Thursday assorted links

by on October 26, 2017 at 12:12 pm in Uncategorized | Permalink

1 rayward October 26, 2017 at 12:30 pm

2. It always comes down to sex, doesn’t it. Ross Douthat believes our problems can be solved with more sex. Well, not sex per se, but more babies that sex produces. It might be called a “grow families” policy achieved by “more productive sex”. I don’t intend to dismiss the problems that can be caused by an aging (or falling) population. In the ancient world every woman was required to have at least 6 to 8 pregnancies just to maintain the population (because so many mothers and infants died in childbirth). Thus, the life of a woman in the ancient world has been described as a cycle of birth, sex, death, and decay. And women today think they have it bad. China has a one child policy, and China’s economy seems to be doing okay. I suppose that’s because there are so many of them. What about tomorrow? Demographers project that China’s population will continue to grow during the first have of this century then fall by 400 million (that’s million) in the second half (that’s the mid-range projection). Imagine the economic and social disruption that may be caused by a drop in total population equal to the entire population of the U.S today. Douthat and his soul mate Thompson need to alert China to the dangers that what lie ahead for China if they don’t adopt a “grow families” policy and “more productive sex”. Birth, sex, death, and decay.

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2 anon October 26, 2017 at 12:48 pm

5. In other news, John “Most studies are false” Ioannidis comes for economics

https://twitter.com/leecrawfurd/status/923173921842753537

I am suspicious of this $1.50 for $1.00 thing, but I supposed I could be convinced by a … oh

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3 anon October 26, 2017 at 12:52 pm

And this might be the real Larry Summers link:

http://larrysummers.com/2017/10/26/hat-i-do-support-in-a-new-tax-plan/

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4 Jeff R October 26, 2017 at 12:54 pm

#2: This might sound counterintuitive to some people who’d assume that a large influx of low-skilled immigrants would be a huge drag on federal resources. In the short term, they might be. But as the children of immigrants find jobs and pay taxes, immigrant families wind up being a net contributor to the government over many decades, according to a 2016 report from the National Academy of Sciences.

But there is a growing body of evidence that as rich majority-white countries admit more foreign-born people, far-right parties thrive by politicizing the perceived threat of the foreign-born to national culture. That concept will sound familiar to anybody who watched the 2016 U.S. presidential race, but it’s a truly global trend.

Alternative explanation: far-right parties are the only ones to acknowledge something really obvious and really important: not all these low-skilled immigrants are created equal. Some classes of low-skilled immigrants are going to wind up being huge drags on federal resources not just now, but for generations. Greg Clarke was right: the son also rises (or doesn’t, as the case may be).

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5 neoliberalcuck October 26, 2017 at 3:07 pm

Your point is obvious, but how is it important? On net, immigrants and their children provide long run benefits. Sure, some percentage will end up being duds. But if that percentage is smaller than the current percentage of Americans who fit the same description (it is), then immigrants are making the country better off as a whole. If people see -some- immigrants who don’t work out and apply that generalization to -all- immigrants, they’re being bigoted. It’s pretty straightforward.

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6 Jeff R October 26, 2017 at 3:18 pm

You can apply some pretty simple heuristics to determine which ones will likely be a net fiscal drain. Drive up the ol’ batting average, as it were. That’s the point.

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7 anon October 26, 2017 at 3:21 pm

I am not “neo” but I thought we don’t actually have any history of immigrant groups “winding up being huge drags on federal resources not just now, but for generations.”

We have groups of the captured and dispossessed who have had slower gains, but that’s not at all the same thing, and a sadly predictable outcome..

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8 Careless October 26, 2017 at 4:39 pm

I am not “neo” but I thought we don’t actually have any history of immigrant groups “winding up being huge drags on federal resources not just now, but for generations.”

Yes, we do. Mexican Americans aren’t a new thing, you know. They’ve been here in significant numbers for a long time.

9 anon October 26, 2017 at 4:48 pm

See the full story on the Mexican Repatriation below.

And of course that was not at all the last time a US born citizen was treated as a “Mexican” instead.

10 neoliberalcuck October 26, 2017 at 3:41 pm

The batting average is already pretty great! Far higher than for our native-born. Why should we change the rules when the best rule, a preference for risk-taking, is already working so well?

There are many ways I’d like to change our system, but Canadian-style points is not one – seems totally unnecessary for the USA. Is this what you have in mind?

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11 JWatts October 26, 2017 at 4:44 pm

“The batting average is already pretty great! Far higher than for our native-born. Why should we change the rules when the best rule, a preference for risk-taking, is already working so well?”

Households headed by illegal immigrants have a higher percentage of welfare usage than the US median. A lot of biased articles point out that immigrants have a lower percentage on welfare, but that’s because they can’t legally get most forms of welfare.

Granted, just decreasing illegal immigrants would tend to resolve most of the issue. Legal immigrants, on average, do just fine.

12 chuck martel October 26, 2017 at 3:28 pm

” Some classes of low-skilled immigrants are going to wind up being huge drags on federal resources not just now, but for generations.”

Low-skilled (whatever that means) immigrants remain low-skilled forever, not being capable of acquiring education or even training, pretty much like the entire population of the US. And the federal resources they drag upon, protection by aircraft carriers and nuclear subs, interstate highways, FBI office buildings, radio frequency allocations, ethanol subsidies and sugar tariffs will be destroyed by their presence.

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13 Chip October 26, 2017 at 4:16 pm

A CIS study found that 3rd-generation Hispanics in the US were actually worse off than not only the first generation, but also their second-generation parents with regards to poverty, education and use of welfare.
https://cis.org/Immigrants-United-States-Profile-Americas-ForeignBorn-Population

Asian-American second- and third-gen immigrants do better even after starting at a much higher base.

The only way to understand the essential truth of these statistics is to appreciate that cultural backgrounds are very persistent influences.

I’ve said this before but the one reason why Democrats have embraced open borders is that subsequent generation Hispanics also become much stronger Dem voters than their parents, thereby helping to permanently shift America leftward.

A combination of unskilled migration from statist cultures and the seductive appeal of Dem policies that mix benefits with victimology, will not end well.

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14 anon October 26, 2017 at 4:44 pm

Two things, first that paper says it is not comparing parent-child, but contemporaneous 1st, 2nd, 3rd generation immigrants. Some tricky normalization is required there.

Second, these are not exactly immigrants.

https://en.m.wikipedia.org/wiki/Mexican_Repatriation

They were for many years, and some places still are, a dispossessed underclass.

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15 Potato October 26, 2017 at 7:10 pm

What. You’re claiming that all illegal immigrants are actually secretly the children of American citizens ?

Jesus Christ and I thought the right wing had the current lock down in insanity.

Jesus. Christ.

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16 anon October 26, 2017 at 7:21 pm

Chill.

I am saying that this map matters.

https://en.m.wikipedia.org/wiki/Mexican_Repatriation#/media/File%3AHispanic_population_in_the_United_States_and_the_former_Mexican-American_border.png

The red line is the old border. The vast majority of “Mexican Americans” live within the borders of old (pre-1848) Mexico.

That has a lot of historic implications. It makes that population different say than Swiss immigrants who arrive without that kind of history.

17 anon October 26, 2017 at 7:25 pm

Shorter: Nobody ever told a Swiss to go live (work, go to school) on “the Swiss side of town.”

18 anon October 27, 2017 at 7:58 am

“Some classes of low-skilled immigrants are going to wind up being huge drags on federal resources not just now, but for generations.”

The link, to the same things being said about Italians 100 years ago should not have been removed.

If you like historic cycles, there is one plain and clear.

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19 rayward October 26, 2017 at 12:55 pm

6. I wouldn’t expect Cowen to promote the Niskanen Center (given its historical roots), but Cowen keeps his own views close to the vest. Here’s a guest op/ed in today’s NYT by two more intellectuals affiliated with Niskanen that provides a more concrete indication of its philosophy. https://www.nytimes.com/2017/10/26/opinion/trump-made-the-swamp-worse-heres-how-to-drain-it.html By the way, Will Wilkinson writes so well in part because he took a break from the ism wars and got an MFA in creative writing. He no longer describes himself as “libertarian”. His philosophy has been described as “Rawlsekian”, a combination of John Rawls and von Hayek. Square that circle.

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20 The Other Jim October 26, 2017 at 1:28 pm

>Cowen keeps his own views close to the vest

Well, except when clearly posts them to his own blog.

Which is every single day.

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21 anon October 26, 2017 at 3:10 pm

Interestingly, Tyler liked a quite polar opposite yesterday:

https://twitter.com/tylercowen/status/923208398811881472

Rationalists on one side, and the irrationally resentful on the other.

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22 Art Deco October 26, 2017 at 5:15 pm

He no longer describes himself as “libertarian”.

He has a wife and child, now.

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23 jg October 27, 2017 at 4:25 am

> I wouldn’t expect Cowen to promote the Niskanen Center (given its historical roots)

He’s a member of the advisory board, https://niskanencenter.org/about/

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24 rayward October 26, 2017 at 1:14 pm

5. I am forever confusing Steve Landsburg with Steve Landesberg. The former, like the latter, has a dry sense of humor, as reflected in this blog post by Landsburg (it can’t be by Landesberg since he’s dead).

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25 The Other Jim October 26, 2017 at 1:34 pm

>More Krugman.

Dear God, man. WHY???

I’ve been in a great mood lately, so I thought I’d wade into the pool of Krugman’s idiocy, just so you don’t have to. And it had been awhile, so I wanted to see if he’d matured even a little over the past year.

Nope. Today’s “argument” is: we can’t possibly cut corporate taxes to benefit Americans because…. foreigners would benefit too! And Trump HATES foreigners, so why would he even do this? He must be too stupid to realize he is helping the foreigners he totally hates!!

You’re welcome. Have a good one.

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26 JWatts October 26, 2017 at 1:40 pm

It’s classic Krugman.

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27 Vladimir October 26, 2017 at 2:20 pm

I agree!

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28 JWatts October 26, 2017 at 1:35 pm

“A baby shortage sounds like an adorable misfortune of middling significance. Actually, it’s a critical problem. To expand their economies, countries need to expand their populations, particularly at a time of low productivity growth. ”

Why do first world countries need to “expand” their economies. Per Capita economic growth is good, but what’s the inherent virtue in raw GDP growth absent per capita growth? Why should I care?

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29 Potato October 26, 2017 at 7:13 pm

Yeah … what requires an exponentially increasing base to stay afloat ?

Something about Pharoahs….and like…schemes…and things built with limestone..

I’m sure we’ll be fine.

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30 Lurker October 27, 2017 at 5:04 am

THE ECONOMY MUST EXPAND!!!

Because the government cannot pay back its debt if it does not.

Economic expansion is necessary if the population is growing, but as I understand it that is slowing down, which should be a celebrated thing by anyone who has had to commute to work recently.

Economic expansion is necessary to achieve a higher standard of living, but at what point is the standard “good enough”? Until there is a Thai-Mex fusion restaurant within a few miles of everyone’s houses?

Economic expansion is necessary if I want my portfolio to last until I am 90 years old, but secretly I am not holding out for either.

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31 JWatts October 26, 2017 at 1:52 pm

“2. Derek Thompson is not yet a reactionary.”

Someone should point Mr. Thompson to the article above: “New Zealand Government to ban foreigners from buying property”.

I’m not sure how he can justify his assumption that restrictions on foreigners is right wing xenophobia with the adoption of even harsher policies by a Left wing government.

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32 Justin October 26, 2017 at 2:32 pm

Does Krugman not understand that in a global economy, pretty much any kind of good policy you enact will also benefit some people from outside your country? Funny to see him banging the nationalist drum when it’s convenient for his party.

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33 msgkings October 26, 2017 at 2:41 pm

“Funny to see him banging the nationalist drum when it’s convenient for his party.”

Yeah he’s like the only person that does that.

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34 Sam Haysom October 26, 2017 at 2:58 pm

I mean yea you do it too but Krugman has a noble prize whereas you have a bus pass.

I don’t hold you to the same standard. No one should.

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35 msgkings October 26, 2017 at 3:35 pm

Link?

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36 Sam Haysom October 26, 2017 at 3:52 pm
37 mgregoire October 26, 2017 at 3:27 pm

6. Give up on Utopia! Pay attention to what works! Next add respect for tradition as adaptive behaviour, and a preference for incrementalism and localism. Eventually arrive at Burkeanism.

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38 The Anti-Gnostic October 26, 2017 at 4:12 pm

#2 – Diversity, liberty, or equality; choose one.

Diversity is perforce incompatible with equality. Why is this so hard to understand? Different people are different and want different things, and have different statistical means in numerous areas. That’s what separate countries are for.

Equality itself does not exist anywhere in the physical or biological realms. Liberalism is a long tantrum against reality.

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39 Steven Kopits October 26, 2017 at 4:23 pm

Here are where my numbers come out:

Assumptions
– Nominal GDP: $19 trillion
– Effective corporate tax rate: 18.6% (equal to 35% nominal)
– Proposed new tax rate, nominal, 25%
– Corporate taxes as share of GDP: 1.6%; in dollars, cc $300 bn

Thus,
1/(1-t) = 1.23, not 1.5, because effective, not nominal, rates would seem to matter in terms of economic effect

A reduction in the tax rate to 25% results in an assumed effective tax rate of 13.3%, and a reduction in total corporate taxes paid to cc $215 bn.

Thus, tax savings equal $85 bn on initial taxes paid of $300 bn, which increases profits by 5.3% immediately, with valuations presumed to follow pari passu (ie, DOW to 24,600).

Labor constitutes 60% of the economy, which translates into $13.3 trillion. The wage effect is 1.23 x the savings of $85 bn, or $105 bn. This increases workers wages, to the extent such savings affect workers as a class (as opposed to the workers in question at those companies) by increasing wages 0.9% over the long run.

Thus, corporations see an immediate increase in profits of 5.3% and workers see an eventual gain of 0.9%.

As a practical matter, it looks to me like Summers is right. For corporations, there is an immediate benefit to the bottom line. For workers, there is some gain over time which will essentially be washed out as noise.

Or do I have this wrong?

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40 JWatts October 26, 2017 at 4:48 pm

Has anyone done any study on the likelihood of International HQ’s and American companies parking money overseas? It seems likely that the US would have less HQ transfers to foreign countries if our taxes weren’t significantly higher.

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41 Meets October 26, 2017 at 8:38 pm

In the long run, that benefit passes on to workers.

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42 Vivian Darkbloom October 27, 2017 at 2:56 am

Steve,

The tax proposal contains a lot more than just rate reduction. I think this has to be figured into your effective tax rate calculation even though I understand your explicit assumption. Because of many other anticipated provisions in the same bill, I would not expect the “effective rate” to be as low as you assume.

One thing may significantly alter the calculation, particularly the short versus long-term calculation. The plan supposedly provides that unrepatriated foreign earnings of US corporations (+/- $2 trillion) will be subject to a one-time tax at a currently undisclosed rate (certainly lower than 35 percent it would be safe to assume). Corporations may have a few years to pay any tax due. The proposal doesn’t simply have tax accounting implications, it would result in considerable actual repatriation of unrestricted cash to the US. I say “unrestricted” because current law effectively precludes any “investment in US property” with such funds (e.g., purchase of other US companies, financing of dividends, purchase of US plant, equipment, etc., even though the money can sit in a US bank account). I would expect, contrary to your calculation and Summers’ prediction of “an immediate benefit to the bottom line”, that the net result is no net corporate tax saved in the first couple (few?) years, but signficant repatriation of unrestricted cash. Would such a provision significantly change your short versus long-term view?

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43 Art Deco October 26, 2017 at 5:12 pm

The Niskanen Center employs a ‘vice president for policy’ who lives in Iowa and has no background in statistics. (He does, however, have an MFA). That would tend to neutralize any inclination to donate a few bucks to Niskanen.

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44 MattW October 26, 2017 at 5:36 pm
45 d October 26, 2017 at 5:54 pm

2. It’s absurd and intellectually dishonest to talk about xenophobia without dealing with the “irrational fear” part implied by the suffix “phobia.”

What do the data say about various immigrant groups, their behavior patterns and their effect on the society, welfare and social service use, voting patterns, criminality, their open hostility to the white majority, their net effect on American workers, schools, job market, the size and shape of government, Putnam’s findings, etc.

Calling something xenophobic implies none of or almost none of those things are negative.

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46 Judah Benjamin Hur October 26, 2017 at 6:37 pm

I wonder if Tyler Cowen has read this article:

“The problem of doctors’ salaries
An economist argues that American doctors get paid too much—and offers some bold ideas on what to do about it.”

http://www.politico.com/agenda/story/2017/10/25/doctors-salaries-pay-disparities-000557

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47 TSB October 26, 2017 at 9:08 pm

Thomson underrates Australia, but more particularly does not distinguish between reactions to stable legal immigration, consisting of people patiently and politely applying for entrance; and illegal immigration and sudden influxes of self-directed refugees, consisting of people kicking down the gates and climbing through the windows. Scelerophibia isn’t xenophobia.

Except in New Zealand. The Arden government is already right up there with the USA’s and the Philippiness for immediate weirdness.

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48 Sandia October 26, 2017 at 11:10 pm

#6 – A serial idealogue talks himself into having a new non-idealogical idealogy, and in the process uses a lot of words to try to convince us that this represents a change in his need to be an idealogue.

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49 Sandia October 26, 2017 at 11:11 pm

#6 – A serial ideologue talks himself into having a new non-ideological idealogy, and in the process uses a lot of words to try to convince us that this represents a change in his need to be an ideologue.

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