Markets in everything, Japan edition

by  Tyler Cowen in

Get the double entendres out of your mind:

Lola – or Rora – to give her a slightly more Japanese pronunciation – is a beauty and she knows it.

Customers pay by the hour for her company. Usually they just want to stroke her, but as a special treat for favoured clients, she will lie back in a chair, close her eyes and pose for photographs.

Lola is a Persian cat who works at the Ja La La Cafe in Tokyo's bustling Akihabara district. It is one of a growing number of Cat Cafes in the city which provide visitors with short but intimate encounters with professional pets.

When I called, there were 12 felines and seven customers, mostly single men…

It costs about £8 ($10) an hour to spend time in a Cat Cafe.

Here is the article, courtesy of Marco Haan; other Japanese markets are discussed as well, including the renting of pet beetles.

And no, this next one is not a "sexy" Markets in Everything, but it, via Megan McArdle, is still remarkable in its own way: Quilt with Matching Tote.

Dogs and Demons

by  Tyler Cowen in

The subtitle is Tales from the Dark Side of Japan and the author is Alex Kerr.  It is recommended reading for those who would have Obama expand his stimulus plan to include more construction.  Here are some strung-together excerpts:

Few have questioned why Japan's supposed "cities of the future" are unable to do something as basic as burying telephone wires; why gigantic construction boondoggles scar the countryside (roads leading nowhere in the mountains, rivers encased in U-shaped chutes); why wetlands are cemented over for no reason…or why Kyoto and Nara were turned into concrete jungles…

Led by bureaucrats on automatic pilot, the nation has carried certain policies — namely construction — to extremes that would be comical were they not also at times terrifying…

Dozens of government agencies owe their existence solely to thinking up new ways of sculpting the earth.  Planned spending on public works for the decade 1995-2005 will come to an astronomical…$6.2 trillion, three to four times more than what the United States, with twenty times the land area and more than double the population, will spend on public construction in the same period.

…from an economic point of view the majority of the civil-engineering works do not address real needs.  All those dams and bridges are built by the bureaucracy, for the bureaucracy, at public expense.

…The construction industry here is so powerful that Japanese commentators often describe their country as doken kokka, a "construction state."…the millions of jobs supported by construction are not jobs created by real growth but "make work," paid for by government handouts.  These are filled by people who could have been employed in services, software, and other advanced industries. 

Kerr provides almost four hundred pages of documentation for these claims and more.  In the meantime, I am pondering the question of whether government in the United States is of higher quality than government in Japan.  I believe it can be argued either way. 

Addendum: Here is my previous post on fiscal policy in Japan.

Princeton Encyclopedia of the World Economy

by  Tyler Cowen in

These are two heavy volumes (1328 pp.) and if you read them you will have a very good background understanding of the institutions behind the global economy.

Here is the book's home page with some sample free material.  Here is a list of contents.  Here is one summary of the book's contents.  The editors, Kenneth A. Reinert and Ramkishen S. Rahan,are from GMU School of Public Policy although note that is not the same as the economics department.  You can buy it here.

Betting markets in everything

by  Tyler Cowen in

Bet on your own grades.  Here is how it began:

One
Sunday afternoon, Steven and I were sharing ideas, and I mentioned to
him that I had an exam the following day and that if I were to study I
was sure to get an A. But I was enjoying my Sunday afternoon, and I
made it clear to him that I had no intention of studying. That’s when,
in order to provide me with motivation, we made the following
agreement: If I got an A on the exam, he would give me $100, and if I
didn’t get an A, I would give him $20. We thought every student would
like this type of motivation, therefore, we established Ultrinsic
Motivator Inc.

I thank Max for the pointer.

When have countries refused to take back land?

by  Tyler Cowen in

Matt Yglesias writes that the Jordanians don't want the West Bank back, at least not in anything resembling its current state.  The Palestinians would be regarded as destabilizing by the Jordanian government.  How many historical examples can you find of countries refusing to take back territory that was once, in some form or another, theirs?  Spain probably wouldn't take back Ecuador but the offer will not come because the Ecuadorean government values the land.  So when is the political shadow value of land negative for both governments?  (Of course it's not negative for the Palestinians.)  The West Bank aside, I can't think of examples where there is both a possible offer and a refusal to take the land back.

Could Puerto Rico be an example?  Maybe the U.S. would gladly "give it back" (that is debatable, however) but it seems that Puerto Rican voters don't want full, unencumbered title.

Department of provisional Bayesian update

by  Tyler Cowen in

Today I read this:

Although Mr. Obama has not publicly identified which priorities will have to wait, advisers and allies have signaled that they may put off renegotiating the North American Free Trade Agreement, overhauling immigration laws, restricting carbon emissions, raising taxes on the wealthy and allowing gay men and lesbians to serve openly in the military.

Here is the article.  When it comes to health care, the prediction is that we get a "down payment" on future change but not yet the whole reform.

Eight reasons why we are in a depression

by  Tyler Cowen in

1. We have zombie banks.

2. There is considerable regulatory uncertainty in banking and finance.

3. There is a negative wealth effect from lower home and asset prices.

4. There is a big sectoral shift out of real estate, luxury goods, and debt-financed consumption.

5. Some of the automakers are finally meeting their end, or would meet their end without government aid.

6. Fear and uncertainty are high, in part because they should be high and in part because Bush and Paulson spooked everyone.

7. International factors are strongly negative.

8. There is a decline in aggregate demand, resulting from some mix of 1-7.

I have two simple points,  First, a large fiscal stimulus addresses factor #8 but fares poorly in alleviating the other problems.  Of course it may give a band-aid for #5 or #6 and you can tell other stories but we are in a multi-factor depression.

Second, forecasting will prove very difficult.  These factors interacted with each other in a unique manner on the way down and they may well interact in an unpredictable manner on the way back up, whenever that comes.  Just for a start, who has a good model of #1, #2, or #6?  Right now we're seeing a lot of good faith efforts to develop forecasts, but I say don't believe any of them, whether they support your point of view or not.

Satantango

by  Tyler Cowen in

It's seven hours long and probably the greatest Hungarian movie.  I'm about to start the third of three Netflix disks.  One reviewer described it as "desacralized Tarkovsky."  Another summarized the "plot": "Moving at a pace that would suit a glacier, Mr. Tarr [the director] contemplates a
group of grim-faced, wretched characters whose agricultural collective
has fallen into decay, and who engage in desperate forms of chicanery
as a way of denying their failure."  If you love Tarkovsky, Sakurov, and Hou Hsiao Hsien, this is the next step and it does stand in that league.  The Rotten Tomatoes reviews are very good too, noting there is a selection bias in who watches in the first place.  Here is a review from a guy who started off totally unconvinced but was pulled in.  Hardly anyone knows this movie, I can't imagine why.

“Pleonasms are abundant.”

by  Tyler Cowen in

Pleonasms are abundant.  "I done done it" (have done it or did do it).  "Durin' the while."  "In this day and time."  "I thought it would surely, undoubtedly turn cold."  "A small, little bitty hole."  "Jane's a tol'able big, large, fleshy woman."  "I ginerally, usually take a dram mornin's."  "These ridges is might' nigh straight up and down, and, as the feller said, perpendic'lar."

Everywhere in the mountains we hear of biscuit-bread, ham-meat, rifle-gun, rock-clift, ridin'-critter, cow-brute, man-person, women-folks, preacher-man, granny-woman and neighbor-people.  In this category belong the famous double-barreled pronouns: we-all and you-all in Kentucky and you-uns and we-uns in Carolina and Tennessee.  (I have even heard such locution as this: "Let's we-uns all go over to youerunses house.")

That is from the often quite interesting Our Southern Highlanders: A Narrative of Adventure in the Southern Appalachians and a Study of Life Among the Mountaineers, by Horace Kephart, recommended to me by a loyal MR reader.

To think that "cow-brute" is a pleonasm is truly very excellent.  I might add that the discussion of the triple and quadruple and indeed quintuple negative is of interest: "I ain't never seen no men-folks of no kind do no washin'."

Stating the obvious

by  Tyler Cowen in

"We have very few good examples to guide us," said William G. Gale, a senior fellow at the Brookings Institution, the liberal-leaning research organization.  "I don't know of any convincing evidence that what has been proposed is going to be enough."

Here is the article, from today's NYT.  I would reword this slightly, so as to indicate that progrram size alone does not guarantee success.  In fact the larger the stimulus becomes, the fewer good examples we have to guide us.  Aggregate demand macroeconomics does add a great deal of value to our understanding of the economy, but as in all macroeconomic theories the limits to our knowledge are quite severe.