Crazy Rich Swiss

Chinese tourists are flocking to Switzerland, and apparently it is not an unmitigated blessing to the locals, as officials are now running “special” train service up Mt. Rigi (in the Lucerne area) for “Asians”!

Not that they are racist or anything:

“Despite the special service, the Mt. Rigi railway station authority reiterated that they welcome Chinese visitors”

do go on, railway station authority:

“It also pointed out that increasing number of Chinese travelers may make the local people feel uneasy to some extent” but “the increase in the number of special trains has nothing to do with discrimination against Asian people, particularly Chinese people.”

so glad they cleared that up!

However:

“Swiss authorities will improve the cleaning of the washing rooms and designate certain spots, including a huge stone sent from China’s Mt. Emei in July this year, for Chinese tourists to take photos.”

Oh my.

Back in my days of wandering Europe, it was the Japanese that knotted the Swiss panties. Time marches on I guess.

In the end though, I really don’t understand what all the fuss is about.

After all, the best way up Mt. Rigi is by foot!

Put a Bird On It

The first time I visited Mexico, I instantly fell in love with the bright, beautiful colors of many of the houses and commercial buildings.  I had never seen anything like it and I thought it was a wonderful expression of creativity and joy.  Apparently I’m not the only one.  The FT reports that a group called Germen Crew, an initiative by the federal government, is breathing new life into poor barrios by hiring locals to paint them in technicolor.

The article highlights the changes in a neighborhood called Las Palmitas, which only 7 years ago had no electricity.  I was wondering how the group got buy-in for the paint job, but apparently the crew “spent months getting to know residents before the painting began, attending town meetings to discuss colours and workshops for children.”  It’s important to note too that the house painting is only one leg of the program, which also includes more policing (and video surveillance cameras to fight crime), increased help to start up businesses, and funding scholarships for high school dropouts.

Gang rivals joined together in the painting initiative.  As one gang member stated, “somehow, we worked together.”  The government cites a “79 per cent drop in the crime rate in the first half of this year, compared with levels in 2012.”  I’m not sure why the comparison year is 2012 or if this can totally be attributed to the Germen crew, but you cannot argue with the visual results, which are stunning.  Check the article for more incredible photos.

painted_barrio

There I Fixed It*

Today’s line-up of people who really don’t get it:

1.Jackson Mayor Tony Yarber of Mississippi is “encouraging citizens to pray for the city’s infrastructure, proclaiming ‘Yes….I believe we can pray potholes away.'” And sadly, this is not from The Onion!  I don’t see any problems with this strategy; it’s practically flawless.

2. Venezuelan President Maduro, who has managed to absolutely gut the economy in a few short years, is now pointing to Colombians as the real scourge.  Sounding a lot like a certain buffoon in the US, he stated:

“Who comes from Colombia to Venezuela? These are people who come with no education, without a penny in their pocket, it’s the poor who come fleeing … Venezuela has become a magnet, a guarantee for social rights for the Colombian people. I have to say it, and I ask for your understanding … I don’t offend Colombia by telling the truth, that Venezuela is hurting, because of all the poverty and the misery coming from Colombia … but aside from that, we get drug trafficking, mafias, and here we are, making sure Venezuela is a territory free of drugs, we are the victims, let’s open our eyes. And now, we are the victims of paramilitaries brought by the right, and send by Colombia’s far right.” 

Yeah, that’s right, it’s the poverty and misery from Colombia that’s dragging down the Venezuelan economy.   And deporting 800 Colombians from the border region will almost certainly solve the economic woes.

3. And now for the (unintentional) master of irony, we have first-class economy wrecker Bobby Mugabe, who yesterday proclaimed that there was “no suffering” in Zimbabwe. It’s hard to believe he could say that with a straight face.  He went on to hilariously ask “But what is it that the people are suffering from? Didn’t we give them land?”  That’s right Bobby.  Land redistribution to your cronies should have fixed everything, right?  What are these damned ingrates still complaining about?

*In honor of the very funny “There I Fixed It” Blog

EPN finally gets to the bottom of something

EPN took to twitter to clear up a big controversy. Unfortunately, it was about whether he knows how to put on a pair of socks!

While we here at CG applaud this as progress, we wonder if EPN might not be better served clearing up more important issues like say, where is Chapo Guzman, or killed those 43 students, or why so many journalists are still dying, or why his wife has a mansion given to her by a big government contractor.

Well at least we all know now that EPN knows the difference between his toes and his heel. He’s still working on distinguishing his butt from a hole in the ground though.

New PR tactics, Belarus Edition

I’ve often lamented the lack of PR expertise that EPN has in Mexico (either that or he just pays them no mind).  Here are some new campaign tactics that I hadn’t thought of before, courtesy of Belarus’ President-for-life Alexander Lukashenko.  He released photos of him harvesting potatoes and melons at his official residence, apparently to show that he is a hard-working man of the people.  The produce yielded was then given to orphanages.  Here are some great pics from the show:

potatoes1

potatoes2

Note that it’s important to dress up for the photo op.  An old undershirt and boxer shorts will do just perfectly. (Note that he looks just like Stan Wawrinka winging this year’s French Open)

The article notes that this isn’t the first time Lukashenko has resorted to some odd photo ops.  Here he is with Gerard Depardieu “scything grass at the leader’s farm north of Minsk.”  Remind me not to visit him—sounds like he puts his guests to work (although it doesn’t look like Depardieu missed his calling as a farmer).

scythe

straight talk about global poverty that won’t fit into one chart

By now, everyone and their siblings have seen the bye-bye poverty chart. You know, this one:

CMTCOe_WgAAyvnD

Now it is undoubtably true that there has been major poverty reduction in the world, especially since the opening of China.  However, this graph paints an overly rosy picture.

The first point is that $1.25 / day is not exactly un-poor, and it is an artificial “bright line”. I am not saying the following is true, but if we lifted every person at $1.24 to $1.26 according to this metric we would have eradicated extreme poverty. And that is obviously silly.

The second point is that the incidence of global poverty reduction is very uneven. A great bulk of it comes from China and to a lesser extent, India. The picture in much of the rest of the world is much less good.

Thirdly, while the share in poverty is falling, the number of people in the world is rising so the absolute number of poor people can be rising.

There is an excellent article by Chen and Ravallion (QJE 2010) that addresses in detail poverty in the developing world from 1981 to 2005. I am quoting from an ungated working paper version available here.

Note that they are only looking at developing nations, and don’t include the rich world in their numbers.

“Our estimates suggest less progress (in absolute and proportionate terms) in getting above the $2 per day line than the $1.25 line. The poverty rate by this higher standard has fallen from 70% in 1981 to 47% in 2005 (Table 4). The trend is about 0.8% per year (a regression coefficient on time of -0.84; standard error=0.08); excluding China, the trend is only 0.3% per year (a regression coefficient of -0.26; standard error=0.05%). This has not been sufficient to bring down the number of people living below $2 per day, which was about 2.5 billion in both 1981 and 2005 (Table 5). Thus the number of people living between $1.25 and $2 a day has risen sharply over these 25 years, from about 600 million to 1.2 billion.”

So, move the line from $1.25 to $2.00 and the absolute number of people below the line (2.5 billion) is unchanged from 1981 to 2005. Thus, much of the decline in the number of poor people at $1.25 / day is marginal, with people “bunching up” just above the $1.25 / day line (600 million more people between $1.25 and $2.00 in 2005 than in 1981).

What about a more ambitious comparison? How many people in the developing world are at or above the US poverty line?

From the same paper,  “In 2005, 95.7% of the population of the developing world lived below the US poverty line; 25 years earlier it was 96.7%.”

The US poverty rate in 2005 was at $13/day.

Again, I am not saying the world hasn’t made a lot of progress. I am not saying things were better in the past. I am saying that global poverty is still a very serious issue, more serious that the “you won’t believe this one amazing chart” type of journalism makes it seem.

Creative Destruction and Papier-Mache

The term “creative destruction” was coined by Joseph Schumpeter in the 1940s to describe the fact that capitalist economies are constantly creating new technologies, which in turn destroy older ones.  Or as the Schumpeter put it, “creative destruction describes the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one” (Wikipedia).

When teaching undergrads it is important to try to use real world examples to make concepts such as these relevant.  Here is one student (from the wonderful website Shit My Students Write),who sort of gets the picture, but in a hilariously weird way:

When you make a really great papier-mâché diorama but then a member of the bourgeoisie tells you its terrible so you destroy it.

Nailed it! I need to remember this example to wow the undergrads next time I teach Schumpeter.