Month: July 2010
Assorted links
Le Club Pigou?
French tourists who run into trouble after taking unnecessary risks overseas could have to pay for their rescue and repatriation under legislation debated today by MPs in Paris.
The proposed law, put forward by a government tired of having to foot the bill, would enable the state to demand reimbursement for "all or part of the costs … of foreign rescue operations" if it deems that travellers had ventured knowingly and without "legitimate motive" into risky territory.
According to the foreign ministry, the bill is an attempt to encourage a "culture of responsibility" among French travellers at a time of frequent kidnappings, hijackings and civil instability across the world.
Germany already does this to some extent; for instance a German backpacker rescued in Colombia had to pay twelve thousand euros to cover the cost of her helicopter trip. The full story is here.
The Peltzman Effect
The NHTSA had volunteers drive a test track in cars with automatic lane departure correction, and then interviewed the drivers for their impressions. Although the report does not describe the undoubted look of horror on the examiner’s face while interviewing one female, 20-something subject, it does relay the gist of her comments.
After she praised the ability of the car to self-correct when she drifted from her lane, she noted that she would love to have this feature in her own car. Then, after a night of drinking in the city, she would not have to sleep at a friend’s house before returning to her rural home.
From CSV. The Peltzman effect doesn’t mean that improvements in safety are always negated but it does remind us that we can never ignore the human response.
Hamburg notes, Hafen-City
Compared to my previous visit twenty-five years ago, the run-down parts of the city are much worse; it is hard to believe you are in northern Europe. The nice parts of the city are more splendid. They are building a new city section altogether — Hafen-City – at a hard-to-discern rate of occupancy, can you say Austro-Hamburg business cycle theory? It's all mixed with in 18th century warehouses. Here are some apartments for sale. Here is one good introduction to the project.
In Hamburg they serve smoked eel with moist scrambled eggs, on delicious black bread.
A good chunk of the people in Hamburg could pass for Scandinavian; that's not the case in Berlin.
For contemporary work, Hamburg's Hafen-City is the architectural marvel of the Western world. It is Europe's single largest development project, not counting whole countries of course. Who said we no longer build coherent, splendid-looking neighborhoods? It is sadly under-discussed (addendum: but not here). For my unusual taste, the views from Hafen-City, through the harbor, all the way down to Hamburg-Altona, are among the very best in Europe. The bridges, the elevations and overpasses, the rows of brick, steel, and glass, the transport links, the integration with the water, and the "imaginary harbor," cosmopolitan in nature of course, remind me of what I would expect to find in the lost notebooks of a brilliant "Outsider" artist, except it's all for real.
One lengthy description, in German (but good visuals), is here.
Where should LeBron James go?
According to what moral theory?
Still, to me the answer is obvious, though no one seems to even discuss my idea. He should go to the Los Angeles Lakers. For a one-year contract, zero pay, if he can't convince the Lakers to pay the luxury tax. Better yet, make zero pay part of the PR in an age where viewers are sick of huge corporate bonuses for non-winning CEOs. This way he would learn the ways of a winning organization, which he needs to do, and very likely win a title immediately. He would convince Phil Jackson to return for another year. Most of his income comes from endorsements anyway, so he doesn't need the salary, plus the title and Los Angeles exposure would make his name more valuable. He would get "credit" for the title (does anyone these days complain that Magic Johnson never won a title without Kareem Abdul-Jabbar? No.) He could play fewer minutes and extend his career and keep his stamina intact for the playoffs. The next year he could move on or he might even decide to stay, pairing with Gasol and Bynum for years, while Kobe slides into a sixth man role. Since he has had good health, he could buy an insurance policy to protect against career-ending injury.
The idea of pairing James with Wade and Bosh seems to me extremely misguided: LeBron, please read Ludwig Lachmann's Capital and its Structure!
Turkey sentence to ponder
Turkey is closer to fulfilling the criteria for adopting the euro than most of the troubled economies already in the euro zone.
There is much more here.
How to learn Faroese
Wikipedia reports:
So most students are forced to learn it autodidactically by books, listening to Faroese on the radio (there is an internet live stream) and trying to correspond with Faroese people. A good opportunity for learning Faroese is also visiting the websites of Postverk Føroya and reading their stories about the stamp editions both in Faroese and English (or German, French and Danish) as well as an online dictionary on Sprotin [1], which requires a small subscription fee.
You can learn some simple phrases here. Overall I conclude that the prospects for learning Faroese are not extremely favorable.
Assorted links
German fiscal policy and the German economic recovery
Germany’s cabinet is poised this week to approve a 2011 budget as part of a four-year programme of public spending cuts meant to serve as an example to other European governments without jeopardising the country’s increasingly robust economic recovery.
The economy is continuing to grow, unemployment has been falling for twelve months, and the long-term fiscal picture is improving. Plenty of vacations are being postponed. You don't have to think that real shocks caused the downturn to believe that real factors provide the way out. The full story is here.
Beggar thy neighbor? Don't blame the productive. Besides, a lot of what the Germans are producing and selling is inputs for other people's production:
Ulrich Reifenhäuser, managing director and owner of plastics machinery maker Reifenhäuser, said his company was struggling to cope with an order increase of more than 100 per cent in some months this year.
You may recall that Alex — a prophet of the MarginalRevolution — has long predicted Germany as an economically undervalued country. Now that events have caught up with him, he needs a new pick…
A new anti-AIDS strategy?
Leading scientists fighting the world's worst Aids epidemic have called on African leaders to head a month-long sexual abstinence campaign, saying it would substantially reduce new infections.
Epidemiologists Alan Whiteside and Justin Parkhurst cite evidence that a newly infected person is most likely to transmit HIV in the month after being exposed to it. An abstinence campaign could cut new infections by up to 45%, they say – a huge step in countries such as South Africa, Zimbabwe, and Swaziland.
Unlike most abstinence campaigns, this one requires only a month of adherence [TC: does it break the chain or just postpone it? It depends why transmission is so likely in the first month]. A month with condoms could have similar effects. Will it happen? The full article is here.
Polls of German economists
A very interesting poll from the German FT is here (in German). In addition to answering other questions, German economists speak to who are the important economists for the 21st century. I'll add together the first two categories ("very important" and "somewhat important") for a total percentage measure for reported importance. (Correction: there were 1158 respondents.) The standings look like this:
1. Keynes: 92.4 percent
2. Paul Samuelson: 87.8 percent
3. Joseph Stiglitz: 86.0 percent
4. Milton Friedman: 84.6 percent
5. George Akerlof: 83.9 percent
6. Robert Solow: 82.5 percent
7. Joseph Schumpeter: 82.2 percent
8. Paul Krugman: 81.8 percent
9. Friedrich von Hayek: 74.6 percent
10. Amartya Sen: 71.4 percent
11. Gary Becker: 70.1 percent
12. Daniel Kahneman: 58.1 percent
13. Walter Eucken: 53.0 percent
14. Robert Shiller: 53.0 percent
15. Hyman Minsky: 34.2 percent
16. Ludwig Erhard: 30.3 percent
Based on my observation, I believe the supporters of Hayek, Eucken (a classical liberal), and Erhard are relatively old and that this strand of thought is losing ground in German academia.
The party membership of these same economists is striking for its relative rejection of the two largest parties:
SPD (the second major party and somewhat to the left of CDU/CSU)
FDP (the market-oriented party)
No preference
I take this to reflect that German economists are more intellectual, and more philosophical, than their American peers and thus more likely to adhere to a consistent philosophy of some kind or another. They are less likely to affiliate with mainstream political thought.
You will find more questions and answers here. By a 2.5 to 1 margin (roughly), German economists think that the U.S. taxation system should be more progressive. By almost 2 to 1 they think economics has become too formal. There are very mixed answers on whether Germany needs to overhaul its export-oriented growth model, but few German economists favor a total overhaul.
Here are their answers on what makes for a good economist, again all in German. These I did not find so startling.
For the pointers to this treasure trove of data, I thank Mathias Burger.
Assorted links
1. How do German politicians move?
2. Good review of Nicholas Carr.
3. Interview with Robert Hall.
4. Paul Romer on the New Orleans police force.
5. Profile of Reinhart and Rogoff, and how Rogoff quit chess.
6. Model this.
Marking the Fourth of July
Have the ironies and agonies of war and patriotism on the fourth of July ever been better expressed?
The Andy Grove essay
Many of you have sent me this, and requested comment, thanks for the pointer. Read the essay, here are a few remarks for perspective:
1. The current results on trade, wages, and jobs do not support his basic claims. Those results are not definitive, and might be wrong, but so far they're better than anything Grove serves up. And his entire argument depends on the assertion that trade is a major factor hurting the U.S. job market.
2. Only he who first shows he understands comparative advantage has license to partially reject it.
3. There is so much talk about scale, scale, scale. The big exporting success these days is Germany, which has less "scale" than does the United States. What is the evidence that lack of scale is the problem, rather than a symptom, even assuming it is a generalizable symptom? I don't see it.
4. He doesn't once mention that we might get useful ideas from China and other countries, or that their prosperity is good for America.
5. I would like him to state how Asians enter into his social welfare function.
6. He calls for a tax on Chinese imports; at best, given the logic of his argument, this would imply a tax only on the increasing returns industries, not a general tax. He doesn't seem to realize this.
7. Is he assuming that the whole world works like his sector — semiconductors — does?
8. An innovation shortfall may well be a serious problem today, as every reader of Michael Mandel should know. But what are Grove's solutions? The government tries to pick winners, on a massive scale with public funds, and we start a big trade war against China? The evidence for these proposals is one citation to Robert Wade. Sorry, I'm not convinced. I heard that in the 1980s except China was Japan. We ignored that advice in the 80s and in the 90s the job market was fine. Grove is writing from a time warp in which these debates never happened or never were settled or never something — I don't know what.
9. And now for something completely different: Analects of Boettke.
Aggregate demand?
Other than "Chinese baby lusts after German automobile," how else would you title this photo?