Anti-Semitism & Economic Crisis: Apparently anti-Semitism isn’t dead. Unsurprising.
Shape-Memory Brassieres: Heh.
Transparent Society Watch, Credit Card Data Mining Edition:
Something quants got right….
I always wondered if anyone would ever get around to data-mining credit-card companies’ customer-transaction data. I’d just assumed, however, that it would be marketers – not bill collectors – that were using such data.
If only similar databases & psychological profiles existed for mortgages – such profiles would be quite useful in predicting defaults (and, in turn, in properly valuing mortgages & securities based thereupon).
Note that, insofar as such profiling is generally applicable to all debt – not merely credit card debt – we could be looking at a non-trivial improvement in lenders’ abilities to properly ascertain (and therefore price) credit risk. Think FICO on steroids.
Worldwide Housing Bubbles: At least we weren’t alone.
Demographics & Politics:
Start by considering the electorate’s six broadest demographic groups — white voters with at least a four-year college degree; white voters without a college degree; African-Americans; Hispanics; Asians; and other minorities.
Now posit that each of those groups voted for Barack Obama or John McCain in exactly the same proportions as it actually did. Then imagine that each group represented the share of the electorate that it did in 1992. If each of these groups voted as it did in 2008 but constituted the same share of the electorate as in 1992, McCain would have won. Comfortably.
That’s because Obama’s best groups are much larger today than in 1992….
Also interesting was Kling’s take on this:
…libertarians may have the basic economics right when it comes to open borders. Other things equal, more immigration is much better for the immigrants and somewhat better for the native population.
But other things are not equal. Taking into account the effect of immigration on the political equilibrium, Steve Sailer may have it right. We may have seen the last of America as a dynamic economy with a competitive political system. Instead, we may be headed toward a stagnant economy and a one-party political system
Violence & Social Order:
An interesting take on “open access orders” vs. “traditional states”. The latter are the norm, and the former the exception. Kling fears we may be headed from the former to the latter.
China, Japan, Junk Lending, & Zombies:
In Hempton’s view, massive private savings enabled Japanese banks to avoid the consequences of their bad lending decisions, and instead do more of the same (i.e., make even more bad loans – whether new funds or rolling over old ones). This massive misallocation of resources to unproductive zombie companies/industries kept the latter on life support, and, in turn, contributed to Japanese economic stagnation.
Now, per Shih, China’s banking system is also prone to bad lending decisions, combined w/ massive private savings. One wonders if history could repeat itself. Certainly this appears to be Pettis’ fear.
Economics: “People with higher IQs make wiser economic choices”
Neuroscience: “a positive link between cognitive ability and cortical thickness in the brains of healthy 6 to 18 year olds. The correlation is evident in regions that integrate information from different parts of the brain.”
Civil-Military Gap, Collegiate Edition: Why colleges would benefit from having ROTC on their campus.
Britain & Industrial Revolution:
1. English textile manufacturing out-competes competitors, & comes to dominate the European market.
2. Further stimulus to English manufacturing comes from exports to lands outside Europe (e.g., colonies). Mercantilism & naval power aid this.
3. #’s 1 & 2 grow London as a center of manufacturing & trade.
4. London’s growth, in turn, depletes Britain’s supply of wood fuel, which (via higher prices arising from the resultant wood shortages) creates incentives to mine & burn coal. The exploitation of coal makes British energy cheaper than its competitors.
5. British manufacturing also increases demand for labor, which increases wages.
6. Urbanization (#3) & high wages (#5) increase demand for food; #5 also creates incentives to increase agricultural productivity (e.g., via consolidation of small farms into larger ones IOT exploit economies of scale).
7. High wages & cheap energy create demand for cheap technology that substitutes capital & enegy for labor. Hence the steam engine; the cotton mill; & new mechanized iron-making techniques utilizing coal in lieu of charcoal.
8. In the beginning, the technologies of #7 were relatively inefficient (in terms of energy use & productivity), and were profitable only ‘cuz labor was so costly, & energy so cheap. In countries lacking such conditions, their use wasn’t profitable. Hence, absent #11, the IR remains confined to Britain.
9. The need to develop technology (#7) stimulates R&D, which in turn leads to further technological developments.
10. The demand for #9, in turn, increases demand for literacy, numeracy, & trade skills; while #5 makes acquisition of such skills affordable to ordinary workers.
11. #9 also, eventually, increases the efficiency & productivity of #7. Though done as a cost-saving measure, such improvements also enable the #7’s technological descendants to be utilized in places w/ more expensive energy & cheaper labor. Hence, the IR goes global.
Why you should never arm-wrestle a chimpanzee
Chinese Computer Viruses