Sunday, April 27

Why rice is so expensive.

Tyler Cowen:

The damage that trade restrictions cause is probably most evident in the case of rice. Although rice is the major foodstuff for about half of the world, it is highly protected and regulated. Only about 5 to 7 percent of the world’s rice production is traded across borders; that’s unusually low for an agricultural commodity.

So when the price goes up — indeed, many varieties of rice have roughly doubled in price since 2007 — this highly segmented market means that the trade in rice doesn’t flow to the places of highest demand.

Poor rice yields are not the major problem. The United Nations Food and Agriculture Organization estimates that global rice production increased by 1 percent last year and says that it is expected to increase 1.8 percent this year. That’s not impressive, but it shouldn’t cause starvation.

The more telling figure is that over the next year, international trade in rice is expected to decline more than 3 percent, when it should be expanding. The decline is attributable mainly to recent restrictions on rice exports in rice-producing countries like India, Indonesia, Vietnam, China, Cambodia and Egypt.

And the same is true of other commodity shortages.

No one's winning any awards for fiscal responsibility.

Not Hillary Rodham Clinton, not Barack Obama, and not John McCain.

Free trade helps the poor

[A] way of investigating the relationship between inequality and trade with poor countries implies that China may actually help the poor, suggests new work from University of Chicago economists Christian Broda and John Romalis.

Instead of focusing purely on what's produced outside of the country, Broda and Romalis turn their attention to an interesting but obvious relationship between imports and consumption within our border: The goods exported by poorer countries are typically consumed by lower-income Americans. Our typical methods of quantifying inequality, however, don't take this into account.

At the same time, inflation in the price of these goods has fallen behind inflation in services, which make up a greater portion of what wealthier people buy. Taken together, these trends imply that official measures may be overstating the rise in inequality.

Looking at trade data between 1994 and 2005, Broda and Romalis construct inflation rates for different income groups and find that rates for the richest outpaced rates for the poorest by about 4 percent over the period. Since income inequality between the top and bottom 10 percent of earners grew by about 6 percent, the different inflation rates among income groups wipes out about two-thirds of the rise in inequality.

China's role in this new way of analyzing inequality is large, accounting for about 50 percent of the total reduction.

(A very interesting aside. Broda and Romalis also find that the poor are more likely than the rich to buy newer goods. Because of the lag in how quickly the CPI tracks new products, the researchers argue that once this "new goods bias" which serves to keep official inflation rates higher than they actually are since newer goods are typically cheaper, is factored out, inequality between the rich and the poor between 1994 and 2005 may not have changed at all.)

Via Tyler Cowen

Friday, April 25

Message to all: there's not enough money

Message to Republicans: if you cut spending on "worthy causes" to zero, you still would not balance the budget. You will have to raise personal income taxes.

Message to Democrats: if you increased personal income tax receipts by 25 percent (a ginormous tax increase), you still would not balance the budget. You will have to cut back on "worthy causes."

Message to the AARP: if Social Security and Medicare continue to be "untouchable," then y'all had better buy guns, because in twenty years there won't be any money left to pay for national defense, much less for any "worthy causes."

Tuesday, April 22

Just look at their voting record

You can't judge a candidate on their policy platform; half of it is shameless pandering with fictional numbers, and the rest of it won't pass Congress.

No matter what you think the most important issue is now, the odds are extremely good that the candidate's most important task will be dealing with something that neither you nor (s)he foresaw.

Trying to judge candidates on their "character" seems equally foolish. Candidates are essentially on an eighteen month first date. Their task is to seem unrealistically compelling until it's too late for anyone to do anything about it.

There's a rich body of literature suggesting that job interviews are actually counterproductive. You are much better off hiring people (or not) based on their resume and/or body of work. Interviewing actually reduces your chances of hiring a satisfactory candidate.

I'm beginning to think that the same is true of election campaigns. They're just saying whatever they think will make us like them, so why bother with it? Look at their voting record and call it a day.

Job interviews are counterproductive? It makes sense to me; I wonder if it's really true, though.

Revolution as adolescent fantasy

In fact, much of the revolutionary impetus resembles adolescent fantasy -- dreams of omnipotence that should have been outgrown and never were, leading to murderous consequences. Fourier's delusions at least seem to have been relatively harmless in themselves; he imagined that in the new world order, which he would help to bring about, the climate would become "universally mild, and the sea would turn into a sweet, potable liquid much like lemonade."
Charles Fourier wrote, "Ce fluide combine avec le sel, donnera de l'eau de mer le gout d'une sorte de
limonade que nous nommons *aigresel*." He also claimed that people would live, on average, to 144 years of age.(Théorie des quatre mouvements et des destinées générales). He also wrote, that people would grow a fifth member that they could use as a parachute ("un cinquième membre et qui pourra servir de parachute"), but that may have been a joke. But then there is a certain kind of person that loves to bullshit, and is happy to have people take their words at face value, but if people attack them, they say they were just joking.

Monday, April 21

Here I was thinking hypocrisy was a good thing.

If a particular practice is socially frowned on by some, then the substantial minority -- or sometimes even a majority -- that engages in it may hide its behavior, leading everyone to dramatically underestimate the prevalence of the practice...

The quote ["Growing up in Seattle, I knew nobody who owned a gun"] reminds me of Justice Powell's famous line "I don't believe I've ever met a homosexual," said at the time Justice Powell was considering his vote in the Bowers v. Hardwick (1986) gay sex case. (See John C. Jeffries, Jr.'s biography.) Powell had by then had several gay clerks, and apparently said the statement to a clerk who was himself in fact gay. Powell's belief that he'd never met a homosexual was much like some people's belief that they didn't know anyone who owned a gun.

This also helps show the wisdom of many gay rights activists' view that coming out to friends and family is itself a potent political action. It's much harder to demonize that which your friends happily do than that which no-one you know would ever dream of doing.

Hmpf. Many of the people I've known over the years have revealed stuff about themselves that I'd much rather not have known.

Saturday, April 19

The universe doesn't care about us

Ophelia Benson cites Desmond Tutu as saying that the universe is a moral place, and that truth and justice always ultimately prevail. She responds:

No - it isn't and they don't. Especially the universe is not a moral place - I think that's such a mistake. The universe is a bunch of gas and rock; it's no more moral than my kettle is when I put it on to boil water. We're here and the universe is there and the universe couldn't possibly care less about us or about morality. If there's going to be any morality it has to come from us. That's sad, because we're not much good at it, but we're all there is. And, alas, truth and justice don't ultimately prevail, not least because there is no ltimately, there's only a series of nows, all of which are shot through with truth and justice not prevailing.

There's nothing left to say.

How to get rich

Many poor people became richer by leaving their country of birth. [Lant Pritchett and Michael Clemens] estimate that "two of every five living Mexicans who have escaped poverty did so by leaving Mexico; for Haitians it is four out of five." There is a point to this exercise: Clemens and Pritchett want to call attention to the fact that migration has made a lot of migrants richer.

Friday, April 18

Income Redistributionist

[W]hen the tax rate has risen over the past half century, capital gains realizations have fallen and along with them tax revenue.

But Obama

is ignorant of this revenue data, or he doesn't really care because he's a true income redistributionist who prefers high tax rates as a matter of ideological dogma regardless of the revenue consequences....

...Both candidates would have voters believe that taxes on investment income only affect the rich. But that's not what Internal Revenue Service returns show. The reality is that the Clinton and Obama rate increases would hit millions of Americans who make well under $200,000. In 2005, 47% of all tax returns reporting capital gains were from households with incomes below $50,000, and 79% came from households with incomes below $100,000.

A Bad Person

Will Wilkinson:
The failure to incorporate realistic models of politics into one’s thinking is the reason many people are statist in the first place.... When concerted political action based on this or that moral framework is conceived as a redemptive ideal, questioning its desirability just makes you a bad person.... [F]or many pushing large, immediate anti-warming action, there is exceedingly little interest in science per se, but a great deal of interest in the rhetorical and political possibilities of science. When you see Scientific American giving its pages over to English teachers to argue that economics is not a science, in order to clear the way for political action, you can be sure that the science of it all is not really the paramount concern.
Robert Lee Nadeau, the author of the Scientific American paper, wrote his PhD thesis on William Faulkner. I suppose that qualifies him to write about science as well as economics.

Thursday, April 17

Catastrophic Climate-Change Policies

In recent years, we've heard that climate change could be catastrophic for nature and humanity. But it's becoming increasingly evident that over the next few decades, climate-change policies could prove even more catastrophic.

Food riots have erupted in Mexico, Morocco, Egypt, Cote d'Ivoire, Guinea, Mauritania, Cameroon, Senegal, Uzbekistan and Yemen. Vietnam, Cambodia, India and Egypt have all placed restrictions on their rice exports to drive down domestic prices. Pakistan has reinstated food rationing, which is also under discussion in Bangladesh and rumored in Sri Lanka.

Supposedly climate-friendly policies in the United States and the European Union - subsidizing the production and consumption of such renewable biofuels as ethanol and biodiesel - have diverted such crops as corn, soybeans and palm oil from food to fuel. This, in turn, has increased prices for food worldwide at a time when the highly populous and newly prosperous East and South Asian countries are demanding more of it.

Perverse Democrats

The loss of almost 4 million U.S. manufacturing jobs since 1998 seems easy to explain by cheap imports or the flight of plants to Mexico, China and other poorer countries. The truth is murkier: Although this has occurred, job losses also stem from greater efficiency (fewer workers producing more goods) and slumping domestic demand (for communications equipment and computers after the dot-com bust and for housing materials and vehicles now). Nor has falling factory employment crippled overall U.S. job creation.

Look at the numbers. From 1998 to 2007, total non-farm payroll employment rose 12 million, and unemployment averaged only 4.9 percent -- despite the 4 million lost factory jobs. In that period, U.S. manufacturing output rose 22 percent.

No matter. Globalization and trade have become lightning rods for myriad grievances (job insecurity, wage inequality, eroding fringe benefits). But even if trade caused all the factory job loss, its impact is shifting. The dollar's dramatic depreciation (down an inflation-adjusted 20 percent since early 2003 against a basket of currencies) has enhanced the competitiveness of U.S. exports. Their growth now looms as a major source of job creation and economic expansion.


What House Democrats did was particularly perverse. They suspended trade promotion authority, which mandates that Congress vote up or down on trade agreements within 90 days of their submission. TPA gives other countries a reason to negotiate in good faith. They can make politically difficult concessions without fearing that Congress will ignore the agreement because it dislikes the U.S. concessions.

Americans do have legitimate trade complaints: China manipulates its currency to aid exporters; other countries restrict imports. It's in the U.S. interest to dismantle these obstacles. Now the suspension of TPA can serve as an excuse -- symbolically and substantively -- for other countries not to negotiate, just when U.S. firms can most benefit from market openings.

What matters for workers and manufacturers is not what politicians say. It's the consequences of what they do. On trade, many Democrats -- and some Republicans, too -- are fighting the last war.

Both Obama and Clinton irresponsible

Both [Obama and Clinton] promised to not raise taxes on those making less than $200,000 or $250,000 a year. They both just emasculated their domestic programs. Returning the rich to their Clinton-era tax rates will yield, at best, $40 billion a year in revenue. It’s impossible to fund a health care plan, let alone anything else, with that kind of money. The consequences are clear: if elected they will have to break their pledge, and thus destroy their credibility, or run a minimalist administration.
Not that McCain is much better.

Save the cosmos!

U.S. streets could soon be over-run with cats if communities fail to get a handle on growing feline populations, a veterinary medicine researcher says.

This reminds me of how the cosmos was saved thanks to someone having killed 52 houseflies 11 years earlier. How? The flies' 9.550892 x 10357 descendants would have occupied a cube about 3.45 x10100 parsecs on a side. (Our own galaxy is a mere 25-30 parsecs across.)

As Cecil says,
The second law of thermodynamics, simply put, is as follows: left to themselves, things tend to go to hell in a handbasket.

Wednesday, April 16

Who Do NPR Reporters Vote For?

In response to T.R. Reid's Taiwan Takes Fast Track to Universal Health Care, I wrote
The segment on Taiwan's healthcare system noted that patients are allowed to go straight to the specialists; however, patients do not necessarily know which disease is indicated by a particular symptom,which means that both patients and specialists can waste their time. The segment also omitted to mention that because physicians are paid by the patient visit, their incentive is to examine as many patients as possible, which means that in order to see literally hundreds of patients a day, some doctors will adopt an assembly-line approach, with does nothing for quality. Moreover, medicines in Taiwan are dispensed by the doctor, so those with chronic conditions are inconvenienced by having to visit their doctor every few days, again wasting their time and that of the professionals. Finally, to keep costs down, many procedures are performed without sedation unless the patient pays out of pocket. Indeed, some of the more expensive medications that are standard in the U.S. are only available in Taiwan if the patient pays the entire cost.
Of course they didn't air it. It wasn't about how good Taiwan's system was; it was meant to show that the American system is no good.

Consider also Steve Inskeep's snide aside on the April 9, 2008 after reporting about American Airlines' cancellations for inspecting wiring, he added:
Now, along with these cancellations, American Airlines put out a statement along the lines of - what, me worry? The airline says it's grounding planes for, quote, "technical compliance issues" and not because of what it describes as safety of flight issues.
His assumption is that this was obviously a safety issue rather than a regulatory issue. Even the evening news did better than he did.

Monday, April 14

The problem with the Olympics

Stephen Hugh-Jones damns the whole enterprise in general:

Of Beijing's view of human rights, enough said. One could add that China is not the only country lording it over places that it shouldn't, and that for most Chinese people life today is a lot freer than under Mao Zedong. The self-styled Olympic "movement" and its games, in contrast, have gone from bad to worse in the past 30 years (with the connivance of flunky politicians): from conceit to sanctimonious arrogance, from overweight to elephantiasis.

Their driving force is money. Fair enough, but whose money? If private sector companies choose to sponsor the Olympics, that's up to them. But why on earth hurl public funds at these tarnished saturnalia? Have Greece (in 2004), China and Britain (in 2012) no better use for their citizens' cash than white-elephant sports stadiums and a hyperathletics trade fair?

As does Frank Deford, who calls it "NASCAR with accents":

The torch relay was conjured up by the Nazis for the 1936 Olympics and then embedded in our dreamy Olympic consciousness by the magnificent gossamer photography of Leni Riefenstahl, Hitler's favorite moviemaker. Now, three-quarters of a century later, it has come back as an unexpected curse to haunt another totalitarian government to which the International Olympic Committee has hitched its wagon.

American biases

Class bias works both ways. Urban elites tend to view rural America, especially Southerners, as a bunch of yahoos. Rural Americans, meanwhile, think big city types are elitist snobs who don’t love America. There are similar resentments between rich and poor, educated and not, and even Ivy League -State College. In private gatherings, where people think they are among the like-minded, one hears shocking bigotry along those lines.

There’s a huge cultural divide that’s been with us since well before (and, indeed, was a major factor in causing) the Civil War. Great national crises, like World War II and the 9/11 attacks, bridge those divides but only temporarily. And the permanent campaign that has characterized our politics in recent years continues to poke a stick at these wounds.

Share my delusion?

When enough people share a delusion, it loses its status as a psychosis and gets a religious tax exemption instead

Tuesday, April 1

That is so!

Ne te révolte pas devant l'idée de l'oubli. Appelle-le plutôt ! Les gens comme nous doivent avoir la religion du Désespoir. Il faut qu'il soit à la hauteur du Destin, c'est-à-dire impassible comme lui. A force de se dire: "Cela est, cela est, cela est" et de contempler le trou noir, on se calme.
--to Ernest Feydeau, October 26, 1859

"That is so!" is Julian Barnes' translation of "cela est".