Here is part of Ezra’s description:

I had a simple plan: ask Cowen for his thoughts on as many topics as possible. And I think it worked out pretty well. We discuss everything from New Jersey to high school sports to finding love to smoked trout to nootropics to Thomas Schelling to Ayn Rand to social media to speed reading strategies to happy relationships to the disadvantages of growing up in Manhattan. And believe me when I say that is a small sampling of the topics we cover.

We also talk about Tyler’s new book, “The Complacent Class,” which argues, in true Cowenian fashion, that everything we think we know about the present is wrong, and far from being an age of rapid change and constant risk, we have become a cautious, even stagnant, society.

This as information dense a discussion as I’ve hosted on this podcast. I took a lot away from it, and I think you will too.

Here is the link.

Wednesday assorted links

by on March 29, 2017 at 12:07 pm in Uncategorized | Permalink

It’s a paradox of kinds that in the United States we use markets more than in other countries but as a people we are less likely to participate in a market. Of course, when we buy things at the supermarket we Lasalgoan1are participating in a market but in posted-price markets it’s hard to see price formation and supply and demand in action. So when I travel abroad, I like to visit markets. (Tyler calls it GDP tourism).

The Lasalgaon onion market is Asia’s largest. It’s about four hours from Mumbai in Nashik district which is also well known for grape production. Twice a day during the season(s) onion farmers bring their small trucks and trailers filled with onions to auction. Farms in India are small, approximately 67% are one hectare (2.4 acres) or less and 99% are below 10 hectares. Thus, hundreds of trucks park in long lines that stretch into the distance. The farmers dump some of their onions onto the ground so the buyers can inspect for the type, size, moisture content and quality. An auctioneer then walks down the line and quickly auctions off the content of each truck. As we watched, one truck’s onion supply was bought for a buyer in Dubai, the next went to Malaysia, the next and highest quality went to France. The process is fast, fast, fast!

Lasalgoan2We were guided in our adventure by Nanasaheb Patil, a highly respected businessperson and the chairman of the Agricultural Produce Market Committee, a group that runs the market and ensures the honesty of the auction process.

Current onion prices are very low, below production cost, but high onion prices have brought down more than one national government so the farmers don’t get much of a hearing. When prices are high the government bans exports and blames farmers for hoarding (when prices are low as is true today, exports are allowed).

The onion crop from certain times of the year rots quickly. Lasalgoan3The government did build a very expensive irradiation facility to improve shelf life but the facility, which can process 10 tonnes of onions an hour, was only used for 3 hours of onion processing in a recent year! Although using the facility isn’t expensive it requires unloading, sacking and reloading tonnes of onions which renders it uneconomic (the facility is used for mango irradiation because mangoes exported to the US must be irradiated.)

One thing I hadn’t expected was that our presence at the auction market was something of an event and led to a story and photo (you can probably spot my wife and son) in the local newspaper.

We also visited some of the local grape farms. You can get an idea about wages by noting that on this farm, which was exporting grapes, every single bunch was wrapped in newspaper to prevent sunburn.

A special hat tip to Milind Murugkar, engineer, writer, and long-time reader of MR who invited me to Nashik and arranged for us to meet our wonderful host Nanasaheb Patil.


The study, by David Blau and Bruce Weinberg, both professors of economics at Ohio State University, found that the average age of employed scientists increased from 45 in 1993 to nearly 49 in 2010. Scientists aged faster than the U.S. work force in general, and across fields — even newer ones, such as computer and information science. The study includes those natural and social science, health and engineering degrees.

The trend will only continue, with the average scientist’s age increasing by an additional 2.3 years within the near future, without intervention, according to a model included in the study.

I found this sentence illuminating:

Still, McDowell said he wouldn’t want to bring back mandatory retirement for professors.

Here is the study, here is the story, with some useful visuals as well.  As the article notes, even if older scientists are still productive, this can skew or limit the incentives for younger scientists and limit their creativity.

That is the topic of my latest Bloomberg column, and here is part of the discussion of food:

Restaurants are increasingly an organizing and revitalizing force in our cities, and eating out has continued to rise as a means of socializing. America’s educated professional class may be out of touch with sports and tired of discussing the weather, and so trading information about new or favorite restaurants, or recipes and ingredients, has become one of the new all-purpose topics of conversation. Food is a relatively gender-neutral topic, and furthermore immigrant newcomers can be immediately proud of what they know and have eaten.

…Music made us get up and dance, or occasionally throw a rock. Food, especially if combined with wine, encourages a state of satiety and repose. Most conversation about food is studiously nonpolitical and removed from controversial social issues. There is a layer of left-wing critique of food corporations, genetic modification and food-associated pollution, but its impact on broader American culture has been marginal. These days, it could be said that food is the opiate of the educated classes. Anecdotally, I observe that the contemporary preoccupation with a particular kind of food fanciness and diversity has penetrated black communities less, and those are also the groups where music might in some cases remain politically important.

Otherwise, the contemporary food world grants diners the ability to cite a multicultural allegiance without controversy. One can mention a taste for Senegalese food, and win credibility for sophistication and worldliness, as well as knowledge of Africa. At the same time, one isn’t pinned down to having to defend any other specific feature of Senegalese culture. Maffa — usually a meat in peanut and tomato sauce — isn’t that controversial or revolutionary as a concept.

The current culinary touchstone is the foodie or TV host who “eats everything,” from pig snouts to worms to scorpions. Cannibalism aside, the list of what has been consumed on television is now so long it’s hard to shock viewers (not only do some insects taste like potato chips, but in some dining circles consuming potato chips is arguably the more rebellious act). The more prosaic truth, however, is that eating everything is not much of a revolution. If anything, historical resonance has been achieved by people who refused to eat certain foods, whether the underlying doctrine was vegetarianism, Jainism, Judaism or Islam.

There is much more of interest, including the take on music, at the link.

In light of these laws and institutions safeguarding user privacy, members of the House of Representatives need not fear that voting for the joint resolution to rescind the FCC’s privacy rule will mark the end of individual privacy on the Internet.

Here is the full piece by Ryan Radia, via Brent Skorup.  He also recommends this longer Georgia Tech paper of broader interest (pdf).

The specific thinkers cited for ‘cyclical models of history’ are Vico, Spengler, and Toynbee, in that order.

With that triple-burst trigger pull, the race to a second, Straussian reading begins.

Taking a cue from those statements, consider that the book itself might be a cycle. Read forwards, it is a series of slightly overcooked thinkpieces that ends on a surprisingly bold note. Read backwards, one finds it hides a thrilling call to arms.

This is a contrarian reading; one I make no claim should actually be attributed to Cowen himself. Nonetheless, the coherences pile up too neatly to simply be ignored once seen.

There is much more of substance at the link.  That is from Thomas Barghest, via Justin.  By the way, someone else did a long “Alt Right” take on the book and emailed it to me, and I meant to link to it, but I misplaced the email somehow.  If you email it to me, or leave it in the comments, I’ll put it into Links tomorrow.  And here is just a wee bit more:

Cowen shows us that if we had the courage of immigrants and foreigners to ignore contemporary mores and treat our strengths as something to take pride in rather than something to hide, we might restore our culture to a dynamic greatness. Such honest pride in ourselves and our abilities was ours only a half-century ago, before the 60’s, he implies. It is not so long gone.

However, a proper neoreactionary, he doesn’t pretend we can simply wish ourselves there. Americans’ current complacency is not pure timidity. The transcendent is not something we’ve simply lost. It was crushed, stolen, and turned against us.

Overall, you guys crack me up, and I do mean “guys.”

Tuesday assorted links

by on March 28, 2017 at 12:04 pm in Uncategorized | Permalink

Òscar Jordà, Björn Richter, Moritz Schularick, and Alan M. Taylor have a new and somewhat unsettling NBER paper on that topic:

Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies between 1870 and 2013 and for the post-WW2 period, and holds both within and between countries. We reach this startling conclusion using newly collected data on the liability side of banks’ balance sheets in 17 countries. A solvency indicator, the capital ratio has no value as a crisis predictor; but we find that liquidity indicators such as the loan-to-deposit ratio and the share of non-deposit funding do signal financial fragility, although they add little predictive power relative to that of credit growth on the asset side of the balance sheet. However, higher capital buffers have social benefits in terms of macro-stability: recoveries from financial crisis recessions are much quicker with higher bank capital.

Here is Christopher Balding on whether China is deleveraging.

Wil Wade emails me some very interesting points:

As someone who has changed jobs a fair amount and recently, I thought I might be able to give some ideas on why better matching and results decreases mobility. Some of these might be fairly easy to set up tests for. (Note I am a programmer, someone with many job prospects in almost anywhere I could want, so salt as desired.)

1. You think you will find something. Everywhere has lots of jobs posted, so if feels like if you just wait until tomorrow, that job in your area will pop up. Why look at another city, when your city posts 100 new jobs a day (none of which will be good for you, but you don’t know that)

2. Perhaps especially in white collar jobs, you never get a job from a job posting. Never is a bit strong, but your network leads to most jobs. (of the 5 jobs I have had in the ~10 years since graduating, three of those were network based) The less mobile your network, the less mobile you can be.

3. Comparisons are really hard to make when cost of living varies so much. I do not know if the variance in cost of living has increased over the past 30 years, but I do know that it feels really high. As a programmer I easily could move to any of the large cities SF, LA, NYC. But the cost of living adjustment is really hard to make. And currently impossible to make at an I could move anywhere level.

Monday assorted links

by on March 27, 2017 at 1:09 pm in Uncategorized | Permalink

We fight over health care policy because we focus on demand and redistribution. We could reach greater agreement if we focused on supply and innovation. What are the key areas where agreement is likely?

1) Cancer kills both Republicans and Democrats so more spending on medical research is likely to reach broad agreement.  As I said in Launching:

Looking at the future, if medical research could reduce cancer mortality by just 10 percent, that would be worth $5 trillion to U.S. citizens (and even more taking into account the rest of the world). The net gain would be especially large if we could reduce cancer mortality with new drugs, which are typically cheap to make once discovered. A reduction in cancer mortality of this size does not seem beyond reach, and the value of such a reduction in mortality far exceeds that of spending more on medical care today. Yet because the innovation vision is not central to our thinking, we overlook potentially huge improvements in human welfare.

By greater spending on medical research, I mean not only greater spending through the NIH but also a commitment to innovation policy more broadly. We know, for example, that price controls kill medical research so no price controls. We can also improve the FDA. I would favor less regulation but there are other methods to speed up the approval process which could command bipartisan support such as greater funding of the FDA. The FDA is also not monolithic, some departments are better than others, so we can reform the FDA by making it more like the better parts of itself.

In thinking about pharmaceutical regulation we also need to remember that 80-90% of prescriptions are for generic drugs and due to intense competition, generic drug prices are low and falling–so lets build on the parts of the US health care system that work well by keeping the entry barriers to entry in the generics market low.

2) Increase the supply of physicians. Despite an aging population and greater demand, the number of MDs per person has been trending downwards! Increasing physician supply could involve a combination of increased immigration of foreign physicians (skilled immigration is really a non-brainer that receives widespread support), increased slots at medical schools and in residency programs (via Medicaid), increased support for allowing nurse practitioners, dental hygienists and so forth and making occupational licenses portable across states. (In addition to making it easier for foreign physicians to come to US patients we should also make it easier for US patients to travel to foreign physicians–patients without borders). None of these things are easy to do, of course, but neither are they riven by ideological differences.

3) Demand price transparency from hospitals and other health care providers. In real markets, a price is a signal wrapped up in an incentive. With few exceptions, we don’t have real markets in health care and so “prices” neither signal nor incentivize. Thus, I don’t expect miracles from “price” transparency and this is a policy that could go wrong but transparency would still allow for some standardization, comparison, and computation of tradeoffs. Price transparency would also limit some of the worst forms of bill abuse. Even the Soviets found prices to be useful for these purposes.

Other supply side reforms that could find bipartisan support?

I don’t usually “go after” news stories and headlines but this one is such a bad mistake, and it so affected my Twitter feed (I was swindled too), that it deserves comment (the pointer by the way comes from Alex, our Alex).  Stephanie Saul wrote in The New York Times:

Nearly 40 percent of colleges are reporting overall declines in applications from international students, according to a survey

Here is what the opening of the survey itself said:

39% of responding institutions reported a decline in international applications, 35% reported an increase, and 26% reported no change in applicant numbers.

The NYT article does not reproduce the more positive pieces of information, from its own cited study, which may be suggesting international applications are not down at all, or perhaps down by only a small amount.  If you look at all the data, they probably are down, but by no conceivable stretch of the imagination should the 40% figure be reported without the other numbers.  The headline of the piece?:

Amid ‘Trump Effect’ Fear, 40% of Colleges See Dip in Foreign Applicants

I look forward to not only a correction but in fact a retraction of the entire article and its headline.

Hint: Trump is not working with Paul Ryan to disassemble Medicare as we know it.

Those of us who predicted gridlock, stasis, and an excessively weak Trump presidency are so far right.  Hardly anything has gotten through, though we have managed to scare off 40% of the potential foreign applicants for higher education, one of America’s most successful export industries.  Tax reform, which is not an ideological touchstone, won’t be easy, and the Republicans have not reached prior agreement on many of the (numerous) details.  Russia will continue in the headlines.  The weakness of political parties remains an underlying theme.  Overall, it is good that health care reform is off the table for now, because superior alternatives were not likely to result.

Is it good or bad, all things considered, that foreign governments are seeing increasing latitude to ignore Trump’s threats?  And why exactly does Trump dislike Germany so much?

By the way, the end of global QE is rapidly approaching, with U.S., European, and possibly Chinese central banks all tightening at about the same time; maybe that’s the real news!

Addendum: Alex writes to me:

39% of responding institutions reported a decline in international applications, 35% reported an increase, and 26% reported no change in applicant numbers.