Category: Current Affairs

A loyal MR reader asks:

When does Italy leave the EC?  What are the likely costs of doing so?

Italy won’t leave the EC anytime soon, why should they?  I also don’t think Italy will leave the Eurozone.  It does give them an overvalued currency, but that is only the nominal exchange rate.  In the long run prices of exports can fall so the real exchange rate ends up where it should be.  In other words, the problem will cure itself with the passage of time, noting that Italian wages and prices are often sticky.  But everything adjusts, sooner or later.  If Italy can live with the Euro today, tomorrow will be just a wee bit easier.

Leaving the Eurozone would make it very hard for Italy to borrow at good rates again.  Plus the real value of their debt would rise considerably.  Nope, I don’t think they will do it.

#whatever in a series of 50.

1. Some brain injuries make people more like consequentialists: "Damage to an area near the center of the brain, several inches behind
the eyes, transforms the way people make moral judgments in
life-or-death situations, scientists are reporting.  In a new study,
people with this rare injury expressed increased willingness to kill or
harm another person if doing so would save others’ lives."

2. Apropos Alex, here is Dave Leonhardt on credit: "It’s easy to see everything since then as a step in the wrong
direction, to romanticize a time when debt was less common.  But think
about what life was like before easy money.  Think about how hard it
would be to buy a house or pay for college if a 42 percent interest
rate still seemed normal. Some of the changes are surprisingly
recent.  Just a generation ago, a temporary setback, like illness,
divorce or job loss, was much more likely to force a family to take
drastic measures than it is today.  That’s in large measure because of
debt, which allows families to smooth out the rough edges of their
financial lives.

You can see this change in the national statistics on consumer
spending.  Since the early 1990s, the peaks in spending growth rates
haven’t been as high as they were in the 1960s, ’70s and ’80s, but the
valleys haven’t been as low, either.  Not coincidentally, recessions
have come less often over the last two decades and they have been
fairly mild."

Some say no.  The challenge:

Name one government programme, in a democracy, for anything other than a war (on people, I mean, not ideas or natural conditions), that has ever forced the entire citizenry to do something as painful and inconvient as cut their energy usage by 20-50%.  If you can do so, I will reconsider my stance. I note that Britain is in the early stages of just such a plan, and if it works, I will eat my words with a glad smile.

On the Republican ticket that is, here is the story.  Here are many more stories.

Advertising Age calculates that around $100 million has been spent blanketing billboards and magazines with images of Bono and other "celebrities", while the total sum raised for Africa is $18 million.

Just to be clear… Total spent on making Bono more famous = $100 million.

Total spent on drugs for Africans = $18 million.

Here is the link, and thanks to Chris F. Masse for the pointer.  Jason Kottke comments. 

A loyal MR reader asks:

Africa.  What are your long term predictions?  Which policies should rich countries adopt?  Which will they adopt?  What can I do?

My long-term prediction is that Africa will stay quite poor.  Rich countries should offer Africa complete free trade, but the benefits of this move are overrated.  Low productivity, and transport costs and corruption within Africa remain the central problems, not foreign tariffs. 

Libertarians are too quick to say that foreign aid is counterproductive.  Most African governments would be corrupt anyway, and there is usually some positive trickle-down from the aid.  The wastage is massive, and I can understand the desire to stop sending government-to-government aid, but there is a real moral dilemma. 

I also think most of Africa is in a Malthusian trap. That is perhaps the better critique of aid, but alas also of trade as well.  But even within this trap, wealthy foreigners can help make the transition from one steady state to another less painful.  And the trap need not hold in every local corridor.  Plus we are offering a lottery ticket (with what p?) out of the trap.  Malthus doesn’t mean we should turn our backs on suffering. 

The intellectual property issues, when it comes to copying drugs, involve an irreconciliable clash between rule and act utilitarianism. 

Africa is a much bigger moral dilemma than most people are willing to admit.  And that moral dilemma appeared pretty big in the first place.

I see some chance that parts of Africa, such as Ghana and Senegal, will escape the Malthusian trap within twenty to thirty years.  That’s the most positive prediction I am willing to make.

You can do some good if you are willing to directly administer medical treatments to Africans, in Africa.

Here is an interesting bit:

“Thinking about problems analytically can easily suppress sympathy for smaller-scale disasters without, our research suggests, producing much of an increase in caring for larger-scale disasters”, the researchers said. "Insight, in this situation, seems to breed callousness".

#14 in a series of 50.

[please discuss] China

I love China, and I love braised pork belly.  That’s why we have China Fact of the Day, and that is why I eat and cook so much Chinese food.  (French food is its only rival.)  The pragmatic optimism of the Chinese is a delight.  It’s a shame about the Great Leap Forward and all that other stuff.  I never get tired of reading books on Mao, the recent biography and the one by his doctor are especially good.  Chinese opera has marvelous quivering timbres, although they are usually ruined by electrification and by recording.  The Story of Qiu Ju is my favorite Chinese film, although there are many good ones.  Soul Mountain is my favorite Chinese novel.  China is also the future of Western classical music.  Tang horses are overpriced but still they are amazing and subtle.

Here is why China will not take over the world, sadly the trip to Shanghai still awaits us.  By the way, their nominal exchange rate peg is not a real peg in the medium- to long-run.

#09 in a series of 50.

In parts of China, black ants are sold by the bagful to be steeped in tea or soaked in liquor as a natural remedy for ailments such as arthritis.

Wang sold packages of ants to the investors for up to as much as 10,000 yuan ($1,290) when they were only worth 200 yuan, China Central Television reported.

Here is the story, the sentence is death.  The total con is estimated at $387 million, what would Gary Becker say, in any case that is a lot of imaginary ants.

One customer had a marriage proposal included at the end – for $44.79, plus shipping and handling.

Here is the link, and thanks to Robert Anderson for the pointer.  Here is an earlier version of the idea, and didn’t Alex have a post on this too? 

Lindsay Lohan reportedly keeps her appendix in her freezer because she was so worried it would end up being sold on eBay she asked the hospital staff if she could take it home.  Additionally, her friend Kimberly Stewart is trying to get her to auction it off for charity herself.

Here is (not much) more.

The American public truly has little tolerance for budget deficits, here is the proof.  An object lesson in the danger of polling…it is also sociologically interesting to see the different slant which Matt Y. gives to the video.  Of course they forget to tell her she would inherit the bonds…

The New York Times reports (and more):

Pizza Patrón, a Dallas-based pizza chain with many Latino customers,
has begun accepting pesos as payment, hitting a nerve in the nationwide
immigration debate.  Critics call the idea unpatriotic.

I see five readings:

1. This is testament to the remarkable new-found stability of the Mexican peso.  Immigrant arrivals still hold pesos rather than ditching them ASAP.

2. People could have free banking or competing currencies already, if they wanted it.

3. The pizza chain is receiving lots of positive publicity with its Latino customers.  I saw this same item on Primer Impacto last week.

4. If everyone accepted pesos, currency substitution effects would make the demand for dollars harder to predict, and thus monetary policy would be harder to implement.  Inflation would accelerate the velocity of monetary circulation to a greater degree, if dollar inflation is high just switch from dollars to pesos.

5. Change is given at the rate of twelve pesos to the dollar, so this is price discrimination against patriotic and possibly unsavvy Mexican customers.

Average wage in Northern Mariana: About half the U.S. federal minimum wage

Current plans of the Democratic Congress: Raise the U.S. minimum wage to $7.25, and apply that raise to Northern Mariana, although maybe not to American Samoa.

Imagine a modern metropolis with no outdoor advertising: no billboards,
no flashing neon signs, no electronic panels with messages crawling
along the bottom. Come the new year, this city of 11 million,
overwhelmed by what the authorities call visual pollution, plans to
press the “delete all” button and offer its residents an unimpeded view
of their surroundings…

The outsized billboards and screens that dominate the skyline,
promoting everything from autos, jeans and cellphones to banks and sex
shops, will have to come down, as will all other forms of publicity in
public space, like distribution of fliers.

The law also
regulates the dimensions of store signs and outlaws any advertising on
the sides of the city’s thousands of buses and taxis.

Here is the full story.  As far as I can tell (my last visit was eight years ago, however), most of it is not down yet.  In any case I suspect the city is more attractive with the commercial angle.  The underlying buildings are mostly ugly, so a fanciful clutter will do better than an attempt at sleek postmodernism.

By the way, it was already the case that most of Sao Paulo’s 13,000 or so outdoor billboards were installed illegally.  The goal is to clear the space entirely, so that any single offender sticks out very obviously and can be prosecuted.  But of course the tipping point matters.  Whatever change ends up in place, I expect a slow creep back towards the status quo ex ante.

Male workers who vow to stay away from prostitutes after year-end celebrations in South Korea are to be rewarded.

The Ministry for Gender Equality is offering cash to
companies whose male employees pledge not to pay for sex after office
parties.

Men are being urged to register on the ministry’s website.  The companies with most pledges will receive a reward.

Note that the vow is awarded, not the abstinence.  The pointer is from Claudio Shikida, Brazilian economist and blogger.