Symphony orchestras and sectoral shifts
Before the financial crisis, symphony orchestras had considerably more financial support than they do today. We now observe the Philadelphia Orchestra, one of America’s most classic musical institutions, dealing with issues related to bankruptcy. Other orchestras are on the verge on folding or at least scaling back their season’s programs.
The initial negative shock of the crisis, among its other effects, caused donors and potential donors to see that support for these projects was weaker than they thought. Many of these donors are now less than keen to keep pouring money into losing endeavors. An unraveling process has set in. It’s not just the negative wealth effect, but new information has been revealed about popularity and sustainability of the underlying venture. Neither monetary nor fiscal stimulus will prove any kind of easy cure for these institutions or, potentially, for these jobs.
There is a well-known literature in finance about how trading, combined with the possibility of sudden price dips, causes market participants to learn the shape of the market demand curve and thus revalue the appropriate overall level of prices. The mere act of trading can generate market volatility. This kind of insight is not yet sufficiently appreciated in macroeconomics. The financial crisis caused us to see that many market institutions were on shakier ground than we had thought.
You will note, once again, that this structural problem — like so many others — does not imply excess demand for labor in any sector. Why do I keep reading literally hundreds of blog posts which conceive of structural labor market problems only in terms of “‘excess supply of labor in one market, excess demand for labor in another.” That’s a simple, unforced error.
File under: Recalculation arguments for Arnold Kling. In fact, Arnold is thinking along very similar lines:
One way to view the past few years is that the financial crisis of September 2008 sent a signal to firms that had been holding on to old, costly production methods that now would be a good time to try out newer, cheaper approaches. So we had a clustering of this sort of restructuring.
Richard Bury spam markets in everything “of making books there is no end”
From Slashdot:
“Make it easy to self-publish books and the spammers will be right along too. Amazon’s Kindle marketplace has been deluged by low-quality ‘books’ selling for 99 cents each. ‘[Thousands of ebooks published each month] are built using something known as Private Label Rights, or PLR content, which is information that can be bought very cheaply online then reformatted into a digital book. These ebooks are listed for sale – often at 99 cents – alongside more traditional books on Amazon’s website, forcing readers to plow through many more titles to find what they want. Aspiring spammers can even buy a DVD box set called Autopilot Kindle Cash that claims to teach people how to publish 10 to 20 new Kindle books a day without writing a word.'”
The link is here, hat tip to Michael Rosenwald, his piece on internet advertising is here.
Conceptually, there is a lot at stake here
Motty Rosenzweig is the only remaining kosher slaughterer in the Netherlands and, if a new law goes through, he will be the last.
The Dutch parliament is preparing to pass a law that would end religious slaughterers’ exemption from rules requiring animals be “stunned” or anaesthetised before they are killed. Because Jewish and Muslim rules do not permit animals to be unconscious when they are killed, the law would in effect ban kosher and halal slaughter in the Netherlands.
Here is more.
How a country pulls up even?
The reason that unconditional convergence fails at the country level seems to be that not all industries (agriculture?, informality? many services?) are equally adept at absorbing technologies from abroad.
The trick seems to be moving labor into the manufacturing (and other) industries where there is automatic convergence to the global productivity frontier.
That is from Dani Rodrik.
Assorted links
1. Some guy who reads a lot of books.
2. How to jam radio-detonated bombs, good article.
Not From the Onion
The headline says it all:
House keeps farm subsidies, cuts food aid
Here are some of the other provisions which seem designed just to be ridiculed by Jon Stewart:
Directs the Agriculture Department to rewrite rules it issued in January meant to make school meals healthier. Republicans say the new rules, the first major overhaul of school lunches in 15 years, are too costly.
Forces USDA to report to Congress every time officials travel to promote the department’s “Know Your Farmer, Know Your Food” program, which supports locally grown food, and discourages the department from giving research grants to support local food systems. Large agribusiness has been critical of the department’s focus on these smaller food producers.
Prevents USDA from moving forward with new rules that would make it easier for smaller farmers and ranchers to sue large livestock companies on antitrust grounds. The proposed rules are meant to address the growing concentration of corporate power in agriculture.
Delays for more than a year new rules for reporting trades in derivatives, the complex financial instruments blamed for helping precipitate the 2008 financial crisis. A Republican amendment adopted Thursday would require the Commodity Futures Trading Commission, which funded in the bill, to first have other rules in place to facilitate its collection of derivatives market data.
Prevents the FDA from approving genetically modified salmon for human consumption, a decision set for later this year.
Questions the scope of Obama administration initiatives to put calories on menus and limit the marketing of unhealthy foods to children.
Don’t get me wrong, I’d probably do away with a number of these rules as well. But anyone who argues against making school meals healthier because it’s too expensive at the same time as they vote for keeping billions of dollars in farm subsidies is not concerned about expenses. What unites the bill is not ideology but protection of agribusiness.
Perhaps the most outrageous provision was one the good guys won:
Critics of farm subsidies did score one victory: The House voted to block a $147 million annual payment to Brazil’s cotton industry. The United States agreed to make that payment last year after Brazil’s industry complained to the World Trade Organization that Washington unfairly was subsidizing U.S. cotton farmers. The United States lost the WTO case and agreed to make the payments to Brazil as a settlement.
So not only have we been subsidizing cotton farmers but we have been paying Brazil to allow us to keep subsidizing cotton farmers. Incredible. I wonder whether this provision will make it into the final bill.
Anadolu University
It’s in Eskisehir, central Anatolia, a long way from home. And yet the campus looks remarkably like George Mason University. It has about the same number of students, the same kind of suburban feel, the same kinds of sculptures and fountains scattered around campus, the buildings use steps in a similar way, the cars are parked in similar configurations, there is similar signage, and there are related styles of architecture for the buildings. Here are some photos. All in all, it is quite unheimlich.
Both schools have women wearing Islamic head scarves, slightly more here. The Anadolu campus was designed by an economist, unlike George Mason, and the school is a leader in distance education.
I would describe Eskisehir as the Curitiba of Turkey. I am told it used to be much worse.
Here is a good recent piece on Eskisehir.
From a reader
One point on your post on U.S. money market funds’ ownership of European bank paper: much of what the U.S. money
market funds own is paper issued by the U.S. domiciled subsidiaries of those banks (a partiallist of DB’s: http://annualreport.deutsche-bank.com/2010/ar/notes/additionalnotes/38subsidiaries.html). This is according to the CEO of Federated Investments (one of the largest operators of MM funds), speaking at the KBW investment conference last week. Obviously, the turmoil in Europe isn’t helpful to these subs, but, as they have their own U.S.-domiciled assets backing them, they carry considerably less risk than parents do.
The initial post was here.
Assorted Links
1. Justin Wolfers makes Americans fat.
2. Prison is safer for black males than being on the streets.
3. Phagocytosis and Benny Hill. Youtube doubler is fun.
4. The Arty Bollocks Generator. I want one of these for statements of teaching philosophy.
Murder markets in everything
Mr. Kahan estimated that there were perhaps half a dozen murderabilia vendors in the United States who advertise online. They include serialkillersink.com, murderauction.com, and supernaught.com.
Just type in the address and behold: A holiday card signed by Joel David Rifkin, convicted of the murders of nine women in New York City, available for $350. A shirt worn by Richard Ramirez, a k a the Night Stalker, can be yours for as little as $1,400. Paintings by the executed serial killer John Wayne Gacy are especially popular and pricey; a portrait of his alter ego, Pogo the Clown, is currently going for $19,999.
And why would anyone want this stuff?
“Each piece tells a story,” Joe Turner, a British collector who owns a Gacy painting and a lock of Charles Manson’s hair, wrote in an e-mail.
Assorted links
1. Price collapse for Japanese watermelon, down to $4,000.
2. In many U.S. counties, life expectancy for women is declining.
4. UFM in Guatemala.
6. Meandering but interesting blog post, culminating in a discussion of “peak attention” and Coasean growth.
“Agitated honeybees exhibit pessimistic cognitive bias”
Via Michelle Dawson, here is a new paper by Melissa Bateson, et.al.:
Whether animals experience human-like emotions is controversial and of immense societal concern [1,2,3]. Because animals cannot provide subjective reports of how they feel, emotional state can only be inferred using physiological, cognitive, and behavioral measures [4,5,6,7,8]. In humans, negative feelings are reliably correlated with pessimistic cognitive biases, defined as the increased expectation of bad outcomes [9,10,11]. Recently, mammals [12,13,14,15,16] and birds [17,18,19,20] with poor welfare have also been found to display pessimistic-like decision making, but cognitive biases have not thus far been explored in invertebrates. Here, we ask whether honeybees display a pessimistic cognitive bias when they are subjected to an anxiety-like state induced by vigorous shaking designed to simulate a predatory attack. We show for the first time that agitated bees are more likely to classify ambiguous stimuli as predicting punishment. Shaken bees also have lower levels of hemolymph dopamine, octopamine, and serotonin. In demonstrating state-dependent modulation of categorization in bees, and thereby a cognitive component of emotion, we show that the bees’ response to a negatively valenced event has more in common with that of vertebrates than previously thought. This finding reinforces the use of cognitive bias as a measure of negative emotional states across species and suggests that honeybees could be regarded as exhibiting emotions.
From the comments
Albert Ling writes:
How about this: Amy Chua’s method is better in raising successful kids career-wise, at the expense of emotional attachment, family warmth, etc. It’s a trade-off. If you envision your child’s future life to be of economic hardship and misery, maybe it’s a GOOD trade-off (as evidenced by the stricter methods of parenting on poorer societies, and also in the past when being poor really influenced your happiness).
If you already earn more than USD 25,000$ a year (which is the threshold after which income stops correlating positively with happiness), then it’s probably better to be a B.Caplan-style parent. (if your goal is to maximize your child’s total future happiness).
I think the answer is that simple.
Is information technology a general purpose technology?
Here is a 2006 paper by Susanto Basu and John Fernald, relevant to some current debates:
Many people point to information and communications technology (ICT) as the key for understanding the acceleration in productivity in the United States since the mid-1990s. Stories of ICT as a ‘general purpose technology’ suggest that measured TFP should rise in ICT-using sectors (reflecting either unobserved accumulation of intangible organizational capital; spillovers; or both), but with a long lag. Contemporaneously, however, investments in ICT may be associated with lower TFP as resources are diverted to reorganization and learning. We find that U.S. industry results are consistent with GPT stories: the acceleration after the mid-1990s was broadbased—located primarily in ICT-using industries rather than ICT-producing industries. Furthermore, industry TFP accelerations in the 2000s are positively correlated with (appropriately weighted) industry ICT capital growth in the 1990s. Indeed, as GPT stories would suggest, after controlling for past ICT investment, industry TFP accelerations are negatively correlated with increases in ICT usage in the 2000s.
This is further evidence for the view that we are in the preparatory stages of a longer-run boom, that many of the gains have yet to come, and the productivity-enhancing impact of IT so far has been overstated.
Health care queuing: this will get worse
The study used a “secret shopper” technique in which researchers posed as the parent of a sick or injured child and called 273 specialty practices in Cook County, Ill., to schedule appointments. The callers, working from January to May 2010, described problems that were urgent but not emergencies, like diabetes, seizures, uncontrolled asthma, a broken bone or severe depression. If they were asked, they said that primary care doctors or emergency departments had referred them.
Sixty-six percent of those who mentioned Medicaid-CHIP (Children’s Health Insurance Program) were denied appointments, compared with 11 percent who said they had private insurance, according to an article being published Thursday in The New England Journal of Medicine.
In 89 clinics that accepted both kinds of patients, the waiting time for callers who said they had Medicaid was an average of 22 days longer.
Here is more. Once again, health care policy needs to be about the supply side.
Addendum: Ezra Klein reports that the budget deal may involve significant Medicaid cuts.