Saturday, June 23, 2007

You Can Check Out Anytime I Want


The Arctic archipelago of Svalbard has become a haven for immigrants,
because an unusual treaty says they do not need a visa or permit to work and
live there ... Longyearbyen is Svalbard's biggest settlement and has about 1,800 residents...The treaty was signed by World War I victors in Paris in 1920. It gave sovereignty over Svalbard to Norway, conditional on there being no barrier to entry...Longyearbyen, named after John Munro Longyear, the American coal miner who founded the town in 1906, lies in a glacial valley on the edge of a fjord. It now has a university, hospital, school and hotels, restaurants and shops. East Europeans also live and work in Longyearbyen and the pizzeria is run by Iranian brothers. In all, there are about 25 nationalities living in the town...But there are two hitches to Svalbard life - the weather, temperatures in winter can fall to -40C, and limited social services. The governor has the right to throw people off the island if they cause trouble or cannot find work or accommodation. (al Jazeera English, ATSRTWT)

(nod to KL, who got thrown off the island LONG ago)

Same Mistakes, Not Different Models

Interesting view of growth problems, in Restoring Japan's Economic Growth, by Adam S. Posen

Why aren't nations rational?

UPDATE: Chapter 6 is available on-line. Simplistic, perhaps, but good questions about growth, and nongrowth.

We need more Michiganders like Wally Wallington

I am leaving Michigan today (much to everyone's relief) and as always I'm struck by the sheer awesomeness of the people here. From Mark Perry, I found the story of Wally Wallington who manipulates and moves 30' x 30' pole barns and 20,000 pound concrete columns with wood, rope, stones, sand, and water. Why? Like the old punchline says, because he can!

Wally thinks he's uncovered how the ancients constructed Stonehenge and plans to singlehandedly erect a concrete replica in his back yard. Check out Wally's fantastic story via YouTube video here.

The north WILL rise again, people.

Friday, June 22, 2007

Biker Brutality

A story of a guy who was tased, and beaten, for riding his bike.

Now, I bet he is one strange guy.

But you can't mess with people like that.

Not just the fault of the police, either. We criminalize things that are no one else's business. As one of my favorite groups, the Corporate Avenger, point out:

"I don't fault the police....'cause the people that run 'em, got 'em on a short leash." (And thanks to Large Guns Man for that!)

(nod to Whacking Day)

Growth: F-cups and Bulging briefs

A remarkable post.

The part about growth struck me as....striking.

The post goes to say that a similar product for men, tentatively being called “bulging briefs biscuits,” is rumored to be ready for release early next year, although some commentators are claiming it may come sooner than expected.

I just HATE it when bulging briefs come sooner than expected. Sort of takes the edge off the whole proceedings. And then you have to talk for half an hour, at least, and hope she doesn't get sleepy.

Also from Japundit:
These new health foods (assuming they actually work) are sure to bulk up the population and also help with Japan’s flagging boinky boinky rate.

Tokyo Times gets the scoop: ATSRTWT

Happy Halloween: Don't say "Boo" for 30 yr Treasuries

We do not need the 30-year bond to meet the government's current financing needs, nor those that we expect to face in coming years. Looking beyond the next few years, as I already observed, we believe that the likely outcome is that the federal government's fiscal position will improve after the temporary setback that we are now experiencing.

There are two less likely outcomes that we have also considered.

First, it is possible that the federal government will return to significant and sustained budget surpluses even more quickly than we now expect. In this event, maintaining current issuance levels of 30-year bonds would be unnecessary and expensive to taxpayers.


The date? October 31, 2001.

Could anyone really have believed this? Surpluses? Sad to read, now.

And then there was this.

Maybe it doesn't matter very much. The 10-year T-bond is the new benchmark, and has been.

It just made me feel nostalgic to think of surpluses. That Halloween, 2001 press release was so confident......

(Nod to JT)

They put the "DOH" in Doha!!

When I first caught the bloggin' bug doing a guest gig on Marginal Revolution, I posted about the dicey prospects of concluding the Doha trade round. Yesterday, a new effort which consisted of the US, EU, Brazil and India negotiating on reducing agricultural subsidies in the US and EU also failed.

The US blamed Brazil & India saying in effect that you gotta give something to get something and Brazil & India absolutely wouldn't give anything.

The Indian trade minister countered by pointing out that while the US had lowered their offer for capping agricultural subsidies to $17 billion (from $22 billion), the current level of said subsidies is around $11 billion. He said such an offer had "no logic or equity". Nicely played sir!!

The US is playing out Rorden Wilkenson's script of ratcheting up the rhetoric:

Now, the U.S. trade representative, Susan Schwab, will head to Geneva, where she will meet with the WTO director general, Pascal Lamy, and appeal to other developing countries to pressure Brazil and India for new concessions that would jump-start the round. "We are absolutely determined not to give up on the Doha round," Schwab said.

and also this:

"Large economies like Brazil and India should not stand in the way
of progress for smaller, poor developing nations - but that appears
to be what happened in Germany this week," Tony Fratto, a
White House spokesman, said.

I really think Doha is done and agree with Dani R that its not such a big deal.

Thursday, June 21, 2007

Yeah Baby, Americans do IT better!!

Austan Goolsbee in todays NY Times cites research showing that American firms have been the best at transforming cheap computing power into business productivity (link to article).

Goolsbee (I just love typing that!) cites a paper showing that in sectors like financial services, retail trade, and wholesale trade American takeovers of British firms caused a tremendous productivity advantage over a non-American alternative.

The irrepressible Goolsbee sums up as follows:

Perhaps the lesson from the research can be boiled down to something most Americans clearly understand: The world economy may be tough on your industry but look on the bright side: you could be French.

Amen, Brother

You Mean Economic Growth is NOT a Family Value?

Chris Dillow, at S&M (sorry) posts an interesting thought: economic growth can lead to loosening of family ties. He notes five mechanisms, and links some interesting and on-point research.

A summary (and perhaps an inept one; ATSRTWT!)
1. Dishwasher effect: more technically feasible for people to live alone, outsourcing kitchen jobs to machines
2. Tools, leverage, and capital: The premium on physical strength has diminished, so comparative advantage of men for lots of jobs has shrunk, or disappeared.
3. Creative destruction: more growth, more frictional job loss, more divorces.
4. Social moblity/migration: may be harder to "meet someone," and marriages lack the support structure of nearby families if children or finances strain the union.
5. Aspirations: disparities in income are larger if growth is strong, and women (in particular) can see the consequences of these disparities on telly. Why stand by your man when you can do better? Or, maybe you can do better (My wife certainly could!)

Now, given my views of my family, growing up, I don't mind reducing family ties. I moved out as soon as I could, and didn't go back very much. But I would be upset if my sons had that attitude. MANY people don't like their families; growth and modernity mean they can bail. What are the consequences, long-term, for the nature of society?

Wednesday, June 20, 2007

governator, rust belt style

I's in yr statehouseraisin' ur taxes, kthxby


From the Guv's own homepage: New Michigan Business Tax Key to State's Economic Future, Creating Jobs

Homenaje a Tyler



You guessed it. I'm in Michigan (visiting family) and here's my best of Michigan list:

1. Sufjan Stevens, second best Michigander of all time (after Pontiac). His album "Greetings from Michigan" (pictured above) is highly recommended.

2. Mark Perry, my ex-student, friend and co-author.

3. Berry Gordy. Motown was the soundtrack of my youth on either CKLW or WKNR radio. I'd put the radio under my pillow and listen into the night. I was constantly on the scrounge for batteries!

4. Sleeping Bear Sand Dunes, trudge to the top and tumble to the bottom. lather rinse repeat. Pretty much the highlight of every summer for me was going there.

5. Iggy Pop , (born James Osterburg). While the Stooges reunion efforts are appallingly bad. The original Stooges were/are awesome. Their first three albums (The Stooges, Fun House, and Raw Power are not to be missed). From Ann Arbor trailer trash to the Godfather of Punk. Well done Ig!

Tuesday, June 19, 2007

Recycling Humor

Apropos of pretty much nothing, a joke....

Bill and Hillary are now married 40 years. When they first got married, Bill said, "I am putting a box under the bed. You must promise never to look in it." In all their 40 years of marriage, Hillary never looked. However, on the afternoon of their 40th anniversary, curiosity got the best of her, and she lifted the lid and peeked inside. In the box were 3 empty beer cans and $1,874.25 in cash. She closed the box and put it back under the bed. Now that she knew what was in the box, she was doubly curious as to why. That evening they were out for a special dinner. After dinner Hillary could no longer contain her curiosity and she confessed and said "I am so sorry. For all these years I kept my promise and never looked into the box under our bed. However, today the temptation was too much, and I gave in. But now I need to know why do you keep the empty cans in the box?" Bill thought for a while and said, "I guess after all these years you deserve to know the truth. Whenever I was unfaithful to you I put an empty beer can in the box under the bed to remind myself not to do it again." Hillary was shocked, but said, "I am very disappointed and saddened, but I guess after all those years away from home on the road, temptation does happen and I guess that a few times is not that bad considering the years." They hugged and made their peace. A little while later Hillary asked Bill, "Why do you have all that money in the box?" Bill answered, "Whenever the box filled with empty cans, I cashed them in."

Utah

Great times in Utah this year, for the annual Liberty Fund week long gig at Park City.

Some pictures.....




(Nod to K-Rad, for setting up the Facebook Group, "I Found Libert at the Tripod". Just remember: "Everyone do what you want" is not the same as "Anarchy," no matter what your fascist lefty friends say!)

Market Daffy-nitions

When I worked at GMU, one of the best experiences for me was freelancing as a junior associate with Bob Tollison on his antitrust consulting. I quickly (for me at least) learned three things. (1) big time lawyers are really smart, (2) never tell a client work they propose is unnecessary, and (3) anti-trust cases often come down to how the relevant market is defined, which is our present topic.

Consider the old proposed acquisition of Seven up by Pepsi. We (Pepsico) tried to define the market as "stuff to drink", while the government sought to define it as "nationally distributed flavored carbonated beverages". We set about estimating residual demand curves showing that a wide range of beverages were economic substitutes for soda and the battle was joined.

The foregoing is pertinent to the current antitrust proceeding against the proposed Whole Foods purchase of Wild Oats. The government is defining the market as "nationwide operators of premium natural and organic supermarkets", of which Whole Foods and Wild Oats are about all there is. Presumably, Whole Foods seeks to define the market as "places that sell food", where they are not even a drop in the proverbial bucket. My history probably biases me, but I gotta think the latter definition is more nearly correct than the former.

Anyway, if the past is any guide, economists will be hired, elasticities estimated, depositions taken, and then a judge will make a ruling based mainly on how much he liked or didn't like his personal experiences at Whole Foods.

Monday, June 18, 2007

6 degrees of Angus

One of my favorite young artists is Souther Salazar. Heres a pic:




For those of you on the east coast, Souther is having a solo show at Jonathan LeVine Gallery in NYC June 23-July 21.

This morning, Robin was scanning Slate magazine when she remarked "man these videos are ripping off Souther Salazar!!" However, a closer inspection revealed that Souther had indeed done the animation. Too Cool.

Then, the angus CPU dimly recalled having seen the alien video before along with a Rick Santorum reference and was able to pull up this Mungowitz Post. At that time, I didn't recogize the essential Souther-ness of the video.

Everything is Illuminated, people.

A new Consensus on Democracy and Growth??

For all democracy's seductive charms, most empirical work in economics concludes that the partial correlation between democracy and economic growth is if anything, negative (See Barro (1996 Journal of Economic Growth) and also Wacziarg).

However, three new papers are finding different results.

(1) two dudes named Kevin Grier & Michael Munger show that when one expands the sample of countries to include more long term non-democracies than are in the Penn World Tables, and when one accounts for the effects of regime length on growth, democracies enjoy a substantial growth advantage over non-democracies.

(2) Philippe Aghion, Alberto Alesina, and Francesco Trebbi argue that democracy affects economies in a heterogeneous fashion, specifically improving performance in "advanced" sectors.

(3) Torsten Persson and Guido Tabellini study regime transitions and find large growth penalties for exits from democracy.

So maybe there is one less reason to hate democracy!

The Right Thing and Wrong Thing

You have no doubt seen the "fight" in the Alabama Senate. It was more of a smack-down. The sort of man who insults another in public, relying on the character of the target to temper the response, generally has little stomach for actual fight.

Didn't really think much about it, but then I noticed this kind of response. Look: It's a simple rule....you can insult me. But if you insult my mom, there is going to be a fight. You don't want the fight, don't rock the insult. And for those of you unfortunate enough to be born outside the South (including Angus, now a Southerner by importation), if you don't get this, you are likely to get punched.

I was moved to send a letter to Senator Bishop. Here it is:

Senator Charles Bishop
Room 733-D
State House
11 South Union Street
Montgomery, AL 36130

Dear Senator Bishop:

You have recently been at the center of some controversy.

I write in support of your position.

It is perfectly true, as you have said repeatedly, that grown men do not settle differences with fists. This is even more true on the floor of the Senate chamber.

But there is a higher truth. In the South, a heritage you and I share, one man does not attack the character or memory of another man’s mother. There are some insults so infamous that they demand action, regardless of the consequences.

Sometimes, the wrong thing is precisely the right thing to do.

I am sorry to have heard of the criticism you have suffered, and appreciate your attempts to explain. But I don’t see that you had any choice, under the circumstances. One cannot accept such a public affront to she who gave him life.

With all best wishes,
Michael C. Munger

Sunday, June 17, 2007

LOLGOLF

Ize in ur Kuntry: Winnin' ur Open!!

More Aid for Africa?

There is a huge and sometimes heated debate about whether Aid helps to create economic growth. The most well-known facet is probably the public debates between Jeff Sachs and Bill Easterly. One odd thing about this debate though is that it is largely conducted by rich country academics, with little input from the "beneficiaries".


However three recent African perspectives on aid can be found as follows:

(1) From today's NY Times "What does Africa Need Most: Technology or Aid?"

The article comes down in favor of technology and entrepreneurship. It also tells the story of the man to built the Congo's vast growing wireless telecom network.

Money quote: "What man ever became rich by holding out a begging bowl?"
(uh, I know this one, Lee Iacocca, right??)

(2) An older piece from Der Spegel (2005) interviewing Kenyan economist James Shikwati

Money quote:

SPIEGEL: What are the Germans supposed to do?

Shikwati: If they really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own two feet.


(3) The writings of George Ayittey, economics professor at American University in DC.