Category: Food and Drink

The separating equilibrium (a ban by any other name?)

by  Tyler Cowen in

Governor Ron DeSantis would not let cruise ships sailing from Florida mandate vaccination?  Well, this is what you end up with:

Now we know the true cost of not getting vaccinated for COVID-19: You won’t be able to order sushi when cruising on Royal Caribbean‘s Freedom of the Seas.

Here is a list of all the other restrictions for the unvaccinated cruise passengers.  Via Stephen Jones.

Roger Scruton Hungarian coffee shop markets in everything

by  Tyler Cowen in

When the philosopher Sir Roger Scruton died last year Boris Johnson called him “the greatest modern conservative thinker”.

It seems that he had an even greater admirer in Viktor Orban, the right-wing prime minister of Hungary, whose allies have poured £1.5 million into a chain of coffee shops in Scruton’s memory. The first opened in November in Budapest and is filled with Scruton memorabilia donated by his widow, Sophie.

More cafés will follow, says John O’Sullivan, a former speechwriter for Margaret Thatcher who now chairs a Hungarian think tank. The £1.5 million investment comes from the state-sponsored Batthyany foundation, which also paid for the historian Norman Stone to write a history of Hungary that praised Orban’s leadership.

Here is the full link from the London Times (gated).  For the pointer I thank Jason D.

Markets in everything Japanese melon pan mask edition

by  Tyler Cowen in

Melon pan is not only delicious, but one Japanese company also thinks it can make a good mask.

Osaka-based experimental think tank Goku no Kimochi The Labo has created “Mask Pan” or “Mask Bread” after college students from Fukuoka and Okinawa decided they want to sniff the smell of bread all the time. What better way to do that than wearing melon pan on your face?

FNN reports that Goku no Kimochi The Labo roped in famed melon pan specialty shop Melon de Melon to bake the bread. For each Mask Pan, the middle is carved out, making space for the wearer’s mouth and nose. As silly as this might seem (and goodness does it ever), the melon pan’s signature crunchy outside supposedly has a degree of effectiveness.

Here is the full story, via Shaffin Shariff.

The regulatory cicada culture that is American

by  Tyler Cowen in

As millions of cicadas began emerging in Loudoun County about two weeks ago, Chef Tobias Padovano at Cocina on Market in Leesburg began foraging for the noisy insects and serving them in tacos.

That is, until last week when a customer ordered and ate the cicada tacos, only to later complain to the Loudoun County Health Department, which then forced the restaurant to temporarily stop serving them.

Victor Avitto, an environmental health supervisor with the Loudoun County Health Department, told the Times-Mirror that the cicadas needed to be sourced from an approved food source, and only then it would it be fine to serve them.

“They need to be sourced from a farm that is inspected and certified,” he said.

On Wednesday, Padovano said he found an online source for cicadas from Dubai which was approved by Avitto, allowing for the sought-after cicada tacos to again be served.

Here is the full story, via HHL.

Is the second-cheapest wine a rip-off?

by  Tyler Cowen in

The standard economic analysis of product-line pricing by Mussa and Rosen (1978) implies that higher-quality varieties command higher absolute mark-ups. It is widely claimed that this property does not apply to wine lists. Restaurateurs are believed to overprice the second-cheapest wine to exploit naïve diners embarrassed to choose the cheapest option. This paper investigates which view is correct. We find that the mark-up on the second cheapest wine is significantly below that on the four next more expensive wines. It is an urban myth that the second-cheapest wine is an especially bad buy. Percentage mark-ups are highest on mid-range wines. This is consistent with the profit-maximising pricing of a vertically differentiated product line with no behavioral elements, although other factors may contribute to the price pattern.

That is from a new paper by David de Meza and Vikram Pathania, via The Browser (which is worth paying for).

Why the lab leak theory matters

by  Tyler Cowen in

Here is Ross Douthat at the NYT:

…there’s a pretty big difference between a world where the Chinese regime can say, We weren’t responsible for Covid but we crushed the virus and the West did not, because we’re strong and they’re decadent, and a world where this was basically their Chernobyl except their incompetence and cover-up sickened not just one of their own cities but also the entire globe.

The latter scenario would also open a debate about how the United States should try to enforce international scientific research safeguards, or how we should operate in a world where they can’t be reasonably enforced.

I agree, and would add one point about why this matters so much.  “Our wet market was low quality and poorly governed” is a story consistent with the Chinese elites not being entirely at fault.  Wet markets, after all, are a kind of atavism, and China knows the country is going to evolve away from them over time.  They represent the old order.  You can think of the CCP as both building infrastructure and moving the country’s food markets into modernity (that’s infrastructure too, isn’t it?), albeit with lags.  “We waited too long to get rid of the wet markets” is bad, but if anything suggests the CCP should have done all the more to revolutionize and modernize China.  In contrast, the story of “our government-run research labs are low quality and poorly governed”…that seems to place the blame entirely on the shoulders of the CCP and also on its technocratic, modernizing tendencies.  Under that account, the CCP spread something that “the earlier China” did not, and that strikes strongly at the heart of CCP legitimacy.  Keep in mind how much the Chinese apply a historical perspective to everything.

A number of you have asked me what I think of the lab leak hypothesis.  A few months ago I placed the chance of it at 20-30%, as a number of private correspondents can attest.  Currently I am up to 50-60%.

My Conversation with Mark Carney

by  Tyler Cowen in

Here is the audio, video, and transcript, definitely recommended.  Here is part of his closing statement:

COWEN: Last question. You wake up each morning. Surely you still think about central banking. What for you is the open question about central banking, where you don’t know the answer, that you think about the most?

CARNEY: I gave a speech at Jackson Hole on this issue, and I started — which is the future of the international monetary system and how we adjust the international monetary system.

I’ll say parenthetically that we’re potentially headed to another example of where the structure of the system is going to cause big problems for the global economy. Because it’s quite realistic, sadly, that we’re going to have a fairly divergent recovery with a number of emerging, developing economies really lagging because of COVID — not vaccinated, limited policy space, and the knock-on effects, while major advanced economies move forward. That’s a world where rates rise and the US dollar strengthens and you get this asymmetry, and the challenge of the way our system works bears down on these economies. I think about that a lot.

And this:

COWEN: If you’re speaking in a meeting as the central bank president, do you prefer to speak first or speak last?

CARNEY: I prefer — I tend to speak early. Yes, I tend to speak early. I’m not sure that’s always the best strategy, but I tend to speak early. I will say, one thing that’s happened over the years at places like the G20, I noticed, is the prevalence of social media and devices. The audience drifts away over time, even at the G20, even on a discussion of the global economy.

And from the horse’s mouth, so to speak, do note this:

CARNEY: …I think you’re absolutely right on that, there wasn’t. It is revealed that there wasn’t a liquidity trap.

Rooftops!  Finally, on more important matters:

COWEN: Are the Toronto Raptors doomed to be, on average, a subpar NBA team due to higher taxes?

And:

COWEN: What’s the best Clash album?

CARNEY: Fantastic question. London Calling, and one of my best memories — I was very fortunate; they came to Edmonton when I was in 12th grade in high school. I went to the concert and that was fantastic, yes.

COWEN: I also saw them, I think in what would have been 12th grade had I been in school that year. But London Calling is too commercial for me. I much prefer the Green album, like “Career Opportunities,” “Janie Jones.”

CARNEY: Well, “I Fought the Law” was the best song at the concert. I have to say, they had got to Combat Rock by this time, which was relative — [laughs] Combat Rock was more commercial, I thought, than London Calling, although they threw it all out the door with Sandinista!

Again, here is Mark’s new book Value(s): Building a Better World For All.

My Conversation with Pierpaolo Barbieri

by  Tyler Cowen in

Here is the audio, visual, and transcript.  Here is part of the summary:

Pierpaolo joined Tyler to discuss why the Mexican banking system only serves 30 percent of Mexicans, which country will be the first to go cashless, the implications of a digital yuan, whether Miami will overtake São Paolo as the tech center of Latin America, how he hopes to make Ualá the Facebook of FinTech, Argentina’s bipolar fiscal policy, his transition from historian to startup founder, the novels of Michel Houellebecq, Nazi economic policy, why you can find amazing and cheap pasta in Argentina, why Jorge Luis Borges might be his favorite philosopher, the advice he’d give to his 18-year-old self, his friendship with Niall Ferguson, the political legacy of the Spanish Civil War, why he stopped sending emails from bed, and more.

Here is just one bit:

COWEN: Why did Argentina’s liberalization attempt under Macri fail?

BARBIERI: That’s a great question. There’s a very big ongoing debate about that. I think that there was a huge divergence between fiscal policy and monetary policy in the first two years of the Macri administration.

The fiscal consolidation was not done fast enough in 2016 and 2017 and then needed to accelerate dramatically after the taper tantrum, if you want to call it, or perceived higher global rates of 2018. So Macri had to run to the IMF and then do a lot of fiscal consolidation — that hadn’t been done in ’16 and ’17 — in’18 and ’19. Ultimately, that’s why he lost the election.

Generally speaking, that’s the short-term electoral answer. There’s a wider answer, which is that I think that many of the deep reforms that Argentina needed lack wide consensus. So I think there’s no question that Argentina needs to modify how the state spends money and its propensity to have larger fiscal deficits that eventually need to be monetized. Then we restart the process.

There’s a great scholar locally, Pablo Gerchunoff, who’s written a very good paper that analyzes Argentine economic history since the 1950s and shows how we move very schizophrenically between two models, one with a high exchange rate, where we all want to export a lot, and then when elections approach, people want a stronger local currency so that we can import a lot and feel richer.

The two models don’t have a wide acceptance on what are the reforms that are needed. I think that, in retrospect, Macri would say that he didn’t seek enough of a wider backing for the kind of reforms that he needed to enact — like Spain did in 1975, if you will, or Chile did after Pinochet — having some basic agreements with the opposition that would outlive a defeat in the elections.

And:

COWEN: The best movie from Argentina — is it Nine Queens, Nueve reinas?

BARBIERI: It is a strong contender, but I would think El secreto de sus ojos, The Secret in Their Eyes, is my favorite film about Argentina because of what it says about the very difficult period of modernization, and in particular, the horrors of the last military regime that marked us so much that it still defines our politics 50 years since.

Recommended.

From the comments, on restaurant labor and UI

by  Tyler Cowen in

I own a restaurant and bar in a rural community in western Washington. Our state minimum wage is currently $13.69 per hour which is what we pay our tipped front of the house employees. After tips these employees are making $25 to $35 per hour. Not bad for a job that requires no formal training.

We start our back of the house cooks at $17 hour and up. For full time employees we also offer health insurance.

We are still having major problems finding employees. I have ads for employees that get zero responses. I am not alone in this. Everyone in our area from Costco, to Walmart, to all of the construction companies which pay very well can’t find help. In all my years I have never experienced a labor market like this.

My anecdotal experience from talking with local individuals is that they are enjoying the paid time off and have no plans to come back until the bennies run out.

For those of you who think you can just pay more and raise prices by a nickel, you are out of touch. As a point of reference, in 2020 the minimum wage increased from $12 hour to $13.50. The increase in costs to my business based on 2019 hours was over $65,000 which is most of my profit. Then covid hit.

Finally, keep in mind that most restaurant workers are not going to learn to code. I’ve have had recovering drug addicts, felons, and people with other social and mental disorders work for us. The restaurant business is an opportunity for many people at the margins of society to be productive and to get their lives together. We give them structure, training, and a paycheck. But the big question is how can you pay someone $15 hour who is only giving you $7 of value? In the long run you can’t.

The current policies of paying people not to work in the long run is going to hurt a lot of small businesses and more importantly, a lot of people in the margins of society.

And Slocum chimes in:

Everyone commenting here and every restaurant owner out there facing labor shortages is perfectly aware that if they raise wages high enough, they’ll get all the applicants they could ever want.

But some of the commenters here (and restaurant owners themselves) also know that restaurant profit margins are not large and that they have limited pricing power because restaurant meals are highly elastic, and that as restaurants raise prices, their customers will come less frequently and buy less when they do come. They also know that wages are sticky — that when the pandemic UI ends, they won’t be able to simply reduce wages back to previous levels without having a big impact on employee morale.

And as a business owner, just how big a bidding war would you want to get into just to be able to bribe the least ambitious prospects into getting off their couches?

Here is the link to the comments.

Does performance pay increase alcohol and drug use?

by  Tyler Cowen in

I would like to see this replicated, but the result is interesting nonetheless:

Using US panel data on young workers, we demonstrate that those who receive performance pay are more likely to consume alcohol and illicit drugs. Recognizing that this likely reflects worker sorting, we first control for risk, ability, and personality proxies. We further mitigate sorting concerns by introducing worker fixed effects, worker-employer match fixed effects, and worker-employer-occupation match fixed effects. Finally, we present fixed effect IV estimates. All of these estimates continue to indicate a greater likelihood of substance use when a worker receives performance pay. The results support conjectures that stress and effort increase with performance pay and that alcohol and drug use is a coping mechanism for workers.

By Benjamin Arta, Colin P. Green, and John S. Heywood, via the excellent Kevin Lewis.