Foriegn Financial UnProductivity responsible for US Trade Deficit?

June 24, 2005

A few posts back, I linked to an article that discussed the entirely dismal productivity of the retail sector in Japan and other foriegn countries and how that was an indicator that they were actually much poorer than we were here. Now MarginalRevolution points to this article by Glen Hubbard about foreign financial unproductivity and how it may be the reason why so many foreigners choose to place their wealth here. The only way they can get their wealth into US dollars is for them to maintain a trade surplus with us. This would explain why the dollar keeps such a high value despite substantial US tradedeficitis.

As an aside: it is likely that the same forces that prevent financial sectors from getting more productive (e.g. by foreclosing on bad loans) are also the forces that prevent companies like Walmart from entering. Small business.


Does San Francisco cause infertility?

May 26, 2005

Yahoo News reports:

San Francisco has the smallest share of small-fry of any major U.S. city. Just 14.5 percent of the city’s population is 18 and under.

It is no mystery why U.S. cities are losing children. The promise of safer streets, better schools and more space has drawn young families away from cities for as long as America has had suburbs.

But kids are even more scarce in San Francisco than in expensive New York (24 percent) or in retirement havens such as Palm Beach, Fla., (19 percent), according to Census estimates.

So, if you live in a city, do you abandon it when you want to raise kids, or do you decide you like your city life so much that you decide not to have them. Do you only have kids in the city if you have lots of money?

Kids are fundamentally more expensive in cities than in suburbs. Cities are valuable because they concentrate people who need to reach each other. Kids take up space in cities without providing commensurate social networking value. Certainly parents meet each other because through their kids, but there are less expensive hobbies that produce the same result.

Efficient Outcomes: Selling Service. Buying Service. No “IT”

May 23, 2005

Jeff Nolan has two recent posts on IT. In “IBM Moves in FIrefox’s direction,” He says

The interesting dynamic that I referenced in the beginning of my comments is that these large companies are adopting many open source projects without any expectation of support from a providing vendor. They are going it alone. Obviously in the case of Linux itself there are large vendors providing services, and many large projects like Apache and Sendmail have strong support organization, but the vast majority of open source projects don’t so when a large enterprise IT organization officially supports them it is their intention to be the first and last line of support, and this should strike fear into the hearts of every enterprise software company out there

In “The End of Corporate IT” he taks about corporate customers prefering hosted applications because they don’t want to deal with their own IT departments. He says <blockquote, there is an unavoidable conflict developing. Increasingly I find myself doing customer reference calls for companies offering hosted solutions and when I ask them about how IT responds to their desire to have a hosted application I am told that NOT having IT involved is a major incentive to go with hosted apps.

So it looks like the trend is towards vertical integration of software stacks by hosted app providers. If you are doing vertical integration you get efficiency by sharing costs through support of open source projects. Companies don’t want IT. They want to buy a hosted app or sell a hosted app. Anything in between allows someone to blame someone elsse.

“Free Muslim Against Terrorism” rally has low turnout. CAIR decides not to show

May 16, 2005

Pics here. Lots of details here. The mainstream Muslim organizations stayed away.

MSM Silence on Arab Silence on Genocide

May 8, 2005

Joseph Britt wrote a brillian post over a Belgravia Dispatch.

Friedman doesn’t mention Darfur in this column. By contrast, his fellow Times columnist Nick Kristof writes frequently about Darfur without mentioning any Arab country or government other than Sudan’s. This is a remarkable coincidence, at least to an admitted layman to whom one slaughter looks much like another. Arabs in Darfur seem to use rape as a weapon more often than Arabs from Saudi Arabia or Ramadi, and explosives not as often. But these look like details to me, a case of different people relying on different chapters of The Savage’s Handbook.
I know all the likely rebuttals to this deliberately brutal and inflammatory language. None of them explain the Arab genocide in Darfur; the silence of other Arabs about Arab genocide in Darfur; or the Western media’s silence about Arabs’ silence about Arab genocide in Darfur. Friedman, for example, seems oblivious to the subject. Kristof, who is not, follows the conventional practice of American journalists witnessing something awful. This is to demand that the American government do something about it.
Well, this is fine. We’d all like Washington to put out this particular fire before it burns itself out, and I don’t really object to any of the specific steps Kristof recommends in this case. As a practical matter, though, this habitual treatment of every actual or potential disaster around the world as primarily an American problem is a good way to ensure that actual disasters get worse and potential disasters turn into real ones.

Is Separate Actually Better Than “Equal”?

May 2, 2005

In 1896, in a case called Plessy v Ferguson, the US Supreme Court decided that:

A statute which implies merely a legal distinction between the white and colored races — a distinction which is founded in the color of the two races, and which must always exist so long as white men are distinguished from the other race by color — has no tendency to destroy the legal equality of the two races…The object of the [Fourteenth A]mendment was undoubtedly to enforce the absolute equality of the two races before the law, but in the nature of things it could not have been intended to abolish distinctions based upon color, or to enforce social, as distinguished from political equality, or a commingling of the two races upon terms unsatisfactory to either.”

In 1954, it changed its mind and in Brown v Board of Ed. ruled that

“We come then to the question presented: Does segregation of children in public schools solely on the basis of race, even though the physical facilities and other “tangible” factors may be equal, deprive the children of the minority group of equal educational opportunities? We believe that it does…We conclude that in the field of public education the doctrine of ‘separate but equal’ has no place. Separate educational facilities are inherently unequal. Therefore, we hold that the plaintiffs and others similarly situated for whom the actions have been brought are, by reason of the segregation complained of, deprived of the equal protection of the laws guaranteed by the Fourteenth Amendment.

But now Alex Tabbarock of Marginal Revolution presents two studies that put the conclusion of Brown v Board into doubt. The first is a study that shows that white students perform better with white teachers and that black students perform better with black teachers. The study does not address the question of how much benefit each group derives from same-race teachers, but it does imply that students would be better off if they could select the race of their teachers.

The other study shows that women perform much better when they compete with other woman than when they compete with men. Male performance is unchanged. This study implies that women would perform better in all female environments. So it encourages single sex schools and firms.

We don’t have data about whether students perform better or worse with classmates of the same race, but it stands to reason that the more similar the students in a classroom are the easier it is for the teacher to pick a teaching method that works for them. The more the teacher is like the students, the more likely it is that the teacher will be able to choose such a method correctly.

That being said, it feels like there is a lot of benefit from learning about differences from peers. But, perhaps it is only white males who benefit from classroom diversity. What a depressing thought!

Why is CNN gaining on Fox News

April 27, 2005

CNN is gaining against Fox News in the ratings. The question is why now? My theory is that CNN is more convenient to watch (default) and people care less about its ideological blinders when we are outside of election season. Note I don’t watch either network so it is also possible that CNN has simply improved and Fox degraded. But if so, why would that be?