Category: Travel

Australian Travel Notes from a Policy Wonk

Here are some notes on Australia, mostly from and for policy wonks.

Australia has a private pension system. In the 1990s a Labor government, with the support of the trade unions, created a system of private pension accounts to supplement the basic, means-tested state pensions that Australia has had since 1909. Employers are required to pay 9% of an employee’s wages (scheduled to increase to 12%) into the private accounts. The funds can be withdrawn at retirement (age 60 for new workers), at age 65, or in exceptional cases with disability. Workers can invest their funds with very few restrictions–workers, for example, can choose among a variety of mutual funds (such as Vanguard etc.) or invest with non-profit funds run by trade union associations or they can even self-manage. The accounts, now totaling more than 1.4 trillion, have increased savings and made Australia a shareholder society. Some issues remain including fees which are probably too high (better default rules could help) and a lack of annuitization (annuitization of some portion of the lump sum payment should be required to avoid moral hazard)–see here for one critique–but overall the system appears very favorable relative to the American system.

Australia farmers pay for water at market prices. Water rights are traded and government water suppliers have either been privatized or put on a more stand-alone basis so that subsidies are minimized or at least made transparent.

Australia has one of the largest private school sectors in the developed world with some 40% of students in privately-run schools.

Australia has a balanced-budget principle (balanced over the business cycle) which has been effective although perhaps more important has been a widely held aversion to deficits combined with an understanding of sustainability and intergenerational fairness (factors which also played a role in the decision to create private, pre-funded pensions).

Prostitution is legal in much of Australia and some of Sydney’s brothels have made significant capital investments.

The Australian civil service is of very high quality. I spoke at the Department of Prime Minister and Cabinet, the Treasury and the Department of  Industry, Innovation, Science, Research and Tertiary Education (whew) and in all cases I found the civil servants to be highly informed and sophisticated. I was not the first to bring up the term rent seeking or to laugh at the latest political shenanigans which everyone acknowledged had been done for votes and not for sound reasons of public policy. All consistent with Yes, Minister but it gave me a different perspective.

More than a quarter of the Australian population is foreign born but there is very little cultural or economic tension about immigrants within Australia (with minor exceptions over refugees (“jumping the queue”) and occasional minor flare-ups over job visas). From cab drivers to MPs the word on immigration was, “Not an issue, mate.”

I had some of the best Thai food I have ever had anywhere. Spice I Am was excellent (thanks!) and Home on Sussex was outstanding.

The Manly ferry is a great way to see Sydney’s magnificent coastline.

The world owes Sydney barristas (New Zealand also) an enormous debt for the flat white, perhaps the best form of coffee yet perfected. The flat white has made its way to London but is only now becoming available in a few high end coffee shops in New York.  I eagerly await for this trend to extend to Fairfax as I am already jonesing for another.

Australia has great natural beauty. The British should have left the convicts behind and moved everyone else.

Addendum: And here is Lars Christensen on Australian monetary policy, also very good, and Reihan Salam with more on education.

Calgary notes

They refer to themselves as Calgarians, which makes them sound more closely related to science fiction than in fact they are.  On Saturday I walked around in a sweater only.  In the span of little more than an hour, I was told numerous times that Calgary and southern Alberta have more U.S. citizens living there than any other region in the world.

Canada just had a very good job creation month.  About a third of the Albertan provincial budget comes from resource revenue, and bitumen prices have been falling, leading to some tough fiscal choices.

The city has elected a Muslim mayor.

On Snowquester virtually all flights out of DC were cancelled, even though Reagan National Airport had literally no snow.  Only Air Canada was flying a normal schedule and thus I arrived.

There are some excellent food choices in Calgary, although it is a city for ordering main courses, not appetizers.

There is no good reason to turn down a trip to Calgary, even in the winter.

Not in a Better Place

Better Place, about which I was optimistic several years ago when visiting Israel, is not doing well:

Better Place, which staked out its position in the electric car market with an innovative battery-swapping technology, has sold only about 750 cars in Israel, while piling up losses of more than $500 million. Agassi was forced out of Better Place in October, his successor as CEO quit in January, and the company has put its global rollout on hold. Better Place needs to raise more money this year, and that won’t be easy, insiders say.

The devil appears mostly to be in the details. The technology works, people who use it like it, but it isn’t cheap enough yet to overcome a bunch of individually minor regulatory and societal hurdles.

One point which occurs to me is that the automatic battery-swapping technology pairs well with self-driving cars. The cars can charge themselves when not in use.

Hat tip: Brad Plumer at Wonkblog.

On the FAA and the sequester, from Air Genius Gary Leff

Of course the FAA budget goes up year-over-year (in nominal terms) even under the sequester, and air traffic control is handling 27% fewer departures than prior to 9/11 with a budget that’s 41% higher (again, nominal $).  And that’s aside from actually probably being able to make some cuts without noticeable service effects, even before having to put off capital investment in future air traffic control improvements.

That is from an email.  There is more from Gary here, including this:

Lots of commenters argued that I must simply not understand the sequester, that the money has to be taken proportionally from each program / project / activity. I pointed out that these things are not at all defined in the statute, and it was still up to the Administration then to choose what that would mean for implementation.

Taxis and the shortest route home (from my email)

I used to drive a taxi. I made a lot of money doing it. I learned very early on to never drive someone to their destination if it was a route they drove themselves, say to their home from the airport, or from their home to work or vice versa. Everyone prides themselves on driving the shortest route but they rarely do. Often people develop a route that is based on need -say going by the day care, or avoiding an intersection where they once had an accident or to avoid driving by an ex’s house or skirting road construction long since resolved- but as they become habituated to it, they fail to reorganize their strategy when their needs change. When I first started driving a cab, I drove the shortest route –always, I’m ethical- but people would accuse me of taking the long way because it wasn’t the way they drove. So, I learned to go their way ending up with a lot less grief and a lot more money. If you’ve ever wondered why a seeming professional cab driver will ask you how to get to your destination, this is why. Going your way means they’ll make more money and they won’t be accused of ripping you off. Not to say that in the beginning, I wasn’t stupid. I’d try to show the customer the route on a map but they’d usually be offended that I was contradicting them. It was to their house, if I’d never been there, how could I possibly know better than they did? In the end, experts they consider themselves to be, people are a tangle of unexamined emotional impulses and illogical responses.

You can read more about quite different topics here.  And here is another point:

Oh, and here’s a tip I hope you never need: if your car is ever stolen, your first calls should be to every cab company in the city. You offer a $50 reward to the driver who finds it AND a $50 reward to the dispatcher on duty when the car is found. The latter is to encourage dispatchers on shift to continually remind drivers of your stolen car. Of course you should call the police too but first things first. There are a lot more cabs than cops so cabbies will find it first -and they’re more frequently going in places cops typically don’t go, like apartment and motel complex parking lots, back alleys etc. Lastly, once the car is found, a swarm of cabs will descend and surround it because cabbies, like anyone else, love excitement and want to catch bad guys. Cabbies know a lot of stuff*. I found a traveling shoplifting ring in Phoenix once. Professional shoplifters always take cabs. So do strippers going to work but that’s another story.

Digitalization and the value of various tourist locales

Miles, a loyal MR reader, writes to me:

I’ve spent a fair amount of time today at my desk in California looking at this, and it got me thinking about an interesting interplay between the tourism industry and the “digital revolution”:

(use the +/- buttons to zoom and drag to shift the view)

After finding people and understanding the scale of those mountains, I am in awe of Everest and the Himalayas, but feel absolutely no need to travel there. A digital representation has given me an amazing experience of a place on the other side of the world, and at least for this particular occasion, has convinced me never to go there (try to find the people climbing the upper portion of the glacier and you’ll understand why). So maybe some amazing (non deadly) location would convince me that I need to visit in person, but at some point, the digital experience gets so good that it’s a better, cheaper alternative to travelling. If in a few hundred years we can create digital experiences far more immersive than physical visits to locations, what experiences/amenities/etc will induce people to travel? Where will tourism die off (Himalayas), where will it increase (Paris)? As you say, solve for the equilibrium.

Thought it might make for an interesting discussion.

I predict that bustling, interactive locations — such as Guatemala — will do fine, and it is the static nature settings which will face a bit more competition.  That said, while I have never visited the Himalayas, I suspect the trip there involves a lot of bustling interaction with local cultures and that the final destination is in part an excuse for the process.  Keep also in mind that most of us do not in fact enjoy travel but enjoy only the memories of travel, with our minds playing a fairly active role as editor.  I doubt if the memory of visiting the digital image will ever compare, even if the image itself is more beautiful and more convenient than the reality of an actual physical site.  Finally, there is marketing to consider.  The digital image may market the original, just as the rather vivid LOTR movies have boosted tourism to New Zealand rather than replacing it.  So overall I still see tourism as a continuing growth industry.

Tyler and Alex in Delhi

Here is the information for our public talk in Delhi which is hosted by the Center for Civil Society and will be on Thursday December 20, 3-5 pm at the Heinz Auditorium, YMCA, New Delhi. Register here or email [email protected], +91-9910667576 –this is a public talk open to everyone.

We are also pleased to be speaking later that evening to the fellows at the Young India Fellowship, an exciting and innovative program of liberal education that connects some of the best young minds in India with a star-studded faculty in India and abroad.

India, India, India!

Today at MRUniversity we release the first of our country sections, India. In nearly 50 videos we cover key aspects of India’s history, economics, politics and culture from the viewpoint of development economics. Among the topics are India’s Early Growth History, Gandhi and the Salt March, the Green Revolution, Food Crises and the Media, the Rise of Private Education in India, and the Economics of Bollywood.

Tyler and I will both be in Delhi on Thursday December the 20th to talk to students of MRUniversity and others about economics, development and the future of online education. Information on times and places to follow.

By the way, for those of you taking the Development Economics course the India material is bonus to be sampled at will – this won’t be on the exam!

MRU also introduces new features this week including user contributions of links, videos and other materials directly from the video pages, ordering of questions by votes or recency and easier ways to see and access related materials and user contributions.

Tripolitanian cuisine in Tel Aviv

Libya is an artificial country, so they don’t call it Libyan food, even though the restaurant is run by “Libyan” Jews.

Odelia, Ben Yehuda 89, Tel Aviv.  The “Hrime” is pieces of snapper in an excellent red pepper sauce, very spicy and tasty.  Eggplant Mafrom, with root vegetables, is recommended too.  It’s also an excellent neighborhood for walking.

There are a number of Tripolitanian places in Tel Aviv.

Robots for parrots

African grey parrot, Pepper, perched atop his special robot, the “Bird Buggy”, designed by his human companion, Andrew Gray.

Proving that robots aren’t just for people any longer, African grey parrot, Pepper, has learned to drive a robot that was specially designed for him. Pepper, whose wings are clipped to preventing him from flying around his humans’ house and destroying their things, now manipulates the joystick on his riding robot to guide it to where ever he wishes to go.

This robotic “bird buggy” was the brainchild of his human companion, Andrew Gray, a 29-year-old electrical and computer engineering graduate student at the University of Florida. It was inspired by Pepper’s growing frustration with his human family’s rude behaviours.

Here is much more, with videos, and I like the subtitle of the article: “Now, for the first time ever, a parrot has successfully trained a human to design and build robots specifically for the parrot’s use and entertainment.”

For the pointer I thank Vic Sarjoo.

Taxi Tip Nudge

NYTimes: New York’s cabbies howled when the city began forcing them to take credit cards. Some even went on strike, calling the requirements a kowtow to tourists and a burden on drivers.

But two years later, the back-of-the-cab swipe has emerged as an unlikely savior for New York’s taxi industry, even as other cities’ fleets struggle to find fares in a deep recession.

The saving grace appears to be a simple nudge. Before the credit card swipe system the average tip was around 10% but the computer offers three tip sizes 30%, 25%, 20% and the average tip has now risen to 18-22%!

Joshua Gross estimates, that this simple nudge has increased the income of taxi drivers by $144 milion per year. Had the drivers demanded this increase via an increase in rates it probably never would have happened.

Sometimes it can be better to be nudgy than pushy, even in New York.

Hat tip: Cheap Talk.