Venezuela prison quotation of the day

by  Tyler Cowen in

The inmates’ chief, Mr. Rodríguez, interviewed as bodyguards shucked oysters for him, attributed these distinctions to his rule. A mural at the prison depicts Mr. Rodríguez as conductor of a train, accompanied by gun-wielding subordinates, barreling toward a snitch hanging from a noose.

“There’s more security in here than out on the street,” said Mr. Rodríguez, a thick-necked long-termer who barks orders into a cellphone. Asked about his ambitions after incarceration, he said he would consider politics.

Here is the article, interesting throughout, hat tip goes to Michael Rosenwald.

China at the frontier

by  Tyler Cowen in

Following previous efforts (http://www.genomics.cn/en/news_show.php?type=show&id=644 and http://www.genomics.cn/en/news_show.php?type=show&id=647), BGI, based in Shenzhen, China, and its collaborators at the University Medical Centre Hamburg-Eppendorf, as well as a growing number of researchers around the world “crowdsourcing” this data, are exploring in-depth the European disease outbreak helping trace the origin and spread of the lethal E. coli strain. Different sources have reported that two strains, 01-09591 from Germany isolated in 2001 and 55989 from Central Africa in 2002, are highly similar to the 2011 outbreak strain. Based on the most recently curated assembly publically released by BGI yesterday (ftp://ftp.genomics.org.cn/pub/Ecoli_TY-2482), these strains have an identical Multi Locus Sequence Typing (ST678) based on analysis of seven important “housekeeping” genes*.

BGI (formerly known as Beijing Genomics Institute) was founded in 1999 and has become the largest genomic organization in the world. With a focus on research and applications in the healthcare, agriculture, conservation and bio-energy fields, BGI has a proven track record of innovative, high-profile research which has generated over 178 publications in top-tier journals such as Nature and Science.

Bravo.

The North Korean global happiness index

by  Tyler Cowen in

Here at MR we are always keen to report dissenting viewpoints:

China is the happiest place on earth(!!) according to a new global happiness index released by North Korea’s Chosun Central Television. China earned 100 out of 100 points, followed closely by North Korea (98 points), then Cuba, Iran, and Venezuela. Coming in at 203rd place is America (or rather “the American Empire”, 美帝国), with only 3 happiness points. South Korea got a measly 18 points for 152nd place.

I cannot find the full rankings (which countries came between South Korea and the United States?) but here is a partial screen shot of the results, in Chinese.  For the pointer I thank Eapen Thampy.

A prediction market for climate outcomes?

by  Tyler Cowen in

From Shi-Ling Hsu:

This article proposes a way of introducing some organization and tractability in climate science, generating more widely credible evaluations of climate science, and imposing some discipline on the processing and interpretation of climate information. I propose a two-part policy instrument consisting of (1) a carbon tax that is indexed to a “basket” of climate outcomes, and (2) nested inside this carbon tax, a cap-and-trade system of emissions permits that can be redeemed in lieu of paying the carbon tax. The amount of the carbon tax in this proposal would be set each year on the basis of some objective, non-manipulable climate indices, such as temperature and mean sea level, and also on the number of certain climate events, such as hurricanes or droughts, that occurred in the previous year (or some moving average of previous years). In addition to setting a carbon tax rate each year, an auction would be held each year for tradeable permits to emit a ton of carbon dioxide in separate, specific, future years. That is, in the year 2012, a number of permits to emit in 2013 would be auctioned, as well as a number of permits to emit in 2014, in 2015, and so forth. In the year 2013, some more permits to emit in 2014 would be auctioned, as well as more permits to emit in 2015, 2016, and so forth.
The permits to emit in the future are essentially unitary exemptions from a future carbon tax: an emitter can either pay the carbon tax or surrender an emissions permit to emit in the specific vintage year. Because of this link between the carbon tax and the permit market, the trading price of the permits should reflect market expectations of what the carbon tax will be in the future, and concomitantly, expectations of future climate outcomes. The idea is to link the price of tradeable permits to future climate outcomes, so that a market is created in which accurate and credible information about future climate conditions are important inputs into the price of permits. The market for tradeable permits to emit in the future is essentially a prediction market for climate outcomes.

The rationale for this idea is clear, namely a desire to build consensus by getting agreement to a broader proposal ex ante.  Nonetheless I think of such fine-tuning as a misguided approach.  Is there such a good “basket” measure of climate outcomes with sufficiently low short-term volatility? (Or does the metric do econometrics on the higher-order polynomial?)  Should the tax be fine-tuned year-by-year when the lag times between energy inputs and climate outputs is thirty years or longer, possibly reaching up to one hundred years?  Still, I am happy to pass the idea along for consideration.

For the pointer I thank Chris Auld.

The Global War on Drugs has Failed

by  Alex Tabarrok in

The global war on drugs has failed, with devastating consequences for individuals and societies around the world.

…End the criminalization, marginalization and stigmatization of people who use drugs but who do no harm to others. Challenge rather than reinforce common misconceptions about drug markets, drug use and drug dependence.

…This recommendation applies especially to cannabis, but we also encourage other experiments in decriminalization and legal regulation that can accomplish these objectives and provide models for others.

…Break the taboo on debate and reform. The time for action is now.

  • Asma Jahangir, human rights activist, former UN Special Rapporteur on Arbitrary, Extrajudicial and Summary Executions, Pakistan
  • Carlos Fuentes, writer and public intellectual, Mexico
  • César Gaviria, former President of Colombia
  • Ernesto Zedillo, former President of Mexico
  • Fernando Henrique Cardoso, former President of Brazil (chair)
  • George Papandreou, Prime Minister of Greece
  • George P. Shultz, former Secretary of State, United States (honorary chair)
  • Javier Solana, former European Union High Representative for the Common Foreign and Security Policy, Spain
  • John Whitehead, banker and civil servant, chair of the World Trade Center Memorial Foundation, United States
  • Kofi Annan, former Secretary General of the United Nations, Ghana
  • Louise Arbour, former UN High Commissioner for Human Rights, President of the International Crisis Group, Canada
  • Maria Cattaui, Petroplus Holdings Board member, former Secretary-General of the International Chamber of Commerce, Switzerland
  • Mario Vargas Llosa, writer and public intellectual, Peru
  • Marion Caspers-Merk, former State Secretary at the German Federal Ministry of Health
  • Michel Kazatchkine, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, France
  • Paul Volcker, former Chairman of the United States Federal Reserve and of the Economic Recovery Board
  • Richard Branson, entrepreneur, advocate for social causes, founder of the Virgin Group, co-founder of The Elders, United Kingdom
  • Ruth Dreifuss, former President of Switzerland and Minister of Home Affairs
  • Thorvald Stoltenberg, former Minister of Foreign Affairs and UN High Commissioner for Refugees, Norway

The report of The Global Commission on Drug Policy is very strongly worded and the commissioners are so stellar it will be difficult to ignore.

*Claude Lévi-Strauss: The Poet in the Laboratory*

by  Tyler Cowen in

Patrick Wilcken is the author of this excellent book, excerpt:

Lévi-Strauss began work in the autumn at the New School for Social Research, his name chopped down to Claude L. Strauss, to distinguish himself from the jeans.  “The students would find it funny,” he was told by way of explanation.  The confusion would plague him throughout his life. “Hardly a year goes by without my receiving, usually from Africa, an order for a pair of jeans,” he told Didier Eribon in the 1980s — though, with fame, Lévi-Strauss found he could almost hold his own.  When he gave his name while queuing for a restaurant in San Francisco in the 1980s, the waiter shot back, “The pants or the books?”

Definitely recommended, read the Amazon reviews at the link.

*Pox: An American History*, by Michael Willrich

by  Tyler Cowen in

The Medical Department’s vaccination program had carried vaccination to the people on an unprecedented scale.  According to Hoff, the vaccinators had performed nearly 860,000 operations (742,062 vaccinations and 116,955 revaccinations) in a period of five months.  And the vaccine produced at Coamo Springs was, by contemporary standards, good, with a reported success rate of 87.5 percent.  Colonial administrators always kept the bottom line in view.  Hoff noted with satisfaction that the entire vaccination campaign had cost only $43,000.

By the end of June, the “head-fire of vaccination” had stopped variola [smallpox] in its tracks.  In the decade before the arrival of the U.S. Army, the annual death rate from the disease had averaged 620 people.  From January 1 to April 30, 1900, not a single death from smallpox was reported.

This was done under a form of martial law.  The Philippines, under colonial control, was another early example of a largely successful public health program: “Americanized Manila stood as a model of the healthful city.”  Who would have thought?

It’s an interesting book.

The 1937-1938 contraction

by  Tyler Cowen in

A few months ago I was surprised to see this paper by Chris Calomiris, Joseph Mason, and David Wheelock:

In 1936-37, the Federal Reserve doubled the reserve requirements imposed on member banks. Ever since, the question of whether the doubling of reserve requirements increased reserve demand and produced a contraction of money and credit, and thereby helped to cause the recession of 1937-1938, has been a matter of controversy. Using microeconomic data to gauge the fundamental reserve demands of Fed member banks, we find that despite being doubled, reserve requirements were not binding on bank reserve demand in 1936 and 1937, and therefore could not have produced a significant contraction in the money multiplier. To the extent that increases in reserve demand occurred from 1935 to 1937, they reflected fundamental changes in the determinants of reserve demand and not changes in reserve requirements.

My view had traditionally been that of Friedman and Schwartz, Eggertsson (and here), and Krugman, but if you wish to read the other side of the story there it is.  In any case I do not see any good argument for monetary contraction today, no matter how one reads the 1937 story.  We await clarification from Scott Sumner.

 

When does greater inequality lead to greater redistribution?

by  Tyler Cowen in

Henry Farrell reports:

Noam Lupu and Jonas Pontussen (PDF) have a piece on the relationship between inequality and distribution in the new American Political Science Review. There is a lot of debate about whether the level of economic inequality in society leads to greater or lesser distribution – what Lupu and Pontussen suggest is that the structure of inequality (that is – the more particular relationships between different segments in the income distribution, rather than some summary index) is more important. More particularly they argue that if one tries to hold racial and ethnic cleavages constant, the key factor determining redistribution is the income gap between middle income voters and lower income voters. Where this gap is low, middle class people feel some degree of solidarity with the poor and exhibit what Lupu and Pontussen describe as “parochial altruism.” That is, they are more likely to support income redistribution because they feel that the poor are in some sense, ‘like them.’ When the gap is high, middle class people will have a much weaker sense of solidarity with the poor, and hence be less supportive of redistribution. Lupu and Pontussen suggest that the US is an outlier, with weaker solidarity than the structure of US inequality would suggest. They argue that the explanation for this is straightforward – “it is clearly attributable to the high-concentration of racial-ethnic minorities in the bottom of the income distribution.” More bluntly put – middle class Americans feel less solidarity with the very poor because the very poor are more likely to be black.