Link Banana

I apologize heartily for the cringe-worthy title. I bear no responsibility for it’s creation, merely it’s prorogation. But Reihan Salam, among others, thinks that men and machoness are unlikely to emerge from this recession unscathed. While part of me is screaming “bogus trend story,” I can’t condemn it as meritless:

As behavioral finance economists Brad Barber and Terrance Odean memorably demonstrated in 2001, of all the factors that might correlate with overconfident investment in financial markets—age, marital status, and the like—the most obvious culprit was having a Y chromosome. And now it turns out that not only did the macho men of the heavily male-dominated global finance sector create the conditions for global economic collapse, but they were aided and abetted by their mostly male counterparts in government whose policies, whether consciously or not, acted to artificially prop up macho.

(via Idea of the Day)

bear

This is interesting:

Greenland’s [increasingly independence-minded] government, using US Geological Survey data among others, says that the mean estimates for its oil reserves is about 50 billion barrels. That number is a bit abstract, so I did some math: The island has about 56,000 people, and if things go as they appear to be going, it will be an independent country some time in the next couple of decades. That means each Greenlander will own about 900,000 barrels of oil.

That is more per capita than any oil-rich country you’ve heard of. But, it’s largely unverified — no oil has been found in Greenland — and is less than a fifth of the total reserves of Saudi Arabi. If these estimates are accurate, Greenland would be between Russia and Libya, a few spots down from Kuwait, in total reserves.

(via Passport)

Apparently, economists think there are better and worse ways for us to spend our way out of the recession. Some of their most interesting suggestions:

Tyler Cowen, George Mason University: In my view, fixing the banking sector is more important than getting the stimulus right. So if you can afford to lose the money, go to a large bank (more likely to be insolvent), find their most overpriced service, and buy as much of it as you can. That way you are doing your part to recapitalize our banking system.

Ethan Harris, Barclays Capital: Get a haircut. It is a purely domestically produced service with extremely high labor content. This means no drain in spending power out of the country: it is “Buy American” without violating any trade agreements.

Robert Shiller, Yale University: I suggest using it to give an extra-generous tip to taxi drivers. They talk to lots of people, especially active business-oriented people, and they will be feeling more upbeat, sensing that some people are feeling flush, and they will communicate this feeling to numerous people, thereby helping restore confidence.

(via Ideas)

Chipping away at the “to read someday” pile, I found this bit from The Economist.

To be on the right-hand-side of an eye-level selection is often considered the very best place, because most people are right-handed and most people’s eyes drift rightwards. Some supermarkets reserve that for their own-label “premium” goods.

I’m definately going to be thinking about this next time I’m shopping.

In the category of bogus scientific-sounding conclusions, NYU professer Ken Maymin claims that the popularity of Beyonce’s “Put a ring on it” — with its regular beat — indicates coming stock market volitility. Or said psuedoscientifically:

After studying decades of Billboard’s Hot 100 hits, Maymin found that songs with low “beat variance” had an inverse correlation with market turbulence.

(via Passport; Apologies if this post got that infernal song stick in your head. You can take some solace in the fact that it’s presently stuck in mine.)

David Brooks worries, in a troubling coherent piece, that the incoming President may have already bitten off more than he’ll be able to successfully manage. The conclusion sent chills down my spine:

By this time next year, he’ll either be a great president or a broken one.

Interestingly, Paul Krugman’s piece (also from Friday’s paper) argues that the incoming administration needs to do even more.

Lloyd point to one of things I find so frustrating about gift exchanges:

The most conservative estimate put the average receiver’s valuation at 90% of the buying price. The missing 10% is what economists call a deadweight loss: a waste of resources that could be averted without making anyone worse off. In other words, if the giver gave the cash value of the purchase instead of the gift itself, the recipient could then buy what she really wants, and be better off for no extra cost.

Clay Shirky wrote this paper in 1997. His point is still sinking in:

The price of information has not only gone into free fall in the last few years, it is still in free fall now, it will continue to fall long before it hits bottom, and when it does whole categories of currently lucrative businesses will be either transfigured unrecognizably or completely wiped out, and there is nothing anyone can do about it.

(via Andrew Simone)

Timothy Noah’s hardly the first person to claim that the Democrat’s go-to economic wise men, Bob Rubin, should have to shoulder a piece of the blame for the current financial mess. But his arguments are clearly laid out, and worthy of a perusal for anyone with a faint interest in the topic.

If you think of Mr. Krugman as an often shrill mostly political columnist — as I frequently do — this was something of a surprise. But the folks at Marginal Revolution are here to make sure you understand that this was actually closer to inevitable.

• Tyler Cowen explains — with copious good links — who Krugman the economist is, and why this was something of a no-brainer.
• Alex Tabarrok explains one of Krugman’s most substantial contributions: new trade theory.

In case you hadn’t already assumed so, evidence suggests that the financial crisis has indeed caused some illegal immigrants to leave the United States.

In March this year an estimated 11.9m people were thought to be living in America without papers, down from 12.4m in 2007, according to the Pew Hispanic Centre. Various factors are at play, including rising unemployment and stricter policing in America, and better economic conditions in home countries, especially Mexico, origin of nearly 60% of America’s immigrants.

Two people I respect a great deal, Marc Ambinder and David Brooks, both think the failure of the bailout yesterday makes obvious the full-scale meltdown of the GOP. Here’s Brooks:

House Republicans led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party. Not long ago, they led an anti-immigration crusade that drove away Hispanic support. Then, too, they listened to the loudest and angriest voices in their party, oblivious to the complicated anxieties that lurk in most American minds.

Now they have once again confused talk radio with reality. If this economy slides, they will go down in history as the Smoot-Hawleys of the 21st century. With this vote, they’ve taken responsibility for this economy, and they will be held accountable. The short-term blows will fall on John McCain, the long-term stress on the existence of the G.O.P. as we know it.

It seems ludicrous, but Steven Dubner makes it seem a touch less ludicrous.

Two semi-scientific surveys point to the facts that:

• Democratic presidents have been historically better for the economy than Republicans.
• A survey of 500 economists by Scott Adams (he of Dilbert fame) shows them more likely to favor Obama’s economic policies, nearly 2-to-1. (via /., Tyler Cowen comments)

Feel free to read as much and as little bias into these items as you wish.

While recent unemployment numbers give us more reason to fear, it’s worth considering the oddball effects of the recession, like that the toothfairy can now only afford about $1.50 per tooth. The rate was over $2 not more than six months ago.

(via Ideas)

Postscript: I’m aware I may be inaccurate in calling this a recession, but I prefer it’s brevity to “economic crisis”, “credit crunch”, “economic readjustment”, etc.

Uncommon Knowledge highlights interesting facts about the Olympics. This one was new to me:

the disruptions in the host city - or at least the perception of disruptions - are actually a major boon to competing locales. In 2002, the year Utah hosted the Winter Olympics, counties with ski resorts in Colorado netted an additional $160 million in retail sales, according to sales-tax data.

This on isn’t surprising, but it’s still interesting:

Male athletes were seen as more composed and intelligent in victory, and less committed in defeat. Female athletes were seen as more courageous in victory, and weaker athletes in defeat. A similar pattern was found [in NBC’s coverage] with regard to nationality. Americans were seen as having more concentration, composure, commitment, and courage in victory, while non-Americans were granted more athletic skill. The authors note that “parallels between long-held racial stereotypes (e.g., blacks being ‘born’ athletes and whites being superior intellectually) may transfer in similar ways within the domain of nationalism.”

I just read two profiles. Neither was interesting enough to merit it’s own post, but the combination seemed to just pass the bar. The two:

• Dr. Doom. Depending on who you ask Nouriel Roubini is either a lucky pessimist or prescient thinker. There is, however, no doubt that he predicted America’s current economic turmoil in 2006.
• Hit Man. Jerry Corsi, author of the bestselling “Obama’s a Muslim drug addict” book, gets a brief but interesting profile in the New Yorker.

Making time to do things that I usually “don’t have time for” was a good idea. For example, Paul Tough’s (rather long) story for the New York Times Magazine about the challenge and hope for New Orleans schools is good. The most striking paragraph in a primarily optimistic article:

Pastorek’s optimism and determination can be inspiring, but he admits that for now, at least, there’s no proof that a portfolio model will do a significantly better job educating poor children than a command-and-control model. When I spoke last month to Diane Ravitch, a historian of education who has spent decades studying and writing about the often dispiriting process of school reform, she said that she was skeptical that a change in the governance model would solve the problems plaguing New Orleans’s schools. “The fundamental issue in American education — I say this after 40 years of having read and studied and written about the problems — is one that is demographic,” she told me. Poor children, Ravitch said, simply face too many problems outside the classroom. “If you don’t buttress whatever happens in school with social and economic changes that give kids a better chance in life and put their families on a more stable footing, then schools alone are not going to solve the problems of poor student performance. There has to be a range of social and economic strategies to support and enhance whatever happens in school.”

The reality of the price at the pump against the price of a barrel:

Analyses of gasoline economics show that when the price of oil rises, it takes up to four weeks for gas station prices to catch up, with most of the increase taking place within the first two weeks. But when oil prices sink, it takes up to eight weeks for the savings to be passed along to consumers. The phenomenon is known as “asymmetric price adjustment” (PDF) or, more informally, “rockets and feathers.”

An interesting look at the reality of the much heralded and fretted over Tata Nano:

Malhotra is having second thoughts. He’s done the math and realized that once taxes and insurance costs are added, the price of the entry-level Nano rises to just over $3,000. For an extra $500, he says, he could buy a decent used car with a more powerful engine and air conditioning, which the Nano won’t have.

(via Passport)