Tuesday, February 28, 2012

How much counterfeiting can a currency tolerate?

Press inquiries in 2010 found that, with over 41 million faked [British] pound coins in circulation—nearly 3 percent of the total coinage—the Royal Mint was facing the possibility of an expensive currency recall. An internal HM Treasury email (PDF), released under Britain's Freedom of Information law, notes that analysts typically regard 5 percent as the point of no return for any currency. But the report also points out that South African 5 Rand and Malaysian 1 Ringgit coins were both reissued (in 2004 and 2005, respectively) after much lower counterfeit rates. The implication is that Britain's currency is already in peril. ...

What may have spared the United States from such embarrassment, Matthews politely ventured to me, is our level of usage: That is, $1 coins are so unpopular that even counterfeiters can't be bothered. ...

But could coin counterfeiting happen here? Incredibly, we don't even know if it already has. The Secret Service is in charge of dealing with counterfeit currency; but after making Freedom of Information Act inquiries with them when the $1 presidential coin program was in full swing, I found their countermeasures appeared to be ... nothing at all (PDF). The U.S. Mint website doesn't even mention the possibility of fake modern circulating coinage, nor does it give instructions on how to detect them. Then again, with 25 different $1 coin designs already in circulation—the Susan B. Anthony, four Sacagawea variants, and the first 20 presidents—the $1 coin's identity has been so diluted that few would know a real from a fake anymore.
--Paul Collins, Slate, on faking it till you unmake it

Charles Lindbergh's gift to France

After completing his famous transatlantic flight to Paris, Charles Lindbergh received an audience with King George V. According to accounts of the meeting, the King leaned forward and asked, “There is one thing I long to know. How did you pee?” Lindbergh explained that there was a funnel hooked up to his wicker seat, which directed his waste into an aluminum container. Of the aluminum container he said, “I dropped the thing when I was over France.”

Tuesday, February 21, 2012

What the reaction to Jeremy Lin reveals about America

Jeremy Lin has dribbled America into the previously quiet corner of its casual prejudice and lazy stereotypes of Asian Americans.

The true beauty of his story is in awareness of the ugliness that has been found there. ...

America should see itself in the murky reflection of a society that has long considered it reasonable to publicly categorize Asian Americans in ways that would never be acceptable for other, more vocal minorities.

America should see the writer from Foxsports.com who began the barrage of ignorance last week by tweeting a tired joke about the assumed size of Lin's manhood. The guy apologized, but his company did not, which should not be surprising considering Fox Sports is also the outfit that last fall aired a segment in which a reporter ridiculed Asian Americans at USC for not understanding football.

Can you imagine a major American media company tolerating this sort of blatant racism if it were directed toward any of Lin's African American teammates?

America should see the game video from the Knicks' MSG network in which cameras focused on a homemade sign that showed Lin's face above a fortune cookie with the words, "The Knicks Good Fortune.''

Can you imagine, five months from now, that same television director willingly airing a shot of a sign that made fun of the heritage of a Latino member of the New York Mets?

If America has the stomach, it should even watch the tape of the WNYW morning show in New York where one of the anchors, upon hearing a reporter list Lin's physical attributes, asked, "What about his eyes?"

The newsman made the slur, he sort of winked with glee, the entire news desk laughed and I'm thinking, you're kidding me, right? In a media world that is reluctant to even cite a subject's ethnicity unless it is relevant, it's suddenly OK to openly laugh about Lin's cultural characteristics because, well, because he's Asian American and everybody does it? ...

America really needs to watch the "Saturday Night Live'' skit in which three sports reporters laughingly discuss Lin while using Asian American slurs, yet when a fourth newsman tries to discuss other Knicks by using African American slurs, they become offended.
--Bill Plaschke, LA Times, on the different rules for Asians. HT: MEL

Tuesday, February 14, 2012

Bus good, train bad

There is an old joke that 40 years of transportation economics at Harvard can be boiled down to four words: “Bus Good, Train Bad.” The many advantages of the bus were first illustrated in the classic text, “The Urban Transportation Problem,” by John Meyer, John Kain and Martin Wohl. (Meyer and Kain were both mentors of mine). Buses are flexible, cheap and can move almost as fast as urban trains if they operate on a dedicated road or a private tunnel. Perhaps the most positive transport innovation of the past decade has been the enormous competition of private buses plying the roads of the Eastern Seaboard.

Cars can’t be the only answer for urban commuters, especially for poorer Americans during an era of high gas prices. Buses can be a pleasant alternative, with televisions and Wi-Fi connectivity. Buses can move quickly if they are given enough space to drive. Instead of chasing the quixotic dream of high-speed rail in Texas, public-transit aficionados should start agitating for better bus service, with plenty of private competition.
--Ed Glaeser, Bloomberg, on getting over our rail obsession. HT: Marginal Revolution

Monday, February 13, 2012

Why the wealthy are moving their money offshore

[Jim Duggan, a tax and estate planning attorney who specializes in wealth management issues for the very rich,] says a growing number of wealthy people are looking into moving some of their money offshore. "The interest in offshore planning has increased basically by a factor of five in the last ten years," he says. Clients want to talk to him about it all the time.


Contrary to popular opinion, it's not really to save on taxes.

That's because American taxpayers are taxed on their worldwide income -- so if you're making $10,000 (or $10 million) in interest on a bank account in, say, the Caymans or Switzerland, you're getting taxed by Uncle Sam as if you're making it in a bank account here.

It's easy to scoff and assume the rich are hiding their money and cheating. Doubtless some are. But enforcement is tight, and the penalties aren't so much draconian as medieval. They are far more severe than for tax evasion onshore.

And there are plenty of tax shelters available here in the U.S. anyway -- such as trusts in low tax states, buying life insurance, and variable annuities.

So what are the real reasons the rich are casing the Caymans with their cash?

There are two, says Duggan: Litigation risk, and political risk.

Yes: Political risk. Or, as he puts in a nice legal euphemism, "jurisdictional diversification."

Litigation risk is the old reason. You could get hit by a crazy lawsuit here in the U.S. The wealthy are an easy mark, and anything onshore is vulnerable. ...

The new reason, though, is political risk: "Diversification from our government, policies, and banking systems," says Duggan. The last few years have shaken faith in our system. Duggan says growing numbers of his clients are worried about the financial system, confiscation -- the whole shebang. "They're concerned about our government, and where our society is headed. There's a lot of socialistic tendencies, capital controls, the redistribution of wealth."
--Brett Arends, SmartMoney, on offshore accounts as insurance

Sunday, February 12, 2012

Jeremy Lin and the Black game

[T]o understand Jeremy Lin, we must look to Jin, the diminutive Chinese emcee from Jackson Heights who, for seven weeks, dominated the Battle Stage on BET’s 106th and Park. ...

As is true with Jeremy Lin, it mattered that Jin was American born, it mattered that he was competing in front of a mostly Black crowd on BET and it mattered that he was doing it with lines like, “If you make one joke about rice or karate/NYPD be in Chinatown searching for your body.” ...

Yes, he probably inspired a few Asian kids to see a rap career as a real possibility, but Jin represented more than another against-all-odds Asian success story. He wasn’t Connie Chung or Gary Locke or Jerry Yang, who, regardless of their intentions, confirm the country’s racial math. Jin went Black. In doing so, for those of us who were heeled on the mantra of assimilation, who have grown weary of the race towards whiteness, who have lived our lives in the strange space of identifying with hip-hop’s stories of racial oppression, but who have never really felt that our own stories could live up to the comparison, Jin’s bravado and skill offered an alternative interpretation of what it meant to be an Asian-American.

Try to understand, most of us, at some point in the race, have wanted to turn around and start running the other way. ...

It’s mostly about the dunks. The attention surrounding Lin has exploded this year, not because he’s playing any better than he did last year or because anyone cares about Harvard basketball, but because of the clips that have started circulating around youtube and sports websites that show Jeremy Lin dunking all over Georgetown, Boston College and UConn. ...

With its giants in skimpy uniforms, basketball allows us to see, clearly and plainly, the differences between us, the fans, and the athletes on the floor. Our perception of those bodies is driven by antiquated, but overwhelmingly accepted ideas of race. Dwight Howard is described as the winner of a “genetic lottery.” Lebron is either “otherworldly” or “superhuman,” whereas Steve Nash’s success comes from his ability to “overcome his athletic limitations.” When confronted with the task of placing their man on either side of the divide, Jeremy Lin’s fans, who have spread their research out across message boards and sports blogs, point out his breakaway speed, his vertical leap, his deceptive height. What they do not discuss is his jump shot, his free-throw percentage or his ability to throw a crisp bounce pass. Somewhere in the endless comparisons, odd personal anecdotes about meeting the man, and obsessive odes to Lin’s musculature, these fans have placed an implicit caveat onto his story: if he makes it to the league and plays a White game, this will all be for nothing.

Unfair, yes. But those of us trapped within the metanarrative have been conditioned our entire lives to imagine White. Like Jin before him, what Jeremy Lin represents is a re-conception of our bodies, a visible measure of how the emasculated Asian-American body might measure up to the mythic legion of Big Black supermen.

Within that singularly American calculus, it’s not about basketball at all. It’s about our fucked up anthropology.
--Jay Caspian Kang, FreeDarko.com, January 14, 2010, on why it matters that Jeremy Lin isn't just an outside jump shooter

Thursday, February 9, 2012

Clean water's bang for development buck

One million children die from drinking unclean water every year. ...

A World Health Organization study estimates that the availability of clean water in a rural village reduces infant mortality by 35 to 50 percent, at a cost of roughly $10 per person per year. Because infant mortality rates in the poorest countries often range from 60 to 110 per 1,000 live births, the cost of saving a child's life by providing clean water alone may lie in the range of only $180 to $400. To development economists, cheap-plus-effective is an endearing combination.
--Bruce Wydick, Christianity Today, on what might work better than fair-trade coffee

Fair-trade coffee's zero benefit

Fair-trade coffee isn't a scam, but it is hard to find a development program that has attracted so much attention while having so little real impact. The most recent rigorous academic study, carried out by a group of researchers at the University of California, finds zero average impact on coffee grower incomes over 13 years of participation in a fair-trade coffee network. Low impact is due to a flawed program design: growers must pay for FLO (Fair-trade Labeling Organization) certification and bear the costs of compliance with fair-trade standards. When coffee prices exceed the $1.41 threshold (as they do today, with prices at around $2.50), all growers essentially receive the same market price. It is when coffee prices fall below this minimum price that the real benefits of the program kick in. But in these same years of low coffee prices, coffee growers flock to fair-trade certification, lowering the fraction of the fair-trade crop that can be marketed at the higher fair-trade price, thus neutralizing the benefits of the program.

What is more, fair-trade programs continue to encourage the cultivation of more coffee; the best thing for coffee growers around the world would be if everyone grew less.
--Bruce Wydick, Christianity Today, on the case for free-trade coffee

Monday, February 6, 2012

Who shoplifts in New Haven

A lot of the time, the people doing it aren’t people off the street: One of the biggest demographics of shoplifters is Yale female undergraduates.
--Liz Rider, manager of New Haven's Ten Thousand Villages, on desire being stronger than need

Thursday, February 2, 2012

Statistics on the Asianification of classical music

With the median age of concertgoers rising, fewer than one in 10 adults reported attending a classical concert in 2008, according to a periodic survey conducted by the National Endowment for the Arts, a 28 percent drop since 1982. The financial state of orchestras today is roughly comparable to that of Blockbuster Video post-Netflix. Ticket sales are dropping; layoffs and bankruptcies abound. ...

But there is one group that still likes classical music and, what’s more, pays to hear it performed: Asians. Of Asian-Americans ages 18-24 responding to the same survey, 14 percent reported attending a classical concert in the past year, more than any other demographic in that age group. Despite classical’s deserved reputation as the whitest of genres, Asian attendance rates match or surpass the national average up through the 45- 54 age range. ...

Asians make up just over 4 percent of the U.S. population, but 7 percent of U.S. orchestra musicians are Asian, and the figure rises to 20 percent for top orchestras such as the New York Philharmonic. At the elite Julliard School for music, one in five undergraduates—and one in three Ph.D. students—is Asian. ...

However circumscribed the music may be, Asia is one place where classical artists can be genuine pop stars in ways long forgotten in Europe and North America. “Whenever I play in Korea, I feel like I’m at a rock concert,” says [violinist Joshua] Bell. ...

Faced with the unenviable task of trying to make the most hidebound of music traditions hip and relevant to kids, the survival strategy of orchestras has mostly been to throw up their hands and pray that their remaining season ticket-holders cling to life another year. Instead, they might prepare for a future in which their subscribers look a lot different than they do today, and cultivate leadership, outreach and programming which reflect that.