by Tyler Cowen
on February 6, 2016 at 12:34 pm
1. Installment #2 in the Caplan symposium on ancestry and long-term economic growth.
2. The economics of Indian beef bans.
3. Applying computer science to game theory.
4. Jason Furman defends the Cadillac Tax.
5. Dirk Nowitzki responds to Kareem’s charge that he is a “one-trick pony.”
Whole lotta good links here…
#1 – Racism noted. Or rather ‘ancestry’. Seems these papers are simply demonstrating the well know historical phenomena of “the West is best vs the Rest” but using dummy variables instead of names, dates, places. But this was interesting: “2. A careful reading shows that CEG is widely misread. They don’t show that events thousands of years ago matter today – even adjusting for ancestry! After adding standard controls, tech in 1000 BC doesn’t matter. Neither does tech in 0 AD. Tech in 1500 AD definitely seems important. But since only one out of three measures of tech works as expected, the wise interpretation is unclear.”
#2 – Collapse of milk prices in India blamed on a pro-cow law. But there’s a worldwide glut of milk, might the global milk lake be responsible?
#3 – A Greek mathematician, akin to John Allen Paulos but even smarter, who applied his math to economics: “In it, Daskalakis proves that computing the Nash equilibrium for a three-person game is computationally intractable. That means that, for any but the simplest of games, all the computers in the world couldn’t calculate its Nash equilibrium in the lifetime of the universe. Consequently, Daskalakis argues, it’s unlikely that the real-world markets modeled by game theorists have converged on Nash equilibria either.” – kind of like the three-body problem in physics? So game theory is bounded by bounded rationality. Hence game theory becomes nothing more than the banal observation by Nobelian Shiller that humans cause irrational, non-Gaussian perturbations. But if you can model a computer to imitate this, you might get rich.
#4 – “Because employees pay income and payroll taxes on wages but not on compensation provided in the form of health care benefits, it is rational for employers to skew compensation packages away from wages and toward excessively costly and inefficient health benefits.” – well, it’s only costly and inefficient if you are ‘average’ and not suffering from some one-in-a-million disease that only can be cured in the USA. Seems to me (having lived abroad more than most) that the USA wants to ‘dumb-down’ their medical care to make it ‘cheap and dirty’ for the “majority” of illnesses, as they do outside the USA. This is smart for keeping costs down, but keep in mind it will cause those few who have rare maladies to suffer. Of course it will cut back on the “have a sniffle, go to the doc and get antibiotics” visits, and that’s a good thing.
#5 – Dirk did not play on dominant teams yet had decent stats, so Kareem is being a bit unfair. I think the comments of the linked article are interesting and informative, here’s one that seems true: “I remember Kareems’ skinny a$$ play. Kareem always had stars playing with him. Kareem would have gotten man handled by shaq and lit up by Dirk. The players of today are generally bigger, stronger, and faster. Hence the competition is greater.” – true in chess too (today’s players are better than yesteryears)
I saw NY Knicks Willis Reed (past his prime) eat up rookie Kareem. It was man vs. boy.
And, that time Kareem suckered punched a player . . . He looked like a felon.
Thankfully, Larry Bird looked liked the great white hope when he brawled, right? http://bleacherreport.com/articles/81255-top-five-brawls-in-nba-history
Including losing the fight part.
“Alcindor’s presence enabled the 1969–70 Bucks to claim second place in the NBA’s Eastern Division with a 56–26 record (improved from 27–55 the previous year). Alcindor was an instant star, ranking second in the league in scoring (28.8 ppg) and third in rebounding (14.5 rpg), for which he was awarded the title of NBA Rookie of the Year.”
Yeah, pretty uneventful rookie season.
Reviewing the Kermit Washington Wikipedia webpage leads to this: “The events that precipitated the fight have been frequently debated, and variously interpreted. Two months earlier, on opening night of the season, the Lakers played the Milwaukee Bucks. Bucks center Kent Benson elbowed Abdul-Jabbar in the stomach, and Abdul-Jabbar appeared to be in intense pain. Abdul-Jabbar then punched Benson from behind, breaking Benson’s jaw and his own hand”
Seems like NBA fighting was more common back in the days.
Perhaps as one would expect, I thought Kareem’s comments on basketball were his least defensible in the whole interview.
1. So if there is an enormous shift of capital from productive societies to less productive societies, does a black hole open up and absorb technology and cause secular stagnation.
The Cadillac Tax, along with perhaps the device manufacturers tax, is among the least offensive parts of the ACA. Employer-sponsored plans are a horrible idea, and taxing the worst of them partially offsets the unusual tax benefits they have enjoyed in the past. With sufficient inflation, the tax could even be meaningful. We may not see the full benefit given the employer mandate, but under the right set of circumstances people might end up doing the right thing.
Of course, since Democrats want healthcare to be infinitely expensive, they won’t defend the Cadillac tax, and Republicans seem willing to be trolled in to attacking the least interesting parts of the ACA rather than the heart of it (mandates, plan rules, and technology requirements). This tax should be repealed with the rest of the act, and no sooner.
3. not that informative
Why is Dirk deferential to Kareem? Kareem is the all time leading scorer because he didn’t know if he would get his money back from bad investments he made. A lawsuit dragged on for three years until 1989 and after he won he retired that season. He wan’t playing for the love of the game or anything.
Plus Dirk didn’t get involved with these guys: http://blogs.weta.org/boundarystones/2014/03/14/hanafi-siege-1977
Dirk is respectful of just about everyone, certainly a legend like Kareem. I don’t believe I’ve ever seen or heard Dirk make a disrespectful off-the-floor comment about a player (maybe Dwayne Wade once). I know it’s quaint in the modern NBA, but there are still some who appreciate his attitude.
4. ” The uninsured rate has fallen by 45%, and for the first time, more than 9 in 10 Americans have health insurance.”
Yet, the cost of health care continues to increase. We should be so happy that the technological improvements in medicine that make it possible for technicians to perform examinations, make diagnoses and prescribe treatments, rather than highly-paid physicians, has made no dent in medical bills. But, the same holds true for higher education, where administrators draw big bucks while grad assistants do the work and the effort is to make it easier for students to borrow the money to pay the inflated salaries of people who work only a few hours a week. The upper levels of the non-productive white collar/bureaucratic class has created a parasitic environment that will inevitably fail as they price themselves out of the market.
1. As I understand Fred Begay’s story, he started with a very traditional Navajo life, and ended up doing advanced physics, trying to break the fusion energy problem. That’s a big leap between low and high tech history. Perhaps just noise on Caplan’s charts.
So does that mean economic equilibria are probably neither Nash nor Arrow-Debreu equilibria?
If you mean theoretical equilibria, they can remain whatever. Real equilibria will be harder to argue. Part of the Behavioral trend.
My high school life was heavily influenced by Dewey, who reasonably wanted WASP Americans, since they were not going to teach their government-school students about the love God has for his people anyway, to treat their high school charges with the amused respect French teachers gave French lyceens.
I have enjoyed dozens of movies influenced by a book about heroes by a flighty semi-academic guy who liked to read a lot of books named Campbell – unfortunately I cracked the code about halfway through the Tatooine scenes of the first movie in the interminable run of uber-profitable kitsch known as the Star Wars canon. The best non-fiction book that you will likely not find in your local bookstore is, in my humble opinion, the book that most inspired the young and happy Newton, namely Euclid’s Elements, which Newton (who basically, Magnificent Principia or not, was the Wynton Marsalisish corollary to Euclid’s Bix Beiderbecke) could have talked about for weeks on end without repeating himself. A couple of years ago Barnes and Noble had a multi-volume version of Euclid that had decent printing standards, but they did not republish it and if you find it now it is generally faded and slightly musty. Dover’s edition has ridiculously small and disrespectful print, although with lots of good comments provided by Heath. There is a Taschen cool-colored reprint of a Victorian version of Euclid with colorized theorems, but you won’t find that in the bookstores. Let’s not talk about the Great Books of the Western World version. I believe there is a beautifully edited and formatted version in Latin and Bulgarian, printed in Sophia, but I do not want to buy it on Amazon as that would drive the price higher for other lovers of truth, and we lovers of truth care about each other. Well, and there are Scott and Stowe, who wrote books that helped inspire the last big war in these parts (I live in the southernmost parts of the Great North-Eastern forest), and the Aeneid and the Quixote – which are a treat and a pleasure to read in their original language – but which are probably not read straight through for pleasure (in the original language, that is – Signet and Bantam and Penguin have been real troopers about providing great English translations) more than once or twice a decade in any given average-sized English-speaking city. Then there is, sadly, Marbury v Madison, not a book , but , as we have known since 1973 or so, surpassing any book one might name in the ratio of quantity of pernicious foolishness to quantity of words.
Also, the best argument for Dirk Nowitzki is that there are at most, seven or eight players every decade where you can say that his team would not have won the championship without him. That argument carries the day for those who care about the competition aspects of basketball. The rest is noise. (Kareem obviously is one of those guys too). (Earlier comment belonged on a nearby but different thread, obviously).
“5. Dirk Nowitzki responds to Kareem’s charge that he is a “one-trick pony.””
That’s fun that you set two superstars to arguing, and that it’s a reasonable, intelligent argument on both sides.
The comments on the Nowitzki article complain that older NBA players in general tend to tear down the younger players to make them feel better. This could be true, but I didn’t pick up on that from the actual talk.
Kareem was very complimentary of Stephan Curry (who is obviously a very different player) for his ‘deal-with-Satan’ shooting ability beyond the arc. My words, not Kareem’s. Perhaps he’s tougher on other centers?
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