Markets in everything
I'm afraid to give this one much of a subtitle:
India's Hindu nationalist movement is launching a new soft drink made from cow urine.
The
bovine brew is in the final stages of development by the Cow Protection
Department of the Rashtriya Swayamsevak Sangh (RSS), India's biggest
and oldest Hindu nationalist group, according to the man who makes it.
Om
Prakash, the head of the department, said the drink – called "gau jal,"
or "cow water" – in Sanskrit was undergoing laboratory tests and would
be launched "very soon, maybe by the end of this year."
"Don't
worry, it won't smell like urine and will be tasty too," he told the
Times of London from his headquarters in Hardwar, one of four holy
cities on the River Ganges. "Its USP will be that it's going to be very
healthy. It won't be like carbonated drinks and would be devoid of any
toxins."
The drink is the latest attempt
by the RSS – which was founded in 1925 and now claims 8 million members
– to cleanse India of foreign influence and promote its ideology of
Hindutva, or Hindu-ness.
I thank John de Palma for the pointer.
Very good sentences
The good news is that we're going through this cycle more rapidly than Japan–dithering faster, you might say.
That's from Megan McArdle.
Jon Chait defends waste in the stimulus package
Read him here, commentary from Matt Yglesias. I know all about Keynesian ditch-digging but we should keep a few points in mind:
1. Some of these expenditures will end up being permanent or at least long-term.
2. Government expenditure does increase monetary velocity in a way that boosts aggregate nominal demand. But these higher velocity effects may not last for more than a single round of spending, which is to say they won't last long at all.
3. The second- and third-round stimulative effects of productive investments are much greater. Production begets further production through the complementarity of the capital structure and through its ability to create profitable, sustainable jobs.
4. A lot of the stimulus will shift people from one job to another, rather than simply employing the current unemployed. We really don't want to take people from producing something useful to producing something wasteful.
5. Many on the left are boasting that the U.S. government could borrow lots more (look at the current T-Bill rate), forgetting they used to warn us that international capital flows, as amplified through noise traders and speculators, mean that crises can arrive in a single, whiplash moment, bringing countries from riches to rags virtually overnight. Somehow those old narratives are being forgotten, I wonder why.
Assorted links
1. The Political Economy of the Financial Crisis, by the excellent Roger Congleton.
2. How to trick your three-year-old.
3. Markets in everything, Japan edition once again.
4. Serotonin and financial risk?
5. Arctic unicorns, worth a view.
The countercyclical meal plan, Arrow-Hahn-Debreu edition
Will Wilson blogs:
Seattle’s 5 Spot has a new “Blue Plate Special” promotion, with the daily meal priced like this:
recent close of the Dow Jones Industrial Average. If the Dow closes at
8650, then your “square meal” will only cost you $8.65; if it closes at
7875, then you win your meal for a mere $7.87.
There’s a built-in stop-loss, too. They make a limited number of blue plates each night, and when they’re gone, they’re gone.
Kicking the Stimulus
Smokers are three times more likely to kick the habit for at least six months when they are paid up to $750 (£520), a new study has found.
Nearly 900 General Electric workers took part in the test across 85 US sites. The results were published in the New England Journal of Medicine.
GE will launch a similar scheme in 2010 for all US employees, believing it will be cost-effective in the long term.
Buy a House, Get a Visa
Add Thomas Friedman to Tyler, myself, Lee Ohanian and others suggesting immigration as a way to alleviate the recession:
Leave it to a brainy Indian to come up with the cheapest and surest way to stimulate our economy: immigration.
Koreans,” said Shekhar Gupta, editor of The Indian Express newspaper.
“We will buy up all the subprime homes. We will work 18 hours a day to
pay for them. We will immediately improve your savings rate – no Indian
bank today has more than 2 percent nonperforming loans because not
paying your mortgage is considered shameful here. And we will start new
companies to create our own jobs and jobs for more Americans.”
Note that the multiplier on the “buy a house, get a visa” strategy would be much larger than any possible domestic multiplier since the money would come from outside the economy (and efficiency would improve as well.)
I think there would be considerable support among economists that immigration (buy a house, get a visa), a payroll tax cut and maintaining state and local funding would be reasonably good policies in this recession (albeit not necessarily sufficient) yet these policies seem to be the ones that the political system rejects out of hand. (See also Matt Yglesias here and here). Now, I can understand rejecting these policies as compared to doing nothing, ala a precautionary principle, but why these policies are rejected compared to taking a trillion dollar gamble is puzzling even to someone like myself schooled in public choice.
San Juan, Puerto Rico bleg
I won't be there for long, but where should I eat? Is there credible street food in or near the city?
Good sentences
Here is more, interesting throughout. Shakespeare, in his Henriad, understood that citizens do not allow their leaders to be nice, reasonable, likable guys who admit when they are wrong. I am still glad — for eggheady, "merit good," and self-aggrandizing of my own relative status reasons — that Obama is trying to be reasonable, but I am not naive as to what lies at the end of the process.
There is no good reason for this
Thomas Friedman reports:
…the U.S. Senate unfortunately voted on Feb. 6 to restrict banks and
other financial institutions that receive taxpayer bailout money from
hiring high-skilled immigrants on temporary work permits known as H-1B
visas.
It is, however, another unintended consequence of bail-outs and we can expect riders like this to increase as the amount of money spent is increased.
Krugman and Barro respond to Clive Crook
Via Megan McArdle, lots of back and forth, definitely worth a read, you decide.
The job market for economists turns…dismal
Here is a good article by Justin Lahart:
The dismal economy has claimed yet another victim: jobs for the economists who study it.
Columbia University's economics department, for example, isn't
making any new hires this year. That's in stark contrast to last year,
when Columbia poached eight economics professors from other schools,
and hired one economist out of graduate school. The University of North
Carolina at Chapel Hill, Amherst College and the University of
Minnesota all have suspended their searches for economics professors.
And Harvard University has gotten permission to hire just one person —
only after "many rounds of negotiation," according to Harvard economist
Lawrence Katz, who is handling recruiting this year. Typically, Harvard
hires two or three economics professors out of graduate school.
Barack Obama on Sweden
Read this post; here is Obama speaking:
Sweden, on the other hand, had a problem like this. They took over the
banks, nationalized them, got rid of the bad assets, resold the banks
and, a couple years later, they were going again. So you'd think
looking at it, Sweden looks like a good model. Here's the problem;
Sweden had like five banks. [LAUGHS] We've got thousands of banks. You
know, the scale of the U.S. economy and the capital markets are so vast
and the problems in terms of managing and overseeing anything of that
scale, I think, would — our assessment was that it wouldn't make
sense. And we also have different traditions in this country.
Here is a short movie by Ingmar Bergman. Here is a Carl Milles sculpture. Here is some cabbage with your pizza.
Interview with The Daily Beast
From The Daily Beast, with me. This was done before the new Geithner plan was announced. Here is one part:
maybe no one has a clear vision. And a finger in the dike is better
than nothing. But it's not a great place to be.
Here is the closing bit:
think things are manageable so it makes me more optimistic. I hope
that’s not just them trying to trick me. So you can take their response
actually as somewhat of a sign that things aren't as bad as the worst
doomsayers are claiming.
Today I am less optimistic about that.
Theories of TARP evolution
Via J. Wallace, here is a tableaux of how U.S. banking/bailout proposals have evolved. And of course the Geithner plan has hardly proven itself overwhelming. I offer up the following hypotheses, none of which settles the issue for me:
1. U.S. banks have been known to be insolvent for some time and everyone is simply afraid to come out and admit it.
2. The economists offer up coherent plans, but they are then bogged down by the input of competing advisers and Karl Rove-like politicos.
3. The goal of the various plans has been to confuse Congress.
4. The Republicans were just stupid and irresponsible and now the Democrats are smart but they lack experience at the rudder and they need another try to get it right.
5. The Republicans were just stupid and irresponsible and now the Democrats are just stupid and irresponsible.
6. The Obama team is brilliant and we are the silly ones who insist on imposing simple narratives on all policy actions. Good policy should be difficult to understand.
7. The Democrats made the mistake of setting an artificial deadline and by the time it came around they realized they had nothing so they put up what they had, which wasn't much.
8. We need to re-benchmark our expectations because the world doesn't work as well as we used to think. What we used to consider "bad policy" is, in reality, compared to the relevant alternatives, "reasonably good policy."
9. U.S. banks are insolvent but we can muddle through if we ignore that fact and let them evolve back into solvency. What we need is a plan which lacks transparency and Geithner delivered.
10. All of the above.