Tyler Cowen's Blog, page 46

Airbnb markets in everything

Massachusetts man rents out igloo on Airbnb for $10 a night

Pierre, who says he learned to build igloos in Siberia, is offering the digs outside his Cambridge home, which ‘comfortably fits 1, or 2 if curled up.’

The full article is here, point from NinjaEconomics.  Sleeping bags are not included.  And here is an FT feature on living quarters in Japan:

Instead of the traditional 70 square metres, some of Glorio Eifukucho’s three-bed apartments are 60 sq m, a trend mirrored at new developments across the Tokyo suburbs, according to analysts and developers. Since bedrooms need beds, kitchens need stoves and bathrooms need showers, the living room gets squeezed.

Who are the most admired men in America today?

In order:

1. Barack Obama

2. Pope Francis

3. Bill Clinton

4. Rev. Billy Graham

5. George W. Bush

6. Ben Carson

7. Stephen Hawking

8. Bill Gates

9. Bill O’Reilly

10. Benjamin Netanyahu

11. Vladimir Putin

The source is here.  If I understand the ranking system properly, #6-11 are basically tied.

Given who is on the list, what should we infer about America as a nation?  About human nature?

Pink explosion markets in everything

When their new $70,000 princess-themed playroom is finished in March, Stella, 4 years old, and Presley, 2½, will have a faux gem-encrusted performance stage, a treehouse loft, and a mini-French cafe. A $20,000 custom carpet with colorful pathways will lead the girls to the various play areas.

“It’s going to be a pink explosion, with hearts and bows and crowns and tassels,” says their mother, Lindsay Dickhout, chief executive of a company that makes tanning products. The playroom will occupy about 1,500 square feet on the ground floor of the family’s 7,000-square foot home in Newport Beach, Calif.

Upstairs are the girls’ royal bedrooms, in which Stella sleeps in a $6,000 custom-made castle bed, and Presley’s pink-and-white striped wallpaper is illuminated by a crown-shaped chandelier.

Princesses have long enchanted little girls. But cultural flash points in recent years, such as Disney ’s blockbuster “Frozen” and Prince William’s royal wedding, have fueled demand for increasingly elaborate—and expensive—fantasy rooms.

Enjoying the spoils are interior designers who specialize in decorating kids’ ultimate bedrooms. Specialty furniture companies deal in lavish royal-boudoir accouterments, from $3,000 Cinderella lamps to $35,000 carriage-shaped beds. As the style becomes more popular, more mass-market companies have rolled out crown-shaped cornices, tulle canopies, and Rococo children’s furniture.

The full Katy McLaughlin WSJ article is here, the photos are superb.  For the pointer I thank Samir Varma.

Unions for Online Education

The Washington Post reports on a new campaign by the Service Employees International Union, the 2nd largest and fastest growing union in the United States, to greatly raise the wages of university teaching adjuncts:

Now, a union that’s been rapidly organizing adjuncts around the country thinks that number [wages, AT] should quintuple. Last night, on a conference call with organizers across the country, the SEIU decided to extend the franchise with a similar aspirational benchmark: A “new minimum compensation standard” of $15,000. Per course. Including benefits.

…At the moment, the $15,000 number sounds even more outlandish than $15 did when fast food workers started asking for twice the federal minimum wage. But organizers argue that if you’re teaching a full load of three courses per semester, that comes out to $90,000 in total compensation per year — just the kind of upper-middle-class salary they think people with advanced degrees should be able to expect. (Most adjuncts teach part-time, which would put them at $50,000 or $75,000 per year.)

Assorted links

1. Andrei Shleifer on Clark award winner Matt Gentzkow.

2. Steven Pinker responds to some critics on violence (pdf).  Are liberals more biased in their judgments of science?  (yes, maybe so)  After Portland, D.C. is gentrifying more quickly than anywhere else in the nation.

3. Visions of the future, from the golden age of futurism.

4. Might TTIP actually bring some free trade to education?

5. “The Planck data confirm the basic predictions that quantum fluctuations are at the origin of all structures in the Universe.”

6. Syriza and the French indemnity of 1871-73; I disagree with much of this essay but still it has something new and interesting to say about the Greek debt crisis.  The piece is discussed by Matt Klein at the FT here.

7. Lee Smolin and Roberto Unger have a book together, sort of.

There is something negative in the state of Denmark

Denmark’s central bank governor pledged to face down speculators testing its currency peg to the euro, saying he would do “whatever it takes” to defend it.

Lars Rohde told the Financial Times that Nationalbank could “go on forever” defending the peg, after lowering interest rates four times in three weeks to a global record low of minus 0.75 per cent. It has also swelled its balance sheet to a record size by printing krone in an attempt to weaken the Danish currency.

“The main message is that we are ready to do whatever it takes to defend the peg. We have unlimited access to Danish krone and we have no restrictions on our balance sheet,” he said, in his first public comments since the recent quadruple rate cuts.

The FT article is here, here is Bloomberg coverage.  I would bet against them, in any case this will be a neat test case for our judgments of Switzerland.  The Danish government also has stopped selling bonds to help maintain the peg; Lord Polonius comments on that policy.  The Danes have announced a true precommitment, in a way the Swiss never did, now let’s see what happens.  Defense of the peg is in fact their only official monetary policy target, and the central bank head claims it is supported by all segments of Danish society.

Denmark, of course, has not yet joined the euro, or wanted to.  Meanwhile, Crown Princess Mary of Denmark just turned forty-three.

Are desserts in decline?

I hope so.  Todd Kliman writes:

The problem is that restaurateurs are unwilling to charge more than $30 an entrée. That number has held steady for years, the Maginot Line of the industry. Forced to look elsewhere, they’ve sought to recoup their escalating expenses by aggressively targeting the start of the meal, upping the prices of appetizers and “snacks,” cocktails, and glasses of wine. At some places, you’ll pay nearly as much for a six-ounce pour of Chardonnay as you would for a plate of chicken.

The question is why so many restaurateurs have opted not to jack up the prices of dessert, too.

“It’s just not worth it,” a successful owner told me, noting that the prices of dairy have gone up by as much as 150 percent in little more than a year. High-fat butter, a necessity for gourmet baking, sells for more than $4 a pound, double what it was in the summer of 2013. “A cocktail brings in twice as much money as a dessert, and it doesn’t hold up a table at the end of the meal. You have to turn the tables.”

And the higher urban rents rise, the more tightly space is squeezed and restaurants need open tables, and thus the more restaurant desserts will decline and indeed should decline. (“the rent is too damn high and where is my dessert!?” could be the new motto).  I would be happy enough if all desserts were simply dark chocolate ice cream or gelato, consumed rapidly and perhaps at a different venue altogether.

Human capital, wealth, and Piketty’s calculations

David N. Weil has a new paper on this topic, and it makes some interesting points, here is one:

Net Social Security wealth of currently living Americans in 2013 was $12.9 trillion, or three quarters of a year’s GDP.

More generally he makes this point:

In 1700, at the beginning of the period that he studies in his book, marketable assets were indeed pretty much the only form of wealth.  But over the intervening 300 years, new types of wealth, most notably human capital and transfer wealth, have come to constitute a very significant fraction of total wealth.  Thus the constancy of the wealth/income ratio as portrayed in his data is an illusion.  More important, however, is the fact that the distribution of the new types of wealth that he does not measure is far more equal than, and not perfectly correlated with, wealth that falls into his analysis.

The paper is interesting throughout, the NBER version is here.  The top link here leads you go an ungated pdf.

Addendum: In a new essay Piketty responds to critics.

Graduate fellowship applications, including for non-GMU students

Mercatus Center graduate fellowship applications are at this link.

And if you are enrolled elsewhere: “The Adam Smith Fellowship is a one-year, competitive fellowship for graduate students attending PhD programs at any university, in a variety of fields, including economics, philosophy, political science, and sociology. The aim of this fellowship is to introduce students to key thinkers in political economy that they might not otherwise encounter in their graduate studies. Smith Fellows receive a stipend and spend three weekends during the academic year and one week during the summer participating in workshops and seminars on the Austrian, Virginia, and Bloomington schools of political economy.

It includes a quarterly stipend and travel and lodging to attend colloquia hosted by the Mercatus Center. It is a total award of up to $10,000 for the year. Acceptance into the fellowship program is dependent on acceptance into a PhD program at an accredited university. The deadline for applications is March 15, 2015.”

Geoengineering markets in everything

Oliver’s Travels, a luxury travel and rental service, has begun offering the service for prospective brides and grooms who are interested in a sunny destination wedding at certain venues in France (the company is planning on expanding availability to the UK and Italy if the concept “takes off”).

For a fee starting at £100,000 (~$150K), the company will give a team of pilots and meteorologists 3 weeks to plan and affect the weather on your big day. The technology is called “cloud bursting” (or “cloud seeding“) or using a chemical called silver iodide to “seed” the clouds and cause them to rain.

By inducing rain and cloud dissipation for 24 hours before the wedding day, the team can guarantee a relatively cloud free and sunny environment on the day of.

There is more here, and for the pointer I thank Michael Rosenwald.