Good Letter, Wrong Address

by  Alex Tabarrok in

Mark Thoma has an An Open Letter to ABC about the Presidential Debate signed by Brad DeLong, Kevin Drum, Henry Farrell, Eric Alterman and many others. 

The debate was
a revolting descent into tabloid journalism and a gross disservice to Americans
concerned about the great issues facing the nation and the world….
For 53 minutes, we heard no question about public policy from either
moderator. ABC seemed less interested in provoking serious discussion than in
trying to generate cheap shot sound-bites for later rebroadcast. The questions
asked by Mr. Stephanopoulos and Mr. Gibson were a disgrace…

I agree.  The only thing the signatories got wrong was where to send the letter.  The letter should have been addressed to the American public.  After all, this debate, which came in the flurry of all the tabloid journalism of the past several weeks, was the most-watched of the 2008
presidential campaign.  The public got what it wanted.

The Horse the Wheel and Language

by  Tyler Cowen in

The tribes Europeans encountered in their colonial ventures in Africa, South Asia, the Pacific, and the Americas were at first assumed to have existed for a long time.  They often claimed antiquity for themselves.  But many tribes are now believed to have been transient political communities of the historical moment.  Like the Ojibwa, some might have crystallized only after contact with European agents who wanted to deal with bounded groups to facilitate the negotiation of territorial treaties.  And the same critical attitude toward bounded tribal territories is applied to European history.  Ancient European tribal identities — Celt, Scythians, Cimbri, Teoton, and Pict — are now frequently seen as convenient names for chamelon-like political alliances that had no true ethnic identity, or as brief ethnic phenomena that were unable to persist for any length of time, or even as entirely imaginary later inventions.

That is from David W. Anthony’s The Horse The Wheel and Language: How Bronze-Age Riders from the Eurasian Steppe Shaped the Modern World.  In particular this book focuses on the origin of the Indo-European language group and the relationship between archeology and linguistics.  He is also skeptical of Jared Diamond’s well-known thesis that early Europe had much diffusion of innovation in the East-West direction.  Recommended.

Climate solutions and carbon dividends

by  Tyler Cowen in

Peter Barnes, Climate Solutions: A Citizen’s Guide is the full title.  This simple book is written in the form of punchlines and cartoons but it’s still one of the more insightful treatments of the topic.  He is skeptical of a carbon tax:

A carbon tax will never be high enough to do the job.

A low carbon tax would create the illusion of action without changing business as usual.

His alternative proposal has four steps:

1. Carbon cap is gradually lowered 80% by 2050.

2. Carbon permits are auctioned.

3. Clean energy becomes competitive.

4. You get an equal share in the form of permit income.

The "carbon dividends" of course are intended to make the tax politically palatable.  Naturally I am worried by the idea of revenue addiction, not to mention the general practice of redistributing income from business to citizens simply because it is popular to do so.  It might feel pretty good at first but we don’t want to encourage Chavez-like behavior on the part of our government.

A broader question is whether the carbon dividends in fact make the citizenry better off.  First there is the question of the incidence of the initial carbon tax, which of course falls on individuals one way or another.  Second, does just sending people money, collectively, make the populace better off?  Aggregate demand effects aside, will the fiscal stimulus make the citizenry as a whole better off?  No.  Will printing up more money and sending it to everyone, even if that is popular, make people better off?  No.

(As an aside, does the Humean quantity theory experiment redistribute wealth from corporations — which don’t sleep on pillows and thus cannot wake up in the morning to "more money" — to individuals, who do sleep on pillows?  Or is the corporate veil fully pierced?  Just wondering…)

I fear versions of this idea whose (possible) popularity rests on tricking voters.  Being pro-science also means being pro-economic science. 

The general point remains that most discussions of global warming focus on prices and technologies alone, without incorporating realistic models of politics.  By the way, if you think John McCain is a straight talker, try this for yikes. 

The countercyclical asset

by  Tyler Cowen in

Sorry, but the problem has become worse and I have to blog this again:

In Haiti, where three-quarters of the population earns less than $2
a day and one in five children is chronically malnourished, the one
business booming amid all the gloom is the selling of patties made of
mud, oil and sugar, typically consumed only by the most destitute.

“It’s salty and it has butter and you don’t know you’re eating dirt,”
said Olwich Louis Jeune, 24, who has taken to eating them more often in
recent months. “It makes your stomach quiet down.”

Netflix pricing

by  Tyler Cowen in

It looks kind of screwy; 3 movies at a time is $16.99 a month but 8 movies at a time is $47.99 a month.  After three movies, the average cost of a rental (see the link for the numbers) is either flat or rising.  Why go for the 8 movies deal instead of setting up separate accounts and queues, thereby saving money?  Why is Netflix encouraging everyone to do the 3 movies a month version of the plan?  Why are there no quantity discounts past the 3 movies a month margin?  (And, by the way, aren’t there still lower prices for newbies, at least for a while?)

I suspect this is one of those pricing models that traps a small number of overenthusiastic patrons into paying more, keep a few others away from overgorging on old Jackie Chan films and then quitting prematurely, and de facto gives most customers a pretty flat pricing structure.  Transparency is sacrificed but does anyone really care?

The pointer is from Angus Hedrick.

The safety of elevators

by  Tyler Cowen in

Nonetheless, elevators are extraordinarily safe–far safer than cars, to
say nothing of other forms of vertical transport. Escalators are scary.
Statistics are elusive…but the claim, routinely advanced by elevator professionals,
that elevators are ten times as safe as escalators seems to arise from
fifteen-year-old numbers showing that, while there are roughly twenty
times as many elevators as escalators, there are only a third more
elevator accidents. An average of twenty-six people die in (or on)
elevators in the United States every year, but most of these are people
being paid to work on them. That may still seem like a lot, until you
consider that that many die in automobiles every five hours. In New
York City, home to fifty-eight thousand elevators, there are eleven
billion elevator trips a year–thirty million every day–and yet hardly
more than two dozen passengers get banged up enough to seek medical
attention. The Otis Elevator Company, the world’s oldest and biggest
elevator manufacturer, claims that its products carry the equivalent of
the world’s population every five days.

And I like this passage:

Two things make tall buildings possible: the steel frame and the safety
elevator. The elevator, underrated and overlooked, is to the city what
paper is to reading and gunpowder is to war. Without the elevator,
there would be no verticality, no density, and, without these, none of
the urban advantages of energy efficiency, economic productivity, and
cultural ferment.

Here is the article, interesting throughout.

Sunspots forever

by  Tyler Cowen in

David Cass, formerly an economist at the University of Pennsylvania, has passed away.  His contributions were notable:

He made singular
contributions to economic theory, including the introduction of the "Cass-Koopmans"
growth model, the discovery of the "Cass" criterion for Pareto efficiency in overlapping
generations models. With Karl Shell, he discovered the importance of extrinsic uncertainty (sunspots)
in economic dynamics.  His work with many
coauthors on incomplete financial markets was extremely influential.

The main idea of sunspots models is that when multiple equilibria are present, expectations can determine which equilibrium comes to pass.  This is a twist on rational expectations; under RE people expect the true model but Cass showed that what is the true model will depend on what people expect.  If I recall correctly, Cass also helped figure out when problems with infinities will render growth models incoherent or invalid.  Cass’s version of "high theory" is exactly what is out of fashion today but in the 1980s it was the rage.  I believe some of his work will return in importance.  Here is Cass on scholar.google.com.

Thanks to Chester Norman for the pointer.

Russ Roberts asks about Beethoven’s slow movements

by  Tyler Cowen in

I was giving a talk and I referred to Beethoven’s slow movements as some of the most splendid creations of humankind.  Russ asked me for a list, so I’ll nominate the following:

1. The Emperor Concerto.  This warhorse is a much underrated piece of music, especially the slow movement.  The best recording, and indeed one of the best classical recordings of all time, is Michelangeli-Celibidache.

2. Beethoven’s 9th.  You could try the recordings by Abbado, Barenboim, or Klemperer, among others, for sublime takes on the slow movement.

3. The Late String Quartets, most of all Op.132 but indeed all of them.  The slow movements are done best by Quartetto Italiano or the Busch Quartet, noting that the latter has inferior sound quality.

4. Hammerklavier Piano Sonata.  Schnabel’s take on the slow movement is the most profound, but his outer movements are a mess.  Gilels or Pollini are safer.  The box of late piano sonatas by Solomon covers the slow movements beautifully as well; when push comes to shove that is my pick.

Richter-Rostropovich are the choice for the slow movements in the cello sonatas.  And don’t forget Ivan Moravec playing the slow movement in the Appassionata.

The Mobi

by  Alex Tabarrok in

The Mobi is Germany’s mobility bonus, funding that covers moving, relocation and retraining costs for unemployed Germans seeking work anywhere in the world.

Plagued by high unemployment due to the turmoil of
re-unification and rigid labour laws, Germany has been helping
its skilled and less-skilled jobless workers match up with
foreign employers searching for manpower.

The country has also been offering financial support to
cover moving and transportation costs for the hordes of
unemployed Germans in search of jobs across the European Union,
and even as far away as Australia and Canada.

The mobility bonus strikes me as a move of desperation. The Germans have created a bloated welfare state and now they are paying people to get off the welfare rolls and get out.  I wonder what Rawls would have said?

Even now, I see an opportunity for America:

Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!