Marginal Revolution

Car patrol vs. foot patrol

Car patrol eliminated the neighborhood police officer.  Police were pulled off neighborhood beats to fill cars.  But motorized patrol -- the cornerstone of urban policing -- has no effect on crime rates, victimization, or public satisfaction.  Lawrence Sherman was an early critic of telephone dispatch and motorized patrol, noted, "The rise of telephone dispatch transformed both the method and purpose of patrol.  Instead of watching to prevent crime, motorized police patrol became a process of merely waiting to respond to crime."

That is from Peter Moskos's Cop in the Hood: My Year Policing Baltimore's Eastern District; here is my previous post on the book.

Why economics was late in starting

I've already posed the question, I'd like to add two points.  First, sustained economic growth in the Western world starts in 17th century England, as shown by Greg Clark.  Interest in economic reasoning then comes rapidly, first from the mercantilists, then in Adam Smith and some earlier free trade thinkers, such as Dudley North and Nicholas Barbon.

Second, the idea of "private vices, publick virtues" was central for eighteenth century economic thought and for social science more generally.  This came from Bernard Mandeville (drawing upon the French Jansenists) in 1720.  It's no accident that Mandeville lived in the Dutch Republic, which had very little censorship.  No, I am not a Straussian but the merits of that viewpoint are often overlooked.

The School of Salamanca had an excellent marginal utility theory in 17th century Spain, the framework simply did not go anywhere.  For that matter we can look later and see that Samuel Bailey, Mountifort Longfield (1834), and others had critical components of Marshall.  But no one really cared because they could not yet see how important those contributions would turn out to be.  This is a central theme in why the growth of economic thought took so long.

It also suggests that today we might have some very important ideas amongst us, we simply cannot yet see how fruitful they will be.  Their own proponents may not even know it.

Assorted links

1. Soccer and violence

2. Satire of a Tyler Cowen book review, via Bamber

3. Japanese barcodes, via David Zetland

4. Leonhard Euler, via www.geekpress.com

Predictions about 2008

From 1968:

A typical vacation in 2008 is to spend a week at an undersea resort, where your hotel room window looks out on a tropical underwater reef, a sunken ship or an ancient, excavated city. Available to guests are two- and three-person submarines in which you can cruise well-marked underwater trails.

But many of the predictions are good, at least in part.  Get this:

The single most important item in 2008 households is the computer. These electronic brains govern everything from meal preparation and waking up the household to assembling shopping lists and keeping track of the bank balance. Sensors in kitchen appliances, climatizing units, communicators, power supply and other household utilities warn the computer when the item is likely to fail. A repairman will show up even before any obvious breakdown occurs.

Computers also handle travel reservations, relay telephone messages, keep track of birthdays and anniversaries, compute taxes and even figure the monthly bills for electricity, water, telephone and other utilities. Not every family has its private computer. Many families reserve time on a city or regional computer to serve their needs. The machine tallies up its own services and submits a bill, just as it does with other utilities.

Via www.geekpress.com.  As usual, it is presumed that traffic and transportation problems will have seen a lot of progress when in fact they have not.  Nor was it understood how unevenly the benefits of progress would be distributed and how possible it would be to continue a life basically devoid of these advances.

Capital requirements smackdown watch

Eric Falkenstein writes:

How much capital for derivatives? Good question. Should it be weighted by risk? If so, how does one measure risk? Considering that risk is a function of the collateral, which comes in many different flavors (traded debt, pools of mortgages, pools of bank lines), and then are structured very differently, with differing levels of subordination, differing rules for the waterfalls of cashflows depending on various metrics of collateral quality. It's a mess.

...You may think this is no different than regular lending, but you would be wrong. For example, lets say you have two swaps, but they both offset each other almost exactly for interest rate risk, but as they have different counterparties, they have differing credit risk. How about swaps from the same counterparty, but differing interest rate exposures, partially netted. How much should capital be netted? And if the US banks have capital requirements greater than economically necessary, how many seconds before all swaps would move offshore?

I take him to be saying that financial institutions can never be transparent in their risk-taking, or at least not in the sense that can be made accountable to a regulator.  Read the whole thing.  Read also Doug Colkitt's comment here.  Note by the way that Bear Stearns, at the time of its collapse, had met Basel capital requirements.

Mark Thoma writes:

I'd argue that even though Basel was not perfect it was much better than having no regulation at all...If the regulations under Basel caused banks to move assets off the books, then without regulation they wouldn't have needed to move them, but the assets still could have been used in the same way, financial institutions could have taken the same risks and would have had the same or more incentive to do so without regulatory oversight, and they could have caused the same troubles. I don't see how the regulations themselves caused the risk taking. Regulation caused evasion of regulation, and Basel II is trying to deal with that problem, but the regulations did not cause the risk-taking itself.

Currently my view is closer to Thoma's.  The case against regulation requires that derivatives risk is observable (by the bank itself, and of course if it is not observable to anyone run the other way!) but not verifiable to an outside regulator (otherwise it could be controlled by regulation).  Even in that case, however, more informal systems of regulation should work, albeit imperfectly.  Yes banks will sometimes lie and trick the regulators but at least another layer of protection is in place.

There's lot of talk about the government buying up mortagages.  Even if you favor that plan, it's a one-off measure, not a long-term solution to stop a future crisis.  There is in fact a paucity of good regulatory proposals on the table.  There are plenty of ideas for how to stop what went wrong "last time" but fewer good ideas for how to stop the next version of a financial crisis.

The future of economics

In a nutshell, foreigners and empirical work:

This short paper collects and studies the CVs of 112 assistant professors in the top-ten American departments of economics. The paper treats these as a glimpse of the future. We find evidence of a strong brain drain. We find also a predominance of empirical work.

Three-quarters of the bachelor degrees were obtained from abroad.  Macro, econometrics, and labor economics are the most popular fields, see p.8 for the full list.  Here is the paper, hat tip to Pluralist Economics Review.

Scarcity

The brain’s store of willpower is depleted when people control their thoughts, feelings or impulses, or when they modify their behavior in pursuit of goals. Psychologist Roy Baumeister and others have found that people who successfully accomplish one task requiring self-control are less persistent on a second, seemingly unrelated task.

In one pioneering study, some people were asked to eat radishes while others received freshly baked chocolate chip cookies before trying to solve an impossible puzzle. The radish-eaters abandoned the puzzle in eight minutes on average, working less than half as long as people who got cookies or those who were excused from eating radishes.

From the NYTimes with some good advice on test taking, dieting and how to increase your will power over time.

Katrina recommendations

Steven Horwitz, who notes that Wal-Mart did a better job than FEMA, has a study and a plan:

1. For relief and recovery efforts and ensure that its role [the private sector] is officially recognized as part of disaster protocols.

2. Decentralize government relief to local governments and non-governmental organizations and provide that relief in the form of cash or broadly defined vouchers.

3. Move the Coast Guard and Federal Emergency Management Agency (FEMA) out of the Department of Homeland Security (DHS).

4. Reform “Good Samaritan” laws so that private-sector actors are clearly protected when they make good faith efforts to help.

Part of the Problem

1. Given that Bear held trading contracts with an outstanding value of $2.5 trillion with firms around the world, "we were talking about the possibility of a global run on the bank."

2. Bear had a hand in a whopping $10 trillion worth of transactions, by some estimates.

3. Bear Stearns had total positions of $13.4 trillion.

My favorite things Utah

Lately there has been too much travel, yes, but writings these posts is fun.  I am headed toward Sundance.  Here goes:

1. Author: Orson Scott Card's The Ender Trilogy (start with Ender's Game) is a modern landmark which will be read for years to come.  Next on my list is Wallace Stegner's Angle of Repose.

2. Actor: James Woods, as he plays in Casino and Virgin Suicides, two fine movies.

3. Best Robert Redford movie: Out of Africa, schmaltz yes but I love it.

4. Film, set in: Butch Cassidy and the Sundance Kid comes to mind.

5. Novel, set in: Norman Mailer's The Executioner's Song.  The first half in particular is a knockout.

6. Can I have a category for kidnapping victim?  Jeopardy champion?

The bottom line: I love Utah.  I love its baked goods, its Mexican food, its sense of building a new world in the wilderness.  I love that it has a uniquely American religion and I find Salt Lake City to be one of America's most impressive achievements.  I regard southern Utah as quite possibly the most beautiful part of the United States.  That said, I had a tough time filling out these categories and of course plenty of the usual categories are blank altogether.

What I've Been Reading

1. Nudge: Improving Decisions About Health, Wealth, and Happiness, by Richard H. Thaler and Cass R. Sunstein.

I liked Alan Schwartz's Amazon review: ""Buy on apples, sell on cheese" is an old proverb among wine merchants. Taking a bite of an apple before tasting wine makes it easier to detect flaws in the wine, and the buyer who does so will not as easily make the mistake of paying more than the wine is worth. Cheese, on the other hand, pairs well with wine and enhances its flavor, so a seller who offers cheese may command a higher price for the wine (and may even deserve it, if the wine is intended to be drunk with cheese).""

2. Clay Shirky, Here Comes Everybody: The Power of Organizing Without Organizations.  Yes, that's the Clay Shirky.  This is (implicitly) a very good Hayekian, spontaneous order treatment of social software on the web.  The book poses a simple and important question: what happens when it is virtually costless to organize people into groups?

3. Starved for Science: How Biotechnology is Being Kept Out of Africa, by Robert Paarlberg.  The point is unassailable, the subtitle says it all.

4. Steve Coll, The Bin Ladens: A Saudi Family in the American Century.  So far it's great.  I know you're sick of reading about Bin Laden; just think of it as a (partial) history of the Saudis.

Addendum: The new "Nudge" blog is here.

Was Avner Greif right about the Maghribi traders?

Jeremy Edwards and Sheilagh Oglivie write:

Economists draw important lessons for modern development from the medieval Maghribi traders who, according to Greif, enforced contracts multilaterally through a closed, private-order 'coalition'. We show that this view is  untenable. The Maghribis used formal legal mechanisms and entered business associations with non-Maghribis. Not a single empirical example adduced by Greif shows that any 'coalition' actually existed. The Maghribis cannot be used  to argue that the social capital of exclusive networks will facilitate exchange in developing economies. Nor do they provide any support for the cultural theories of economic development and institutional change for which they have been mobilised.

Here is the paper, which if it is correct amounts to a stunning refutation of what was once a seminal contribution to economic history and the theory of social norms.  Thanks to a loyal MR reader for the pointer.

Foul Weather Austrians

I am puzzled by the resurgence of Austrian Business Cycle theory among Sachs, Krugman, Baker and many others who you would not ordinarily associate with the theory.  Sachs, for example, writes:

...the US crisis was actually made by the Fed... the Fed turned on the monetary spigots to try to combat an economic slowdown. The Fed pumped money into the US economy and slashed its main interest rate...the Fed held this rate too low for too long.

Monetary expansion generally makes it easier to borrow, and lowers the costs of doing so, throughout the economy. It also tends to weaken the currency and increase inflation. All of this began to happen in the US.

What was distinctive this time was that the new borrowing was concentrated in housing....the Fed, under Greenspan's leadership, stood by as the credit boom gathered steam, barreling toward a subsequent crash.

What is puzzling about this is two-fold.  First, there is no standard model that I know of (say of the kind normally taught in graduate school) with these kinds of results.  Second and even more puzzling is that the foul-weather Austrians don't seem to draw the natural conclusion from their own analysis.

If the Federal Reserve is responsible for what may be a trillion dollar crash surely we should think about getting rid of the Fed?  (n.b. I do not take this position.)  The true Austrians, like my colleague Alvaro Vargas Llosa, have long taken exactly this position.  So why aren't Sachs, Krugman et al. calling for the gold standard, a strict monetary rule, 100% reserve banking, free banking or some other monetary arrangement?  Each of these institutions, of course, has its problems but surely after a trillion dollar loss they are worthy of serious consideration.

Nevertheless, I haven't heard any ideas, from those blaming the crash on the Fed and Alan Greenspan, about fundamental monetary reform.  (Can Sachs, Krugman et al. really believe that it was Greenspan the man and not the institution that is to blame?  That seems naive.)

Instead, the foul weather Austrians seem at most to call for regulatory reform.  But that too is peculiar.  Put aside the fact that banking is already heavily regulated, have these economists not absorbed the Lucas critique?  In short, suppose that whatever regulation these economist want had been put in place in earlier years.  Would the crash have been avoided or would the Fed have simply pushed harder to lower interest rates?  After all, the Fed lowered rates for a reason and if the regulation reduced the effectiveness of monetary policy in creating a boom well then that just calls for more money.

Kirkland Homogenized Milk

Did you ever buy a carton of milk and find that, upon pouring the milk into your cereal bowl, it spills out onto the table?  At the same time the milk runs down the side of the carton and appears to drip out of the bottom.  Is this spillage a temporary aberration in the steadiness of the wrist?  (But it spilt for Natasha as well.)  Is it a design flaw in just a few of the cartons?  If so, exactly what went wrong on the assembly line?  Or does the product work this way on purpose?  Does there exist an angle at which the milk can be poured without spillage?

Does this mean we won't all evolve into uploads?

Facebook markets in everything

In November, the duo created Friends for Sale, now one of Facebook's most popular games with nearly 700,000 daily players. Users buy, sell and own their friends, as though their friends were pets or stocks. Owners can control their acquisitions, forcing them to do or say things, as well as sell them and turn a profit. Those being bought and sold are also part of the game, going up and down in value.

The game has become especially popular among Facebook's crowd of users in their 20s.

Here is much more, for the pointer thanks to Marko Siladin and also Curt Gardner.  I have to admit I don't really understand how this works, but it sure sounds like a "Markets in Everything" entry.

Assorted links

1. The end of the Irish miracle?

2. Are SWFs smaller than you think?

3. Local government isn't always better

4. Do you vote differently if you have daughters?

5. New blog on water economics

Giving the Fed more (less?) regulatory power

A few points on the new plan:

1. The Fed is smarter than other regulators, the Fed can pay higher salaries, and the Fed has more independence.

2. Ceteris paribus, the Fed usually can do a better job than other potential regulators.  If someone is going to oversee hedge funds and other non-bank financial institutions, why not the Fed?

3. An independent central bank is, all things considered, a good idea for reasons of monetary policy.

4. The Fed, as regulator of financial markets, has an incentive to keep economic growth high and this also militates in favor of the Fed as regulator.  A new prudential regulatory agency for capital markets would not be responsible for the overall macroeconomy and would not necessarily have that same pro-growth incentive. 

5. A regulator must, one way or another, be accountable to Congress and the President.  The more that the Fed is accountable to the other branches of government on regulatory issues, the more it is accountable to them period.  That would be true even if monetary policy and regulatory decisions were not converging in practice, as they have been in recent months.

6. In essence we are on the verge of "spending" some of the Fed's monetary policy independence in return for superior regulation.  That choice makes me nervous.  Indeed, arguably we have already made that "expenditure."

7. The new plan, oddly enough, takes away the Fed's power to oversee banks on a daily basis.

8. One important question is what kind of relationship would develop between the Fed and a new, unified office of prudential regulation.  See #7.  Even if there is consolidation of all the loose regulatory spokes (should credit unions really get a separate regulator?) into an oversight agency, we should somehow keep the Fed's special access to bank balance sheets.  I'm not sure how the Paulson plan fares on that score.

Note also that the Fed is deliberately non-transparent.  Is that, when all is said and done, one reason why we are looking to it to enforce more transparency in other institutions?

Adverse selection of slaves

I find the expected quality of a slave who was sold was just 61 percent of the quality of his unsold cousin.

Here is much more, thanks to Eric Crampton for the pointer.

Why are the social sciences backward?

In a study of Gordon Tullock's The Organization of Inquiry (the full Tullock symposium is here), Bruce Cadwell writes:

Tullock next turns to what he considers to be the real reasons behind the backwardness of the social sciences, which in his view is due to differences in the social organization of natural versus social science. The first difference is the relative absence of applied research: because there is no way to patent applied research in the social sciences (He asks, for example, how does one patent a new sales technique?), little of it is done. But this means that, unlike the natural sciences, there are many fewer checks from the applied side on pure social science research (p. 149). Furthermore, the second motive for research, curiosity, is in the social sciences “likely to get distracted to essentially non-scientific ends.” This is because in the social sciences:

[TC: this is now Tullock]. . . there is a strong possibility of artistic distraction. Literature of all kinds is quite frequently based on careful observation of human beings. A large number of brilliant men led by their curiosity to study their fellow men have produced great literature instead of science (p. 151).

Tullock is responding to Mises and Hayek, who both thought that the social sciences were different because matters of human affairs are more complex and because of the subjective dimension of human choice and expectation (NB: the views of Mises and Hayek are not exactly the same and Hayek himself changed his position over time, laying greater stress on complexity rather than subjectivity). 

I would note, by the way, that while economics lags behind physics, we understand the economy better than we understand the human brain or for that matter the deep ocean.  I see complexity of the topic and accessibility to information as determining the progress of a science; I am not so far from Hayek's view, although he underestimated how much progress quantitative and experimental economics could make.

It seems there were even ancient computers, not to mention advanced philosophy.  So the point remains: the absence of a developed economics until the mid-18th century remains a startling anomaly in the history of ideas.  Why was that?

Addendum: Arnold Kling comments.

Should the SEC and CFTC be consolidated?

That's part of the latest Treasury plan. 

The potential gain is that a single agency would be accountable for all the in-between derivative products which are currently overseen by no one.  Even if you're a libertarian who hates regulation, a lot of the subsequent oversight (but not all of it) would be enforcement of laws against fraud and false dealing.  Some of it would be preventing excess leverage to take advantage of the Fed safety net.

At current margins the gains from regulatory competition are less than before.  Arguably the CFTC applies a lower regulatory tax to keep economic activity in one of the sectors it oversees, most notably financial futures, and thus to keep itself in business.  This in turn forces the SEC not to regulate stock trading too heavily, otherwise volume will jump into the futures market.  All true, but that argument made more sense in the mid-1980s (post Shad-Johnson), when stock index futures were still a novelty with an uncertain future.  Furthermore international competition constrains the regulators more today than it did twenty years ago (London would gladly pick up business from the Merc), so that means less need for regulatory competition within the USA.

Ideally a regulatory marriage should focus the resulting agency on its most important roles, namely discovering and penalizing outright fraud and preventing catastrophic meltdowns.  Of course that wish might be dreaming.  After all, if investors are tricked why will underpaid lawyers see through the underlying problems in the market? 

Note also that few regulatory consolidations have gone well, at least not in their first few years.  Imagine actually forging the SEC and CFTC into a single culture with a single set of norms and regular communication patterns and employment practices.  I'd be surprised if it could be done in less than four years' time and that is usually with some big bumps along the way, all in the service of learning of course.  (Google "Homeland Security.") 

So ideally the time to consolidate the SEC and CFTC is when the crisis is truly passed, not today.  In the meantime we should recognize that the case for separate agencies isn't as strong as it used to be.  But given that the SEC already has its hands full (did they catch the Bear Stearns problems? No), do you want to divert its talent to managing the merger?  I'm not ready to press the "yes" button on this one, even though the final outcome is probably a better place to be.  A simpler alternative is to give the SEC authority over the derivatives and fold in the CFTC five years from now.

Income per natural

It is easy to learn the average income of a resident of El Salvador or Albania. But there is no systematic source of information on the average income of a Salvadoran or Albanian. In this new working paper, research fellow Michael Clemens and non-resident fellow Lant Pritchett create a new statistic: income per natural — the mean annual income of persons born in a given country, regardless of where that person now resides...Almost 43 million people live in a group of countries whose income per natural collectively is 50 percent higher than GDP per resident. For 1.1 billion people the difference exceeds 10 percent.

The pointer is from Will Wilkinson, here is the paper itself.  By the way, can you guess the country with the highest income per natural?  It's the United States (ahem), with Norway and Luxembourg close behind.  Scroll to pp.34-35 of the paper for a full list.  Bermuda does surprisingly well.  Guyana has the biggest difference between income per capita and income per natural, at over 100%.

Sentences to ponder

Federal spending is lower in areas where there is less press coverage of the local members of congress.

Here is much more, ungated here; there is a claim of causality and the paper is interesting throughout.

God's Servants Do Play Dice

Chris Blattman, development economist extraordinaire , posts from Liberia.

Today we sat down with an inter-faith network of Liberian religious leaders to talk about their peace building plans. They are a truly inspiring organization, building local capacity to resolve conflicts, and training mediators to resolve disputes in the community. The countryside is, to some extent, a powder keg, and they are building local early warning systems and rapid response capability to potentially serious conflicts.

Moreover, to reduce tensions in conflict-prone places, these religious leaders--principally Muslims and Christians--do not just aspire to a new social contract, they sit down with ethnic and religious leaders in each village and coax them to actually write one, specifying norms and sanctions.

And they want to know if it's working.

I hum and haw about comparison groups, going through my impact evaluation 101 schpiel. I have serious concerns that one would or could develop a control group, let alone randomize, for such a program. So I dance delicately around the subject.

"Wait a minute," interrupts the Imam, "Are you talking about a randomized control trial?"

I gape.

"Oh I see!" says one Reverend Minister, "We need a control group! This is a good idea."

It turns out his holiness was once an agronomist. "This is just like our control plots for fertilizer. But how are we going to control for spillover effects?"

An older Methodist leader frowns sitting in the corner glowers. "Please, a moment," he says. "I see a real problem here."

Here it comes. Here is the doubt and questioning I expected. We're talking about a peace building exercise, not fertilizer on a farm plot. Even I have my reservations. This man, of an older generation, clearly has other priorities.

"How," he asks "are we going to select a proper sample?"

Hat tip to Dani Rodrik.

Bottom line

What's really going on? What's going on is that perhaps $6T of mortgages with a duration of a decade that had been priced at a 1% per year chance of default (with a 1/3 value haircut in the event of default) are now being priced at a 4% per year chance of default. That's a loss of $600B in market value--and if your share of that $600B is greater than your capital, or is thought to be greater than your capital and so impedes your operations, you are gone.

But truth be told it is a zero-sum game--not a real destruction of wealth. The real rates at which cash flows of constant risk are being discounted haven't changed much: there hasn't been a big redistribution of wealth between the present and the future. What has happened was that a bunch of people believed that the default risk was 1% when it was actually 2% and reported gains of $200B (of which they took 2-and-20 on the hedge fund slice, perhaps $20B, for themselves), and that now a bunch of people believe that the default risk is 4% when it is actually still 2% (unless, of course, the assembled central banks of the world fail and unemployment heads rapidly upward). So in aggregate hedge fund partners have gained $20B, hedge fund investors have paid$20B to their money managers for the privilege of losing another $200B that they never had, and there are $400B of transitory paper losses that will turn into real losses for those overleveraged and caught by the credit crunch and so forced into fire sales, and into real gains for those with steel nerves and liquidity.

Unless, of course, Ben Bernanke and company fail to contain the crisis, and we wind up in a severe depression. But then we would have much, much bigger things to worry about than $600B of missing paper mortgage value. 4 years x 3 percent excess unemployment x Okun's Law coefficient of 2 x $13T economy means a $3.1T cumulative Okun gap in lost real wages, salaries, and profits. That's the thing to worry about.

That's Brad DeLong, here is the link.

Retribution, by Max Hastings

In the course of the war, Germany lost 781 submarines, Japan 128.  By contrast, the Japanese navy sank only 41 American submarines, 18 percent of those which saw combat duty.  Six more were lost accidentally on Pacific patrols.  Even these relatively modest casualties meant that 22 percent of all American sailors who experienced submarine operations perished -- 375 officers and 3,131 enlisted men -- the highest loss of any branch of the wartime U.S. armed forces.

The subtitle of this book is The Battle for Japan, 1944-45.  Have you ever wondered what kind of peace the Japanese expected (before losing), how the battle for the Philippines unfolded, why the Japanese treated their POWs so badly, or what it is like to be in a submarine surrounded by falling depth charges?

Every year there are five or six books that just wow me.  This is one of them.  It is as gripping as a first-rate novel and I learned something on almost every page.  Here is one review.  You can buy it here.

How to choose a mechanic

Eamon McGinn, a loyal MR reader, asks:

I was wondering if you were willing to share your ideas for picking a mechanic. I had a look through the archives and couldn't find anything.

Considering a choice between a garage run by an individual mechanic and one run by a nationwide company:

The individual run garage stands to lose more if too many repairs are done (causing me not to return in the future) but he has a temptation to increase the amount of repairs as he gets most of the profits (as opposed to the mechanic working at a company run garage who, ipresume, gets a wage). I feel the latter effect will dominate as I can't really tell if too many repairs are done.

This would indicate that the company run garage is the one to go for. However the lack of incentive to over-charge also implies a lack of incentive to do a good job.

This is a tough dilemma, though I am not sure if individual vs. company is the trade-off I am worried about.  I would expect individual mechanics in large repair companies to have plenty of incentives to overcharge you (does anyone know how these people are compensated?)

I am pleased that, at 46 years old, I've never had to use a mechanic in the traditional sense.  I've never needed anything other than standard maintenance.  So my first piece of advice is to always buy a Toyota or Honda.  My second piece of advice is to support free trade and, if I dare say so, to support a reasonable level of immigration.  I suspect that a mechanic who is an immigrant, indeed an illegal one, is less likely to rip you off.  No proof, that's just my best educated guess, based on the idea that people who are afraid of losing a big surplus are less likely to invite scrutiny and the irritation of others. 

As for the question itself, lack of experience, in this case, also implies lack of expertise.  Readers, do you have good suggestions for Eamon?