Results for “age of em” 17234 found
Paths out of The Great Stagnation
Thankfully, Thingiverse user Tom Lombardi invented a solution for this age old problem. Enter the Lucky Charms Sifter.
According to Lombardi, the humble-looking 3D printed cup removes over 90 percent of all the cereal, leaving only the marshmallowy goodness. All the user has to do is pour Lucky Charms into the cup and give it a good shake. The precision-printed holes are just large enough for the whole-grain hamster food to fall through, while still retaining the slightly larger marshmallows.
Here is more, hat tip goes to ModeledBehavior. And via Rob Nelson, here is 3-D printing for pet hermit crab shells.
That all said, 3-D printing is unlikely to end up being a transformative technology; transportation costs for what it can produce are already fairly low. The printers may in some longer run be cheaper than UPS, truck, and commercial rail, but that’s a moderate savings only, albeit a nice one.
The most likely paths out of TGS — by far — are artificial intelligence and natural gas supply (with some chance of E-Cat). Smart machines will be most successful in their least romantic, furthest from hard AI, most mundane forms, starting with Siri and Watson. Natural gas and other energy source developments will likely make North America the cheap energy power for much of the next fifty years; this may improve the quality of our foreign policy as a collateral benefit.
Assorted links
1. Dolphins have non-instrumental curiosity and orangutans have cultural transmission.
2. Phone storage trucks, markets in everything, also endangered species kakapo vomit remains.
3. Peter Chang update, including a feature film? Domestic mobility is way down, but still not for him.
4. They made me buy the new John Fahey box.
5. Peter Thiel’s latest project: independent entrepreneurial scientists.
Were non-bank banks actually a good idea all along?
I’ve been wondering that for the last few days. These entities were capped and banned in the late 1980s but once upon a time Sears Roebuck and American Express offered full banking services and their financial arms grew at a rapid clip. They took deposits but did not make commercial loans, thereby skirting banking legislation at the time and, I believe, avoiding FDIC premiums.
The big debate today is how to get more capitalization for the banks, and we have such absurdities as Basel III, not bad in spirit but somehow wishing that a bunch of essentially insolvent institutions magically had another $700 billion or so. I say the way to recapitalize banks is to keep them well capitalized to begin with. Indeed, we just bought a new microwave at Sears the other night. These institutions have a lot of commercial capital on the line.
At the time non-bank banks were banned because many people feared — and I can see why –that the non-bank banks would take big risks, backed ultimately by taxpayer money. (The banks also didn’t like the “unfair competition” and indeed it was unfair but of course it would have been fair had the model been allowed to spread more widely, allow more of them or by allowing commercial affiliation more generally, even mixed with commercial lending.) Prescient, no? Well, sort of. In reality, it turned out that the non-non-bank banks (i.e., the banks) did that anyway. With all the financial instruments and risky loans around, it is so much an extra problem that Sears Roebuck might initiate an overly aggressive lawnmower marketing strategy? I don’t know.
I do see the potential downside to the non-bank bank model, namely that systemic risk can become bigger yet through the traditional commercial sector. Not every company is as safe as Sears and even Sears has not always been safe. Still, at a time when the radicals amongst us wish that banks could be capitalized at say forty percent, is this not a model worth looking at once again?
Here is a 1987 Cato Institute defense of non-bank banks. Here is further background. And you can trace Adam’s posts on the idea here.
Andrew D. Smith has a question
There are a lot of companies out there trying to help consumers reduce energy consumption, theoretically to save money AND the environment. The NYT had a long story on a smart thermostat company today: http://www.nytimes.com/2011/10/25/technology/at-nest-labs-ex-apple-leaders-remake-the-thermostat.html
Can you discuss whether this can possibly work? As I understand the power industry, such a high percentage of the costs are upfront (with nuclear plants in particular, but with carbon burning plants as well) and the marginal price of producing energy (up to plant capacity) is so low, that falling demand would mostly cause plants to cut prices until they were again operating at capacity.
So “saving” energy at the consumer level won’t really reduce total energy consumption or gas emission.
Is that right?
Assorted links
1. On the new EU deal, and here too, the Italian ten-year yield is down only a small amount.
2. On TGS, the excellent Edward Tenner.
3. Telemundo will start using some English subtitles and other smatterings of the language.
4. More on Italian small firms, and here is Henry’s post but I think Italian small firms have to do better than just OK, once you consider the volatility of different sectoral fates.
5. Observations about successful fiscal adjustments, and economics Haiku.
Why the current revenue model of higher education is in trouble
The picture for females is also not pleasant, all from the excellent Michael Mandel. Those are simple facts, denied by some.
Non-college grads also have seen declining wages, and so one can look at the “finish college vs. finish high school only” margin and conclude that the return to higher education is robust. Another approach is to look at the “finish college and get on a real career track” vs. “finish college and hang out” margin and conclude the sector is in trouble, which indeed is the case. Don’t get stuck looking at the old margins only, the new and powerful margin, I am sorry to say, is relative to unemployment or extreme underemployment. The status and avoid-shame returns are high enough to keep a lot of people going to college, at current prices, but the falling real wages for graduates aren’t going to sustain an enormous amount of extra sectoral growth, including on the price side. Nor do I expect the preceding orgy of student debt to repeated, at that level, anytime soon.
Sikhs defend and promote Parmesan cheese the culture that is Italy
Many of Italy’s 25,000-strong Sikh community originate from India’s Punjab region but have found their calling producing Parmesan and prosciutto ham in Lombardy and Emilia Romagna. Most are employed as dairy hands but some, such as Singh, are taking over key roles in preparing the sharply flavoured hard cheese grated onto pasta dishes and shaved into salads the world over. “I looked for any work when I first arrived, even as a dishwasher. I was ready to do anything, but I like being a cheesemaker a lot,” said the 34-year-old father of two.
…There aren’t Italians in the industry any more. Making Parmesan means long hours: you have to work weekends, holidays, every day of the year. Italians have money and the young won’t do the job any more,” he said. “I’ve stayed because I’m passionate about it, you have to be,” said the 71-year-old as he supervised Singh stir vat after vat of slowly heated cow’s milk, breaking up the curds with a huge, unwieldy whisk.
“We’re really lucky to have found foreigners to milk our cows”.
At the dairy in nearby Novellara, which specialises in producing milk for making Parmesan, half the labourers are Sikhs, prized as methodical, hard workers who are eager to fill the posts that open as Italians desert the industry. By Italian standards, the money is very good too, with Sikh cheesemakers earning up to 2,000 euros (USD 2,800) a month.
“Most of our workers are Indian,” said farmer Stefano Gazzini. “They are more dedicated to their work. They seem to have integrated well into the community, and even have their own temple.”
The story is here and for the pointer I thank Kurt Schuler.
Addendum: Here is an NYT version of the story as well.
Is Iceland really doing so well?
I agree with Megan McArdle’s general point that the winners and losers from this financial crisis have not yet been sorted out. Here is Jon Danielsson, with some negative notes on Iceland’s economic performance:
Based on the current state of the Icelandic economy, the Fund’s claim of success [for Iceland] does not stand up to scrutiny.
- Public finances are not on a sustainable path,
- Exchange rates are not fully stable even with capital controls,
- Investment has collapsed, and
- The financial sector is dysfunctional.
At the same time, the Fund forced Iceland to impose a high interest-rate policy at the time when every other developed economy was doing the opposite…
GDP has declined by about 11% since the crisis of October 2008, but modest and volatile growth has returned, sustained primarily by an increase in private consumption catching up after two years of austerity. Worryingly, export growth is low, even with a sharp fall in the exchange rate, while investment is at a record low.
Business investment rates in Iceland equalled the EU average from 1995 to 2008, according to Eurostat.
- Over the past two years the investment rate in Iceland collapsed to 10% whilst the EU only suffered a small decline to 17%.
…Initially, the capital controls were touted as a temporary measure to prevent a sharp depreciation of the currency, but by now the domestic economy has adapted to their presence, and become increasingly inward looking. The signs point to the controls remaining.
…Unfortunately, the government has also been using the capital controls as means to implement industrial policy, politically selecting those allowed to use cheap offshore kronas to buy Icelandic assets. Such direct political selection of investors can only breed corruption, mistrust, and inefficiency.
From PaddyPower, not the same as the InTrade odds
From an email:
As EU leaders gather in Brussels to formulate a financial package to avert monetary meltdown, the latest odds from bookmaker Paddy Power show they face a mammoth task to convince the cynical markets.
Odds for Greece to leave the Euro first and a complete Eurozone break-up have shortened as analysts nervously wait for any detail which will secure the financial fate of the monetary union.
Greece is 2/7 to be first to leave the economic union, with Portugal next at 6/1. Germany is at 16/1 – perhaps an indication that the major player in the currency may fancy leaving the worst countries to their own devices. It is 6/5 at the Eurozone will be non existent by 2015.
Paddy Power said: “The ministers have a lot of work to do here. Concerns continue to grow about the stability of Spain and Italy and Greek financial stability still isn’t a foregone conclusion. If the great and the good in Brussels don’t come up with a detailed plan soon, it’s going to get a whole lot worse and that is what we are seeing in our betting.”
First to leave the Euro
2/7 Greece
6/1 Portugal
8/1 Ireland
12/1 Italy
12/1 Spain
16/1 Germany
16/1 CyprusEurozone Break Up
6/5 Eurozone to break up by 2015
4/7 Eurozone to break up by 2020
Caveat emptor!
“The network of global corporate control”?
This paper, by Vitali, Glattfelder, and Battiston, has been getting a lot of publicity, here is part of the abstract:
…We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic “super-entity” that raises new important issues both for researchers and policy makers.
I did not find this paper easy to follow, but I can show you the top few control holders, with Wikipedia links supplied by me:
1. Barclays, 2. Capital Group Companies, 3. FMR (Fidelity), 4. AXA, 5. State Street Corporation, and 6. JP Morgan.
The rest of the list, especially the top 25, is heavily financial, see a reproduction of it here. What does Barclays own on the commercial side? The paper is silent on this. CGC is a batch of mutual funds, far more decentralized than the aggregate measure from this paper would suggest; lately it’s been doing major layoffs. Fidelity is also a batch of investment funds and it is misleading to think of Fidelity shareholders as exercising control over what is held through the various funds, even though they are appointing managers to run the funds. AXA is a French insurance company and financial conglomerate. State Street is another umbrella of funds and investment companies, again proxying for a wide degree of dispersed investment. JP Morgan Co., chartered as a bank in the United States, faces serious limits on what it can own commercially, although it does run private equity services for clients.
Think about it: Fidelity proxies for millions of individual (and institutional) investors, and so it is not a corporate Blofeld in disguise. That it “owns itself” does not change this basic fact. Here is an interesting new paper on the role of mutual funds in current corporate governance; here is a somewhat older paper.
Mathematically derived linkages do not equal control or necessarily point in that direction. This paper needed a big dose of verstehen, it is more misleading than illuminating. Start again, distinguishing between ownership/control and financial intermediation and see what comes out of the mix. Comcast does own and control NBC and that relationship is different from the large network of assets held through Fidelity mutual funds. The real lesson of this paper is simply that a large chunk of financial intermediation is run through a few dozen firms, hardly a revelation.
I thank a loyal MR reader for the initial pointer. Addendum: Tim Worstall also nails it.
Assorted links
1. MIE: “Why not create a chrome trout?” From Courtney.
2. The problem of female labor supply in Italy.
3. Simon Dale’s Hobbit House in Wales.
4. Scaring tourists with a stick for 60k a year? And here is growing etrogs.
5. Walking robot requires no power sources, just give it a push (video).
Capitalist Kibbutz or from Marx to Rawls
The Israeli kibbutzim are surprisingly successful examples of voluntary socialism. Even today about 2% of the Israeli population lives on a kibbutz and they account for a significant share of output; about 4% overall (using data from 2004 from here and here) and much higher in some industries such as agriculture where the kibbutzim account for some 40% of Israeli output.
Nevertheless, the kibbutzim aren’t growing and, under economic and social pressure, many are privatizing in various ways. Most notably, beginning in 1998 many kibbutzim lowered the marginal tax rate from 100% (!) to about the same level as in the rest of Israel, 20-50%. The reduction in taxes meant that for the first time there were large wage differences for members of a kibbutz and, most importantly, there were large potential wage differences for those who increased their productivity.
In How Responsive is Investment in Schooling to Changes in Redistribution Policies and in Returns (free here) Ran Abramitzky and Victor Lavy look at the acquisition of human capital for high school students living on kibbutzim before and after the reduction in taxes (using a dif and dif strategy on early and late adopters). The authors find (from an NBER summary):
…The effects of the reforms were relatively small for students from highly educated families, in contrast to relatively large effects for students from families with lower parental education who had been covered by the pay reform for all of their years in high school. This group’s high school completion rates increased by 4.4 percent, their mean exam score went up by 8.3 points, their qualification rate for the Bagrut diploma increased by 19.6 percent, and the fraction of students with university qualifying scores increased by 16.8 percent….boys were most strongly influenced by the change.
The pay reform produced larger increases in educational outcomes than monetary bonuses for Bagrut diploma qualifying scores, a school choice program that allowed students to choose their high school in seventh grade, or a teacher bonus program that paid teachers of math, English, and Hebrew bonuses when their students did well on the Bagrut.
The authors argue that there are general lessons to be learnt:
Our findings have important implications beyond the Israeli context. First, they shed light on the educational responses that could result from a decrease in the income tax rate, thus are informative on the long-run labor supply responses to tax changes. Second, they shed light on the educational responses expected when the return to education increases. For example, such changes might be occurring in many countries as technology-oriented growth increases the return to skills.
I am less confident that the numerical results can be generalized, although of course the general point that incentives matter is well-taken.
The results, however, raise another issue. The original kibbutz were inspired by a combination of Marxism, socialism and Zionism. In the capitalist kibbutz, there is an opportunity for a new principle. Taxes can be set not according to Marx but according to Rawls and his second principle of justice: inequalities are to be allowed so long as they benefit the least-advantaged members of the society/kibbutz.
Thus, it would be interesting to know if any of the kibbutz have tried to adjust taxes so as to implement a Rawlsian approach to inequality (if not, perhaps Israeli taxes are already above Rawlsian levels.)
Where to eat in Naples
1. Friggitoria-Pizzeria Giuliano, Calata Trinia Maggiore 33, open at 7 a.m. or so, one of the best pizzas I’ve had, and for only four euros.
2. Mandara, Via Ponte di Tappia 90-92, doesn’t look like much, more of a deli than restaurant, order at the counter and mimic the choices of others. Go before the line heads out the door.
3. Il Piccolo Ristoro, Calata Porto di Massa, inside the port, not really on a street, the cabbies seem to know where it is, only a few tables, one of the best seafood meals I’ve had. Not outrageously expensive.
Recently I had two and a half days in Naples, following a meeting in Rome, and it is one of my favorite cities. To live in, it combines the worst of Europe and the developing world…to visit, it combines the best of Europe and the developing world.
Why is Italy doing so much worse these days?
Here is the graph from yesterday. So why has Italy done so much worse? During 1950-1990 or so it was a stellar growth performer, though some of this was catch-up growth from wartime destruction. It does not satisfy me to cite Italy’s corrupt and dysfunctional political culture, since that has been the case for a long time, maybe forever.
A good introduction to the bright side of Italy’s economy is Michael Porter’s 1998 The Competitive Advantage of Nations; Porter portrays Italy as having some vital clusters of family-owned businesses, largely in the North. Do you want your kitchen redone with some nice marble tile? Italy can supply just the right stuff. This neat graph shows just how much Italy has specialized in small business.
Perhaps therein lies the problem. With the advent of modern communications and information technologies, arguably the return to “small family firms” has fallen. The return to “largish projects consummated over large distances” has gone up. For Europe, the big winners here are the Nordic countries, which have worked very effectively with information technology and which do not rely so much on family ties to get efficient, non-corrupt management. The losers are Italy and Greece and Portugal too; read this superb paper on how Portugal is cursed by being stuck with all these small firms, inefficiently small for legal and regulatory reasons. These countries seem to be locked out from some of the major sources of contemporary economic growth.
Here is a very important and insufficiently appreciated sentence from the Portugal paper: “…the largest part of the productivity gap between developed and developing countries can be attributed to the inefficient allocation of resources across firms in the latter countries.” And alas Italy stands with one foot in the underdeveloped world; I am reminded of Yana’s excellent sentence, voiced upon visiting Sicily for the first time: “This reminds me of Mexico (pause) — except it’s not as nice!” (Fear not people, she loved Sicily, as do I.)
And those are the countries with the biggest problems in the eurozone. Ireland is closer to the Nordic model, as they do lots of software and hardware with MNCs, and you can see them recovering from this mess more quickly. AD matters, but real shocks and competitiveness matter too. Negative real shocks don’t have to involve “forgetting how make ice cubes.” Ex ante, countries specialize in production methods and networks, and the subsequent evolution of technology does not always bear out their choices as wise.
Viewed in these terms, it is hard to see policy changes bringing a quick Italian recovery. Italy remains good at what it long has been good at, and you can think of their superb restaurants as further and highly visible examples of small, family-run firms. Sadly for them, those efficiencies are not worth quite as much these days.
Addendum: Here is one extensive look at Italy’s growth slowdown in the 1990s.
What I’ve been reading, not reading, or is in my pile
1. Eyes of God, a novel by Philip Babcock, economist at UC Santa Barbara. It is about intrigue and Indonesia.
2. By page 200 I got bored of the new Eugenides novel. The Barbarian Nurseries reaps high praise and is well-written but it feels too ordinary for me.
3. Ladies of Liberty: Women Who Made a Difference in American History, by John Blundell. Biographical sketches of libertarian and libertarian-themed women in U.S. history. Includes Rose Wilder Lane, Isabel Patterson, Rose Friedman, Jane Jacobs, others.
4. Michael Nielsen, Reinventing Discovery: The New Era of Networked Science. The best book on the potential for open, networked science, looking forward. Joshua Gans on the book here and here, the latter having a link to Michael’s TEDx talk.
5. Robert Trivers, The Folly of Fools: The Logic of Self-Deceit and Self-Deception in Human Life. Brilliant, insightful, with occasional lapses of taste, quintessential Trivers, now the go-to book on its topic, recommended.