Update and a bit on British politics

I'm just over halfway through my Winter Break and am having a great time. I was in Germany over Christmas and London for New Years with other students from K. It was great to catch up with all these people I haven't seen in months, and comforting to have some friends around for the holidays. I'm about to board a plane for Scotland, but I'll be sure to post on all my break activities next week. 

In the meantime, here are a few thoughts on this news cycle's political dust up here in the UK. Ed Miliband, leader of the opposition Labour Party, has recently taken a stance to eliminate a loophole that allows agencies to pay EU immigrants less than their Briish counterparts. The fear is that as more Romanian and Bulgarian immigrants come in, this could lower British wages. 

My thinking: 

1) The agencies' practices are deemed "exploitative" because they are paid less than UK counterparts for the "same job". Whenever the term "same job" is bandied about, complexities are being ignored. Are factors such as experience, language skills, and education accounted for? It could be that the immigrants are paid less because they are less productive. 

2) Ed Miliband is worried about Britain's cost of living and understandably wants higher wages. He notes that low wage immigrants work in the food and packaging industries. What are some major determinants of the cost of living? The cost of food and the cost of shipping, which impacts the cost of everything else! 

3) Mr. Miliband correctly notes that cheap immigrant labor creates some winners and some losers. Native workers in those industries have some competition, but all other Britons enjoy lower prices. Mr. Miliband wants to switch the winners and losers. What makes him think his selection is better? Who knows! The current arrangement, however, can be defended by volumes of economic literature on how prices adjust towards an efficient equilibrium. 

4) I'm sure Mr. Miliband is far from concerned about the fate of Britain's current and potential immigrants, but they are people too and worth considering. If they're accepting these low wage jobs, they must be tremendous improvements over their current opportunities. What will the cost be to these immigrants if the law makes it more difficult for agencies to hire them? They will likely lose an important path out of serious poverty. 

The Spirit of Christmas in London and Thousands of Drunk Santas

I've noticed that they do Christmas a lot harder in London than we do in the US. Whether someone says "merry christmas"or "happy holidays" to you in the United States is a political statement. Here though, everyone says merry christmas, I feel like a dweeb reflexively saying happy holidays. I hear at least twice the amount of annoying christmas music than what I'm usually exposed to back home. This struck me as a little odd given that the UK is a much more secular society than the US, and that London in particular is more religiously diverse than Kalamazoo. Then I saw something that snapped all the pieces together.

At about 1 in the afternoon, I saw thousands of young men and women dressed as santa, playing drums, singing, and drinking prodigiously. They loudly proclaimed "merry christmas" and passed out candies as they walked by. I got two chocolate coins, two hard candies, and a sucker! One of the popular chants was "what do we want?" - "Christmas!" - "When do we want it?" - "Now!" People brought out their kids in strollers to watch, and the santas staggered over to put candy into the tikes' hands accompanied by a slurred ho-ho-ho, all of this viewed with approval by the parents. 

Apparently I had witnessed santacon, a world wide phenomena that's been becoming more popular in the internet age of flash mobs. Most everyone I saw seemed amused, except for a few drivers who were unhappy about all the people staggering across the street when the light was green. No one complained about a bunch of santas walking around drunk though - that's what Christmas is about in the UK! Good cheer, free candy, and fancy dress, what's not to like? I think public Christmas displays have become so secular in the UK that outside of homes and churches, Christmas does not have a primarily religious association. 

Make of that what you will, but merry Christmas! 

Cooking With Phil

One of the nice about living in High Holborn is that I get a generously sized kitchen. Even though it can be time consuming, I prefer cooking to relying on a food service system. Here's a sampling of some of my dishes.

The first thing I made, looks less tasty than it was 

Bangers and mash, had to make it! 

I was surprised by how easy this was to make 

A peanut/banana/chicken/broccoli/green onion stir fry

I Visit the NHS

I've used the National Health Service twice in the past week and come away impressed. As a student here for nine months, I'm entitled to full coverage by the NHS. Imagine something like that happening in the United States. I am paying 20% VAT over here though, so I don't feel too guilty.

My stock of medicine from home is running low, so I went into the NHS branch to talk about getting my prescription refilled. My appointment was for 10:30, so SUPER EARLY in other words, and I was embarrassingly 20 minutes late. Despite this, I ended up getting to my appointment in twenty minutes and even though all I had was my pill bottle, there were no problems getting me set up for a refill. The only catch was that I needed to get some blood work done - apparently they have some concerns about my medicine causing liver cancer sometimes or something, which I guess they're not too worried about in the States. I said whatever, it's not my money after all, so I scheduled another appointment to get my blood drawn.

I went into that appointment today, this time only five minutes late, and was seen right away. Getting my blood drawn took no time even though I forgot a paper I was supposed to bring. They had all my records digitized so they knew exactly what was up. Unlike the painfully awkward laptop carts I see them use at Borgess for electronic records, they're process seemed well integrated. The doctor was courteous, even offering a few comforting words to help with my apparent discomfort over getting poked (thanks dad!)

I'll be able to start getting my prescription when I get back from break, and they will cost less than a third of what my family pays back home. Go socialism!

So this is the part where I compare the NHS to the US's dismal system and talk about single payer. It's certainly worth pointing out that the editor of a leading libertarian magazine has written enviously of France's health care system. However, our government already spends more per capita on health care than the UK and other single payer countries! It's just that firms and individuals in the US also spend a ton on health care! I think that if we can get costs down to typical developed country levels, then we could make a smashing public or private health care system. The question is how to get those costs down. There certainly are appealing things about the single payer system in terms of cost control, but I think the issues are so intertwined and deep in the US system that no single reform will have a very large impact, and any major change could have unintended consequences.

The Economics of Ice Cream Revisited - this Time with Turkey

Long time readers may remember a post I made awhile back about why ice cream prices don't rise during the summer (or equivalently, don't fall during the winter) like we'd expect. Well, an article in the New York Times by the always interesting Catherine Rampell tackles the same question, this time from the perspective of cheap turkey around Thanksgiving.

Rampell touches on a number of theories for why we observe this kind of pricing behavior, including the one mentioned in the paper I discuss in my post. As Rampell writes:

Consumers might get more price-sensitive during periods of peak demand and do more comparison-shopping, so stores have to drop their prices if they want to capture sales. 

All the other reasons she discusses are plausible and interesting as well. Give it a read.

Only at LSE

Just wanted to share a few conversations I've had over the past few days that are pretty unique to the atmosphere at LSE...

1. A heated argument about QE in the US. One of my friends suggested that the Fed should've stopped with QE1, and thems fightin' words.
2. A discussion over the validity of purchasing power parity methods for comparing international GDP. Do all those 2$ a day statistics about global poverty take purchasing power parity into account?
3. A geek session about Scott Sumner and unorthodox monetary policy. Forward guidance? Psssshhhhh get back to me when we have some NGDP targeting!
4. Yet another heated argument, this time about the suitability of Germany's export strategy for long term growth. And with a German, no less! I wasn't directly involved in this one, but it did go on for a good fifteen minutes.

Wrapping a few things up

Before I switch this blog over to all London all the time, I should take care of a few loose ends from back in the States.

First, AidGrade has updated their website. I encourage you to play around with their meta-analysis app, it's got some fun information on it. There are still more updates on the way. They are still working on putting up quite a few meta-analyses, including some that I was working on such as HIV education. I'm most excited for when they add the feature for downloading their full data. There are lots of details from these meta-analyses that you can't see in the app. That data is what will be most useful to researchers and non-profits looking to direct substantial donations. AidGrade is also making an appeal through Indiegogo, a Kickstarteresque website. If you are looking to support an organization that supports making aid more effective, I encourage you to contribute. You can also support AidGrade by donating at least $12.99 ($16.99 if you're outside the US) for which you will receive a copy of the book "What Works in Development", covering AidGrade's first ten meta-analyses.

Second, my research project with my fellow K students ended in September. We decided to investigate the viability of installing solar panels on K's campus. Our conclusion was that solar panels would not be a cost effective investment for the campus. Furthermore, the environmental benefits do not seem to justify the economic costs, and there are likely more effective environmental investments K could engage in. The project was loads of fun, and I count myself fortunate to have been able to work with such intelligent and inquisitive peers. Interdisciplinary research was a very unique experience, and I recommend it to anyone interested in research. But it can be exhausting and difficult! Still, it opens your eyes to other perspectives outside your field. I'm very proud that our team stuck by our conclusion. We all wanted to be able to recommend solar panels for K and see the array built, but that's just not what our analysis suggested. If you want to read our report, check out our tumblr. There, you can read our business plan, the article on our findings we published in the student newspaper The Index, and our cash flow analysis. If you have any comments or questions about our findings, I encourage you to leave them on the tumblr.