Tyler Cowen's Blog, page 305

My favorite things Minnesota

I am here for but a short time, speaking at the university, but here is what comes to mind:

1. Folk singer: Is that what he is?  Bringing it All Back Home remains my favorite Dylan album, of many candidates.

2. Rock music: The Replacements were pretty awesome for a short while.  The Artist Formerly Known as Prince has an impressive body of work, with Sign of the Times as my favorite or maybe Dirty Mind, though when viewed as a whole I find the corpus of work rather numbing and even somewhat off-putting.  Bob Mould I like but do not love, the peaks are too low.

3. Jazz: The Bad Plus come to mind.

4. Writer: Must I go with F. Scott Fitzgerald?  I don’t like his work very much, so Ole Rolvaag is my choice.

5. Coen Brothers movie: Raising Arizona or Fargo.   The more serious ones strike me as too grim.

6. Director: George Roy Hill, how about A Little Romance?

7. Columnist: The underrated Thomas Friedman, who ought to be considered one of the world’s leading conservative columnists but is not.

8. Scientist: Norman Borlaug.  I hope you all know who he is by now.

9. Advice columnist: Ann Landers, most of the time she was right, much better and sharper than her sister Dear Abby, plus she coined better phrases.

What else? Garrison Keillor belongs somewhere, even though he isn’t funny.  Thorstein Veblen is often unreadable but on status competition, and its Darwinian roots, he was way ahead of his time.

Overall this is a very strong state, and on top of that I feel I am missing some significant contributors with this list.  Are there painters or sculptors of note from Minnesota?  I can’t think of any.

Assorted links

1. John Goodman on Mediasave in Singapore.  And here – read the comments — is a bunch of angry Singaporeans complaining about their health care system, and complaining about me.  Please note that I very much stand by what I originally wrote.  There is nonetheless a deep and important lesson in these reactions.

2. The Great Stagnation in Taiwan.

3. My interview with Die Welt (in German).

4. Gloomy update on Indonesia.

5. The paradox of health care technology.

6. Super-thin buildings.

The stunning growth in part-time employment

From Greg Mankiw:

John Lott points out the following: “So far this year there have been 848,000 new jobs. Of those, 813,000 are part time jobs…. To put it differently, an incredible 96% of the jobs added this year were part-time jobs.”

In addition to all of this underemployment, today’s job market report shows the labor force participation rate is down to its lowest level since 1978 (when fewer women wanted to work, of course).  And population growth is outpacing job growth, as indeed it had earlier in the oughties before the financial crisis and recovery.  Perhaps that is the new normal?  (Here are a few graphs from the new numbers.)  Here is a passage from my forthcoming Average is Over:

Those laid off workers have been absorbed, into new jobs, at a much slower than usual rate, following a recession.  They can’t get their old jobs back, even though the worst of the crisis is over and corporate profits are back up.  Most importantly, the new jobs being created are more likely low wage than mid wage.  In essence, the American economy is learning that — for structural reasons — it can’t afford as many mid wage jobs as it used to have.  Businesses will make higher profits by slotting those workers elsewhere, but not back in other high or mid wage jobs, where they had been before.

Monetary policy is fine, and I see no significant costs from having a higher rate of price inflation in the United States, but stimulus can fix these problems to only a limited degree.

Addendum: As Ben Engebreth points out, based on these BLS charts, the correct number seems to be 59% not 96%, though the higher estimate does still seem to hold in Lott’s (more cumbersome and less transparent) sources.

Three good new books on politics

1. Isaac William Martin, Rich People’s Movements: Grassroots Campaigns to Untax the One Percent.  He even covers Frank Chodorov.

2. Sumantra Bose, Transforming India: Challenges to the World’s Largest Democracy.  The first sentence of the last paragraph of the book is this: “In the post-1989 era, the people of India have progressively empowered regional(ist) parties and leaders.”

3. Avi Tuschman, Our Political Nature: The Evolutionary Origins of What Divides Us.  He traces differences in political views back to three underlying factors, namely attitudes toward tribalism, tolerance of inequality, and perceptions of human nature (competitive vs. cooperative).  Think of this book as the next step after Jonathan Haidt.

The American fertility rate is no longer declining

The sharp decline in the country’s fertility rate during the economic downturn has come to an end, federal data show, as an improving economy encouraged Americans to resume having babies.

The number of babies born in the United States in 2012 remained flat, the first time in five years that the number did not significantly decline, according to the National Center for Health Statistics.

The leveling off capped a 9 percent decline in the fertility rate from 2007 to 2011, a drop that demographers say began after the recession took hold and Americans started feeling less secure about their economic circumstances.

By the way, economics really does seem to be a factor in these changes:

…the only state to show a slight increase in fertility between 2008 and 2009 was North Dakota, which had one of the lowest unemployment rates in the country.

The teen birth rate is falling, which is further good news.  Here is more.

Unpopular thoughts about obstructionist Republicans

It now seems quite possible that the Syria resolution fails in the House of Representatives.  If so, that would be the fault of unreasonable, obstructionist Republicans.  (When was the last time a Presidential request to use force was denied by Congress?)

Now, I do understand that this would not be the best path to “not attacking Syria.”  (If you doubt that, imagine how such a vote would change Israeli incentives and policy toward Iran.)  Still, I can quite readily imagine that a “no” vote on the Syria resolution would be for the better, all things considered.  Much could go wrong from an attack, nor would the Congressional vote, the way the process has been conducted, represent much of a victory for constitutionalism.

In any case the net effect of having unreasonable, obstructionist Republicans could well be welfare-improving on a massive global scale, all things considered.

You might prefer to “have your cake and eat it too,” namely by having “reasonable but wise on Syria” Republicans, but that was never on the menu.  And you won’t find it among the Democrats, so you do seem to need the unreasonably obstructionist tendencies to get to…actual obstruction.

I still can imagine that the resolution will pass, in which case we could criticize Republicans for not being unreasonable and obstructionist enough.

The whole point of checks and balances is that sometimes the tendency to be unreasonable and obstructionist pays off big time.  It’s worth a lot of gridlock to get those gains.

Designing robots to work with humans

Here is the good news:

Workers generally warm to collaborative robots quickly. Employees are keen to offload the “mindless, repetitive stuff”, as one roboticist puts it. And because workers themselves do the programming, they tend to regard the robots as subordinate assistants. This is good for morale, says Esben Ostergaard, UR’s technology chief. In late 2012 Mercedes-Benz began equipping workers who assemble gearboxes at a Stuttgart plant with lightweight “third hand” robots initially designed for use in space by the German Aerospace Centre. The German carmaker’s parent company, Daimler, is expanding the initiative, which it describes as “robot farming” because workers shepherd the robots “just like a farmer tending sheep”.

This is interesting too:

It turns out, for example, that people are more trusting of robots that use metaphors rather than abstract language, says Bilge Mutlu, the head of the robotics laboratory at the University of Wisconsin-Madison. He has found that robots are more persuasive when they refer to the opinions of humans and limit pauses to about a third of a second to avoid appearing confused. Robots’ gazes must also be carefully programmed lest a stare make someone uncomfortable. Timing eye contact for “intimacy regulation” is tricky, Dr Mutlu says, in part because gazes are also used in dialogue to seize and yield the floor.

When a person enters a room, robots inside should pause for a moment and acknowledge the newcomer, a sign of deference that puts people at ease, says the University of British Columbia’s Dr Croft. Robots also appear friendlier when their gaze follows a person’s moving hands, says Maya Cakmak of Willow Garage, the California-based maker of the PR2, a $400,000 robot skilled enough to make an omelette—albeit slowly.

This is more discomforting:

The world’s largest compiler of voluntary industrial standards, the International Organisation for Standardisation (ISO) in Geneva, has yet to work out safety standards for collaborative robots, such as how much force a robot can safely apply to different parts of a human worker’s body.

The story is interesting throughout, hat tip goes to FT Alphaville.  By the way, humans prefer working with robots which sometimes make mistakes.

Chile fact of the day

 …the average eighth grader in Ghana has a test score that would place her in the bottom 0.2 percent of US students. Even in considerably richer developing countries, the learning gap is large: the average Chilean student would be in the bottom 6.4 percent of US students, based on TIMSS scores.

That is from the Center for Global Development, via Charles Kenny, via Reihan, there is more here.  By the way, here is the teacher response to recent educational reforms in Mexico.

Assorted links

1. Alex on Quora does Q&A on international trade economics.  And Raghuram Rajan, staring at things.

2. In praise of Malcolm Gladwell.

3. How to become an early riser?

4. Does unemployment hurt Protestants more? (Not exactly the Protestant work ethic, I might add).

5. Green energy in Germany, an update.

6. Jumbo mortgage rates fall below traditional ones (what can you infer from that?)

7. Computers playing poker, excellent piece.

South Koreans are turning more toward study in China

The number of South Koreans studying in China more than doubled to 62,855 in 2012 from 2003, according to South Korea’s Ministry of Education. The number of U.S.-bound students grew 50 percent to 73,351 in the same period.

Perhaps this has something to do with it:

Trade with China climbed an average 20 percent per year between 1992 and 2012, faster than the 6 percent growth with the U.S., according to Korea Customs Service. South Korea exported more to China than to the U.S. and European Union combined last year. China overtook the U.S. for South Korean foreign direct investment in the first quarter, the finance ministry said.

There is more here, and for the pointer I thank KunLung Wu.