Friday, February 29, 2008

Letter from Doha

Neanderbill writes:

Thursday, February 28, 2008
Letter # 4
And yet another greeting from Doha,

1. Trouble in Paradise
Apparently not every expatriate is treated as well as Education City professors. As I understand it, in order to work in Qatar, you need to be sponsored by an employer. If you work for Carnegie Mellon, they take good care of you. In fact they take amazingly good care of you.

But suppose you are a construction worker from Nepal, or a housemaid from India. Depending on your employer, this may not be such a good deal. And even though you come in through the front door, so to speak, in some ways you are not as well of as, say, an undocumented Mexican in the US. Why? Because an undocumented Mexican can always quit one job and seek another. If you are in Qatar because your employer sprang for the blood tests and chest x-rays that are required, your employer has a stake in you, and may not be willing to let you take advantage of a labor market. Or you may have had to “pay” all of that plus transportation, and owe it to your employer out of your wages.

There is a website that has the following definition.

Qatar: A slave state in the Gulf where deceived, unsuspecting, and poor laborers are exploited for the benefit of Land Cruisers and late model mobile phones for unapologetic and heartless Qataris.

As the website says, the Indian government won’t send women to be domestic servants because of experiences of exploitation of all kinds. Is this website fair-minded and objective, as I have made the case for Aljazeera? Obviously not. But there is a problem here. And the Qatari government blocks this website, though it permits it at Education City. All in all, this is not a good situation.

2. On the other hand …
Qatar is the only one of 21 Arab states not to sign a “Charter of Principles” designed to rein in satellite TV talk shows that might embarrass Arab governments. (Thanks to my very knowledgeable cousin Marlene Kasting for bringing this to my attention.) And Aljazeera English, which I have praised in an earlier letter, had a documentary on such problems in the Persian Gulf, with specific mention of Qatar. It was a half hour show called “Blood, Sweat and Tears.” My colleague Silvia Pessoa, who brought many of these issues to my attention, gave me a DVD of the show.

3. Kite Runner
The Education City faculty organization sponsored a viewing of the film Kite Runner, which I had read. It is remarkably true to book in terms of specific events, but not nearly as compelling. The producer of the film, Walter Parkes, spoke afterwards. Since Afghanistan is busy with war these days, they had to film it in Kashgar, China, which is in the far west of Xinjiang province. Two Afghanis here have said that that is just what Kabul looked like in the seventies, even to the modern ranch house that Baba and Amir lived in.

I had a chance to ask Parkes what it was like filming in China, and whether the Chinese government put any restrictions on them. Except for one thing, the answer was not at all. There is a stoning scene at halftime at a football (soccer) game. When the Chinese government found out that they were going to assemble thousands of Uyghers (a Muslim minority) in one stadium, they thought that that was not a good idea. Parkes said that five or six black Suburbans rolled up with drivers talking on cell phones. Can’t be done. So the stoning / football stadium scene was filmed near Beijing, I think, with a veneer of Uyghers in front, and the rest of the crowd, whose faces you could not see, were Chinese.

I had never known how to pronounce Uygher. Was a little disappointed to find that it’s pronounced “weeger,” if only because it sounds too much like a casual deck shoe that you can order by mail from LL Bean in Freeport, ME.

By the way, in looking up Kashgar, I discovered that Afghanistan has a little panhandle that touches China. This made me think of Mad Magazine’s apocryphal Panhandle Airlines, which flew to and from panhandles in West Virginia, Oklahoma, and Alaska. Now they can be an international airline.

4. {NeanderSpouse}

While I’m thanking people, I should thank George Tsebelis for reminding us of Skype, with which you can talk from computer to computer free. Now {NeanderSpouse} and I can literally talk every day, instead of email chat. I am happy to say that she will arrive in Doha Thursday, March 7, and we won’t need any kind of electronic devices to communicate. We can hardly wait.

Neanderbill


Funny that George Tsebilis reminds Neanderbill of Skype. George T reminds me of a Greek Fred Flintstone.

Stop, Or I'll Criticize!

From the Economist:

When China's two stock exchanges were created in 1990, the chief goal was to use private savings to restructure state-owned firms. Investors received only minority stakes and limited sway over corporate governance. Equally important, both exchanges were run by bureaucrats, so there were fewer incentives to increase their value by attracting companies and punters. There was little effective competition between them.

Over the past 18 years, China has introduced rules against market manipulation, fraud and insider dealing, but enforcement remains patchy. The China Securities Regulatory Commission seems competent but overwhelmed. Sometimes it takes years to issue penalties after lengthy investigations—and along the way cases lose relevance.

In the meantime, the exchanges have quietly begun to acquire authority. The power that they wield appears flimsy—the most serious penalty they can levy is a rebuke to firms and individuals through public notices. But it is remarkably effective in a country with a long history of punishment by humiliation—think of the cangue, a rectangular slab around the neck, in pre-Communist times and dunce caps in the Cultural Revolution.

Messrs Liebman and Milhaupt write that between 2001 and 2006 the exchanges publicly criticised 205 companies and almost 1,700 people. They looked at the share prices of the targeted firms both when they disclosed the conduct for which they were being criticised and when the criticism was published. The admissions typically preceded the rebukes, and in the few weeks that followed the firms' share prices underperformed the Shanghai stockmarket by an average of up to 6% (see left-hand chart). After the criticism, there was a further lag of up to 3% on average (see right-hand chart).


(Nod to Neanderbill)

I'm Glad I Don't Live in Morocco

Apparently, in Morocco you can be jailed just for being an ass.

Angus and I would both be incarcerated, pretty much forever, if this guy was arrested for "villainous practices."

In grad school, Angus and I were in an office in the CSAB, now the Weidenbaum Center. While in that office, during the day, when there were lots of very serious people there, I did the following:

1. Routinely tried to see how many syllables I could put into the word "f**k", at the top of my lungs, with door open.
2. Once wrote a poem as a means of taking a message. A prof that Angus was working for came by, looking for Angus. I wrote the following poem, and put it on Angus's chair: "BLANK came by, was looking for you. Said to call him, if you're back before two. But as usual, his brain was pure goo." BLANK came back a little later, when I was out, and found the note. Took it back to his office. Clearly, he considered me to have engaged in villainous practices.

In Morocco, they would have forgotten my name by now. Mungowitz is in jail forever.

(nod to Jason T)

UPDATE: A useful followup. For the Moroccan story, I mean.

Strike a Poseur

So, I'm walking towards Perkins Library yesterday. This kid I know, a senior, a great guy, is standing there. Clogs, capri pants, leather man purse with flower embroidered strap across opposite shoulder, a hip length bhurka coat, long scarf wrapped into a knot that exposes his neck, cigarette smoldering, sun glasses (it's a cloudy day), and one of those knit hats with the long stringy ear flaps that trail guides wear.

I stop. I stare. He pulls the cig from his mouth. "What?"

I say, "You are either the biggest hipster, or the biggest poseur, I have ever met."

He laughs, I go in.

He emails later: "I can't believe you called me a poser (sic). I'm just being real."

I respond: "You know the difference between 'poser' and 'poseur'? A poser is a difficult question, a puzzle. A poseur is someone who dresses like you, but doesn't know the difference between the words 'poser' and 'poseur.'"

Went on: "Let me use them in a sentence: 'Gosh, it's a poser to explain why {name} is such a poseur.'"

All day I had felt kind of sick. But after that, I felt much better. As Madonna said: Strike a poseur.

But, Then Why Do They Spend Money On It?

Does intraday technical analysis in the U.S. equity market have value?

Ben Marshall, Rochester Cahan & Jared Cahan
Journal of Empirical Finance, March 2008, Pages 199-210

Abstract:
This paper investigates whether intraday technical analysis is profitable in
the U.S. equity market. Surveys of market participants indicate that they
place more emphasis on technical analysis (and less on fundamental analysis)
the shorter the time horizon; however, the technical analysis literature to
date has focused on long-term technical trading rules. We find, using two
bootstrap methodologies, that none of the 7846 popular technical trading
rules we test are profitable after data snooping bias is taken into account.
There is no evidence that the market is inefficient over this time horizon.

Spanish for Your Nanny

You have probably seen this.

But....I laughed. Fuerte.

And, all too true. The whole nanny gig is pretty rough.

(Nod to Neanderbill)

Thursday, February 28, 2008

Poor Roger

I am Clemens.

Nod to Bayou Jack.

Choosing, Vouching, and Chartering: Coming Soon to a School Near You

The effect of charter schools on traditional public school students in
Texas: Are children who stay behind left behind?

Kevin Booker, Scott Gilpatric, Timothy Gronberg & Dennis Jansen
Journal of Urban Economics, forthcoming

Abstract:
Texas has been an important player in the emergence of the charter school industry. We test for a competitive effect of charters by looking for changes in student achievement in traditional public schools following charter market penetration. We use an eight-year panel of data on individual student test scores for public schools students in Texas in order to evaluate the achievement impact of charter schools. We estimate a model that includes student/campus spell fixed effects to control for campus demographic and peer group characteristics, and to control directly for student and student family background characteristics. We find a positive and significant effect of charter school penetration on traditional public school student outcomes.

-------------------------

Does school choice increase the rate of youth entrepreneurship?

Russell Sobel & Kerry King
Economics of Education Review, forthcoming

Abstract:
Because entrepreneurial activity is a key source of economic growth, promoting youth entrepreneurship has become a priority for policymakers. School choice programs force administrators and teachers to be more entrepreneurial in their jobs by encouraging innovation and by creating competition and a more business-like environment in K-12 education. Does going to school in this climate make students more likely to become
entrepreneurs? In this paper we test whether youth entrepreneurship rates are higher in counties with school choice programs. We find that voucher programs create higher rates of youth entrepreneurship, while charter schools do not, relative to traditional public schools.

-------------------------

The political economy of school choice: Support for charter schools across states and school districts

Christiana Stoddard & Sean Corcoran
Journal of Urban Economics, July 2007, Pages 27-54

Abstract:
Public charter schools are one of the fastest growing education reforms in the US, currently serving more than a million students. Though the movement for greater school choice is widespread, its implementation has been uneven. State laws differ greatly in the degree of latitude granted charter schools, and-holding constant state support-states and localities vary widely in the availability of and enrollment in these schools. In this paper, we use a panel of demographic, financial, and school performance data to examine the support for charters at the state and local levels. Results suggest that growing population heterogeneity and income inequality-in addition to persistently low student outcomes-are associated with greater support for
charter schools. Teachers unions have been particularly effective in slowing or preventing liberal state charter legislation; however, conditional on law passage and strength, local participation in charter schools rises with the share of unionized teachers.

--------------------------

Tiebout choice and universal school vouchers

Eric Brunner & Jennifer Imazeki
Journal of Urban Economics, January 2008, Pages 253-279

Abstract:
This paper examines who is likely to gain and who is likely to lose under a universal voucher program. Following Epple and Romano [D. Epple, R.E. Romano, Competition between private and public schools, vouchers, and peer group effects, American Economic Review 88 (1998) 33-62; D. Epple, R.E. Romano, Neighborhood schools, choice, and the distribution of educational benefits, in: C.M. Hoxby (Ed.), The Economics of School Choice, The Univ. of Chicago Press, Chicago, 2003, pp. 227-286], and Nechyba [T.J. Nechyba, Mobility, targeting, and private school vouchers, American Economic Review 90 (2000) 130-146; T.J. Nechyba, Introducing school choice into multidistrict public school systems, in: C.M. Hoxby (Ed.), The Economics of School Choice, The Univ. of Chicago Press, Chicago, 2003, pp. 145-194], we focus on the idea that gains and losses under a universal voucher depend on two effects: changes in peer group composition and changes in housing values. We show that the direction and magnitude of each of these effects hinge critically on market structure, i.e., the amount of school choice that already exists in the public sector. In markets with little or no Tiebout choice, potential changes in peer group composition create an incentive for
high-socioeconomic (SES) households to vote for the voucher and for low-SES households to vote against voucher. In contrast, in markets with significant Tiebout choice, potential changes in housing values create an incentive for high-SES households to vote against the voucher and for low-SES households to vote for the voucher. Using data on vote outcomes from California's 2000 voucher initiative, we find evidence consistent with those predictions.

(Nod to KL)

Baseball: All Beautiful


Ode to baseballs, and beginnings.

Thanks to the Mayor for the tip.

Wednesday, February 27, 2008

Mark Perry beat me to it!

I love to slam the inane ramblings of the WSJs editorial pages. Today though, my friend and co-author Mark Perry beat me to the punch with an excellent analysis of Ranson's Ramblings from today's Journal.

The OTHER endorsement we've all been waiting for

Greg Oden has endorsed Barack Obama for President, pretty much guaranteeing the rich giants with mohawks vote for Obama.

It was clearly a well-informed decision; here's Greg on the process:

What I got from talking to him is that he is a real sports fan and he knew about the Blazers. He said that when I come back Brandon, LaMarcus and I will be a force next year. He also asked me about my knee, and he said he wasn't feeling my mohawk - lol. I laughed and explained to him that it's just a haircut to me and he told me he liked how I handle myself as a young man - "Thanks Mom." I did not talk politics with him. He talks about that stuff all the time and I'm going to keep learning more about the issues.

The Endorsement We Have All Been Waiting For

Words fail me.

The KKK is, for now, withholding its endorsement for Barack Obama.

Quite a web site. The music is nice, don't you think?

(Nod to KL)

I vant to be a Loan

Development Aid and International Politics: Does membership on the UN
Security Council influence World Bank decisions?

Axel Dreher, Jan-Egbert Sturm & James Raymond Vreeland
Journal of Development Economics, forthcoming

Abstract:
We investigate whether elected members of the UN Security Council receive
favorable treatment from the World Bank, using panel data for 157 countries
over the period 1970-2004. Our results indicate a robust positive
relationship between temporary UN Security Council membership and the number
of World Bank projects a country receives, even after accounting for
economic and political factors, as well as regional, country and year
effects. The size of World Bank loans, however, is not affected by UN
Security Council membership.


(Nod to KL)

Tuesday, February 26, 2008

Massive Power Outage in Central FLA

Bad times in Central Florida.

No word on cause, yet.

4 million people without AC. Even in Feb, that's a problem down there.

Why are the Fed and the ECB acting so differently?

Bernanke and the Fed have been cutting rates like there's no tomorrow. Frequent, large cuts. Trichet and the ECB have been standing pat. No cuts and rhetoric like there's not going to be cuts. Last month I mused that this was an interesting natural experiment about which way was the best way.

Could it be that the ECB is more independent? After all, they have an explicit inflation target and they don't face the same kind of election year pressures that the Fed faces. Or maybe they don't forecast the same looming disaster that the Fed might be forecasting, being relative rookies to the central banking game and all.

An intriguing third possibility now comes from Finnish economist Mika Widgrén via VoxEU. He argues that the unwieldy nature of the ECBs Executive Board (their analog to the FOMC) introduces inertia and status quo bias, preventing the institution from acting as "nimbly" as the FED.

"In the Governing Council, the one-national-central-bank-one-vote principle was intended to ensure that governors of national central banks would participate as independent actors, not as national stake-holders. Nothing guarantees that, though. Moreover, expanding EMU membership increases the voting share of the Central Bank Governors and makes the consequent numbers or inefficiency problem more severe. Indeed, in earlier studies (see footnote 3), co-authors and I argued that in an expanding Euroland it would become highly unlikely that Governing Council could pass optimal policies correspond to Euroland’s aggregated preferences. Moreover, there would be substantial risk of sticking to status quo when facing asymmetric shocks. In sum, Governing Council decisions might be too conservative and biased towards the status quo."

Interesting. Which policy road is rights and why are the two authorities differing so dramatically?

Monday, February 25, 2008

Vote early Vote often

Bookseller Magazine has announced the shortlist for its annual Diagram Prize for the oddest titled book. Here are the nominees:

1. I Was Tortured By the Pygmy Love Queen

2. How to Write a How to Write Book


3. Are Women Human? And Other International Dialogues


4. Cheese Problems Solved


5. If You Want Closure in Your Relationship, Start With Your Legs


6. People who Mattered in Southend and Beyond: From King Canute to Dr Feelgood


You can read synopses here, and you can vote here. I suggest #4 for obvious reasons (PLH McSweeney is an obvious Mungowitz pseudonym, no?), but we do live in a democracy, so have at it people!! NB. polls close March 28th.

Rhymes with "Stitch"

Motivated to Penalize: Women's Strategic Rejection of Successful Women

Elizabeth Parks-Stamm, Madeline Heilman & Krystle Hearns
Personality and Social Psychology Bulletin, February 2008, Pages 237-247

Abstract:
Two studies tested the hypothesis that females penalize women who succeed in male gender-typed jobs to salvage their own self-views regarding competence. The authors proposed that women are motivated to penalize successful women (i.e., characterize them as unlikable and interpersonally hostile) to minimize the self-evaluative consequences of social comparison with a highly successful female target. Results supported the hypothesis. Whereas both male and female participants penalized successful women, blocking this penalization reduced female-but not male-participants' self-ratings of competence (Study 1). Moreover, positive feedback provided to female participants about their potential to succeed (Study 2) weakened negative reactions to successful women without costs to subsequent self-ratings of
competence. These results suggest that the interpersonal derogation of successful women by other women functions as a self-protective strategy against threatening upward social comparisons.

Globalization, Yer doin' it Wrong!

It's another Japanese entry. The Michelin Guide has started giving out stars for Tokyo restaurants; many say thanks but no thanks!

"Many prominent figures of the Tokyo food world, however, are saying to Michelin, in effect, thanks for all the attention (which we deserve), but you still do not know us or our cuisine.

Food critics, magazines and even the governor of Tokyo have questioned the guide’s choice of restaurants and ratings. A handful of chefs proudly proclaimed that they had turned down chances to be listed. One, Toshiya Kadowaki, said his nouveau Japonais dishes, including a French-inspired rice with truffles, did not need a Gallic seal of approval.

“Japanese food was created here, and only Japanese know it,” Mr. Kadowaki said in an interview. “How can a bunch of foreigners show up and tell us what is good or bad?”

With all the doubts about Michelin’s understanding of Japanese tastes, some chefs say a rating in the guide has become a liability. Kunio Tokuoka, head chef at the high-end restaurant Kitcho, said the main Tokyo branch of his restaurant refused a listing in Michelin for fear of turning off customers seeking authentic Japanese cuisine."

With progress like this, I can see Japan opening up its markets and a grand Doha deal blooming any day now!!

Sunday, February 24, 2008

Blowin' in the wind

Tyler Cowen has been very very good to me. We've been friends for 18 years. He convinced me to try traveling outside the USA, he was the matchmaker for my marriage to Mrs. Angus, he turned me on the genius of Antoine Oleyant, he occasionally links to KPC and quadruples our daily volume. So I pretty much try to stay on his good side.

But, in Tyler's most recent NY Times column, he announced, to blogospheric acclaim, that the upcoming US elections probably won't amount to a hill of beans: "This election is certainly important. But based on the historical record, it isn’t likely to result in a major swing in economic policy."

I beg to differ.

Our current status quo is a fairly liberal / populist-ish Democratic Majority in both houses, being held somewhat in check by a witless, right-ish, hawk-ish President whose main weapon is the veto and a large enough minority to block overrides. If Barack Obama is our next president, it seems to me we will have a President to the left of the median in either chamber of Congress and the only restraining influence would be the filibuster threat in the Senate. I am no George Tsebelis (but then again, who is?) but given that McCain would probably be kind of a more sentient and honorable Bush, a President Obama, given the current Congress (which isn't going to move to the right in the election) would make for a big change in where the veto players are located.

I would predict potentially large changes in our trade policies, in tax rates for business and higher earning individuals (isn't Obama in favor of letting Bush cuts expire and also lifting the income cap on FICA taxes?), a large increase in government "green" initiatives with our lovely ethanol policy as a guidepost. I'd also predict a potentially large change in our security policy and our methods of diplomacy, which to be fair Tyler also acknowledges.

Now you may like all or most of that. Cool. Vote for Barack. You may not. Cool. Vote for McCain. But I think saying that there isn't that much at stake here is incorrect.

Maybe I'm wrong, either in the differences in positions between Obama and McCain, or in the weakness of just the filibuster without the veto threat as a restraint on the Congress.

I guess Tyler's position must be that, on the economy, there won't be much difference in positions between McCain or Obama. Since he foresees big changes in foreign policy outcomes, he probably does agree that swinging the executive from the right of a liberal congress to the left of a liberal congress can make for big policy swings, but either thinks Obama is more conservative than I do, or that McCain is more big government than I do (or both!!).

I see real differences. I don't see McCain lifting the cap on FICA earnings. I don't see McCain going for publicly created "green jobs". I do see both of them "fixing" the AMT. I don't see McCain as so anti-trade as Obama.

I see parallels to 1992 when a much less liberal than Obama Bill Clinton came into office, hiked taxes, turned Hillary loose on health care and promptly got slapped with a Republican congress in the midterm elections.


There will be Hype

One thing we as a nation are still good at is creating mindless catchphrases:

Where's the Beef? Talk to the hand! Say hello to my leetle friend!

My personal favorite from last year was Don't taze me, bro!



But I am not groovin' on I drink your milkshake!!


In fact, I will go so far as to say (based only on reading reviews and seeing the trailer), that There will be Blood, just like Michael Clayton is getting the great reviews simply by being an anti-capitalism screed. We watched Michael Clayton last night. It's a two sentence movie. (1) Capitalism = Murder, (2) Lawyers are evil.