fiction.  There are notable works of fiction dealing with the Great Depression, but I can't recall that any of them focus on the financial side.  It's a hard topic to be dramatic about, without being either too simplistic or overly technical.

Corn tamale home recipe

by  Tyler Cowen in

Here is another reader request:

more tyler cowen home recipes. previous installments have been helpful thanks.

Lately I have been buying frozen corn tamales ("tamale de elote") from a Latin supermarket or Shoppers Food Warehouse.  Steam them, wrapped, for ten to twelve minutes.  Serve with El Salvadoran white sour cream on top or to the side.  (Honduran or Guatemalan white sour cream will do in a pinch.)  You also can heat up some Goya small red beans, with a bit of freshly ground cumin and ideally some fresh stock.  For the ambitious, make the stock from celery, black pepper, salt, onion slices, pork neck, and one ancho chile, but the beans taste fine on their own.

It's one of the easiest good meals I know and its a way to bring some deflation into your life.

The Mulligan and Mankiw challenge to extreme Keynesians

by  Tyler Cowen in

To quote Greg:

University of Chicago economist Casey Mulligan offers a challenge to that view.  Casey points out that there is a regular surge in teenage employment during the summer months because more teenagers are available to work (that is, the supply of their labor has increased).  That is no surprise: It is normal supply and demand in action.  But if aggregate demand were the main constraint on employment, this increase in supply should not translate into higher employment during deep recessions such as this one.  But it does!

The link is here.

*City on the Edge*

by  Tyler Cowen in

The author is Mark Goldman and the subtitle is Buffalo, New York.  I loved this book.  It is a splendid portrait of twentieth century America, the connection of industrialism and the arts, the decline of manufacturing and the resulting urban casualties, an applied study of the wisdom of Jane Jacobs, and on top of all that it is the best book I've read on how excess parking helped destroy an American downtown.  I recommend this book to all readers of serious non-fiction.

Markets in everything

by  Tyler Cowen in

Artisanal pencil sharpening:

David Rees, the man behind the popular political comic Get Your War On, wants to sharpen you a pencil. Slowly. Attentively. And with a carefully selected sharpener or blade that suits the pencil best. If there are movements for slow food and slow reading, why not for slow writing implements? 

"With an electric pencil sharpener, a pencil is meat," Rees said. "It's this thoughtless, Brutalist aesthetic. For me, it's almost a point of pride that I would be slower than an electric pencil sharpener."

This is how Rees' artisanal pencil sharpening works: You might send him your favorite pencil, but Rees more often selects and sharpens a classic No. 2 pencil for his clients, he promises, "carefully and lovingly." He slides the finished pencil's very sharp tip into a specially-sized segment of plastic tubing, then puts the whole pencil in a larger, firmer tube that looks like it belongs in a science experiment. Throw it at a wall, he says, and it won't break. The cost? $15.

For the pointer I thank Ellen P.

Why is there a boom in temporary hiring?

by  Tyler Cowen in

Trevor Frankel offers his thoughts:

The part that most clearly indicates policy is the problem is the temp hiring. If businesses are hiring temps off the bottom of a recession, it means that they're seeing demand pick up but they're too uncertain to actually hire someone full time. This is usually followed by permanent hiring, but in this recovery, it has not been. The only obvious culprits here are a) higher required wages and healthcare costs (minimum wage, housing interventions and Obamacare are prime candidates here) and b) general lack of confidence in the economy and policy (the political climate in general is the prime candidate here).

Here is some background:

Temp hiring has been off the charts – temp jobs are up 20% year over year, while permanent private sector jobs are down 1%. (source: http://www.ritholtz.com/blog/2010/08/follow-up-on-temp-services-hiring/)

This is not an argument which I have been pushing, but the boom in temporary hiring does lend some support to it.

P = NP?

by  Tyler Cowen in

Here is one discussion of how hard it is to find the betting market in this proposition.  Here is a betting market of unclear size and relevance, on which Millennium math problem will be solved next; it apparently predicts 76 percent for P vs. Np.

Here is an overview of where the entire debate is at, in Wiki form.

All of the pointers are from the ever-curious Chris F. Masse.

Unusual questions from loyal blog readers

by  Tyler Cowen in

To what extent can someone who is starving cannibalize his/her self to stay alive? My logic in asking you this question was not, "I'm curious about cannibalism, let me ask the food critic." It was more along the lines of "This is a really obscure and somewhat far-fetched idea and question, Dr. Cowen would probably be the best person to present it to because of his wide range of knowledge and access to an intelligent readership."

That's from M.E.  My answer is: "to a limited extent."  By the way, I am giving a talk tonight, and there is a (substantial) prize being offered for the best question from the audience.

Correction of Brad DeLong

by  Tyler Cowen in

He is wrong to suggest that I am calling for deflation.  He draws his conclusion by citing advice which is a thought experiment and which I call "patently absurd" elsewhere in the post.  I also left this comment on his blog:

I am not calling for deflation, this is simply a misinterpretation of what I wrote.  Further an unemployed person with debt is even worse off than an employed person at a lower wage.  *And* even our fairly wimpy Fed is not going to allow a high rate of deflation and thus a big real increase in the debt burden.

Here is an earlier column of mine, entitled "How a Little Inflation Could Help a Lot."  While I am increasingly unsure how much good such inflation would do, I have been arguing for a year that it is worth trying and for instance just yesterday I wrote in the Brad-cited post "I favor a more expansionary monetary policy".