Germany Russia fact of the day
When it comes to supporting the military alliance, it seems the German public agrees more with the American president than with its own government.
According to the latest 2017 Global Attitudes survey conducted by the Pew Research Center, 53 percent of German respondents said Berlin should not take military action “if Russia got into a serious military conflict with one of its neighboring countries that is our NATO ally.” Yet Article 5 of the North Atlantic Treaty, which created NATO in 1949, commits member countries to come to the assistance of a fellow NATO member if that ally is attacked.
Here is the full article, via Bob Cottrell.
Companies by revenue per employee
I was surprised by some of this:
We found that Energy companies have the highest average Revenue per Employee, while Industrials and Consumer Discretionaries perform worst on this metric.
Technology companies performed at the lower end of the range on Revenue per Employee; part of the reason for this however, is other companies in spaces like Energy and Healthcare have large non-employee costs that Technology companies do not have.
…AmerisourceBergen, a pharmaceutical distributor, tops the list, generating more than $7.9M per employee in 2016. With a reported team of 19,000, which is less than half the workforce of Cardinal Health (37,300) and McKesson (68,000), the company compares favorably to its peers on revenue per employee. Cardinal Health and McKesson‘s RPE were $3.3M and $2.8M, respectively. Overall, Healthcare companies score well on revenue per employee, though they have other huge costs (the costs of administering drugs and health services).
As for the lowest revenue per employee:
It is perhaps unsurprising that Restaurant and Hotel chains make up the majority of the list. What is more striking is that IT providers Cognizant and Accenture have among the lowest revenue per employee in the Index.
There are several useful tables at the link. I do not think this is making any adjustment for independent contractors.
For the pointer I thank the estimable Chug.
Should the government guarantee jobs for people?
Adam Ozimek has a very good post on that question, here is one part of it:
(By the way, can you be fired from a guaranteed job? If you’re guaranteeing everyone can be hired, and nobody can be fired or even it’s very difficult to fire them, then that’s creating quite the management headache for whoever participates in this program.)
Crowd out is also a problem on the supply side of the labor market as well, and failing to accurately consider this means the estimated program costs are way too low. The goal of the program is to create 4.4 million jobs that will cost $36,000 a year each. CAP says this will only cost $158 billion. But this assumes there is no crowd out from people who already have jobs. If these are going to be “good jobs with good wages”, then why wouldn’t people who currently have jobs that aren’t as good or have lower wages from trying to get them? About a third of all workers earn less than $15 an hour, and EPI estimates that a $15 an hour minimum wage by 2024 would directly affect 22.5 million workers. So it’s easy to imagine that there would be 20 million people or more who want one of these guaranteed “good” jobs today. How do we decide who gets these jobs, and do we set a cap?
So it seems clear the $158 billion estimated cost is way, way too low. I don’t know if advocates know that this plan would result in a large scale nationalization of the economy and don’t care, perhaps even seeing this as a benefit, or if they are just making a mistake.
Do read the whole thing, Adam makes many good points.
Infrastructure words of wisdom
Places like Singapore have nice infrastructure because they have pro-saving public policies and effective cost controls on construction projects. America has neither. As long as this is the state of affairs, we will not have top-notch infrastructure, no matter how much money the federal government throws at the problem.
That is from Scott Sumner.
Monday assorted links
1. Is Japan suffering from a ninja shortage?
3. Is China on the cutting edge of AI? (NYT)
5. Cyprus reunification talks have collapsed. As I’ve said before, the relative absence of size-expanding political unions is a significant feature of our time, reflecting the power of vested interests and the inability to see through major changes.
The Italian Job
Each year there are more bank robberies in Italy (approximately 3,000) than in the rest of Europe combined, with a 10 percent chance of victimization on average.
…The average robbery lasts 4.27 minutes and leads to a haul of approximately 16,000 euros. Given that more than half of all bank robberies involve two or more perpetrators, the average haul per criminal is approximately equal to 8,700 euros.
…only about 40 percent of all bank robbers disguise themselves when robbing a bank.
Those are a few interesting facts from a bold new paper, Optimizing Criminal Behavior and the Disutility of Prison. The authors, Mastrobuoni and Rivers, use extensive data on bank robberies to model bank robbery as a second by second optimization problem:
The key insight of our model is that bank robbers face a trade-off when deciding how long to stay in the bank. By staying an extra minute, the robbers can collect more money, but they also run the risk of getting caught and sent to prison. The cost of being apprehended is a function of the disutility each individual places on going to prison. By equating the marginal benefit with the marginal cost of time spent in the bank, we can back out the unobserved disutility that robbers assign to prison.
The authors create a sophisticated model of optimizing behavior which they estimate using extensive data. In their conclusion, they focus attention on their finding that higher ability bank robbers have a higher disutility of prison. Thus higher ability offenders can be (especially) deterred by longer sentences. The authors focus attention on high-ability offenders because those are the offenders most likely to fit the assumptions of their rational-actor model. I think it’s actually better to focus on the contra-positive conclusion: its hard to deter idiots.
Moreover, there are plenty of idiots:
Not surprisingly, traveling to the robbery by foot and targeting a bank with a security guard are both consistent with lower ability offenders….
The existence of idiots, however, calls into question the optimizing assumptions of the model. As I argue in What was Gary Becker’s Biggest Mistake? the poorly-socialized-child theory of crime can suggest other approaches to combatting crime (e.g. cognitive behavioral therapy):
Here’s a simple test for whether crime is in a person’s rational interest. In the economic theory if you give people more time to think carefully about their actions you will on average get no change in crime (sometimes careful thinking will cause people to do less crime but sometimes it will cause them to do more). In the criminal as poorly-socialized-child theory, in contrast, crime is often not in a person’s interest but instead is a spur of the moment mistake. Thus, even a small opportunity to reflect and consider will result in less crime.
The guy who robs a bank that has a security guard and then attempts to run away seems like a poor fit for a rational actor model. Perhaps more thinking would have led a better planned bank robbery but more plausibly it would have led to no robbery at all. Thus, I’d frame the author’s contributions in this path-breaking paper as telling us not just about rational bank robbery but about the limits and bounds of rational bank robbery.
Net neutrality isn’t as big a deal as you might think
That is an unpopular point — with both sides — but it might just well be true. Here is a newly published study by Robert W. Crandall:
More than a year after a court invalidated its “net neutrality” rules on broadband Internet service providers (ISPs), the Federal Communications Commission (FCC) decided to extend public-utility (Title II) regulation on broadband services. This paper uses traditional event analysis of the movements in the values of major communications and media companies’ equities at key moments in the FCC’s path to this decision to estimate the financial market’s assessment of the likely effects of regulation on ISPs, traditional media companies, and new digital media companies. The results are surprising: the markets penalized only three large cable companies to any extent, and even these effects appear to have been short-lived. The media companies, arguably the intended beneficiaries of the regulations, were unaffected.
That is via the excellent Kevin Lewis.
Proust as speculator
Through a fast alternation of buying and selling, orders and counterorders, the end of 1911 marked Proust’s fastest plunge into debt exposure in his fifteen-year-long investing career. His patrimony amounted to about 1,522,000 francs, but more than 40 percent of it, precisely 640,000 francs, was tied up in forwards contracts—a crazy level of exposure for an amateur investor. In terms of American dollars, at this time Proust owned a personal fortune of $6,864,000 and had about $2,900,000 tied up in obligations to buy.
That is from Proust and His Banker: In Search of Time Squandered, by Gian Balsamo, via Ray Lopez. Ray also passes along this from the book summary:
Focusing on more than 350 letters between Proust and Hauser and drawing on records of the Rothschild Archive and financial data assembled from the twenty-one-volume Kolb edition of Proust’s letters, Balsamo reconstructs Proust’s finances and provides a fascinating window into the writer’s creative and speculative process. Balsamo carefully follows Proust’s financial activities, including investments ranging from Royal Dutch Securities to American railroads to Eastern European copper mines, his exchanges with various banks and brokerage firms, his impetuous gifts, and the changing size and composition of his portfolio. Successes and failures alike provided material for Proust’s fiction, whether from the purchase of an airplane for the object of his affections or the investigation of a deceased love’s intimate background. Proust was, Balsamo concludes, a master at turning financial indulgence into narrative craftsmanship, economic costs into artistic opportunities. Over the course of their fifteen-year collaboration, the banker saw Proust squander three-fifths of his wealth on reckless ventures and on magnificent presents for the men and women who struck his fancy. To Hauser the writer was a virtuoso in resource mismanagement. Nonetheless, Balsamo shows, we owe it to the altruism of this generous relative, who never thought twice about sacrificing his own time and resources to Proust, that In Search of Lost Time was ever completed…
Sunday assorted links
1. Peter Lawler, RIP, here is his just published essay “Souls Without Longing,” recommended. And here is an appreciation of Lawler, I was a fan too.
2. Jonathan Marks reviews Complacent Class.
3. Rachel Strohm is starting an email newsletter on politics and culture in Africa.
4. Some (mild) economic recovery for Italy? (FT)
Nation-building, nationalism, and wars
That is the new NBER working paper by Alberto Alesina, Bryony Reich, Alessandro Riboni, here is the abstract:
The increase in army size observed in early modern times changed the way states conducted wars. Starting in the late 18th century, states switched from mercenaries to a mass army by conscription. In order for the population to accept to fight and endure war, the government elites began to provide public goods, reduced rent extraction and adopted policies to homogenize the population with nation-building. This paper explores a variety of ways in which nation-building can be implemented and studies its effects as a function of technological innovation in warfare.
That is related to some recent work by Ferejohn and Rosenbluth.
Swiss travel notes
Switzerland has taken in a high portion of foreign-borns, yet without losing its identity or sense of order. Over 24 percent of the population is foreign-born, noting that almost half come from France, Germany, Italy, or Portugal. The country recently imposed restrictions on migrants from Romania and Bulgaria.
German as a second language in Switzerland is declining, as the migrant workers in the service sector do not command it with much fluency if at all. In Lugano, for instance, English now seems to be of more value.
In so many parts of the country unemployment is below two percent, with a national average of 3.3 percent. And the Swiss manage this with an “overvalued” exchange rate, at least by purchasing power parity standards. It is worth pondering how this is possible.
Probably the Swiss have never seen a better time. Their countryside is gorgeous and intact, and their major cities are creative and flourishing, yet many Swiss remain deeply unhappy about inward migration.
The Swiss are no “snowflakes;” they impose and enforce stiff penalties on those who don’t meet the insurance mandate, and they are on the verge of deporting an ethnically Spanish man who was born and raised in Switzerland, and who never has lived in Spain, for his repeated criminal offenses. Furthermore “Voters in Bern on Sunday rejected a proposed 105 million franc funding boost to help asylum seekers in the canton, primarily unaccompanied minors.”
It is striking how much the theory of comparative advantage has operated on Switzerland over the last thirty years, as the country has moved to a true economic integration with the EU.
I see Swiss cuisine as declining in relative value, as quality ingredients have spread to many other countries, including the United States (and Ireland!), but Swiss cooking has grown only marginally more imaginative. And food prices here can be 2x or more typical developed country levels.
Bern feels much freer and less provincial than it did thirty years ago, the last time I visited. Living here now seems imaginable. And in Bern you still can see a working public phone booth. Nor, from casual observation, do people here seem as cell-phone obsessed as their American demographic contemporaries.
As for Lugano, nothing seems to happen there.
Switzerland, an extreme country, and an extremely successful country, is always worth pondering. And visiting, even at 2x prices for the food.
Saturday assorted links
India Fact of the Day
..in the 10 years from 1999 to 2009, India’s workforce increased by 63m. “Of these, 44 million joined the unorganized sector, 22 million became informal workers in the organized sector, and the number of formal workers in the organized sector fell by 3 million.” This is a social catastrophe. It is due not only to labour-market distortions, but to a host of constraints on the creation, operation and, not least, closure of organised and large-scale businesses.
Clyde Schechter defends IRBs (from the comments)
This is not my view, but I am happy to present an alternative perspective for your consideration:
Yes, IRB’s sometimes do ridiculous things. But I served a total of 21 years on the IRB’s of two different institutions, and I’m sure I can match you anecdote for anecdote with obviously dangerous study protocols submitted by investigators, or protocols where the associated consent documents were blatantly misleading or so confusing that even professionals couldn’t understand them. It’s a small minority of submissions, to be sure, but it’s a recurring problem.
In my experience, most protocol delays in IRB review boiled down to issues of clarifying ambiguous language or providing additional background information so that the appropriateness of the proposal can be better assessed. I suspect that much of that could be avoided with better training of investigators on how to write their submissions. At one of the institutions where I served, my Department encouraged junior investigators to “pre-clear” their IRB submissions with me or another Department member who also served on the IRB. We were often able to spot the things that would likely catch the IRB’s attention and help those investigators revise their protocols before submitting them so that they would sail through approval without delays on the first try.
In my view, no person should ever be the judge of his/her own cause. There is nothing in the earlier rules, nor in the modified ones, that prevents an IRB from expediting the review of social science projects that plainly involves little or no risk. Such protocols can be turned around by a staff member in a day or two. But it should never be left to the investigators to make those assessments on their own.
Here is the link of origin.
The Beatles satellite radio Sirius XM station
Is this a good idea? A whole station devoted to Beatles music and Beatles music-derived products, plus a few early musical inspirations? I ask as a fan, not a critic. Based on about a week of listening, here are my impressions:
1. No Beatles songs were better live. Paul McCartney had a few gems in concert, most notably the 1976 Wings over America “Maybe I’m Amazed.” Oddly, “Magneto and Titanium Man” is also better live, perhaps because it was silly to begin with.
2. There are too many extant versions of “Here Comes the Sun,” though Nina Simone had a good one.
3. Ringo songs from the early 1970s, while you would never listen to them voluntarily, hold up OK in this context.
4. The worst feature of the channel is how they use short bursts of Beatle songs to advertise the channel itself. To play only the first few chords of “Getting Better” is an abuse of the ear and maltreatment of the art, like seeing Mondrian designs on shopping bags. Why can’t the station just advertise itself by…playing Beatle and Beatle-derived songs? In their entirety.
5. The last sequence of “Rain” still seem to me their finest moment. “Let it Be” remains the most overrated major Beatles song.
6. The early solo songs are what are most welcome to hear, at the margin.
7. The way this station operates doesn’t mesh well with the rest of satellite radio. No single station on satellite radio is that good, except for the classical music station. Yet the medium as a whole works because you can always switch to another station, especially with voice activation. Yet one is reluctant to switch away from the Beatles station. Even if the current song is bad, you feel something wonderful always might be coming up, and besides most of the songs are pretty short and so they will be over soon. But if it’s just the Beatles you want to hear, you don’t need satellite radio to achieve that end. So a funny kind of intransitivity kicks in, and maybe the Beatles satellite radio channel can nudge you away from satellite radio altogether, precisely because it is better than all the other channels, and it thus pushes you away from an approach based on a diverse menu of DJ-driven choice.
8. Would it hurt to play more Dylan, a major influence on the Beatles?