Are you an asker or a guesser?
Austin Frakt forwards me the following intriguing article. Here is one excerpt:
This terminology comes from a brilliant web posting by Andrea Donderi that's achieved minor cult status online. We are raised, the theory runs, in one of two cultures. In Ask culture, people grow up believing they can ask for anything – a favour, a pay rise– fully realising the answer may be no. In Guess culture, by contrast, you avoid "putting a request into words unless you're pretty sure the answer will be yes… A key skill is putting out delicate feelers. If you do this with enough subtlety, you won't have to make the request directly; you'll get an offer. Even then, the offer may be genuine or pro forma; it takes yet more skill and delicacy to discern whether you should accept."
Neither's "wrong", but when an Asker meets a Guesser, unpleasantness results. An Asker won't think it's rude to request two weeks in your spare room, but a Guess culture person will hear it as presumptuous and resent the agony involved in saying no. Your boss, asking for a project to be finished early, may be an overdemanding boor – or just an Asker, who's assuming you might decline. If you're a Guesser, you'll hear it as an expectation. This is a spectrum, not a dichotomy, and it explains cross-cultural awkwardnesses, too: Brits and Americans get discombobulated doing business in Japan, because it's a Guess culture, yet experience Russians as rude, because they're diehard Askers.
As for myself, I am an asker when it comes to information, but a guesser when it comes to making demands.
Where is economics headed?
Andrew Oswald has a new and interesting paper on what kinds of articles now get published. The piece starts off as follows:
When I was a PhD student, in Oxford in the late 1970s, I was taught nothing about the experimental method or how to weigh evidence, and indeed comparatively little about data. Consciously or subconsciously, we were encouraged to think of economics as a branch of (not very applied) mathematics. My first published paper relied on a fixed-point theorem; it contained no numbers. We were not exposed to, for example, any empirical findings from the psychology literature or the intellectual approach of researchers like epidemiologists.
Amazing, is it not? Turn to p.5 to see one of his basic counts, which puts experimental papers in the lead.
My podcast with Jerry Brito
You will find it here, Jerry summarizes it like this:
The conversation broadly centers on how the web allows us to find, distill, and sort information as never before, which has profoundly affected people’s consumption of culture and creation of their own economies. During the podcast Cowen touches on Lost and Battlestar Gallactica, the iPad, books, the future of the publishing industry, old and new media, Facebook, Twitter, ChatRoulette, and his favorite things on the internet.
Jerry's entire podcast series is here. Jerry's more professional blog is here. Jerry on music is here; he has the good sense to like M.I.A.
Avatar in China
Home owners in Hubei China protest the demolition of their homes. I raise my appreciation of Avatar a notch.
Hat tip Helen Yang.
Assorted links
1. The productivity of Robert Tollison.
4. In Italy, they run a "divorce trade fair."
5. Markets in everything (via Yana): refrigerator especially designed for storing kimchee. Korean version here.
6. Which Metro areas have been the big winners and losers lately? (NB: Michael Mandel is one of the most important economists writing today.)
Megan McArdle asks
But I still don't see what the rest of the eurozone is getting out of it.
The Greek bailout, that is. I view it as a bit like the U.S. in Afghanistan. Whether it will yield anything useful from here on in can be debated for a long time. But if we pull out precipitously, and the Taliban take over, it will be seen as a big U.S. loss (whether that's worth the cost is not the question of concern here, only that it is a gross cost, whether or not it is a net cost, all things considered). Since Afghanistan once attacked us (sort of), our entire deterrent would be much less credible.
Going back to Europe, without the bailout no German or French commitment to another European nation, or another European collective project, would be worth very much for a very long time. Boo hoo you may say, but in the European world that is perceived as a very high cost indeed. It would mean writing off the major narrative of European collective progress since the end of World War II.
A second factor is that the choice is either bail out Greece or bail out some German banks. The smaller European nations are more likely to pitch in to pay for part of the former than for part of the latter. Given the size of German banks relative to German gdp, it's not even clear how much the latter is an option. The Germans have to try to keep their fingers in the proverbial dike or else all hell breaks loose. They just can't afford a run on their shadow banking system.
I view the entire bailout announcement, and its scope, as a signaling issue. The Germans loathe such semi-inflationary commitments and basically they just signaled that their banks are a good deal more precarious than the rest of us would like to believe.
So there you have it. Europe is stuck and in response to a crisis they basically raised the stakes. Arguably they had no choice, but they haven't actually eliminated the potential negative outcomes from the gamble.
Africa fact of the day
For every 100 people put on treatment, 250 are newly infected, according to the United Nations‘ AIDS-fighting agency, Unaids.
There is more here and the article is interesting throughout. Victories in the war against AIDS in Africa are being reversed and fairly quickly at that.
Assorted links
1. The role of on-line experiments in the social sciences.
2. El Ataneo bookstore in Buenos Aires.
3. Create Your Own Economy, the audiobook is now on iTunes (via Chris Masse, the link is here).
4. New and better stadiums raise the price of concessions.
5. When should you bench a basketball player for foul trouble?
Not Scott Sumner
In its statement, the E.C.B. said that the liquidity that the bond purchases will pump into the European financial system will be “sterilized,” or offset with other monetary operations to drain liquidity from the system. In doing so, the bank seemed to be trying to answer criticism that buying bonds is the same as printing money and could lead to inflation.
Here is more detail. Kid Dynamite has a skeptical take on the new plan.
Felix Salmon on Hollywood’s Future(s)
IN the 1950s, onion growers were often shocked at the low prices they were getting. Casting around for a villain to blame, they alighted on derivatives traders, and they persuaded Congress to ban any futures trading in onions
Today onions are the only commodity for which futures trading is banned. Not coincidentally, onion prices remain extremely volatile: they doubled in 2008, and then fell by 25 percent in 2009.
Today, no one is silly enough to ask a member of Congress to simply outlaw futures trading in a certain type of contract – no one, that is, except Hollywood film producers.
As Felix notes, the ban is likely to harm Hollywood more than anyone else who with futures markets would get improved hedging, prediction and promotion.
Hat tip to Daniel Lippman.
(Whoops + yikes) x five
Kevin Drum has sharp eyes. He cites this passage:
The €440 billion pledged by euro-zone governments isn't immediately available cash in hand. Instead, a specially created off-balance-sheet entity will borrow the money, as needed, and then lend it out to the country or countries in trouble. The special entity's borrowings will be guaranteed by euro-zone countries – excluding the country asking for aid. This construction helps skirt the EU treaties' prohibition on one state's assuming the debt of another….This portion would need approval by the parliaments of contributing countries, something that could delay a rapid payout of funds.
Simple thoughts on Europe
1. The fundamental cause of the financial crisis has been people and institutions thinking they are more wealthy than they are; this spread to Europe as well and now we are seeing the comeuppance.
2. Although accounting conventions differ, and numbers should not be shifted out of context, many major European banks are highly leveraged. The mechanics of the so-called "shadow banking system" — namely the ability of short-term creditors to flee on a moment's notice – remain in place.
3. The major European powers would not have come up with a nearly $1 trillion bailout, also involving de facto loss of ECB independence, unless they were scared ****less.
4. They are trying to do a version of TARP-in-advance-of-the-panic and in my view that panic would have come today.
5. Here is one view, consistent with my own: "My quick thoughts on markets are as follows: great for risk assets, terrible news for bonds, great news for southern European bonds, bad news for the flight to quality UST trade, and ultimately terrible news for the EUR. Maybe the EUR tries to rally on this, but it the end this bailout has done nothing positive for the EUR. The market will inevitably look at the ECB as being forced by the EU to monetize the debts of EU rogue nations…"
6. Basically the ECB is monetizing bad government debt claims.
7. The Fed has reactivated its dollar swap lines to Europe.
8. "Greece’s 10-year borrowing costs plunged by almost half – an astonishing 5.9 percentage points – to 6.5 percent." And Deutsche Bank is up ten percent.
9. This doesn't solve any of the basic fiscal problems, so ultimately it raises the stakes and creates a chance of even greater financial failure. Simon Johnson comments.
10. Question: does this sentence sounds scary or non-scary?: "”We shall defend the euro whatever it takes,” Mr. Rehn said."
11. Felix Salmon writes: "They’re not all partners together anymore: now they’re bifurcating into the rich lenders, on the one hand, and the formerly-profligate debtors, on the other. The mind-boggling sums involved are only going to increase resentments both of the south in the north and of the north in the south."
12. How much time has the EU bought itself?
Addendum: Paul Krugman comments. And Arnold Kling comments. Ezra Klein comments. Matt Yglesias comments.
Facts about Europe
The country in Europe with the biggest untaxed, or “shadow,” economy as a proportion of GDP is Greece. Next is (gulp) Italy. Then Portugal and Spain. On the chart below, in fact, the bars look unsettlingly like dominoes.
There is more information and a good chart here. There is this too:
Massive tax evasion helps produce large public-sector deficits. Let’s make some simple back-of-the-envelope calculations: if the shadow economy is adding 25 percent to GDP, with income going untaxed, and if the average tax rate on such income is a conservative 20 percent, recovering such tax revenues would imply an additional 5 percent of GDP in tax revenues, which would bring down the Italian 2009 deficit to zero. As deficits cumulate into debt, prolonged tax evasion could explain – by itself – the whole of the Italian public debt, now projected at 118.4 percent of GDP.
Not From the Onion: Hair, Oil, Transvestites
Discarded hair from salons is being used to sop up oil in the Gulf of Mexico. San Francisco transvestites have been key to the effort.
As it turns out, hair adheres to oil pretty efficiently, which is why your hair gets greasy. Now salons are donating their discarded locks to help with the Gulf Coast cleanup. A group in San Francisco has been producing hair booms for nearly a decade now. Matter of Trust makes nylon stockings stuffed with human hair and trimmed animal fur….
While the group does have lots of hair, Gautier notes, there is one shortage. "I knew that hair wouldn't be a problem, but nobody wears nylons anymore," she says. Well, some people still do. Gautier says the great thing about being based in San Francisco is the city's transvestite community, which has readily donated nylons.
Assorted links
1. How do college students describe great teachers?
2. Tina Harden returns "Gossip Girls" books to public library; she had kept them as a form of protest.
3. The difficulties of translating from the German.
4. How to increase voter turnout.
5. The economics and psychology of football (soccer).