Happy Ação de Graças

Black Friday at Extra, the local version of Walmart

Happy Thanksgiving from Brazil.  Here, of course, its just another day - I had my português class in the morning and its off the the office this afternoon/evening.  There is no reason Brazilians should know about Thanksgiving and, other than the other American in my class, no one has noted it (in my class are or have been students from Italy, Switzerland, England, Venezuela, Colombia, Peru and France).

Though it is expected it makes all the more surprising the fact that Brazilian retailers have totally gone for 'Black Friday.'  This seems totally weird and incomprehensible to me, they even use the English 'Black Friday' rather than the Portuguese 'sexta-feira preta' or something like that.  It has become such a big deal both the nightly news and the newspapers cover it, and at least they bother explaining from whence it comes:

Criado nos EUA, o dia da pechincha é tradicionalmente realizado após o feriado de Ação de Graças (comemorado hoje) e costuma lotar as lojas de consumidores.

As for me, my family is planning a second Thanksgiving for when I return.  Tonight I'll probably have pasta again and be thankful to live in such an interesting and diverse world and to have the chance to explore it.

Notes from the South

As you might have guessed by the complete absence of posts I am crazy busy these days in Brazil.  So many bureaucratic tasks, language classes and regular work to do leaves me with little time and even less energy to blog.  Besides I have little time to keep up with events either here or back home.  Instead what I have been able to do mostly is to experience with a mix of awe and befuddledness the byzantine bureaucratic maze I have to navigate.  I am very close to the finish line, I am happy to report.

In the past few months, in order to pull of a short sabbatical stay in Brazil I have had to procure documents a varied as a criminal background check, proof of health insurance, my birth certificate (many times), have had to go to the consulate in San Francisco, the post office, a notary office many times, the Receita Federal (IRS) and the Federal Police, and I have even had to be fingerprinted and photographed.  But I have now done it all and have left only to open a bank account once I can provide some DNA (joke).

Hopefully now I'll have a little time to enjoy São Paulo.  And maybe some more blogging.

Sunset over São Paulo, taken from the bar atop the Edificio Italia

 

Brazil for Estrangeiros, Part 1: The CPF

Why am I in Alto de Ipiranga?

Because I am currently learning everything the hard way, I am going to share what I learned here in the blog in hopes that it might help someone else.

After a three month delay I finally have my temporary visa for Brazil in which I am identified as a pesquisador (researcher) which I find pretty amusing.  Anyway, now that I am here on the real visa (as opposed to the tourist visa) I have to do a few things, most notably register with the national police as a foreigner (estrangeiro).  Before that, however, I decided to get my CPF.

The CPF is an interesting thing, it is part social security number, part taxpayer ID.  In Brazil you need a CPF to make a lot of purchases.  For foreigners two of the main purchases you need the CPF for are SIM cards and domestic flights.  It used to be pretty hard to get the CPF but not anymore, as long as you know what to do.  In São Paulo, I can help.

First and foremost, disregard the information all over the web sites of the Brazilian Receita Federal (their IRS) saying that you can go to the Correios (post office) or any branch of the Banco do Brazil or Caxia (the two state owned banks).  Recently the system changed and you have to go to a Correios. There you need only to have your passport, no other documents are required of foreigners.  You need to tell them your mother's full name and give them a local address (hotel, for example - in my case I gave the school's address). Done.  It takes about 3 minutes.  The Correios generate a receipt with a number for the Receita Federal.

Now you have to take the receipt to the Receita Federal in Shopping Light in the center of town.  Shopping Light is so named because the power company with the name Light used to be housed there. Now it is a huge multi-story mall.  On the Second floor (third to Americans) there is the Receita office.  There was a long line when I was there so it took about 45 minutes.  But they check your passport again, check again your details entered by the Correios (amusingly, the nice lady at the Correios put may last name first as many Brazilians have Emerson as a first name).  Then they print a piece of paper that is your CPF card.  In the past they would give you the number but the card would be sent later.  Now they print it out and you are supposed to 'plasticar' (laminate) it and you are done.  Easy peasy.

Suggestion: go directly to the Shopping Light. On the metro you get out at Anhangabaú on the Vermelha (red) line and Shopping light is right there.  Right next door to the Receita is a Correios.  Stop first at the Correios and tell them you want to get a CPF and show them your passport.  They will charge you R$ 5.70 and generate the receipt. Then you go next door to the Receita immediately and get your CPF.  If you do it right it'll take you about an hour (as opposed to three days in my case).

Now for my misadventures.  I started by going to a Caxia and, after waiting for 30 minutes being told "oh no, you can't do that here anymore, you must go to the Correios."  So the next day I went to a Correios, but it turns out that this one was a limited service office and could not help me.  So the next day I went to another Correios where they could and did help me and the incredibly nice lady told me where to go to the Receita and how to get there on the Metro.  She gave me impeccable directions, but for some reason I decided when I got to the metro and took the map that Anhangabaú was Alto de Ipiranga.  Why?  I have no idea - it is not even on the right line - it is on the Verde line not Vermelha.  Anyway, as soon as I got out of the station and realized I was not in Centro - I turned around immediately and corrected my error.

Finally I got to Shopping Light but could not find a map of the mall so I just started to go up and it didn't take long to find the Receita (I saw a long line and guessed - correctly - that it must be where I needed to go).  So finally, after three days, I have a CPF and can buy a SIM card.  Phew.

Soo to sum up:

Getting a CPF in São Paulo

1. Go to Shopping Light in Centro (take the Metro to Anhangabaú on the Vermelha line) with your passport.
2. Go to the 2nd floor (3rd floor in American) and find the Correios.
3. At Correios initiate the CPF process, show your passport and pay R$ 5.70.
4. Take the receipt next door with your passport and get your CPF.
5. Done.

This all should take about an hour with normal lines.

So, even if only in Brazil for a couple of weeks it is probably worth it if you want a phone, buy flights to other places (which, if you are in São Paulo, you should go to other places - my suggestion is Rio or Bahia).

Election Night from the Southern Hemisphere

...looks a lot like the US, this is from Globo News as the early polls came in.  Then I went to bed as it was already midnight.  I was very amused when the hosts of the Globo program got into a big discussion explaining the electoral college.  They kept saying how little sense it makes. Hear hear.  It is one of those things everyone agrees is crazy and yet we will never be rid of it.

Silicon Valley South?

Potentially, says The Huffington Post who tags São Paulo as an "emerging tech epicenter."  Actually they mention specifically Campinas which is outside the city proper.  Maybe so, but I have a hard time getting my cell phone to work and experience lots of wonky internet (except at the university which has great internet).  I have been told that Telephonica has inadequate infrastructure for their residential internet service, not what you'd expect for an emerging tech epicenter.

Em São Paulo, Novamente

Back in Brazil where, by the way, bicycle sharing has arrived in, of all places São Paulo:

Now bicycle sharing is great, and I'd love to do it, but there are three things holing me back.

One, São Paulo traffic is insane and there is very little room on the too small streets (yes, São Paulo was never planned as a megalopolis).

Two, the district they are in, Jardins, is very hilly and getting anywhere on these one speed bikes is going to be a big challenge.

Three, there is no way I am venturing out on the streets (see number one) without a helmet which are, sadly, not provided.

Blogging will be erratic and Brazil-centric for a while (I am here all month as I conduct research and learn a little more Portuguese while on sabbatical).

In Praise of Prices

And a cautionary tale of trying to control them.  Before getting all pedantic let's cut to the chase and point out two things about 'price gouging' now that the topic is all the rage (see here and here) given gas and other shortages in the NY/NJ area:

1. Allowing prices to rise uncontrolled will act as a efficient allocation mechanism, doing away with shortages and assuring those whose valuation of the good is highest get it.

2.  This has absolutely nothing to do with 'fairness' or 'equity' and it is very much the case that high valuations and income are highly correlated.

What, of course, is true is that I have just described free markets in general.  

So now to the pedantic part.  Here is Matt Yglesias making point number one:

The basic imperative to allocate goods efficiently doesn’t vanish in a storm or other crisis. If anything, it becomes more important. And price controls in an emergency have the same results as they do any other time: They lead to shortages and overconsumption. Letting merchants raise prices if they think customers will be willing to pay more isn’t a concession to greed. Rather, it creates much-needed incentives for people to think harder about what they really need and appropriately rewards vendors who manage their inventories well.

The last part is a bit of a stretch, it is a windfall profit that vendors get but no more so than the seller of vitamins after a new study shows a daily dose vitamin Q will cause you to live forever not because they are brilliant inventory managers.  But the basic idea is correct: prices are an efficient way to ration a scarce resource.  The part about the vendor also missing the most important point, if gas prices are allowed to rise to market levels, imagine how much harder suppliers would try to get gas deliveries in, how much harder gas stations would work to get temporary power, and so on.

But the second point is not made in either linked article (well, article and radio story) which is that those that would end up with scarce and essential resources would disproportionately be the wealthier members of society.  This is not new, Ferraris are scarce, gold is scarce, 20,000 square foot mansions are scarce, and so on.   So even in the absence of disaster, this is how markets work - something we have known for a long time: markets are efficient but not 'fair.'

None of this solves the question of how we ration scarce resources in a time of crisis, however, and in such this is a lesson in both the power and limitations of free markets. The key, though, is that free markets do a lot better job than price controls.  Price controls mean that, in large part, the lucky get resources and the unlucky do not.

Lines are a rationing mechanism, those with the most need are more willing to wait on line for hours upon hours, but they are terribly inefficient, that time is also a valuable resource where they could be doing more productive things. But prices, for their faults, will assure efficient distributions, will ration and will promote the speedy replenishment of resources.  And the great thing about prices is that it takes no institutional control - all of the efficient rationing would take place immediately and naturally.

A crisis is not the time, I suppose one could say, to start worrying too much about the inequality prevalent in our society - it amplifies it and perhaps suggests we should be doing much more - but price controls only make a bad situation worse.

Now, there could potentially be hybrid solutions - the first two gallons of gas, say at reduced prices, but then whatever price the station wants to charge - but these take institutional control.  It could be that low income folks can get vouchers for stuff, but that would be hard to implement in a crisis. In the end, despite their problems, prices are the first best solution.

The Triumph of SF Over Detroit

The San Francisco Giants (my team) swept past the Detroit Tigers to win the World Series for the second time in three years (remarkably with an almost completely different line-up and without their superstar Melky Cabrera and with only minor contributions from their ace Tim Lincecum).  Ed Glaeser, the urban economist, sees a metaphor for the fate of the two cities in an article that makes fascinating reading.

It seems almost funny to think about a city that is now the capital of the high tech, information technology world as a blue-collar industrial place, but that is exactly what it was in the post WWII era.  The San Francisco bay was ringed by giant shipyards, oil refineries, military bases and factories.  The renaissance started in the 1970s, right about the beginning of the decline of Detroit, also a blue collar, industrial .  So why has San Francisco prospered and Detroit suffered in the intervening years?  Glaeser provides some insight:

But vast factories, such as Ford’s River Rouge, are kingdoms unto themselves. They don’t need the cities that surround them, and when economic conditions change, factories are relocated to lower-cost areas, such as the right-to-work states of the South and the developing world.

San Francisco’s manufacturing base, including its once- mighty shipyard at Hunter’s Point, also declined after World War II. But the city, unlike Detroit, was able to rebuild itself, because it had skills and entrepreneurship.

Detroit in its heyday was marvelously productive, but it was never education-intensive. In 1950, only 5 percent of the Detroit area’s adults had college degrees and that number had only increased to 9 percent by 1970. Wages were so good in the factories, why would anyone waste time in college? Nine percent of the San Francisco area’s adults had college degrees in 1950, and that number had doubled by 1970.

From 1940 to 2000, those places that started with slightly more education typically experienced far faster growth in human capital. By 2000, 44 percent of greater San Francisco had a bachelor’s degree, as opposed to 23 percent of adults in greater Detroit.

Informal skills, learned on the job and at the breakfast table, such as the talent and inclination to be an entrepreneur can be even more important for urban success. Detroit taught plenty of informal skills, especially around the assembly line, but its big companies didn’t inculcate entrepreneurship.

The middle managers of General Motors may have been superb cogs in a corporate machine, but they were not trained to start an electronic greeting company if things went wrong for GM. San Francisco had fewer dominant companies and consequently more entrepreneurs per capita. Entrepreneurs, such as Donald Fisher, who founded San Francisco’s the Gap, always play an outsize role in urban rebirth.

Skills enabled San Francisco to specialize in creating ideas, while Detroit remained a center of goods production. Measures of skill, such as the share of the population with a college degree, do a good job explaining the relative success of U.S. cities. Measures of entrepreneurship, such as having a lot of small companies, also predict employment growth.

Glaeser then goes on to talk about weather. Places with better weather have fared better in the post WWII era. One reason is that entrepreneurship has become more mobile as it becomes more service oriented and less capital intensive (or at least where the capital intensive activities are easier to do at an arms length) and so people are more apt to move to a place they enjoy living.

But I think there is another factor, one that I think about a lot as a development economist. At the heyday of Detroit's auto industry and the power of the unions, you could have a very good middle class life as an auto worker. Because there were very good careers available for high school educated individuals, the incentives to go and get a college degree were lessened and, not surprisingly, few people did. I think the double whammy of this being less true for SF workers (supposition - I don't know this to be true) and the rise of both the UC and CSU systems (and the rise to prominence of Stanford University) created an environment with very different incentives.

Anyway, I was rooting heartily for the Giants, but did feel a little bad. I was hoping Detroit could take a game or two in Detroit to make the fans happy. I also feel a little guilty: I had only to wait half my life (I hope) to see the Giants win while my father, a Bostonian, had to wait most of his to see his beloved Red Sox win.

And, as an aside, my diverse sporting allegiances are explained by my formative years having been spent (in almost equal measure) in San Francisco, Madison, Wisconsin, and Portland while being raised by a London-born mother. In my earlier SF years, I was taken to many Giants games at Candlestick, then later after being transplanted to the midwest, the Badgers and Packers became central, and later the Blazers of the later 80s and early 90s were my passion.  Finally, as a graduate student in a department almost completely made up of foreign students from Italy, Argentina, Brazil, Turkey, Chile and so on, I learned the true passion of the soccer fan and my allegiance to Arsenal was cemented.

So recent years have been very good: the rise of the Badgers from perennial dormat to regular top 25 team in both basketball and Football, the Super Bowls of the Packers, the World Series of the Giants, the success of the Blazers has been good - but we need an NBA championship - and the Arsenal (save for the most recent few years) have played attractive and successful soccer.

Is it any wonder then that Portland, Madison Wisconsin and SF have all prospered relatively in those years as well?  There is one common denominator - me.  Clearly there is a causal link between my presence and success.   After all, OSU hired me and promptly won two national championships in baseball.  I rest my case.