Saturday, August 18, 2012

Catch me if you can

LeBron links to a study claiming the economic benefits of the single currency accrued mainly to Greece, Portugal & Spain.

I decided to look at the issue through the lens of real per-capita GDP via Angus Maddison's dataset and take a longer view than just the post-euro period.

Here's what I found (clic the pic for an even more wonkish image):

Ireland, Spain, Portugal and Greece were all growing fast relative to Germany (and France which is not on the graph) well before the introduction of the Euro. Ireland and Spain take off somewhere around 1990 and the intro of the Euro in 2000 does not speed up their trajectory. Portugal actually falls further behind Germany in the Euro era. Greece is the only country of these 5 whose catch-up to Germany accelerates with the intro of the Euro.

The data used can be found here.

It is also interesting to note that Greece, Portugal & Spain surged relative to Germany from 1960 - 1974, then stagnated till the end of the 1980s.

Friday, August 17, 2012


I don't think I'll be seeing this movie...But not because I believe it to be false.

"Halfway through a special screening of 'Compliance,' the deeply unsettling new film from writer/director Craig Zobel, a woman stood up, yelled out, 'Give me a f*cking break,' and walked out of the theater. As the film progressed, other women joined her...'Compliance,' shown on Tuesday night at a special screening and panel put together by Psychology Today, is not a Holocaust drama or a gory war film or a Lars Von Trier genital mutilation-fest. It is a psychological thriller grounded in an almost documentary level of reality and will probably hold up as one of the most well-paced, brilliantly acted films of the year. It was also, without a doubt, the most uncomfortable film experience of my life...Further compounding the psychologically disturbing nature of 'Compliance' is the fact that it is based almost entirely on true events...In Zobel's version, Dreama Walker stars as Becky, a blond, teenage employee of 'Chickwich,' a fictional fast-food restaurant in Ohio, and Ann Dowd stars -- in an epically nuanced, Oscar-worthy performance -- as her well-meaning manager, Sandra. Early in the film, Sandra receives a call from a man claiming to be a local police officer named 'Officer Daniels,' who explains that Becky has been accused of stealing from a customer. Officer Daniels then instructs Sandra to remove Becky's clothes, her belongings, to help him 'find the money,' and then -- well, it just gets worse from there...At the panel following the screening, psychologist Stanton Peele suggested anyone might do the same thing in a similar situation. Though when the audience was pressed -- 'How many people in this room think they would have gone along with this scenario if they were present?' Peele asked -- no one raised their hands...Another man suggested it was a matter of 'IQ,' and that anyone with a 'high IQ' wouldn't fall for it." [Lucas Kavner, Huffington Post]

"High IQ"?  That guy is an idiot, whatever his IQ is. The Milgram experiments showed IQ has basically nothing to do with it.

The YouTube trailer...

I tell my students that if I had been born the son of a wealthy white slave-owner in the south in 1840, I'm sure I would have supported slavery.  I hate the fact that that is true, but it almost certainly IS true.  And my students would have done the same thing.

If you think you are immune from this need to comply with orders from authorities, you are just wrong.  Some people resist, but not very many.

Nod to Kevin Lewis...

Thursday, August 16, 2012

The NCAA and Fed: Two Organizations People Love to Hate

John C. makes some comparisons I had not thought of.  Interesting.

Both the NCAA and the Fed have a problem of commitment.  And they use threats to try to get what they want.

Sweet Fancy Ethanol!

Our good friends on the left side seem to worry about corporations buying the election, with money from their treasuries.  Fair enough, that would be a problem.  But isn't it also a problem that our President is buying the election, with money from the US treasury?

I assumed that this was a hoax, when I first read it.  Prez O has decided that farm prices are "too low" (compared to what?  Is it really bad for poor Americans if food prices fall?  WTF?)

(more below the fold)

The hole in Robert Samuelson's head*

A true "public good" is a strange beast. It is among other things, non-rivalrous, meaning that one person's use of the good does not reduce the amount of the good available for another person to use (unlike a hamburger).

So, if more people consume the good than before, it doesn't reduce the amount of the good available for use by the previous consumers.

Thus, the quantity of the good does not have to rise in proportion with the population in order to keep per-capita consumption constant.

National Defense is often given as an example of a pure public good. Our nuclear stockpile does whatever it does for each of us no matter how many of us there are. Our aircraft carriers do whatever they do for each of us no matter how many of us there are.

Thus, we should not automatically fear/rail against policies that might cause real defense spending per capita to fall. What really matters is total defense spending.

This brings me to Robert J. Samuelson in today's WaPo. In describing a proposal to limit growth in defense spending to the rate of inflation after 2023, he writes, "Defense cuts could verge on unilateral disarmament".

People, can I get a YIKES? Thank you.

Now, it may be that future events would make us want to collectively consume a greater level of defense than we do now in real terms. It is also in my opinion foolish to claim that anyone today has any influence on how the Congress of 2023 will allocate our money.

But defense spending could fall in per capita terms (or in percentage of GDP terms) without reducing the amount of defense we have.

In fact, spending could fall in per capita terms and we could all be better defended!

Total real spending could rise while per-capita real spending falls and we'd each have more defense to "consume".

Note that this is true of any other government provided public good and partially true for any government provided partially public good (goods that are semi-rivalrous, like roads).

The "any fall in real spending per capita is a cut" meme is just not necessarily true, especially when it comes to government provided goods.

Robert J would be very lucky to get the "gentleman's C" in Econ 101.

*In the print version of the WaPo, Samuelson's piece is titled "The hole in Ryan's Medicare Plan", which is what inspired the title of my post.

Our Debt is Overhung

 And we are in deep Minsky Koo, it appears.

Public Debt Overhangs: Advanced-Economy Episodes since 1800

Carmen Reinhart, Vincent Reinhart & Kenneth Rogoff
Journal of Economic Perspectives, Summer 2012, Pages 69–86

We identify the major public debt overhang episodes in the advanced economies since the early 1800s, characterized by public debt to GDP levels exceeding 90 percent for at least five years. Consistent with Reinhart and Rogoff (2010) and most of the more recent research, we find that public debt overhang episodes are associated with lower growth than during other periods. The duration of the average debt overhang episode is perhaps its most striking feature. Among the 26 episodes we identify, 20 lasted more than a decade. The long duration belies the view that the correlation is caused mainly by debt buildups during business cycle recessions. The long duration also implies that the cumulative shortfall in output from debt overhang is potentially massive. These growth-reducing effects of high public debt are apparently not transmitted exclusively through high real interest rates, as in eleven of the episodes, interest rates are not materially higher.


Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach

Gauti Eggertsson & Paul Krugman
Quarterly Journal of Economics, forthcoming

In this article we present a simple new Keynesian–style model of debt-driven slumps — that is, situations in which an overhang of debt on the part of some agents, who are forced into rapid deleveraging, is depressing aggregate demand. Making some agents debt-constrained is a surprisingly powerful assumption. Fisherian debt deflation, the possibility of a liquidity trap, the paradox of thrift and toil, a Keynesian-type multiplier, and a rationale for expansionary fiscal policy all emerge naturally from the model. We argue that this approach sheds considerable light both on current economic difficulties and on historical episodes, including Japan’s lost decade (now in its 18th year) and the Great Depression itself.

With thanks to Kevin Lewis

Wednesday, August 15, 2012

Santiago: Good, Bad, Strange, and Really Bad

Did some restauranting.  With the EYM here in his new home, Santiago.  Los Condes, actually.  Some quick thoughts.

1.  Tiramisu.  Really, really good pizza.  Everything is good.  Everything.  Pricey, but good.  Service is good.  Room is beautiful.  It's good.  That's what I'm saying here:  Good.

2.  Fragola.  Dessert place.  Again, beautiful, all good.  But the kuchen de nuez may be the best dessert I have ever had.  All time, no qualifications.  The best.  Astonishing.  More generally, though, you simply cannot go wrong with Fragola.

3.  Black Rock Pub.  Odd.  Strange, in fact. In a very good way.  The publican is a bear of a man, an Aussie.  Loves beer, loves to talk about beer.  Has big selection of Chilean artisenal beers, more than you will find....anywhere, actually.  Interesting some of them are not that great, though some are.  His philosophy:  If you can buy it at Jumbo, we don't carry it.  You'll like it.  Happy Hour prices are good, and Happy Hour lasts until 22:00 (it's Santiago...)

4.  "Fresh"  Empanadas at Lider.  (Lider is mid-scale grocery store).  Not health food.  And bad, in a way.  But also good.  Still warm.  Tasty, comfort food.

5.  Astoria.  Comida Peruana.  VERY expensive, by Chilean standards.  We had trio de cebiches (outstanding).  Then the EYM had a turbot entero (a whole turbot, a flounder-like fish, huge, with skin and head still on.  Vegetables, some cooked seaweed, and a chaufa on the side.  Excellent.  I had, as always, the skewers of corazon (beef heart), which came with some slightly mashed roasted potatoes.  The food was great.  For dessert, we had custard/quinoa and ice cream combo.  Sounds weird, was delicious.  And espresso.  But, do NOT go to Astoria.  The service was TERRIBLE.  Not sure why, in Chile, where there are "guards" everywhere and thousands of people paid to do basically nothing, this place couldn't get decent help.  Our waitron was awful:  ranging from hostile to indifferent to inattentive.  The delivery of dishes was just rude.  We had to beg to get her to let us order anything, and when we did it took a very long time to get.  The worst (it's a bad sign that I was timing it, but I was, at this point) was the dessert.  We ordered dessert and espresso.  The dessert came 12 minutes later.  Fair enough, not fast, but okay.  The espressos came 22 minutes AFTER THAT, and were cold.  32 minutes to get espresso.  Then, $97 for the two of us, and we had just one drink, a pisco sour (which was very good, by the way).  So, the food was fine, but the service was so terrible and rude it ruined the experience.  And for the money, there are lots of Peruvian places (La Mar, El Chelan, etc.) that are better.  Do. not. go. to. Astoria.  Awful.


1.  Why is the world's largest corporation buying fake poop?  Note the pictures, it's impressively realistic.

2.  Paul Ryan looks to be Romneycorp's answer to the "Just a bunch of rich out of touch guys" attack.  I had not considered that angle, but it may work to some extent.

3.  Good scientist!  You get a badge!  If they tried something like this in comparative politics journals, let's just say that the total number of badges awarded would be.... none.

4.  Several interesting posts on energy economy from Mark Perry.

Nod to Angry Alex, and the Blonde

Tuesday, August 14, 2012

Karma, Karma, Karma, Karma, Karma, Chameleon

Investing in Karma: When Wanting Promotes Helping

Benjamin Converse, Jane Risen & Travis Carter
Psychological Science, August 2012, Pages 923-930

People often face outcomes of important events that are beyond their personal control, such as when they wait for an acceptance letter, job offer, or medical test results. We suggest that when wanting and uncertainty are high and personal control is lacking, people may be more likely to help others, as if they can encourage fate’s favor by doing good deeds proactively. Four experiments support this karmic-investment hypothesis. When people want an outcome over which they have little control, their donations of time and money increase (Experiments 1 and 2), but their participation in other rewarding activities does not (Experiment 1b). In addition, at a job fair, job seekers who feel the process is outside (vs. within) their control make more generous pledges to charities (Experiment 3). Finally, karmic investments increase optimism about a desired outcome (Experiment 4). We conclude by discussing the role of personal control and magical beliefs in this phenomenon.

(Nod to Kevin Lewis)

Monday, August 13, 2012

Monday's Child is Full of Links

1.  Honey badger, schmoney badger.  The Okie Porkypine is the one what don't care.  Don't mess with the Okie Porkypine.

2.  Is higher ed being left behind, not just in terms of technology but also quality?

3.  Epic Crowd-failing.

4.  From Politico:  Amtrak is making progress on the issue [losses in food and beverage business], but Boardman admits it’s a long slog. “Food and beverage is important to our customers, and it’s very tough to make it profitable,” he wrote.

Amtrak President Boardman's job of running a $4 billion annual expenditure business seems to be impaired by his misunderstanding of what customers value or pricing to translate customer values into profit.  (ED's Note:  It is a little hard to understand why something that customers value and which is essentially a pure private good can, by definition, not be profitable...)

5.  Amtrak's "Fact Sheet."

Thanks to J.L., Angry Alex, J.S., and Jackie Blue.

Hitler Finds Out Ryan is GOP VP Candidate

The "Hitler Finds Out ____" is pretty played out.  Usually, it's enough just to hear the premise; you don't need to watch the thing.  You know, "Hitler Finds Out the DC Metro Closes at Midnight," "Hitler Finds Out Chicken Tikka Masala is Not Really an Indian Dish, But Was Invented in London," that sort of thing.

But this version, about Paul Ryan, is pretty funny.

football vs. football

Nice piece in NY Magazine by Will Leitch on the morality of football. Quick quote:

Forget your own kid playing football. The ­question is whether anyone’s kid should.

Here's the full medal count from the Olympics. What single medal do you think created the most joy in the home country of the winner(s)? My money is on Mexico's gold in men's soccer!

And speaking of medals, the first medal revocation has taken place. A female Belarusian shot-putter has lost her gold medal for juicing.

Sunday, August 12, 2012


Wow, Jimmy Buss really played rope-a-dope with Laker nation.

As of mid June he was lowering expectations of the faithful, telling them not to expect any major moves in the off season beyond an attempt to re-sign Ramon Sessions!

Now the Lakers have a projected starting lineup of Steve Nash, Kobe Bean, Pau Gasol, MWP, and Superman! With Antwan Jamison coming off the bench.


In the NY Times, Howard Beck estimates that the Lakers will be paying around $70 million of  Luxury Tax for the 2013-14 season. I guess he's assuming that Dwight Howard signs a max contract with LA (as of now Howard can walk after the upcoming season), but that's a big number. Remember that the alleged salary cap figure for next season is $58 million!

Yet I still don't see the Lakers getting by my Thunder.

OK people, will Dwight sign long term with the Lakers? Will Jimmy Buss really pay that much to the league? How far will the Lakers go next year?

I know that you know where to tell me.