How bad is the Greek bureaucracy?

by  Tyler Cowen in

Canadian entrepreneur Steve Earle traveled to Greece with plans for what he hoped would be a flourishing business in a sunny, island-rich nation: a sea-plane airline.

But Mr. Earle's company, AirSea Lines, went bust five years later in 2008–hindered in large part, he says, by government bureaucracy. "They killed it by inertia," he says. "Greece is an unsustainable reality."

AirSea's odyssey illustrates one of the key problems preventing Greece from generating the economic growth it needs to pay off its heavy debts: Critics say a sprawling civil service has tried to secure its own survival through an opaque patchwork of fees, taxes and red tape. The European Commission estimates the administrative burden of Greece's bureaucracy–the value of work devoted to dealing with government-imposed administration–is equivalent to 7% of gross domestic product, twice the EU average.

There is much more here.  By the way, here is a new blog on the Greek financial crisis, in both Greek and English.

How to answer questions about your sexual orientation

by  Tyler Cowen in

As an aside, I cannot refrain from relating another anecdote, which is told of Gore Vidal.  In a TV interview he was asked: "Was your first sexual experience with a man or with a woman?"  To which he replied: "I was too polite to ask."

That is from Žižek citing Dolar, p.121.  It's a shame that Kagan does not have the liberty to answer in the same manner.

Assorted links

by  Tyler Cowen in

1. Paradoxes in measuring the coastline.

2. Is the thirty-year mortgage the result of government subsidy?

3. How do Republicans win elections?

4. The culture that is Brazil: central bank directive that banks can close during World Cup matches.

5. The opening of "Dostoyevsvky Station" is delayed – can you guess why?

6. Should the Kentucky Libertarian Party run a candidate against Rand Paul?

Food in Istanbul

by  Tyler Cowen in

My favorite sight has been the mother-daughter pair I saw on the Bosporous ferry.  They were hugging each other on the bench and had virtually the same profile features, yet the mother carried full traditional dress and the daughter wore a mini-skirt and was otherwise dressed comparably.  They loved each other dearly.

How you interpret these women is central to how you view Istanbul.  One intuition is that they are quite alike, another is that they are quite different.

And the food?  You can eat the traditional dishes, in simpler settings, or you can pay extra to eat them — slightly modified — in more gussied up surroundings.  The key to eating well here is to go simple and to look for the best and purest versions of straightforward dishes.  World class raw ingredients are at your disposal, if only you don't let anyone ruin them.

It's not hard to find the good stuff.  Thousands of street restaurants offer seafood (the fried small smelts are my favorite, then the sea bream or "levrek"), eggplants, fava beans, doner kebab, fried mussels, salads with cheese and tomatoes, lamb brains, fried and baked potatoes, Turkish ravioli (harder to find), spicy kabob with sumac, and other delicacies.  It is common for the small restaurants to specialize, an indication of quality.  A meal in these places, with one small portion, will cost six to ten dollars but you can (and should) order more.  Turkish sweets are the dessert and I prefer something with pistachio.

The rest is a sideshow.  Avoid all restaurants near the main sights or near clusters of tourist hotels.  Avoid most of the places — even Turkish ones — on the main thoroughfares.  Look for the neighborhood side streets with clusters of these small restaurants, just off the larger roads.  If you order small dishes, you can visit two or three restaurants in one meal, no problem.

My favorite small Istanbul restaurants have been the soup houses, especially the tripe soup (NB: you don't have to like most tripe dishes to enjoy these creations).  You ladle in some liquid garlic sauce, paprika, a bit of chili pepper, and a green herb of some kind.  Some of these places are open for breakfast.

Unless you've bled this city dry and sampled all the major dishes (which would take a long time), the return to going upscale, or seeking innovation, is not overwhelming.  What happens is that you're either paying higher prices to be in the company of attractive Turkish women or to impress attractive Turkish women who are already in your company.  Not that there's anything wrong with that, but the basic market model here is segregation of restaurant type.  If it's food you're after, don't pay more for the culinary twists.  The food will remain recognizably Mediterranean but it won't be the classic treatment you are looking for and which to you is still original on the fifth day of your trip.

If your restaurant has a good number of attractive Turkish women in it, perhaps you made a food mistake.  Or should I say a money mistake?  Or what kind of mistake?  The cuisine still will be good.

The good here is very good and the best isn't that much better. 

What do the freedom indices measure?

by  Tyler Cowen in

Here is a must-read post from StatsGuy, via James Kwak.  I don't agree with everything he says (e.g., Singapore, Wagner's Law) but here is his conclusion:

The Heritage Freedom Index is really a composite of measures that get at two different things: Good Government, and Less Government. Overall, the Good Government factors tend to dominate, and drive a lot of the correlation with good economic and quality of life outcomes. When one splits out the factors, the case for Less/Weaker Government weakens substantially, and the case for Clean/Non-Corrupt/Efficient government strengthens considerably.

Addendum: Here is a related discussion, especially in the comments.

Assorted links and non-links

by  Tyler Cowen in

1. The economics of old vs. new art markets.

2. Many people are recommending Johanna Blakely's TED talk, on "fashion's free culture," but Turkey finds it of questionable moral value and will not let me view it or link to it.

3. Top ten lessons of the global economic meltdown.

4. Why were some countries hit harder than others?

5. The increasing value of academic teamwork (he could have mentioned textbooks too!).

6. Puffincam.

7. Art Linkletter: an American life.

8. Mark Thoma on tax cuts and balance sheet recessions.

9. Does algorithmic trading improve liquidity?

Mick Jagger on the economics of music

by  Tyler Cowen in

…people only made money out of records for a very, very small time. When The Rolling Stones started out, we didn’t make any money out of records because record companies wouldn’t pay you! They didn’t pay anyone!

Then, there was a small period from 1970 to 1997, where people did get paid, and they got paid very handsomely and everyone made money. But now that period has gone.

So if you look at the history of recorded music from 1900 to now, there was a 25 year period where artists did very well, but the rest of the time they didn’t.

Jagger, of course, studied economics at LSE and is known to be a fan of Hayek.  Hat tip goes to Jerry Brito.

Speculative thoughts on the credit rating agencies

by  Tyler Cowen in

The sometimes-corrupt agencies rate securities and, in response, markets sometimes ignore these ratings but other times use these ratings to achieve nefarious ends, such as when mortgage-backed securities were overvalued and used to game the financial system.

Reform proposals aim to improve the quality of the agencies and limit their corruption.  Imagine honest agencies, overrating securities half the time and underrating them the other half of the time.  The underrated occasions still would be ignored while overrated securities still would be used to game the system.  The core problem would remain about half of the time.

An alternative proposal would be to remove the legal power of the ratings and require each agency to hire a convicted felon as CEO.  Board members would be restricted to men with ten years or more experience as a department store Santa Claus, or eleven-year-old female fans of Hannah Montana.  If the agency is wrong some of the time no matter what, and that error has bad consequences, should we not aim to lower the credibility of the agencies rather than restoring it?

The unenlightened economy

by  Alex Tabarrok in

SNAKING AROUND the outer wall of the courthouse in Mbaiki, Central African Republic, is a long line of citizens, all in human form and waiting to face judgment. It’s easy to imagine them as the usual mix of drunks, reckless drivers, and check-bouncers in the dock of a small American town. But here most are witches, and they are facing criminal punishment for hexing their enemies or assuming the shape of animals.

By some estimates, about 40 percent of the cases in the Central African court system are witchcraft prosecutions.

…most lawyers I consulted there favored keeping the law intact, although they admitted that it fits uneasily in a modern legal system. “The problem is that in a witchcraft case, there is usually no evidence,” said Bartolomé Goroth, a lawyer in Bangui…

More here.  Add this to the evidence for Joel Mokyr's thesis. 

Hat tip: The Browser.

Raghuram Rajan on health care in India

by  Tyler Cowen in

Hospitals in the United States could learn more from each other, as well as from hospitals elsewhere, including India, where costs have been brought down by bringing mass-production techniques perfected in manufacturing to health care.  Indian hospitals have found that error rate are reduced when their doctors specialize and perform many procedures of a similar kind.  The time for operations is also cut down, with no loss of safety.  A focus on eliminating unnecessary frills and on utilizing expensive resources like doctor time most effectively also helps even though good surgeons in India earn about as much as surgeons in the United States, the cost of operations is often an order of magnitude lower.  Regulations that force hospitals in the United States to be "full-service" hospitals rather than permitting specialization tend to drive up costs.  Greater competition between hospitals could also bring down costs; an easy way of encouraging cross-border competition is to authorize Medicare and Medicaid reimbursements for procedures performed by authorized hospitals in other countries, like Mexico and Thailand.

That is from Rajan's Fault Lines: How Hidden Fractures Still Threaten the World Economy.  Most of this book is on the financial crisis — and not health care — and it is one of the two or three best books on that topic.

Ramban, a 12th century Jewish Biblical Commentator

by  Tyler Cowen in

Doni Bloomfield sends me this passage:

Set aside a sum of money that you will give away if you allow yourself to be angered. Be sure that the amount you designate is sufficient to force you to think twice before you lose your temper… (Ramban: A letter for the Ages translated by Avrohom Chaim Feuer Reishit Chochmah, Shaar Ha'anavah Chapter 3)

The link to the source is here.