Univision and Hispanic assimilation: a market test

by  Tyler Cowen in

When Univision [the major Spanish-language TV station] put itself on the auction block earlier this year, it was widely seen as an effort…to capitalize on the surging interest in the fast-growing Hispanic media sector.  Univision signaled early on that it was seeking $40 a share, or more than #13 billion, and was confident it would attract interest from both major media companies and private-equity investors.

But big media…never emerged as serious bidders.

Some of the issues were the general decline in television advertising and regulatory constraints on cross-ownership.  The article continues:

And then there is the demograhic issue: New Hispanic immigrants to the U.S. frequently are drawn to Univision and its popular telenovelas — essentially Spanish-language soap operas  But their children eventually become more mainstream media consumers, after immersing themselves in English-language programming.

That is from The Wall Street Journal, 23 June 2006.  The share price has been falling. 

If you disagree with me on immigration and assimilation, as I know a few of you do, I urge you to buy stock in Univision.

My favorite things Swiss

by  Tyler Cowen in

I am here only briefly, to talk about how America funds the arts.  Of course my favorite thing Swiss is Switzerland itself; in that sense I agree with the natives.  But to get more specific:

1. Sculptor: Alberto Giacometti is the obvious choice, runner-up is Jean Arp.  The smaller the Giaocometti sculpture, the better it is likely to be.  You could say the same for Calder.

2. Drama: I’ll opt for Durrenmatt’s The Visit of the Old Lady or The Physicians, or Max Frisch’s Don Juan, or the Love of Geometry.  I like these better than any Swiss novel.

3. Painter: These days I find Paul Klee repetitive.  Arnold Boecklin and Ferdinand Hodler are both consistently interesting, if not always consistent.  Try this Hodler.  Here is the most famous Boecklin.  Henry Fuseli, who moved to England and became a perverse quasi-Romantic, remains underrated.

4. Novel: I don’t know of a great Swiss novel, unless you count Rousseau’s Heloise for its historical value.  Max Frisch’s Gantenbein is one runner-up.  Robert Walser has his moments.

5. Music: This one gets tough.  Honegger bores me.  I will listen to Frank Martin, though he is not a favorite.  Paul Hindemith was of Swiss-German extraction but born in Germany.  He would otherwise win hands down.  Edwin Fischer was a wonderful Bach pianist.  Swiss popular music is too ghastly to contemplate, as is the folk music.

6. Actress: Can I say Ursula Andress?

7. Movie, set in: I still like George Lazenby’s Bond movie, On Her Majesty’s Secret Service.

Extra: You’ve also got Saussure, the Bernoullis, and the Eulers, not to mention Le Corbusier.  There is an overall inclination toward the mechanical, the scientific, and the systematizing.  Perhaps that is why music is so weak.

The bottom line: It is not just cuckoo clocks (as Orson Welles had suggested), which in any case do not originate in Switzerland. 

Robin Hanson’s ‘Myth of Creativity”

by  Tyler Cowen in

Here is the link.  Excerpt:

To succeed in
academia, my graduate students and I had to learn to be less creative
than we were initially inclined to be. Critics complain that schools
squelch creativity, but most people are inclined to be more creative on
the job than would be truly productive. So schooling is mostly about
selecting the smarter and more diligent, and learning to show up day
after day to somewhat boring jobs with ambiguous instructions.


What society needs is not more creativity or suggestions for change but
better ways to encourage people to focus on important issues, identify
the most promising ideas, and tell the right people about them. But our
deification of creativity gets in the way.

The microeconomics of Click

by  Tyler Cowen in

You know, the new Adam Sandler movie; try this site for the trailer.  The guy has a universal remote control device which he can use to Pause, Fast Forward, or Rewind reality, rather than TV.  How much would you pay for such an item?  And what would you do with it?

Of course you would use it to prevent accidents, such as car crashes.  You would likely die of old age.  I wouldn’t use fast forward much.  If you want more money, Pause could help you shuffle through confidential papers and garner inside information for trading (or are the papers glued to the desk and thus unreadable?). 

Voyeurism is another possibility, as explored by Nicholson Baker’s much-underrated The Fermata.  Here is one good excerpt from the book.  Here is a summary of the basic plot.

I will predict the movie argues that this device is more dangerous than useful and that Adam Sandler must give it up to find happiness with the ever-so-cute woman of his dreams.  Given self-constraint issues, I have yet to find a value-maximizing scenario for the device, can you?  Somewhere in here is a lesson about strong temporal complements and perhaps business cycles as well.

Here is my previous post The Macroeconomics of Superman.

Strange questions I ask Bryan Caplan

by  Tyler Cowen in

Assuming you start from a multi-dimensional global utility maximum, which Lancastrian characteristics — with non-trivial shadow prices — would you like more of in a corresponding unconstrained equilibrium?

Forget about money or time, which obviously we all want more of.  Which unbundlings do you desire? 

I, for one, would like to have more of Bryan.  But he is bundled with Fairfax.  I travel a great deal and he usually stays put.  I can’t get much more of him in my first best outcome.  But if he were suddenly eating kabobs with me in Hyderabad, if only for an hour, how fun that would be.  More generally, I would like to have a less wide circle of friends but my Wanderlust interferes.

I would like taste to be unbundled from calories.  I would like books to be smaller, lighter, and easier to carry, if that were a free lunch so to speak.  I would like fantasy novels to be bound by stricter rules.

What would you like to see unbundled?

Kenneth Arrow on academic freedom

by  Tyler Cowen in

Bowen: There was a study done recently by an economist at Santa Clara University,
Daniel Klein, showing disproportionate numbers of registered Democrats
versus registered Republicans in various departments at the University of California, Berkeley,
and Stanford. [The study’s findings are available at
http://www.ratio.se/pdf/wp/dk_aw_voter.pdf.] He has concluded that this
kind of ideological imbalance has a negative impact on the education of
students. He implies that
there is a temptation to hire one’s own. Conservative activist David
Horowitz has made much the same kind of statement, saying that faculty
are preaching rather than teaching. And why?  Because there’s a gross
imbalance between liberals and conservatives in the professoriate. Effectively,
they are calling for government regulation of the academy [TC: Klein is not, this is inaccurate]. Do you worry
about calls for legislation at the state level to correct this
situation? Does this worry you as an economist or as a professor?

Arrow:
You know, it certainly does worry me. It would worry me a lot if
legislation passed. There was a concern at one time that there would be
repression of the left. And now there are concerns that the left is
taking over. It’s hard for me to judge, of course, but I must say that
my department contains
a number of Republicans. And they were appointed by a democratic group,
whose members said these guys are good, and we’ve got to hire them. And
so far, I have not seen it work the other way, but I’m a little
concerned about where it could swing. In this case, the criticism seems
to be just wrong, because I think the departments hire on the basis of
merit. And I think it’s nonsense to say that we’re discriminating
against Republicans. We hire them all the time. On the other hand,
there was a department here that until the 1960s would not appoint a
Jew. And, finally, the university did interfere, you see, in that case.
The dean took over the department. He took away the power to appoint
from the department and changed its   composition in three or four
years. In fact, I was amazed how rapidly he was able to turn things around
to strengthen an already very good department. To defend the autonomy
of that department would not have been something I would have been very
happy to do.

Bowen: The  economics department at the University of Chicago
has had a reputation for many years for being quite conservative. Do
you think that’s the exception that proves the rule that you hire, as
you said earlier, on the basis of merit, not on the basis of party
identification of ideology?

Arrow:
There are people in that department who are not conservative. It’s a
very good department. Most of the conservatives are really quite
outstanding. I think they flock together. I
don’t think it’s entirely the case where you pick your own kind. I
don’t think the economics department here is reproducing itself.
They’re different politically and methodologically. I think
methodological problems have been bigger more often than political
issues. I do not believe the
university, the central administration, should be totally unconcerned
about appointments. I used to believe that the department had to be
completely autonomous. It took me a couple of years to realize that
that was not right.

I can remember an instance at Chicago
in which there was an incident involving a professor of economics who
was sort of a village atheist type. He was a very good economist, but a
little eccentric. He believed that religion was one of the big
oppressive things in this world. This fellow saw a priest in class. He
went and gave his whole lecture on the evils of the Catholic church.
The next time the priest came, he gives another lecture. The priest
finally quit the class, and the professor said that he could finally go
on with the course.

Well,
you know, the priest went to the chair of the department who had a very
good record on academic freedom at the university. And the chair said
it was a question of academic freedom. He wouldn’t interfere with this
professor.   
      

TC: Does anyone have data on Stanford?
 

Elsewhere

by  Tyler Cowen in

1. Top-down cosmology, from Stephen Hawking: "Out of this profusion of beginnings, the vast majority withered away without leaving any real imprint on the Universe we know today. Only a tiny fraction of them blended to make the current cosmos, Hawking and Hertog claim."  Hat tip to Jason Kottke.

2. France yields on iTunes, sort of.

3. A listing of libertarian professors; apparently I still make the grade.

4. Bryan Caplan doubts himself.  Beware the intelligent argument, it may seduce you.

5. "People are going to be having sex with robots within five years."

6. Larry Summers offers investment advice: poor countries should buy fewer U.S. Treasury securities and more equities.

Is art a good investment?

by  Tyler Cowen in

Daniel Gross writes:

…the data shows that art performs well as an asset over time.

He offers plenty of evidence but I am skeptical.  Studies of auction prices are usually biased toward the winners; the losers never go on the block again or are sold quietly at a loss through dealers.  Many pieces turn out to be fakes.  The placement costs in the dealer market can be higher than those at Sotheby’s.  Storage and insurance costs for masterpieces are considerable.  Art is so much fun it can’t earn the same rate of return as equity, otherwise no one would buy stocks.

Why are corporate reports hard to read?

by  Tyler Cowen in

Apparently there’s a simple reason why annual reports are hard to
read: managers, in many cases, are trying to hide something.

The study, Annual Report Readability, Earnings and Stock
Returns, found that the annual reports of underperforming
companies are harder to read than those of companies that are
performing well.

Feng Li, an assistant professor of accounting at the university,
measured annual report "readability" using a sample of more than
55,000 company reporting years. He examined syllables per word and
words per sentence in reports filed with the Securities and
Exchange Commission.

He used two readability measures.

First, the "Fog Index" indicated the number of years of formal
education a reader of average intelligence would need to read the
text once and understand it. Fog = (words per sentence + per cent
of complex words) x 0.4. Complex words were defined as words of
three syllables or more.

Second, the Kincaid Index rated the reports on a US primary
school level.

According to the study, annual reports of companies with lower
earnings were more difficult to read. Similarly, companies that had
volatile earnings were more likely to produce abstruse reports.

Here is the full story.  The bad companies might be obfuscating.  Alternatively, poor quality production might be correlated with poor quality writing.  Thanks to Natasha for the pointer.

Adam’s Fallacy: A Guide to Economic Theology

by  Tyler Cowen in

Adam Smith that is, the author of this new book is Duncan Foley, and the fallacy is the idea of the invisible hand of the marketplace turning greed into the public good.  Imagine a neo-Marxist introduction to the classical economists, written at a popular level, with plenty of Marx plus bits of commentary on Hayek and Veblen.  Overall the book puzzled me; it hovers on the verge of making definite claims but draws back each time.  I’d rather have a good slugfest with clearly staked out positions.  This is an attempt to be the next Robert Heilbroner.  It is not my cup of tea, but some of you will want to buy it here.  Here is my earlier post on what remains valid from the economics of Karl Marx.

Is the demand for money interest-elastic?

by  Tyler Cowen in

Read the ongoing debate over at EconLog.  Bryan Caplan writes:

When I’ve asked economists "Do you hold less money when
interest rates rise?," they usually admit that they don’t. And we’re
trained to think we should! If we asked non-economists the same
question, I bet that most would simply be baffled.

I have much sympathy for this view as long as we are talking about currency.  But it is a trickier question for the broader monetary aggregates.  High measured nominal interest rates alter the real interest rates faced by some market participants.  We don’t all face the same rate of price inflation.  High nominal rates of interest, for this reason, proxy for a high variance of real interest rates (across individuals) and perhaps a more general greater future uncertainty as well.  I would not be surprised if these effects kept down the broader measures of money demand, albeit not the demand for currency through the mechanism of portfolio substitution. 

Let’s not forget the Litterman and Weiss result (Econometrica, 1983) that high nominal interest rates in a VAR model predict bad times ahead.  Who knows why, but they do.  So why can’t they predict money demand as well?

Sometimes a nominal interest rate is not just "a nominal interest rate," to turn Freud’s aphorism on its head.