Tyler Cowen's Blog, page 521

Be a travel parasite

From Jodi Ettenberg:

2. Be a travel parasite.

No, this does not mean mooching off friends or family. What it means is learning how to use guidebooks to your advantage. While they are useful to have for the history of a place or the basics in itinerary planning, I rarely look to guidebooks for the name of a hostel or restaurant. Instead, I look at their recommendations as things to piggyback on. Lonely Planet recommends a place as "Our Pick"? Great, I go there, and walk two doors down to stay nearby. Rough Guides says "this is the best restaurant in town"? Perfect! Almost every one of those recommendations will spawn another restaurant within walking distance. Industrious entrepreneurs quickly learn that when these books recommend a place, they quickly get overcrowded and prices go up. The solution: they open a place right next door or nearby to handle the spillover. Without fail, those are the places that are cheaper, more delicious and not jaded. Being a parasite isn't always a bad thing. (Having parasites? Not so much.)

There is much more at the link, all related to travel insights.

Assorted links

1. In defense of pink slime.

2. John Cochrane on the mandate, again.

3. Peter Marber's critique of economic statistics.

4. A jobless recovery means the routine jobs never come back.

5. China markets in everything.

6. The Minerva Project, on-line higher ed., Summers chairs the advisory board.

The King's Gambit story turns out to be false.

Someday, the unraveling of these problems will be blamed on austerity

…over the past ten years, France has lost competitiveness. In 2000 hourly labour costs in France were 8% lower than those in Germany, its main trading partner; today, they are 10% higher (see chart 2). French exports have stagnated while Germany's have boomed. An employer today pays twice as much in social charges in France as he does in Germany. France's unemployment rate is 10% next to 5.8% in Germany—and has not dipped below 7% for nearly 30 years.

…How can the country justify its massive public administration—a millefeuille of communes, departments, regions and the central state—which employs 90 civil servants per 1,000 population, compared with 50 in Germany? How can France lighten the tax burden, including payroll social charges, so as to encourage entrepreneurship and job creation?

Here is more.  Some of the French, by the way, blame the problem on insufficiently low tax rates.  Here is an article on Europe, France, and the working poor.  In the periphery, of course, the problems are more likely selective regulation, rent-seeking, lack of trust, and sclerotic privileges, rather than the level of expenditure per se, topped off with the unworkable (and ultimately fiscal) commitment to peg the value of their bank deposits in line with those of Germany.

Mexico fact of the day

This year, though, the peso is up 9.3% against the dollar, making it one of the top-performing emerging-market currencies…

There is more here.  I am of the unfashionable opinion that Mexico is actually winning the war against the drug lords.

Inflation fear and privileged service sector jobs

The greater the number of protected service sector jobs in an economy, the more likely those citizens will oppose inflation.  Inflation brings the potential to lower real wages, possibly for good.  How many insiders, if they had to renegotiate their current deals, would do just as well?

Get the picture?

This is a neglected cost of protected service sector jobs, namely that the economy's central bank will face strong political pressures not to inflate even when a looser monetary policy would be welfare-improving.

Western Europe most of all.  If you see that the young people in an economy aren't doing nearly as well as the privileged insiders, you should suspect that the privileged insiders fear renegotiation and thus fear inflation.

Inflation is easier to sustain in rapidly growing economies where people are moving up various ladders quickly.

Perhaps we have lost the ability and the political economy to support inflation when needed.

True, false, or uncertain?

From Susan Sontag:

On Intelligence

I don't care about someone being intelligent; any situation between people, when they are really human with each other, produces "intelligence."

There is also this bit:

Why I Write

There is no one right way to experience what I've written.

I write — and talk — in order to find out what I think.

But that doesn't mean "I" "really" "think" that. It only means that is my-thought-when-writing (or when- talking). If I'd written another day, or in another conversation, "I" might have "thought" differently.

Here is more.

Assorted links

1. Blog on Tajik anecdotes and photos.

2. Acemoglu and Robinson on why Haiti is so poor.

3. Economics and evolutionary biology reading list, and Singapore whiskey.

4. How one man beat the casinos?

5. Is the King's Gambit finally busted by computers?  Fantastic story, recommended.

6. Should we have an FDA for new financial products?

Young vs. old

Three of the top five symptoms searched for on Yahoo Mobile in January were early pregnancy, herpes and H.I.V. None of these symptoms showed up among the top searches on desktop computers, which are more likely to be used by older people.

The most popular symptom searches on PCs included gastroenteritis, heart attacks, gout and shingles, Yahoo said, adding that the encyclopedic medical symptoms checker on WebMD was the most popular site of its kind among PC users. On WebMD, the top symptoms searched for in January were muscle strain, gastroenteritis and irritable bowel syndrome.

…"I do health searches all the time," said Brittany Lashley, 20, who is majoring in Chinese at the University of Maryland at College Park. She surfs the Web on her iPod Touch for food and drinks that she hopes will increase her energy level and help her stay awake and sharp for late-night studying.

The article is interesting throughout.

Bloomberg Business Week

I am learning that many people still do not know how good it has become.  Every issue has a remarkable amount of substance.  I am in the blogosphere and on Twitter quite frequently, and yet still a large number of the stories are news to me; that is hard to pull off these days.  Many people had grown disenchanted with the old Business Week, but odds are you should be reading the new incarnation.  It would make my list of the five essential periodicals/magazines.  Let's hope it continues, just don't ask me what is their business plan.  Make Bloomberg a more focal name to spur and maintain demand for the terminals?

Surprising Probability Estimate of the Day

The UK's Office of Work and Pensions estimates that a child born today has a 30% chance of reaching the age of 100. In contrast, a person 80 years old today has only a 7.7% chance of reaching the age of 100. Indeed, a person today has to be about 96.5 years of age to have the same probability of reaching the age of 100 as a newborn.

You can find the data at The Guardian.

Hat tip: John Lanchester's article on Marx in the LRB.