Assorted links
1. Scott Sumner's most absurd belief: India as #1 in gdp by 2109.
2. Click "play" and watch unemployment grow.
3. Who is Hollywood's most overpaid star, relative to box office returns? Will Farrell is #1 it seems.
4. Markets in everything: NYC McDonald's with sleek Danish furniture.
5. Saddam's strategic thinking.
6. Via Caroline Flyn, China ethnicity of the week, good for a whole year (photos, recommended).
7. The Political Economy of Trust, by Henry Farrell.
MR vocabulary guide
1. “Self-recommending”: the very nature of the authors and project suggest it will be good or very good. This also often (but not always) means I haven’t read it yet. I am reluctant to recommend *anything* I haven’t read, but I am signaling it is very likely recommendation-worthy and I wish to let you know about it sooner rather than later.
2. An “Assorted link” that ends with a question mark: Worth thinking about, but I wish to distance myself from the conclusion and the methods of the study, without being contrary per se.
3. Hansonian: of, or relating to Robin Hanson.
4. The Jacksonian mode of discourse. I am opposed to this. Political and economic pamphlets in the Jacksonian era were excessively polemical and sometimes the Jacksonian mode is still used today, in 2009, believe it or not.
5. Wunderkind: Take the average age of that person’s relevant peers. If said person is either under twenty or less than half that average, that person may qualify for “Wunderkind” status.
6. Markets in everything: Some of these are celebratory but many of these are sad or tragic. Usually I am trying to get you to think about — as a philosophical question — why the market exists at all and not whether it should be legal.
7. Tyrone is my brother and alter-ego who believes the opposite of what Tyler believes. Trudie offers personal advice. Neither has good time management skills and thus they don’t write very much these days.
8. “Shout it from the rooftops”: What to do with wordy, obscure truths which the world badly needs to learn.
What have I left out?
Is this why the Senate bill has an ok CBO rating?
Because the program would begin taking in premiums immediately
but would not start paying benefits until 2016, congressional budget
analysts have forecast that it would generate a nearly $60 billion
surplus over the next 10 years, cash that would help the larger
measure's balance on paper.
Not long ago I filed this under "Department of Uh-Oh." In the longer run it is very bad for the budget and it is simply an accounting trick. It's a sign that fiscal responsibility will never come to U.S. health care. And yes there is a long-term care provision in the Senate bill. Although I have not read through its current incarnation of 2000-some pages, I am willing to bet we are getting the cost back-loaded version of the idea.
*From Poverty to Prosperity* watch
That's the title of the new and self-recommending book by Arnold Kling and Nick Schulz. This work has text by the authors, interspersed with interviews with famous economists, including Robert Fogel, Robert Solow, Joel Mokyr, Doug North, Bill Easterly, Edmund Phelps, Amar Bhide, William Lewis, and Bill Baumol. Here is Paul Romer:
It's the kind of culture that can tolerate rap music and extreme sports that can also create space for guys like Page and Brin and Google. That's one of our hidden strengths.
You can buy the book here. The subtitle is Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity.
Giovanni Peri’s latest on immigration and productivity
Here is the abstract and it has to do with a Smithian theme, namely division of labor:
Using the large variation in the inflow of immigrants across US states we analyze the impact of immigration on state employment, average hours worked, physical capital accumulation and, most importantly, total factor productivity and its skill bias. We use the location of a state relative to the Mexican border and to the main ports of entry, as well as the existence of communities of immigrants before 1960, as instruments. We find no evidence that immigrants crowded-out employment and hours worked by natives. At the same time we find robust evidence that they increased total factor productivity, on the one hand, while they decreased capital intensity and the skill-bias of production technologies, on the other. These results are robust to controlling for several other determinants of productivity that may vary with geography such as R&D spending, computer adoption, international competition in the form of exports and sector composition. Our results suggest that immigrants promoted efficient task specialization, thus increasing TFP and, at the same time, promoted the adoption of unskilled-biased technology as the theory of directed technological change would predict. Combining these effects, an increase in employment in a US state of 1% due to immigrants produced an increase in income per worker of 0.5% in that state.
The paper is here.
What did Obama eat in China?
I've been trying to find out what Obama ate in China and this is the closest I can come:
"We're also hosting a 'Stars and Stripes' week featuring iconic
American cuisine," said a hotel spokesperson, who declined to give her
name due to company policy."The White House guests may want to enjoy New Orleans flavors, American steak BBQs and Jack Daniel's cocktails," she added.
That was the Marriott but I suspect the Chinese government had a say in things or at the very least it was negotiated. It's an interesting question which side is signaling the dominance with that choice; I say the Chinese. Fortunately in Beijing it seems he had:
Obama-Hu 90 min
meal feat. prawns, soups and lamb chops, plus a presentation of Chinese
noodle making, which the Americans enjoyed.
Economics and biography
I think of the biographer as standing up and demanding that economists take their own method seriously. Surely the economist should at some point be required to explain something in the life of an actual human being.
That is from my (favorable) review of E. Roy Weintraub and Evelyn L. Forget, Economists' Lives: Biography and Autobiography in the History of Economics. The review will be published in a journal called Biography.
Assorted links
1. Strange China video of the day.
2. Do men live longer if they marry smarter women? (No, I haven't checked if the original paper deals with the identification problem in a reasonable way.)
3. Another review of *The Big Questions*.
4. Daron Acemoglu in Esquire on economic growth.
5. How to get wealthy from your own life insurance (hint: Hansonian).
How do you convince someone to stay away?
The feverish but resilient Megan McArdle refers us to a problem in signaling theory:
Slate ponders how to communicate the danger of radioactive waste to the far future. The problem is, if they can't read English, or recognize the radiation trefoil, anything you do sounds more likely to intrigue future anthropologists than to warn them off…
Juliet Lapidos at Slate writes:
Even if future trespassers could understand what keep and out mean when placed side by side, there's no reason to assume they'd follow directions. In "Expert Judgment," the panelists observe that "[m]useums and private collections abound with [keep out signs] removed from burial sites."
…Likewise, a scavenger on the Carlsbad site in the year 12,000 C.E. may dismiss the menace of radiation poisoning as mere superstition. ("So I'm supposed to think that if I dig here, invisible energy beams will kill me?") Hence the crux of the problem: Not only must intruders understand the message that nuclear waste is near and dangerous; they must also believe it.
How can we solve this problem? Similarly, if an attractive woman tells you "You don't want to go out with me" do you believe her and act on that? What other problems have this structure?
Monitoring the bureaucracy in Dubai
Sheikh Mohammed oversees a cadre of undercover mystery shoppers…They pose as prickly members of the public seeking the government's help. Their reports are instrumental in firings and promotions. No bureaucrat can be sure the demanding customer across the counter isn't secretly reporting to the boss. Once in a while, Sheikh Mohammed turns up at 7:30 on surprise inspections. He's been known to fire late-arriving managers on the spot.
That is from Jim Krane's fascinating City of Gold: Dubai and the Dream of Capitalism. This is pretty clearly the best book on Dubai. It has an insider's perspective but is also analytical. Recommended
Only in economics are floors above ceilings!
Only in economics are floors above ceilings! It might be better to say "a minimum allowed price above the market price" and "a maximum allowed price below the market price," although that is a bit of a mouthful. I find that the floors and ceilings language does work, however, if the instructor explicitly points out the oddity of floors above ceilings! In that case, students find the distinction memorable.
Chindogu, making the simple complicated
Today's bizarrely fascinating cultural nugget from Japan: Chindogu. Literally translated as "weird tool," Chindogu is the Japanese art of creating deliberately complex devices that solve simple everyday problems.
Here is one example:
The Dumbbell Phone
People cite "lack of time" as the number one reason they don't work out more. With the dumbbell phone, that's no longer an excuse. Great for bulking up at your otherwise worthless telemarketing job, this phone will have you shaped and sculpted in no time.
This phone also makes a great gift, especially to that parent, friend, or girlfriend who's been known to talk your ear off on the phone. It's subtle, but effective, especially for those with weak arms.
You'll see a photo here, along with a discussion of other ideas, such as using "solar power" to light your cigarette or a fan to cool off your hot noodles. The "grid-backed" shirt helps you tell your partner where to scratch your back. It's a trend:
There's the International Chindogu Society, the Ten Tenets of Chindogu (Number Three: "Inherent in every Chindogu is the spirit of anarchy"), and scores of websites devoted to tracking the newest, and most ridiculous, Chindogu inventions.
Personalized markets in everything, increasing cost edition
Ezra Furman takes his music personally. He doesn’t want to just write songs, he wants to change lives, and in the process have his life changed as well.
Which is why the 23-year-old Evanston native is doing something (take your pick) outlandish, heroic, Quixotic, exhausting, ridiculous. He’s writing a song for every fan who buys his latest album, Ezra Furman and the Harpoons’ “Moon Face: Bootlegs and Road Recordings 2006-2009,” available at ezrafurman.bigcartel.com.
More than 100 albums have been ordered since it became available a few weeks ago. Each consists of 10 tunes culled from Furman’s voluminous archive plus a customized song written directly to and for each paying customer. The tunes range from talking blues to more fleshed out melodies that Furman bashes out into a computer microphone on the road and then emails to his father back in Evanston to mail out on compact disc.
Here is more information.
Assorted links
3. Gladwell responds to Pinker.
4. Via Felix Salmon, Clay Shirky on ontological classification.
6. Why does the universe look the way it does?
San Antonio bleg
Alex and I will be there for the Southern Economics Association meetings, along with many other economists. I don't know the city well, as I've been there only once. There might be a bit of free time. What should we do? Where should we eat?