Category: Current Affairs
Price inflation in Syria
…as the conversation deepened and tea flowed, he spoke of prices. Mr. Hamed leads a battalion near Aleppo. The demand for weapons on his turf is so high, and supplies are so short, he said, that he has had to pay more than $4 for a single rifle or machine-gun cartridge. A Kalashnikov assault rifle, he said, costs $2,000 or more.
In the history of conflict, these are high prices…
What will the supply elasticity be?
…full RPG-7 systems (a reusable launcher with two or three high-explosive antitank rounds) cost more than $2,000, and each replacement grenade costs $500. PK machine guns, another common firearm, cost $6,000 to $7,000. No modern infantry rifle is available for less than $900. Some cost several times that. Thus, arming three riflemen, a machine gunner and a man with a rocket-propelled grenade could easily cost a commander more than $10,000 — not counting ammunition.
Because of lack of ammunition, they are using M-16s as sticks, not guns. Here is much more, interesting throughout. For the pointer I thank Peter Somerville on Twitter.
The culture that is Shanghai
Louis Vuitton is courting China’s wealthy with one-of-a-kind shoes and bags it is branding as unique works of art to reclaim its exclusive cachet in the luxury market.
The French luxury brand, a unit of LVMH (LVMH.PA), is set to open its largest China store in Shanghai on Saturday, complete with a gilded spiral staircase and an invitation-only private floor where big spenders can get their hair done while dreaming up designs for custom bags.
“The made-to-order concept is the ultimate luxury,” Louis Vuitton Chief Executive Yves Carcelle told Reuters during a tour of the store, which the company calls a “maison”.
Here is more, via Daniel Lippman.
Clifford Whinston on driverless cars
Here is one good point of many:
Driverless cars don’t need the same wide lanes, which would allow highway authorities to reconfigure roads to allow travel speeds to be raised during peak travel periods. All that is needed would be illuminated lane dividers that can increase the number of lanes available. Driverless cars could take advantage of the extra lane capacity to reduce congestion and delays.
Another design flaw is that highways have been built in terms of width and thickness to accommodate both cars and trucks. The smaller volume of trucks should be handled with one or two wide lanes with a road surface about a foot thick, to withstand trucks’ weight and axle pressure. But the much larger volume of cars—which apply much less axle pressure that damages pavement—need more and narrower lanes that are only a few inches thick.
Building highways that separate cars and trucks by directing them to lanes with the appropriate thickness would save taxpayers a bundle. It would also favor the technology of driverless cars because they would not have to distinguish between cars and trucks and to adjust speeds and positions accordingly.
The full piece is here.
Reversal of fortune markets in everything
Cote, a 56-year-old drywall finisher from Ogunquit, Maine, has found that with a little dye on his eyebrows and in his hair, he looks a lot like the Republican presidential candidate.
Cote starred as Romney in the “Rombo” ad paid for by the Rick Santorum campaign, and played him in a yet-to-be-aired reality TV show in which presidential impersonators live in a house together. (Fake Sarah Palin created drama by mistaking sleeping pills for allergy medication.)
Now, with the general election campaign just ahead, Cote is hoping to land gigs at corporate events, commercial shoots and TV shows that have meant big paydays for a lucky few candidate impersonators. He said he had already booked some “top secret” photo shoots that will have him on magazine covers and California billboards this summer.
It’s a strange place to be for Cote, who didn’t go to college, doesn’t have a savings account and is divorced — all traits that distinguish him from the erudite, wealthy and long-married 65-year-old Romney.
And yet there is competition:
Cote’s voice is higher than Romney’s, and he has a heavy New England accent. Then there’s the competition: With the race heating up, more wannabe Romneys are popping up, many with professional training in acting.
“This is going to be a challenge,” said Dustin Gold, Cote’s manager. “We’re taking a drywaller, trying to turn him into a country club guy.”
I wonder if it works the other way around. The article is interesting throughout, including the photo and video, and for the pointer I thank Daniel Lippman.
The new tug of war over Medicaid
My New York Times column is here, it has two parts, a prediction and a proposal. The prediction:
Medicaid has never been especially popular, and when its expanded role becomes more widely understood, it is likely to become less popular still.
I am not expecting that governors will turn away nearly-free federal dollars outright. (Though probably some will, here is an update on how the governors are reacting, which as I see it involves lots of bargaining.) I am predicting that the extreme subsidies for states to hop on to the expansion will at some point weaken or go away.
Change might come soon. If Mitt Romney wins the presidential election, and if Republicans control both houses of Congress, they could turn Medicaid into a block grant program, where states can spend the money as they wish.
Even if President Obama is re-elected, some state governments will work hard to reduce the number of people covered by Medicaid. State officials know that limiting Medicaid will place more individuals in the new, subsidized health care exchanges, and that those bills will be paid by the federal government. The basic dynamic is that state and federal governments have opposite incentives as to how many people should be kept in Medicaid.
The proposal? Here is my best take on how Obamacare might evolve into something more practical:
1. Many of the states slip out of expanded Medicaid obligations and many employers slip out of expanded mandate obligations to cover their employees (waivers, willingness to pay fines, lobby to have the law altered). The system evolves toward a form of means-tested vouchers, sold on the exchanges.
2. The subsidies for the private exchanges become so expensive that the individual mandate is limited in scope. Eventually the mandate applies to catastrophic coverage only.
3. For catastrophic coverage, we move toward a mandate and subsidized exchanges, and for non-catastrophic coverage there is no mandate and health savings accounts, the latter supplemented by public contributions if needed or if you wish.
I am not predicting that, nor is it my first or even preferred second-best solution. It is however the best solution I can see evolving out of ACA in its current form.
Spain estimate of the day
Yiagos Alexopoulos at Credit Suisse estimates that Spanish capital outflows are currently running at an annualised rate of 50 per cent of GDP.
Here is more, including a scary picture.
Medicaid Wars, Episode IV
While the resistance of Republican governors has dominated the debate over the health-care law in the wake of last month’s Supreme Court decision to uphold it, a number of Democratic governors are also quietly voicing concerns about a key provision to expand coverage.
At least seven Democratic governors have been noncommittal about their willingness to go along with expanding their Medicaid programs, the chief means by which the law would extend coverage to millions of Americans with incomes below or near the poverty line.
Here is more.
Pictures of Spain
Grandiose projects across Spain now sit empty and dying. The New York Times focuses in on Ciudad de la Luz, a mega-movie studio built far from cultural centers that is now foundering.
Ciudad de la Luz has become a prominent example of Valencia’s frenzy of modern-day pyramid building, which left a legacy of $25.5 billion in regional debt and bankrupt infrastructure projects as well as the backlash now building against it.
Valencia’s other investments included a harbor for superyachts, an opera house styled like the one in Sydney, Australia, a futuristic science museum, the biggest aquarium in Europe and a sail-shaped bridge, not to mention an airport that never had a single arrival or departure. It also attracted extravagant events like the America’s Cup and Formula One racing.
The Daily Mail takes a look at Spain’s “ghost airport,” a billion Euro project that was meant to serve 5 million passengers a year and is now closed after just three years in operation.
The Socialist regional government spent millions propping up the venue, promoting the project with advertising campaigns and approving a €140 million guarantee to keep it afloat.
But, last October, it saw its final commercial flight, by Vueling. The airport remained open for another six months, the staff still being paid to deal with a handful of private arrivals.
It finally closed in April, but even though it is now closed to air traffic, maintenance tasks still have to be carried out.
The 4,000 metre runway has to be continually painted with yellow crosses, so pilots flying over the airport will know they cannot land there.
Private money appears to have also taken a bath on many of these projects although it’s always difficult to say after government guarantees and kickbacks. The Times quotes one tourist on the meaning:
“I understand now why there’s a financial crisis in Europe,” said Bryce Matuschka of New Zealand. “The bridge is a real work of art, and the aquarium is great, but for some of these buildings you just have to ask, What was all that money spent for?”
I don’t think that’s quite right. My view is that rather than causing a crisis, bad investments are mostly masked by a boom and revealed by a crisis. Still, “infrastructure spending” doesn’t always create jobs; sometimes it’s better to stick with slow rail and sewers.
Private Firefighters
Colorado Springs: When firefighter Eric Morris shows up at wildfires across the West, locals battling the flames sometimes look at him and wonder who sent him.
The answer isn’t a public agency. It’s an insurance company.
Morris is among a group of private firefighters hired in recent years to protect homes with high-end insurance policies. In a wildfire season that is one of the busiest and most destructive ever to hit the region, authorities and residents say their help is welcome.
…For insurers, hiring them is worth the cost. They spend thousands on well-equipped, federally rated firefighters, potentially saving hundreds of thousands, if not millions, of dollars to replace a home and its contents.
Private fire fighters benefit the insured and also the non-insured because the extra manpower lets public firefighters divert their attention elsewhere. Since there are spillovers, private firefighters are under supplied.
Hat tip: Tyler Watts.
Re-running the Stanford experiment in Turkish prisons
It goes on today, more or less:
The problem confronting the conscripts nonetheless extends far beyond commanders who are drunk with power. In perhaps the strangest twist in the story of the disko, [rights activist Tolga] Islam says prison guards themselves are chosen from the ranks of conscripts, often from the same group that they oversee — and sometimes torture. “These are people who have been taken from the same group of soldiers, some know each other. And what is most incredible is that, from what we understand, commanders don’t necessarily tell guards how to torture or how far to go. In the disko, they give them impunity to do what they wish.”
It is chillingly similar, Islam says, to a notorious 1971 experiment by Stanford psychologist Philip Zimbardo, where participants were randomly given roles as guards or prisoners in a mock prison. Within less than a week, the mock guards had quickly “become sadistic,” subjecting some prisoners to psychological torture. The experiment was shut down after only six days.
“The diskos are the perfect real life example of this experiment. Guards begin to think, ‘We have this person in our prison for 24 hours. Nobody will stop us if we torture him.’” That disturbing license for abuse leads prison guards develop their own practices of torture, from slapping inmates who make eye contact with guards to severe and prolonged beatings, deliberate malnourishment, confining recruits to cramped and filthy spaces, or leaving them shackled outside in the sun for prolonged periods of time.
While former military judge Kardaş says that such practices follow a “hard logic” of instilling fear and a sense of arbitrary control among recruits, at times even that vague reason for torture seems to be absent. In Uğur’s case, it is difficult to understand what the torture was meant to communicate, given that his unit had just days left before its term of service was over. “The only way to explain it is that there’s a culture of impunity here, one that gives people unimaginable power and allows abuse to go on for years,” Islam argues.
Here is much more, by Noah Blaser, sad story but compelling reading.
Weather or Not People are Bayesians
A new paper by Tatyana Deryugina finds that people make inferences about global warming from local weather but, given that they use local information, their inferences are mostly consistent with rational updating with some deviations in the very short run. Much more important than local weather, however, are other factors such as education and ideology.
…a Bayesian who is perfectly informed about world weather and science should
not give signicant weight to recent weather in his county when updating his beliefs. However, I
find that some forms of temperature and precipitation abnormalities have an effect over short time
scales of 1-2 days. Average weekly deviations and extreme events such as heat waves or droughts
weeks or months before the survey have no effect on beliefs, suggesting that the short run effects
are temporary and due to psychological heuristics.Unlike previous studies, I also consider the effects of prolonged periods (1-12 months) of
abnormal weather. I find that abnormally low precipitation and abnormally high temperatures are
signicant predictors of the degree to which people believe the effects of global warming have
already begun to happen. The estimated patterns are consistent with how a Bayesian who only
observes local information would update his beliefs, but I cannot rule out that informed individuals
simply overweight their local weather.…The marginal effects of education, relative to high school [on “the effects of global warming have already begun to happen”] is 0.045 for “some college”, 0.101 for “college”, and 0.166 for “graduate school” A day on which precipitation is 2.5 standard deviations above normal would produce a change
in beliefs about the timing of global warming comparable to the estimated correlation between beliefs and “some college”. Precipitation would have to be 8 standard deviations above normal to produce a change in beliefs comparable to the coefcient of “graduate school”…In addition, the [weather] effects are short-lived because the average standard deviation over the past week does not change beliefs.
Hat tip: @jzilinksy via @bryan_caplan.
Addendum: Yes, the title of the post was on purpose!
The pivot
…since the Supreme Court upheld the Democrats’ 2010 health care law, Republicans, led by Mitt Romney, have reversed tactics and attacked the president and Democrats in Congress by saying that Medicare will be cut too much as part of that law. Republicans plan to hold another vote to repeal the law in the House next week, though any such measure would die in the Democratic-controlled Senate.
“Obamacare cuts Medicare — cuts Medicare — by approximately $500 billion,” Mr. Romney has told audiences.
I have been predicting this. There is more here. Paul Ryan offered this account:
Mr. Ryan, of Wisconsin, was unavailable for comment, but, pressed on the issue on ABC’s “This Week” on Sunday, he said: “Well, our budget keeps that money for Medicare to extend its solvency. What Obamacare does is it takes that money from Medicare to spend on Obamacare.”
Twitter is slow and stalling, so here goes
Sad how the current outsourcing debate is turning so many progressives into old school economic nationalists.
That’s from me.
From Austan Goolsbee
Of all the public reactions to last Thursday’s surprise ruling from the Supreme Court on the Affordable Care Act, one of the most interesting came from the markets: Nothing happened.
Here is more, “The Supreme Court Rules, Markets Yawn.”
Joseph Cropsey has passed away at age 92
There is one account here, very sad news of course.
For the notice I thank John Farr.