Marginal Revolution

African Successes

Alex Tabarrok

From Shanta Devajaran at the World Bank's blog Africa Can...End Poverty, a post on African Successes.

In recent years, a broad swath of African countries has begun to show a remarkable dynamism. From Mozambique’s impressive growth rate (averaging 8% p.a. for more than a decade) to Kenya’s emergence as a major global supplier of cut flowers, from M-pesa’s mobile phone-based cash transfers to KickStart’s low-cost irrigation technology for small-holder farmers, and from Rwanda’s gorilla tourism to Lagos City’s Bus Rapid Transit system, Africa is seeing a dramatic transformation. This favorable trend is spurred by, among other things, stronger leadership, better governance, an improving business climate, innovation, market-based solutions, a more involved citizenry, and an increasing reliance on home-grown solutions. More and more, Africans are driving African development.

A very interesting list of examples and case studies follows.  My colleague at the Independent Institute, Alvaro Vargas Llosa has also edited a recent book on this theme titled, Lessons from the Poor.

Question: How does focusing on successes change our view of development?

Hat tip J-J Rosa.

Assorted links

Tyler Cowen

1. Man divorces eleven times.

2. Village Voice best of 2009 jazz list and here is another good jazz list.

3. www.oliversacks.com is now up.

4. Peter Berkowitz reviews the new George Nash book on the conservative movement.

5. England's greatest composer?

6. Thomas Boswell: "Long ago, I asked Gene Mauch what was his worst day was as a manager. Random question. But Mauch actually thought about it, then said, "The day you realize you care more than the players do."

Russia Plans to Save Mother Earth

Alex Tabarrok

Russia's space chief said Wednesday his agency will consider sending a spacecraft to a large asteroid to knock it off its path and prevent a possible collision with Earth.

Anatoly Perminov said the space agency will hold a meeting soon to assess a mission to Apophis, telling Golos Rossii radio that it would invite NASA, the European Space Agency, the Chinese space agency and others to join the project once it is finalized.

When the 270-meter (885-foot) asteroid was first discovered in 2004, astronomers estimated the chances of it smashing into Earth in its first flyby in 2029 were as high as 1-in-37.

Further studies ruled out the possibility of an impact in 2029, when the asteroid is expected to come no closer than 18,300 miles (29,450 kilometers) above Earth's surface, but they indicated a small possibility of a hit on subsequent encounters.

Excellent news!  Here is my earlier post, Asteroid Deflection as a Public Good.

Do we find sectoral shifts in the job market data?

Tyler Cowen

Menzie Chinn discusses the evidence on sectoral shifts hypotheses.  See also the piece by Valletta and Cleary.

These are intriguing and useful studies but I don't think they get at the core of the matter, mostly because sectoral shifts and aggregate demand shocks are so closely intertwined in this recession.

Here's a very simple story.  The prices of homes and stocks fall, plus there is some panic, so people spend less.  On the surface, that's an AD story, following from an economy-wide negative wealth effect.  But it's also a sectoral shifts story, because people are not cutting spending proportionately on all items.  For instance luxury consumption and debt-financed consumption have been hit especially hard, not to mention real estate and financial services (for other reasons).  And since I do not expect a quick rebound of real estate or stock prices, this is more or less a permanent change in sectoral priorities.  Still, in the data the AD shock might well absorb most of the "credit" for what happened.

We're also seeing job losses in virtually every sector.  It's not for instance a "sectoral shift away from services and into matchstick production and tungsten."  It's a shift out of jobs which are revealed as unprofitable and a lot of people not knowing where the new jobs will be created.

If someone wants to insist that "this is really an AD shock, not a sectoral shift," I'm not so keen on fighting to keep one term over the other.  I would insist, however, on an issue of substance, namely that not all AD shocks are alike.  If we are going to switch terminology, it could be said that this is a real AD shock and not just a nominal AD shock.  (Though there have been nominal AD shocks too.)  A nominal AD shock can be offset more easily by goosing up some mix of M and V and restoring the previous level of nominal demand.  If you want an example of a nominal AD shock, imagine a more neutral change in monetary variables and indeed those have happened in the postwar era.  Or read David Hume's parable of the money under the pillow.  In those cases you don't need to make people feel wealthier in real terms, you just need to get the flow of spending up again.  Today, part of the problem is that people feel less wealthy in real terms and that influences the content of their spending and investment decisions.

When a real AD shock comes, policy still should be expansionary in response, but there is an important difference.  In absolute terms, nominal expansion won't much help the labor market, which still has to reallocate workers from some sectors to others, given the collapse in asset prices and expectations.

You'll see indirect recognition of this from many current Keynesian writers, when they talk of the jobless recovery or fear that the economy will fall back next year after the stimulus money runs out.  In general I agree with those points.  Yet these writers are less willing to consider the implied conclusion that a bigger stimulus won't much help -- and may hurt -- the longer-run adjustments which are required.  Boosting MV will restore employment only to a very limited extent.  It's still the case that recovery will require a great deal of sectoral readjustment and that will take a good bit of time.

Arnold Kling comments as well.  And again.

The Fed as fiscal authority

Tyler Cowen

We sometimes describe fiscal policy as determining the overall level of the public debt, while monetary policy determines the composition of that debt between money and interest-bearing federal obligations. By that definition, the Fed has clearly now entered the realm of implementing fiscal policy, by issuing debt directly in the form of interest-bearing reserves, reverse repos, and now term deposits.

That's from James Hamilton.  His upshot?:

I fear that as this marriage between fiscal and monetary policy becomes consummated, an amicable divorce is not the most likely outcome.

My advice would be the sooner the Fed can return to plain vanilla central banking, the better.

Regulatory solutions from Emanuel Derman

Tyler Cowen

I had a fantasy in which the Fed and the TSA (Transportation Security Administration) switched roles.

If a bank failed at 9 a.m. one morning and shut its doors, the TSA would announce that all banks henceforth begin their business day at 10 a.m.

And, if a terrorist managed to get on board a plane between Stockholm and Washington, the Fed would increase the number of flights between the cities.

The piece is here and the pointer is from Felix Salmon.

Keep Momma on the Train!

Alex Tabarrok

Today, Paul Krugman writes, under the headline "Stop, you’re killing me" the following:

Eight and a half years ago, when I dubbed the first Bush tax cut the Throw Momma from the Train Act of 2001, I didn’t really think that we’d get to the point where there would be strong financial incentives for wealthy heirs to bump off their parents before the legislation expired, and the estate tax was reinstated....[but] it’s really happening.

As Paul might say, uh no. Or at least not yet. The estate tax goes away in January of 2010 so the story today is that the rich have an extra incentive to keep momma on the train or, as the WSJ correctly puts it, Rich Cling to Life to Beat Tax Man.  (What happens in 2011, however, is another story although the law will almost certainly be changed by then.)  Paul, it seems, just can't stop blaming Republicans for killing people or maybe he just had to make the story fit his Monty Python clip.

Assorted links

Tyler Cowen

1. Ross Douthat defends the filibuster; here is Will Wilkinson on the same.

2. Most Kindle best-sellers are free.

3. The year's best and worst: a Ukrainian perspective.

4. People are reading more not less.

5. Revisionist history of the Ivy League?

6. Map scaled by how many languages an area has produced.

7. Top ten pro-liberty books of the decade?

Moving essay by Tony Judt on ALS

Tyler Cowen

During the day I can at least request a scratch, an adjustment, a drink, or simply a gratuitous re-placement of my limbs—since enforced stillness for hours on end is not only physically uncomfortable but psychologically close to intolerable. It is not as though you lose the desire to stretch, to bend, to stand or lie or run or even exercise. But when the urge comes over you there is nothing—nothing—that you can do except seek some tiny substitute or else find a way to suppress the thought and the accompanying muscle memory.

But then comes the night. I leave bedtime until the last possible moment compatible with my nurse's need for sleep. Once I have been "prepared" for bed I am rolled into the bedroom in the wheelchair where I have spent the past eighteen hours. With some difficulty (despite my reduced height, mass, and bulk I am still a substantial dead weight for even a strong man to shift) I am maneuvered onto my cot. I am sat upright at an angle of some 110° and wedged into place with folded towels and pillows, my left leg in particular turned out ballet-like to compensate for its propensity to collapse inward. This process requires considerable concentration. If I allow a stray limb to be mis-placed, or fail to insist on having my midriff carefully aligned with legs and head, I shall suffer the agonies of the damned later in the night.

Read the whole thing.  I thank The Browser for the pointer.  Here is previous MR coverage of Tony Judt, an excellent thinker and writer.

The economics of dog food

Tyler Cowen

How does the environmental impact of a dog compare to that of an SUV?  Via Robert Nagle in the MR comments section, here is one article defending the dog. It makes many good points but right now I am especially interested in this passage:

...most dogs DO NOT eat meat and cereals.  With a few exceptions, they eat “meat” and “cereals.”  The “meat,” in particular, tends to be byproducts—things that people in the US simply won’t eat, even in hot dogs.

Does that mean that the cow parts are a "free lunch," environmentally speaking?  Let's say you have a dogless world and the cow organs are thrown away.  Dogs come along and suddenly those organs are sold to dog food companies.  The profit margin on cows increases.  The supply of cows goes up, as more resources are put into raising cows, and that means more cow emissions.  This process continues until the (private) costs of cow production rise, and/or the prices of cow products fall.  In other words, it depends on elasticities but the dog diets do have an environmental impact.

Here is a simple piece on the economics of joint supply.

The decline of Christmas cards

Tyler Cowen

Agnostic reports:

Using Lexis-Nexis, I found an estimate of 26 Christmas cards for 1990, so that the number of all holiday greeting cards would have been a bit above -- probably around the 1987 level of 29 cards across all holidays. The first big drop is visible by 1994, when the number of cards received per household was about 25% lower than in 1987. There was another drop-off starting in 2003, and during the most recent years of 2007 and 2008, the number is down about 40% from the late '80s / early '90s. This does not merely reflect the fact that there are more households now than then, which would tend to lower the ratio even if the total number of cards stayed the same. In 1987, 2.856 billion holiday greeting cards were received vs. 2.117 billion in 2007 -- a decrease in sheer volume of 736 million cards.

And what is the upshot?:

1) The various signals of Christmas have been steadily fading since roughly the mid-1990s, at least a decade before the "War on Christmas" debate erupted. Rather than special interests knocking off Christmas-lovers, the general public voluntarily dropped out. None of the changes in the signals is clearly related to the internet, macroeconomic indicators, etc. The only strong association I see is the larger cultural shift away from sincerity and sentimentality toward affectation and irony.

2) They have not been replaced with new signals. Rather, we're pulling out investment from the holiday altogether and shifting it into other holidays like New Year's Eve and Halloween (which Lexis-Nexis suggests was taken over by adults also in the mid-1990s). Anything that will afford us greater opportunities to make the duckface for the cameras.

Contrary to the author's suggestion, I am inclined to see the internet at work here, even if it doesn't explain the entire series.  If you stay in touch by Facebook, what's the point of the yearly reminder?  This is another example of how the internet can lower measured gdp yet raise welfare.

If you scroll down on the blog, you'll find other indicators of the decline of interest in Christmas.

Fischer Black's *Exploring General Equilibrium*

Tyler Cowen

Coming out in paperback, March 2010, for only $20.  You can pre-order now.

Mostly it's Black's views on business cycles, growth, and equilibrium.  It's not an easy book for most people to read, as Black just comes out and states what he thinks, without much in the way of trappings or preliminaries or traditional narrative structure.  There are also no models, just strings of statements about models.  That said, virtually every sentence has substance.  It is one of my favorite books in economics and it still contains many unmined insights.  I'm tempted to order an extra copy, just for the pleasure of buying it.

Assorted links

Tyler Cowen

1. Chinese railway photos.

2. Three lessons for surviving the holidays.

3. Do cell phones deter kidnappings?

4. The loss rate of sprinters.

5. David Brooks's "Sidney Awards," part II.

6. The historical origins of fish and chips.

7. Should scientists be more psychotic?

A world without nuclear weapons?

Tyler Cowen

Thomas Schelling -- who remains a master of cool, insightful analysis, has a new essay on this question.  Such a world would not be a picnic.  Here is one good excerpt:

In summary, a "world without nuclear weapons" would be a world in which the United States, Russia, Israel, China, and half a dozen or a dozen other countries would have hair-trigger mobilization plans to rebuild nuclear weapons and mobilize or commandeer delivery systems, and would have prepared targets to preempt other nations' nuclear facilities, all in a high-alert status, with practice drills and secure emergency communications. Every crisis would be a nuclear crisis, any war could become a nuclear war. The urge to preempt would dominate; whoever gets the first few weapons will coerce or preempt. It would be a nervous world.

Hat tip goes to www.bookforum.com.

Gretchen Rubin's *The Happiness Project*

Tyler Cowen

The book is now out and yes it does add to her blog.

My current take on "happiness" (not the same as Gretchen's) is:

1. I believe in the "set point" theory, at least when our health and the health of our loved ones is at an acceptable level.

2. People should strive to be more interesting and more responsible.  Happiness may result as a byproduct, but those are more important values.  I would like to read a book called The Interesting Project.

3. Shopping and going to the public library (i.e., shopping at p = 0) make people happier, at least for a while.  You can do these activities repeatedly.

4. Most people aren't as interested in being happy as they claim, or seem to claim.

5. On net, Gretchen's tips will enhance your happiness.

Here is Gretchen's post on making effective New Year's resolutions.

Why hasn't the Fed been targeting two or three percent inflation?

Tyler Cowen

I've been thinking about this question more and I've come up with a speculative possibility.  Right now banks are earning their way back into profitability by playing the spread.  They're paying close to zero on deposits and earning fair sums on long-term loans.  Perhaps this term structure is sustainable because people are expecting little inflation in the short run but moderate inflation in the longer run, plus there is some risk on the loans.  (These inflationary expectations may be changing; if you wish pretend I am writing this six months or a year ago.)

So let's say we move from zero expected short-term inflation to three percent short-term expected inflation.  The nominal short rate rises to three percent and the real short rate remains more or less constant.  Long rates would go up a bit but not much, since beyond the short run there is already an expectation of moderate inflation.  In sum, the spread between short and long rates might narrow.

Here is the key point: from the bank's point of view, what is the correct measure of the real rate of interest?  Is it defined by the nominal rate relative to the expected growth in the CPI?  I doubt it.  When you're near the bankruptcy or nationalization constraint, it's often nominal profits that matter (relative to fixed nominal liabilities, accounting standards, capital standards, etc.), not "real profits" defined relative to the CPI.

In sum, maybe three percent expected inflation conflicts with the desire to rapidly recapitalize banks through maintaining a wide interest rate spread.  Maybe we need that zero nominal short rate or at least the Fed thinks we do.

I don't wish to push too hard on this hypothesis, it is speculative rather than confirmed by evidence.  And propositions about the term structure of interest rates do not always run the way you think they will or should.  I'm aware of other problems.  What kind of zero profit condition is imposed on the banks?  Given the odd objective function of the banks, how exactly does the Fisher effect work in the short run?  Or is it imposed from without by competition from non-bank lenders?  I'm not sure on these questions and they suggest possible holes in the above speculation.

I also regard this as a somewhat gruesome hypothesis.  It means that "Main Street" is paying for "Wall Street" (forgive me the use of those awful terms) in at least two ways: high unemployment and inability to earn much on one's savings.  Risk on the Fed balance sheet is also paying some big part of the bill, since presumably that is helping to maintain the interest rate spread.

The term structure also implies that the market is expecting rising short rates, so if the bank mess isn't cleaned up soon, heaven forbid.  The spread, as a means of restoring bank profitability, won't last forever.

Today's music model: meet the 1950s

Tyler Cowen

Someone teleported through time from the early 1950s to 2009 would find a music business curiously similar to the landscape of 60 years ago.  Few specialty record outlets.  Department stores dominating the market.  A singles-driven industry.  Pop music dominating radio.  TV musical talent shows all the rage.

That's from the 21 December issue of Variety.  One difference, of course, is that the best-selling album of this decade -- but not the 1950s -- was by The Beatles.

How does Delhi gridlock get cleared up?

Tyler Cowen

Sometimes it's so bad that the cars can't even more, at least not without external assistance:

...heads begin to appear between the hoods and trunks.

Motivated by a meeting they wish to keep, men wade into the fray, examining the crystalline structure of the traffic, looking for gaps, irregularities, wiggle room. Because there’s always wiggle room. Six inches here, a foot there, and this makes all the difference. It’s reverse Tetris: move one this way, move another that way, and suddenly some cars are free.

The amazing thing is this: these men don’t coordinate their actions. They don’t formulate strategies. In fact, they probably think they’re working against each other—as passengers in trapped cars, they care about helping the other cars move only insofar as it helps get their own car on its way.

The article is here and I thank Dave Prager for the pointer.  Here is one photo of a Delhi traffic jam.

Projects to ponder, and let's drink a toast to fixed costs for once

Tyler Cowen

Hans Larsson, the Canada Research Chair in Macro Evolution at Montreal's McGill University, said he aims to develop dinosaur traits that disappeared millions of years ago in birds.

Larsson believes by flipping certain genetic levers during a chicken embryo's development, he can reproduce the dinosaur anatomy, he told AFP in an interview.

Though still in its infancy, the research could eventually lead to hatching live prehistoric animals, but Larsson said there are no plans for that now, for ethical and practical reasons -- a dinosaur hatchery is "too large an enterprise."

The longer story is here and I thank Bookslut (one of my favorite blogs) for the pointer.  Here is Larsson's home page.

Assorted links

Tyler Cowen

1. A good point: "The central failure of these interviews, like so many, is that they operate from the proposition, "what would my readers find interesting?" instead of "what does my subject find interesting?"

2. Reason to worry about the second half of next year.

3. The Japanese sex-breakfast-mother-appreciation correlations.

4. How Victoria's Secret modifies a photo (excellent link, safe for work).

5. Photo sequences which are truly and deeply baffling to me.  And here is Tavi Gevinson, 13-year-old fashion maven.  

6. The evolution of empires; 1960 is the highlight.

7. Palindromic date puzzle.

What are the odds that the best chess player in the world has never played chess?

Tyler Cowen

The more general issues are how well the modern world allocates talent and how much exposure you need to something you eventually will be very good at. 

My view is that people who are born into a reasonably good educational infrastructure get exposed repeatedly -- albeit briefly -- to lots of the activities which might intrigue them.  If the activity is going to click with them, it has the chance.  To borrow the initial example, most high schools and junior high schools have chess clubs and not just in the wealthiest countries.  Virtually everyone is put in touch with math, music, kite-flying, poetry, and so on at relatively young ages. 

The idea of taking an economics class in college, or picking up some economics literature, strikes most educated people at some point, even if they squash the notion like a bug.  If there is some other Paul Samuelson-quality-would-have-been who didn't become an economist, perhaps he preferred some other avocation even more.

Billions of people are not exposed to quality economics, math, music, etc., but those people also don't have the nutrition, the education, the infrastructure, or whatever, to excel at world class levels.  The infrastructure and the exposure come together and in that sense we keep on mining the pool of potential talent.  (Their only modal scenario to #1 for these individuals is an entirely different life altogether; mere additional exposure won't do it.) 

Ernest Bazanye is blogging from Uganda.

Some people get stuck in local genres, such as a brilliant Nigerian learning funk or rap, in his teen years, but not modern jazz and besides he can't find a Nigerian market for the latter in any case.  These "specialization corners" are less of a problem for math or economics, although the unification of those areas is fraying with time. 

Magnus Carlsen's father suggested that if he hadn't had an older sister, he might not have taken up the game at all.  Magnus was uninterested at ages four and five, but grew intrigued at age eight when he watched his father play chess with his older sister.  I read this anecdote as suggesting he would have been exposed again to the game, one way or another, probably in school.

Two scenarios militate against my thesis.  First, mistreated savants may not receive the necessary exposure to the activity.   I am very much a believer in the potential productivity of mistreated savants.  Still, I believe they often do best when not trying to be pure #1 in some commonly contested, measurable area but rather by filling unusual and hard to specify niches in a broader production process and benefiting from the division of labor to an especially high degree.

Second, a large number of children are placed on medication at early ages.  This may not eliminate their exposure to an activity in the literal sense, but it may stop them from responding to potential interests.

In sum, I believe that the odds that "the best (modal) chess player in the world" has never played chess is well under fifty percent but probably above ten percent. 

Assorted links

Tyler Cowen

1. Evidence for recalculation theories.

2. Markets in everything, "pour chiens."

3. Recessions breed future redistributionists.

4. On Twitter, crime_economist.

5. Twenty things that happen in one minute.

Transparency in health care pricing doesn't come easily

Tyler Cowen

The health care reform bill before the U.S. Senate would require hospitals to publicize their standard charges for services, but New Hampshire and Maine have gone much further in trying to make health care costs more transparent to consumers.

New Hampshire and Maine are the only states with Web sites that let consumers compare costs based on insurance claims paid there.

In New Hampshire, the price variation across providers hasn't lessened since the Web site went live in 2007.

The link is here.  You'll find the background data from New Hampshire, and a study, here.  Here are some anecdotal accounts.  Here is a CBO background paper on the topic.  I can think of a few hypotheses:

1. People don't check the website.

2. People can't interpret the information on the website.

3. People still go where their doctors recommend or to facilities they are familiar with.

4. Many local choices, especially in these states (somewhat rural, so-so road connections), don't involve a lot of competition.

5. All of the above.

Other?

Christmas Game Theory

Alex Tabarrok

The lovely wife says the jewelry I bought her for Christmas has to be returned because "it's just too expensive!"  Excellent.  I get the credit without the credit bill!

What I will never reveal is how far I looked down the game tree before purchase.

Addendum: Do not try this at home.  Without extensive knowledge of game theory and your spouse this strategy can be very dangerous to your finances, c.f. Thomas Schelling, brinksmanship.  

More Engineers in Jihad

Alex Tabarrok

Gambetta and Hertog find that “the share of radical Islamic engineers is no less than nine times greater than the share we could expect if the proneness of engineers to radicalize was the same as that of the male adult population.”  (Tyler blogged this paper several years ago.)

Here is the latest bit of evidence:

Mr. Abdulmutallab grew up in a rarefied slice of Nigeria, the son of an affluent banker. He attended one of the West Africa’s best schools, the British School of Lomé in Togo. After high school, he went to Britain and enrolled at the University College London to study engineering.

Assorted links

Tyler Cowen

1. The high IQs of dyslexics.

2. What determines how well you keep resolutions?

3. Which are the most remote places on earth?  A map.

4. Non-reversing mirrors.

5. Markets in everything: chemotherapy cooking classes.

6. Was Jesus wealthy?

Markets in everything China fact of the day

Tyler Cowen

Wanted: One live-in protester, $146 a month, no days off.

When the managers of a Beijing restaurant marked for demolition were too busy to fight it, they posted an Internet ad and hired a stranger to stay there around the clock. The job seems to be a first for China, where frenzied urban construction has led to violent evictions, protests and even suicide.

Huddled on a makeshift bed in the trash-strewn, freezing restaurant, Lu Daren said he once worked for a demolition crew and understands their tactics.

"I'm tired," the 46-year-old said Thursday, after a long night of fending off the latest visit from what he suspects were hired thugs by the landlord. "Tired, tired, tired." He stays — wrapped in blankets, reading the newspaper or writing idle poetry, occasionally taking short walks_ because he thinks the restaurateurs have been treated unfairly.

The full story is here and I thank Daniel Lippman for the pointer.

Books of note

Tyler Cowen

1. David W. Galenson, Conceptual Revolutions in Twentieth-Century Art.  We've covered Galenson in these posts.

2. Richard A. Posner, The Crisis of Capitalist Democracy.  Due out in April, this book is 400 pp.  The press release notes it "presents what Judge Posner has learned about the econom since writing [his last book]...[and he] thinks we're in for a financial aftershock because of the amount of money the government has poured into the economy to save it."

3. Günter Grass, The Tin Drum, new translation by Breon Mitchell.  I've only browsed this, but it appears to be far better than the earlier English-language translation.

4. Scott Berkun, Confessions of a Public Speaker.  If you get only one good tip from this book, it's worth it.  

5. Peter Singer Under Fire: The Moral Iconoclast Faces His Critics.  The critics include Bernard Williams, David Schmidtz, Jan Narveson, Michael Huemer, and myself'; Singer responds to each essay.

Christmas Bonuses for Fannie and Freddie

Alex Tabarrok

The Obama administration tried to sneak this one under the radar by making it official on Christmas Eve.  The Washington Post did a good job catching the story:

The Obama administration pledged Thursday to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac, an eleventh-hour move that allows the government to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress.

...But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009.

The compensation packages, including up to $6 million each to Fannie Mae and Freddie Mac's chief executives, come amid an ongoing public debate about lavish payments to executives at banks and other financial firms that have received taxpayer aid. But while many firms on Wall Street have repaid the assistance, there is no prospect that Fannie Mae and Freddie Mac will do so.

Merry Christmas

Tyler Cowen

Assorted links

Tyler Cowen

1. Recent work in Austrian economics.

2. 121-hour long lecture (with breaks), the longest ever?

3. Scott Sumner on movies, great post.

4. Is it possible that 225,000 Haitian children are slaves?  Read this too: "Researchers said the practice of young servants, known as 'restavek', is so common that almost half of 257 children interviewed in the shantytown of Cite Soleil were household slaves. The report found that most of the children are sent by parents, who cannot afford to care for them, to families just slightly better off."

5. More on the psychology of menu pricing.

6. Peter Singer and Bill Easterly on Bloggingheads.TV.

Merry Christmas from The Boss (and me)

Alex Tabarrok