RULE ONE: Find a place you trust, and then try trusting it for a while.

RULE TWO: General duties of a student: Pull everything out of your teacher; pull everything out of your fellow students.

RULE THREE: General duties of a teacher: Pull everything out of your students.

RULE FOUR: Consider everything an experiment.

RULE FIVE: Be self-disciplined: this means finding someone wise or smart and choosing to follow them. To be disciplined is to follow in a good way. To be self-disciplined is to follow in a better way.

RULE SIX: Nothing is a mistake. There’s no win and no fail, there’s only make.

RULE SEVEN: The only rule is work. If you work it will lead to something. It’s the people who do all of the work all of the time who eventually catch on to things.

RULE EIGHT: Don’t try to create and analyze at the same time. They’re different processes.

RULE NINE: Be happy whenever you can manage it. Enjoy yourself. It’s lighter than you think.

RULE TEN: We’re breaking all the rules. Even our own rules. And how do we do that? By leaving plenty of room for X quantities.

HINTS: Always be around. Come or go to everything. Always go to classes. Read anything you can get your hands on. Look at movies carefully, often. Save everything. It might come in handy later.

The source is here, via the excellent Ted Gioia.

From Mark R. Rank:

…Thomas A. Hirschl of Cornell and I looked at 44 years of longitudinal data regarding individuals from ages 25 to 60 to see what percentage of the American population would experience these different levels of affluence during their lives. The results were striking.

It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.

Yet while many Americans will experience some level of affluence during their lives, a much smaller percentage of them will do so for an extended period of time. Although 12 percent of the population will experience a year in which they find themselves in the top 1 percent of the income distribution, a mere 0.6 percent will do so in 10 consecutive years.

It is clear that the image of a static 1 and 99 percent is largely incorrect. The majority of Americans will experience at least one year of affluence at some point during their working careers. (This is just as true at the bottom of the income distribution scale, where 54 percent of Americans will experience poverty or near poverty at least once between the ages of 25 and 60).

A further example of such fluidity can be found in an analysis by the tax-policy expert Robert Carroll. Using data from the Internal Revenue Service, Mr. Carroll showed that between 1999 and 2007, half of those who earned over $1 million a year did so just once during this period, while only 6 percent reported millionaire status across all nine years.

There is more here, via Greg Mankiw.

Clive Crook reviews Piketty

by on April 20, 2014 at 8:17 pm in Uncategorized | Permalink

Here is his bottom line and it is correct:

Over the course of history, capital accumulation has yielded growth in living standards that people in earlier centuries could not have imagined, let alone predicted — and it wasn’t just the owners of capital who benefited. Future capital accumulation may or may not increase the capital share of output; it may or may not widen inequality. If it does, that’s a bad thing, and governments should act. But even if it does, it won’t matter as much as whether and how quickly wages and living standards rise.

That is, or ought to be, the defining issue of our era, and it’s one on which “Capital in the 21st Century” has almost nothing to say.

The full review is here.

Shanghai bleg

by on April 20, 2014 at 3:17 pm in Food and Drink, Travel | Permalink

Other than the obvious things I would see in a guidebook, what should I do and where should I eat?  I thank you all in advance for your assistance.

Assorted links

by on April 20, 2014 at 3:07 pm in Uncategorized | Permalink

1. Do you beam with pride or get upset at this article about young, rich philanthropists being courted by the White House?

2. Profile of Thomas Piketty.

3. As a kid I enjoyed Dodgeball.  I still remember me and Jimmy Wainwright being the last two guys on the floor.  (Sadly, Jimmy caught my rather unconvincing fifth grade toss.)   This article calls it “America’s most demonized sport,” but they don’t seem to have heard of the game we used to call “Kill the guy with the ball.”

4. CDs vs. vinyl, I say CDs have higher average quality but vinyl has higher peaks for the very best classical music.

5. Why do economics majors earn so much?  And economics humor.

6. Are babies a performance-enhancing drug?

Officially, the People’s Republic of China is an atheist country, but that is changing fast as many of its 1.3 billion citizens seek meaning and spiritual comfort that neither communism nor capitalism seem to have supplied.

Christian congregations, in particular, have rocketed since churches began reopening when Communist leader Mao Zedong’s death in 1976 signalled the end of the Cultural Revolution. Less than four decades later, some believe China is now poised to become not just the world’s No. 1 economy but also its most numerous Christian nation.

“By my calculations China is destined to become the largest Christian country in the world very soon,” said Fenggang Yang, a professor of sociology at Purdue University in Indiana and author of Religion in China: Survival and Revival under Communist Rule. “It is going to be less than a generation. Not many people are prepared for this dramatic change.”

China’s Protestant community, which had just one million members in 1949, has already overtaken those of countries more commonly associated with an evangelical boom. In 2010 there were more than 58 million Protestants in China compared with 40 million in Brazil and 36 million in South Africa, according to the Pew Research Centre’s Forum on Religion and Public Life.

Yang, a leading expert on religion in China, believes that number will swell to around 160 million by 2025. That would be likely to put China ahead even of the United States, which had around 159 million Protestants in 2010 but whose congregations are in decline.

By 2030, China’s total Christian population, including Catholics, would exceed 247 million, placing it above Mexico, Brazil and the U.S. as the largest Christian congregation in the world, Yang predicted.

The article is here, via Noah Smith.

Mike, a loyal MR reader, asks me:

How do you recommend approaching a book like Capital in the Twenty-First Century?  I’m a reasonably smart guy, undergrad econ, ee, mba from good schools, somewhat well read, etc., but the density, length and relative subjectivity(?) of Piketty’s topic has me hesitant.

Do I start with the reviews or another book(s), dive right in or find a discussion group (usually lucky if anyone actually reads even part it).  Maybe I approach it like the bible, one paragraph at a time over several years :)

For truly serious books, I recommend the following.  Read it once, straight through, with a minimum of fuss.  If you get truly, totally stuck on some point, which the rest of the book depends upon, find somebody to ask.  Otherwise just keep on plowing straight through.

Then write a review of the book.  Or jot down your notes, but in any case force yourself to take definite stances by putting words down on paper (or screen).

Then reread the book carefully, because now you know what you are looking for.  Revise what you wrote.

Of course only a few books a year (if that many) need to be read this way.

Starting by reading reviews of the book is fine for most people, but usually I prefer not to.  I read just enough of reviews to discern whether I wish to read the book (or watch the movie) at all.  Then I stop reading the review, as I do not wish to be contaminated by the reviewer’s perspective and I feel I usually have enough background to make sense of the book without the assistance.  I intend no slight toward reviewers, but the whole point of the reading/review process is to get some independent draws from the urn rather than a cascade of overly mutually influenced opinion.  That said, I recommend this “skip reviews” approach only to people who read a great deal very seriously.

Reading groups can be useful to either a) force you to read a book you won’t otherwise pick up, b) force you to defend your point of view on a book, or c) induct you into knowing a book really really well when currently you only know the book well.  Or, most of all, d) bond a group of people together.  All that is fine.  But I don’t see readings groups as very useful for simply “reading books.”  As Robin Hanson might say, readings groups aren’t about reading, or for that matter books.

Few people can stay interested reading one paragraph a day from a book.  One underrated virtue of fast reading is that you make enough progress to keep yourself interested and this also can improve comprehension.

Not a surprise to me but yikes nonetheless:

In the first comprehensive study of the DNA on dollar bills, researchers at New York University’s Dirty Money Project found that currency is a medium of exchange for hundreds of different kinds of bacteria as bank notes pass from hand to hand.

By analyzing genetic material on $1 bills, the NYU researchers identified 3,000 types of bacteria in all—many times more than in previous studies that examined samples under a microscope. Even so, they could identify only about 20% of the non-human DNA they found because so many microorganisms haven’t yet been cataloged in genetic data banks.

Easily the most abundant species they found is one that causes acne. Others were linked to gastric ulcers, pneumonia, food poisoning and staph infections, the scientists said. Some carried genes responsible for antibiotic resistance.

“It was quite amazing to us,” said Jane Carlton, director of genome sequencing at NYU’s Center for Genomics and Systems Biology where the university-funded work was performed. “We actually found that microbes grow on money.”

This was, by the way, a relatively frequent complaint in 19th century monetary writings, with the advent of banknotes.

Assorted links

by on April 19, 2014 at 12:23 pm in Uncategorized | Permalink

1. Scott Winship reviews Piketty.  And Kevin Hassett on Piketty.

2. Why should there be deflation in Sweden?

3. Why is the singing of the national anthem so much better for hockey?

4. Liberalism unrelinquished, a project headed by Daniel Klein to reclaim the use of this word.  They are looking for signers.

5. Professional actor reading a Yelp review.

6. Will health care spending balloon again?

After he won the Nobel, Tom Sargent was “interviewed” in an ad for Ally bank in which his response was simply (and correctly), “no.” The joke is even better than I realized because Sargent has a history of giving very short speeches. In 2007 he gave a graduation speech to Berkeley undergraduates summarizing economics in just 335 words.

It’s a damn fine speech.

I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words.

Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.

1. Many things that are desirable are not feasible.

2. Individuals and communities face trade-offs.

3. Other people have more information about their abilities, their efforts,
and their preferences than you do.

4. Everyone responds to incentives, including people you want to help. That
is why social safety nets don’t always end up working as intended.

5. There are tradeoffs between equality and efficiency.

6. In an equilibrium of a game or an economy, people are satisfied with their
choices. That is why it is difficult for well meaning outsiders to change
things for better or worse.

7. In the future, you too will respond to incentives. That is why there are
some promises that you’d like to make but can’t. No one will believe those
promises because they know that later it will not be in your interest to
deliver. The lesson here is this: before you make a promise, think about
whether you will want to keep it if and when your circumstances change.
This is how you earn a reputation.

8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.

9. It is feasible for one generation to shift costs to subsequent ones. That is
what national government debts and the U.S. social security system do
(but not the social security system of Singapore).

10. When a government spends, its citizens eventually pay, either today or
tomorrow, either through explicit taxes or implicit ones like inflation.

11. Most people want other people to pay for public goods and government
transfers (especially transfers to themselves).

12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.

Hat tip to Utopia–you are standing on it via Newmark’s Door.

From the comments

by on April 19, 2014 at 12:51 am in Economics | Permalink

Here is BP, on New Zealand:

New Zealand has a chronic shortage of equity capital, exacerbated by a generous pay-as-you-go state pension and a tax system that favours passive landholding as a wealth accumulation vehicle. The country consequently imports a large amount of capital to meet the savings-investment balance and this requires a high equilibrium rate of interest. As a result the exchange rate is chronically high, the returns to exporting are lower than they should be given the country’s bounty, and the hurdle rate of return on investment on new equity investment is high. (Apart from this, the policy mix is pretty good). Many good innovative businesses emerge only to be bought by American corporations or funds before they get to more than say $100m in value, as there is a paucity of domestic investors.

Arrived in my pile

by on April 18, 2014 at 2:24 pm in Books, Uncategorized | Permalink

Nicholas Carr, The Glass Cage: Automation and Us.

David Zetland, Living with Water Scarcity.  Amazon here.

Robert E. Mutch, Buying the Vote: A History of Campaign Finance Reform.

William D. Ferguson, Collective Action & Exchange: A Game-Theoretic Approach to Contemporary Political Economy.

Jacob Soll, The Reckoning: Financial Accountability and the Rise and Fall of Nations.

British retirees may soon receive a novel kind of financial advice, courtesy of the state: They could be told when they are likely to die.

“People are living a lot longer, so we have to make sure they have up-to-date information,” the pensions minister, Steve Webb, said Thursday in an interview with the BBC.

“There’s no point being all British and coy about it,” he said. Gender, age and “perhaps asking one or two basic questions, like whether you’ve smoked or not,” Mr. Webb said, should be enough to determine how long, on average, someone is likely to live. Having an idea of life expectancy would help retirees with private pensions manage their finances more efficiently, he said.

There is more here.

“We understand that we doctors should be and are stewards of the larger society as well as of the patient in our examination room,” said Dr. Lowell E. Schnipper, the chairman of a task force on value in cancer care at the American Society of Clinical Oncology.

In practical terms, new guidelines being developed by the medical groups could result in doctors choosing one drug over another for cost reasons or even deciding that a particular treatment — at the end of life, for example — is too expensive.

More from the NYTimes.

Assorted links

by on April 18, 2014 at 12:07 pm in Uncategorized | Permalink

1. Austin Frakt draws up metrics for Obamacare success.

2. People who think they are attractive are less concerned with income inequality.

3. The forgotten giant arrows that guide you across America.

4. Fragmentary data on the duration of sex, as measured in ten countries.  Which economic variables predict the differences?  And against passwords.

5. “How burrowing owls lead to vomiting anarchists.” (on the SF housing crisis)

6. Orphan Black starts up again this Saturday.

7. Will manufacturing ever boom in sub-Saharan Africa?