Category: Law
The culture that is Germany why the eurozone will fail
A society in Germany which advises on etiquette and social behaviour has called for kissing to be banned in the workplace.
The Knigge Society says the practice of greeting colleagues and business partners with a kiss on the cheek is uncomfortable for many Germans.
The society’s chairman, Hans-Michael Klein, says he has received concerned emails from workers on the issue.
He advises people in the workplace to stick to the traditional handshake.
Speaking to the BBC, he admitted it would be impossible to ban kissing in the workplace outright.
“But we have to protect people who don’t want to be kissed,” Mr Klein added.
“So we are suggesting that if people don’t mind it, they announce it with a little paper message placed on their desk.”
Mr Klein said he had received 50 emails this year alone on the rise of kissing on the cheek – sometimes both cheeks – as a greeting at work.
“People say this is not typical German behaviour,” he said.
“It has come from places like Italy, France and South America, and belongs in a specific cultural context. We don’t like it, they say.”
The society held a meeting on the issue, and carried out a survey of people both on the street and at their seminars, he said.
“Most people said they didn’t like it. They feel there is somehow an erotic aspect to it – a form of body contact which can be used by men to get close to a woman.”
He said there is, in Europe, a “social distance zone” of 60cm (23in) which should be observed.
The Knigge Society, named after the German term for a guide to good manners, is based in a castle 80km from Dortmund in western Germany.
It has reportedly previously ruled on the correct way to end a relationship via text message, and how to deal with a runny nose in public.
The link is here and for the pointer I thank Jacob Levy on Twitter. When the Knigge Society issues its proclamation on the Eurobond idea, I will be sure to let you know.
In German, here are some other Knigge rules, including for soup. Here is their home page. Here is a Knigge quiz: “Wie höflich lieben Sie?” [How politely do you love?] And more tips, including “Wie viel Kinderlärm ist erlaubt?”, buffet rules, and “Dos und Don’ts bei der Baby-Visite.” Here are rules for behaving yourself in 13 different countries, again all in German. For the USA, don’t respond with an elogy to “How are you?”, compliment people on their achievement and teamwork rather than their looks, and “Bedanken Sie sich ständig!”
iPad markets in everything, and fungi too
New York entrepreneur John Vaccaro bought a bunch of Bernie Madoff’s expensive tailored clothing at the federal auction of Madoff’s property in November, 2010, and has resewn them into iPad covers, which he is selling (at rather luxurious prices) through his recently-launched clothing label Frederick James. Vaccaro has estimated that he has enough material to make 31 covers. Perhaps when that runs out, he can start making them from Madoff’s new clothes. Personally I prefer bright orange canvas to dull gray cashmere, anyway. [via CNN]
Here is the link and for the pointer I thank Andrew Zumwalt. From another direction, Jim Swift directs my attention to this iPad app which helps auction off parking spaces.
Via Mark Thorson, here is plants trading with fungi:
Beneath your feet, plants and fungi are exchanging nutrients in a marketplace where generosity is rewarded and cheating punished. The two kingdoms were known to exchange nutrients at root level – now, researchers have shown that they have evolved ways to enforce fair trading.
Animal rights nationalism
I guess they don’t care about the Turkish animals, a funny position for a group with trans-species (but not trans-national?) concerns:
Animal rights activists in Australia have alleged that Australian sheep and cattle are being mistreated in Turkey and stated they will voice their claims at a Senate hearing on Wednesday, an Australian newspaper said on Wednesday.
According to The Australian, animal rights investigators will present fresh claims of sheep and cattle being mistreated in Turkey to Agriculture Minister Joe Ludwig on Wednesday ahead of a Senate hearing into the live export industry.
The daily said Animals Australia, a federation of civil society groups that deals with animal welfare and animal rights issues, has new video footage of livestock being handled and slaughtered in ways that breach international animal welfare standards.
The footage was reportedly taken recently after the group went to Turkey to investigate the treatment of Australian animals for the Senate inquiry into the issue and the independent investigation of the trade being carried out by former diplomat Bill Farmer.
According to the report, investigators said they were unable to confirm that animals documented in the footage were Australian, only that Australian livestock was slaughtered at the Turkish facilities.
The Australians who shipped these animals to Turkey seem oddly exempt from criticism, or did the Turks come, sneak across the border, and capture the sheep and cattle with nets?
Imagine further applications of the principle of animal rights nationalism. Should the nations of the South put “(im)migration restrictions” on the birds coming down from the North each wintertime? Some ideas are too silly to contemplate.
For the pointer I thank Ashok Hariharan.
Markets in everything
In the UK, I have heard they prefer cricket, yet on Amazon sales of aluminum baseball bats are robust.
For the pointer I thank Chris F. Masse.
Bus Deregulation in Germany
In order to protect the railroads, inter-city bus service has been basically illegal in Germany since the 1930s.
NYTimes: “It’s an anachronism,” said Roderick Donker van Heel, general manager of Deutsche Touring, which offers bus service from Frankfurt and other cities to foreign destinations, but is usually not even allowed to drop off passengers within Germany.
The anti-bus law is also a reminder that, despite steady changes over the last decade, barriers to free enterprise remain in Europe. Germany and other countries still shield certain professions and industries from new competitors with thickets of regulation.
“Deutsche Bahn can do whatever it wants,” Mr. Donker van Heel said, referring to the state-owned railroad. “The airlines can do what they want.” But when a bus company wants to offer intercity service, “the answer is no. And we’re in the year 2010.”
A court-case and now a new law, however, mean that buses are to be allowed.
The U.S. also protected its railroads for some forty years by regulating airlines and trucking. There are some efficiency reasons why one might want to protect a network industry, although a straightforward subsidy is preferable to regulation of competitors, but the capture theory seems to fits the facts better, especially for railroads.
We still subsidize railroads in the U.S. and talk about subsidizing high-speed railroads even more, meanwhile bus travel is expanding and modernizing. Randal O’Toole covers some issues:
Intercity buses carry at least 50 percent more passenger miles than Amtrak in Amtrak’s showcase Northeast Corridor. They do so with almost no subsidies and at fares that are about a third of Amtrak’s regular train fares and little more than 10 percent of Amtrak’s high-speed Acela fares. Intercity buses are safe and environmentally friendly, suffering almost 80 percent fewer fatalities per billion passenger miles than Amtrak and using 60 percent less energy per passenger mile than Amtrak.
Today, in fact, I am blogging from a bus. I appreciate the on-board wireless and the fact that on entering the bus I was neither searched, groped nor scanned.
Hat tip: Greg Roscetti.
Ukraine Modigliani-Miller tax arbitrage
Today I received some tax saving wisdom from a taxi driver in Ukraine. He told me that people who import cars to Ukraine sometimes cut the car in two separate pieces and carry it through the customs this way. By doing this, they save a fortune on import tax. A car carried in two pieces is seen as spare parts and therefore is taxed at a much lower rate than a normal car.
When in Ukraine, the car is welded back into one piece. After that, it’s usually sold locally at a good price. I looked through forums and apparently this is a common practise in developing countries, particularly in post-Soviet states such as Ukraine.
The full story, with more pictures, is here. For the pointer I thank Joe C.
Jack Goldstone is now blogging
*The* Jack Goldstone, who by the way is a colleague at GMU. Find his posts here.
FDA: Moving to a Safety-Only System
It now costs about a billion dollars to develop a new drug which means that many potentially beneficial drugs are lost. Economist Michele Boldrin and physician S. Joushua Swamidass explain the problem and suggest a new approach:
Every drug approval requires a massive bet—so massive that only very large companies can afford it. Too many drugs become profitable only when the expected payoff is in the billions….in this high-stakes environment it is difficult to justify developing drugs for rare diseases. They simply do not make enough money to pay for their development….How many potentially good drugs are dropped in silence every year?
Finding treatments for rare disease should concern us all. And as we look closely at genetic signatures of important diseases, we find that each common disease is composed of several rare diseases that only appear the same on the outside.
Nowhere is this truer than with cancer. Every patient’s tumor is genetically unique. That means most cancer patients have in effect a rare disease that may benefit from a drug that works for only a small number of other patients.
…We can reduce the cost of the drug companies’ bet by returning the FDA to its earlier mission of ensuring safety and leaving proof of efficacy for post-approval studies and surveillance.
Harvard Neurologist Peter Lansbury made a similar argument several years ago:
There are also scientific reasons to replace Phase 3. The reasoning behind the Phase 3 requirement — that the average efficacy of a drug is relevant to an individual patient — flies in the face of what we now know about drug responsiveness. Very few drugs are effective in all individuals. In fact, most are not effective in large portions of the population, for reasons that we are just beginning to understand.
It’s much easier to get approval for drugs that are marginally effective in, say, half the population than drugs that are very effective in a small fraction of patients. This statistical barrier discourages the pharmaceutical industry from even beginning to attack diseases, such as Parkinson’s, that are likely to have several subtypes, each of which may respond to a different drug. These drugs are the underappreciated casualties of the Phase 3 requirement; they will never be developed because the risk of failure at Phase 3 is simply too great.
Boldrin and Swamidass offer another suggestion:
In exchange for this simplification, companies would sell medications at a regulated price equal to total economic cost until proven effective, after which the FDA would allow the medications to be sold at market prices. In this way, companies would face strong incentives to conduct or fund appropriate efficacy studies. A “progressive” approval system like this would give cures for rare diseases a fighting chance and substantially reduce the risks and cost of developing safe new drugs.
Instead of price regulations I have argued for more publicly paid for efficacy studies, to be produced by the NIH and other similar institutions. Third party efficacy studies would have the added benefit of being less subject to bias.
Importantly, we already have good information on what a safety-only system would look like: the off-label market. Drugs prescribed off-label have been through FDA required safety trials but not through FDA-approved efficacy trials for the prescribed use. The off-label market has its problems but it is vital to modern medicine because the cutting edge of treatment advances at a far faster rate than does the FDA (hence, a majority of cancer and AIDS prescriptions are often off-label, see my original study and this summary with Dan Klein). In the off-label market, firms are not allowed to advertise the off-label use which also gives them an incentive, above and beyond the sales and reputation incentives, to conduct further efficacy studies. A similar approach might be adopted in a safety-only system.
Addendum: Kevin Outterson at The Incidental Economist and Bill Gardner at Something Not Unlike Research offer useful comments.
Nigerian markets in everything facts of the day
Lagos bigwigs have long paid on-duty local cops to speed them through jams by riding shotgun with machine guns and menacing other drivers with bullwhips.
And:
In 2009, the latest year for such data, more than 2,600 Lagosians were forced to take a psychiatric exam at the Federal Neuro-Psychiatric Hospital because of wrong-way driving, according to the state transportation commissioner.
Officials at the hospital say that the number was slightly lower and that they couldn’t recall the last person to fail the test. Failure would trigger more outpatient tests—and mean continued impoundment for the offending car, officials say.
The article is interesting throughout.
Will Norway get a do-over?
In large countries, single events are not usually taken as defining that country. So if the police in America botch a response to a mass murderer, soon enough another mass murderer will come along. There is almost always a do-over, usually many of them. If need be, we Americans can start a new war to create a do-over.
Norway doesn’t work this way. The country won’t soon have an event which generates comparable international or national publicity to the recent murders. That makes those murders, and the lack of an effective police response, sting all the more. There is no do-over on the horizon.
It turns out for instance that the helicopter crew of the Oslo police force was on vacation. In expected value terms, maybe that wasn’t a mistake but it sure didn’t turn out well. Here is an article on Norway not very much arming its police force.
The Norwegian resistance movement from WWII has a heroic reputation, but now there’s been a do-over of Norwegian response capability, so to speak, or at least a perceived do-over.
Americans have a hard time understanding the concept of not getting many do-overs.
When it comes to our debt-ceiling crisis, we are acting as if we will get a do-over for sure; I wonder if that’s justified.
The Winner’s Curse
Tim DeChristopher has been sentenced to two years in a Federal prison. DeChristopher was an economics major at the University of Utah when he fraudulently bid on a number of oil and gas leases pushing up the prices on some leases and winning others.
The sentence appears to be out of proportion to the crime, even if you don’t accept DeChristopher’s environmental justifications as a mitigating factor. The other bidders did walk away with lower profits than they otherwise would have but their claims should have been made in civil court. The Federal government may even have made money on net because DeChristopher pushed prices up. It is certain that they would have made money had they chosen to resell the rights that DeChristopher “bought.” But a judge later ruled that the Department of the Interior’s environmental impact statement was inadequate and most of the auctions were annulled.
DeChristopher’s big mistake appears to have been winning some auctions as it would have been difficult to prosecute him for simply pushing up bids.
The 11th Commandment?
At the conference I attended in Israel, Shimon Peres said that if he could, he would add an 11th commandment, “Respect your sons and daughters.”
I would go for “Thou shalt not spread my word with the sword,” which sounds appropriately biblical and might have done some good.
If you could write an 11th commandment what would it be?
From which country do these doggie sentences come?
He opened the car door to let the dog escape but an officer jumped out and pulled a gun on the dog, he says. “I threw myself on my dog and said, ‘You have to shoot me before you kill him,'” Milad says.
The article is interesting throughout. And here is some arbitrage:
The flight from Ukraine to Tehran has been nicknamed “the puppy flight” because many of its passengers, mostly university students, are carrying puppies for sale, according to several pet website owners who import from Ukraine.
When airport authorities caught on last year, they increased the tax on importing pets from $50 to $800, according to sellers. Some dog vendors diverted their operation so dogs are transported from Ukraine to Armenia and Turkey and from there smuggled in the cargo section of tour buses and trucks returning to Iran, vendors say.
“We have a large and very capable network expanding from Iran to Europe and beyond to help unite Iranians with dogs,” says the 30-year-old owner of Petpars, who asked that his name not be published.
…The Petpars website promises a puppy equipped with a faux international passport hand-carried from Ukraine via a flight passenger.
For the pointer I thank Ian Robinson.
From Ilya N.
Blog fan here.
I wanted to inform you that there will be a new book published called “First Thing We Do, Let’s Deregulate All the Lawyers” by Robert W. Crandall, Clifford Winston and Vikram Maheshri. I thought you and your fellow GMU economists would be very interested in this book. I provide you a link and a quick summary, if you are interested. Best wishes!
http://www.brookings.edu/press/Books/2011/firstthingwedoletsderegulateallthelawyers.aspxLawyers are prominent among the 20 percent of the U.S. labor force that needs to obtain a government license to practice their profession. Even people who have a legal education are prevented from practicing law in all but a few states unless they graduated from a law school accredited by the American Bar Association (ABA). ABA regulations also prevent licensed lawyers who work for firms that are not owned and managed by lawyers from providing legal services to parties outside of their firm. At the same time, a slate of government policies has increased the demand for lawyers’ services. Basic economics suggests that entry barriers to the legal profession, regulations on the type of legal services that firms and individuals can provide, and government-induced demand for lawyers will raise the price of legal services.
In First Thing We Do, Let’s Deregulate All the Lawyers, Clifford Winston, Robert Crandall, and Vikram Maheshri argue that this higher price cannot be justified as the “cost” of ensuring that uninformed consumers of legal services are served by competent lawyers and that socially desirable policies are implemented and executed. Instead, the forces that reduce the supply of, and increase the demand for, lawyers create significant social costs from higher legal fees, less innovation by law firms and lawyers, misallocation of the nation’s labor resources, and socially perverse incentives for attorneys to support inefficient policies that preserve and enhance their wealth.
To address those costs and improve social welfare, the authors propose that it is desirable to deregulate entry by individuals and firms into the legal profession. This will force lawyers to compete more intensely with each other and to face competition from nonlawyers and firms that are not owned and managed by lawyers. Allowing an ABA monopoly on law school accreditation is not necessary to facilitate informed decisions by consumers of legal services, and neither are statewide licensing-exam requirements.
The book provides a much-needed analysis of a profession whose services have long been seen as enormously expensive. Too little has been done to identify a large source of the costs to consumers and to explain that the system of regulation enables those costs to persist.
The Amazon link is here.
Good thing he didn’t ask Alex to explain the Solow growth model (in French)
He asked an Air Canada fight attendant for 7Up and he got Sprite.
“I’m a little bit disappointed with the lower amount awarded,” Thibodeau said. “But the positive note is that the court recognized our rights were violated on several occasions.”
…So, in 2009, when Thibodeau ordered a 7Up in French, and the English-speaking attendant brought him a — gasp! — different brand of lemon-lime soda, he sued.
“If I take a flight and I’m not served in the language of my choice, and I don’t do anything about it, then my right is basically dead,” Thibodeau told The Globe and Mail. “I was not asking for anything other than what I was already entitled to. I have a right to be served in French.”
It’s a right that Thibodeau — who is a federal employee and happens to speak perfect English — takes very, very seriously.
The full story is here. I suppose one could make a living this way. Which are the French questions most likely to be misunderstood by an English-speaking Canadian? From another article:
It is Thibodeau’s second successful legal action against the airline and its subsidiaries. In 2000, he was refused service in French when he tried to order a 7Up from a unilingual English flight attendant on an Air Ontario flight from Montreal to Ottawa.
Thibodeau filed suit in Federal Court for $525,000 in damages. The court upheld his complaint, ordered the airline to make a formal apology and pay him $5,375.95. Thibodeau was later honoured by the French-language rights group, Imperatif Francais.
For the pointers I thank Graham Rowe. Alex and I explain the Solow growth model — in English — here. Chinese, Spanish, and other editions are on the way.