Tuesday assorted links

by on November 14, 2017 at 12:35 pm in Uncategorized | Permalink

1. Average is over, installment #6372.

2. Does the home mortgage deduction limit the demand for (other) redistribution?

3. Corporate influence in World Bank lending.

4. Why is everyone interested in Djibouti?

5. “What sorts of workplace-related issues have been suppressed by 3-4 decades of a tough environment for workers?”  More here from Conor Sen.

6. “Nearly every other city in California performs better than San Francisco in educating low-income students, and it’s not like most of the cities are knocking it out of the park.” Link here.

7. The Trump administration is shifting back toward fee-for-service health payments (NYT).

8. IV uh-oh.

1 Anonymous November 14, 2017 at 1:07 pm

“2. Does the home mortgage deduction limit the demand for (other) redistribution?”

Didn’t read the link but based on the fact that it’s the mortgage interest deduction I’m assuming redistribution refers to redistribution toward the rich.

7. “Cities like Denver, Washington D.C., and New Orleans are proving that there’s a better way to do public education.

Denver is continuing to deliver results over ten years after its reforms began. Washington D.C. has seen its scores skyrocket on the Nation’s Assessment of Educational Progress. New Orleans achieved amongst the greatest educational gains that the nation has recently seen.”

Denver’s results improved on state tests.(It’s quite common for state test scores to increase even as NAEP or SAT scores remain stagnant, fat thumbs are being placed on the scale.) In DC, gentrification has led to an decrease in the Black population, while the New Orleans miracle occurred due to a similar demographic shift.(Caused in that cause by a hurricane.)

2 Jeff R November 14, 2017 at 1:21 pm

#5: “I wonder if it’s no coincidence that NFL protests, Weinstein-catalyzed wave is occurring as the labor market gets structurally tight.”

What? Come on. Hollywood and the NFL are clearly unique segments of the labor market; what happens in the wider economy really has no effect on them.

3 Greg November 18, 2017 at 12:04 pm

Sure. Hollywood, however, is mirroring the general tightness of the labor market due to the huge expansion in TV and movie production over the last 5-10 years. Peak TV.

4 JonFraz November 14, 2017 at 1:30 pm

Re: …and Communism conquers Asia.

Huh? Neither China nor Vietnam are remotely Communist– at most they are CINOs (Communist in name only). That also applies to North Korea which is in fact just a nasty old absolutist monarchy with delusions of ideological grandeur. Mao is spinning in his tomb over all of it.

5 A Truth Seeker November 14, 2017 at 2:20 pm

Yet, the Chinese red bandits follow the Maoist aggressive line renewing their hostility against India. The red bandits invaded Vietnam in 1979 without any provokation. Red China behaves as a Mongol horde and intends to conquer all Asia.

6 Real Talk November 14, 2017 at 2:22 pm

Your medication has worn off.

7 A Truth Seeker November 14, 2017 at 2:30 pm

No, it hasn’t. I use no medication whatsoever, but antiviral drugs to fight the flu.

8 Guy Makiavelli November 14, 2017 at 1:34 pm

#1 if this guy were 40 he wouldn’t even be getting interviews

9 Just Another MR Commentor November 14, 2017 at 2:12 pm


10 Matt November 14, 2017 at 3:54 pm

Not true, at least not in my case. Although, it depends on the skillset. Hotshot coders are a dime a dozen and if that’s all you are at 40 then yeah. Interviews may be scarce. Get some DevOps, Architecture, and leadership experience, and suddenly age stops being so much of a problem. Again, in the very limited sample set of me and a some friends/contacts/associates of mine

11 Guy Makiavelli November 14, 2017 at 4:25 pm

> Get some DevOps, Architecture, and leadership experience

Leadership experience is the main one. But then that makes you part of the managerial class – not a knowledge worker.

12 Matt November 15, 2017 at 7:31 am

At some point, sure. But IME it’s to a lesser degree in the software development role. Various lead positions that I’ve seen are still hands on, and still require you to know the trade (and yes- it’s a trade) inside and out. I’ve seen the “Master Mason” analogy a couple of times, and it’s not that far off the mark.

13 Dan Lavatan-Jeltz November 14, 2017 at 8:13 pm

I doubt it, it seems like those companies are really desperate to put buts in seats. If you have to study for the interview you are doing it wrong, and you should know which position pays the most so you don’t have to spend a week d*cking around (which he probably didn’t get paid for and would need to subtract from his salary which adjusted for cost of living probably isn’t very impressive).

14 Matt November 15, 2017 at 7:34 am

” and you should know which position pays the most so you don’t have to spend a week d*cking around”

Salary isn’t the only part of compensation.

15 Greg November 18, 2017 at 12:10 pm

This is the most shortsighted comment I’ve read recently. Getting multiple job offers, especially at top tier companies, probably enables you to get at least 20% higher compensation at the next job. Everything else being equal, that carries over to later jobs too. So the couple of months of preparation and the week of interviewing probably increase his lifetime earnings by a few hundred K. Your sour grapes are showing.

16 Fat Ted November 14, 2017 at 1:40 pm

#1 – that’s not how “annealing” works anyway. “was being annealed” doesn’t make sense. Annealing is a process – not a single-step description. My interest in his story has been quenched.

17 Matt November 14, 2017 at 3:44 pm

Annealing : “heat (metal or glass) and allow it to cool slowly, *in order to remove internal stresses and toughen it.*” [Emphasis mine]

Yeah. I’d hate to have that happen to my skillset.

18 dan1111 November 14, 2017 at 1:46 pm

You read it as pretentious; I read it as the writing of a guy who is an engineer and a non-native English speaker.

19 Just Another MR Commentor November 14, 2017 at 2:11 pm

You’re a moron if you read it like that then.

20 dan1111 November 14, 2017 at 2:45 pm

You win. I concede to the overwhelming logical force of your argument.

21 Just Another MR Commentor November 14, 2017 at 3:29 pm

I don’t mean to upset you too much, I’m just saying don’t be a doofus. There’s enough of those around here already.

22 Viking November 14, 2017 at 2:04 pm

“2. Does the home mortgage deduction limit the demand for (other) redistribution?”

#2 has an arrogant wording, and Prof. Cowen knows his question does not make logical sense.

First, why does it not make logical sense? Because the recipient of the home mortgage interest deduction are more likely to be redistribution payers than payees.

Second, interest deduction is like property zoning, it may not make sense, but it is part of the price setting process. So in fact, under the effective market hypothesis, with introduction of mortgage interest deduction, the prices of houses will rise to a level that causes total cost of ownership to be the same as before the deduction was introduced. Thus, current house owners were already paying a for premium purchase price because of the existence of the deduction.

The home interest deduction, like zoning, has very strong defenders, because the opposition is quite obtuse about the injustices that can be caused by a sudden cancellation of these (irrational) rules that are already built into the price.

23 anon November 14, 2017 at 2:08 pm

#6) I don’t know but I wonder how much of an impact the particular demographic situation of SF’s poor families with children is. My understanding is that a much greater percentage of them live in public / subsidized housing compared to the black/Hispanic poor in other CA cities, because of the rental market extremes in SF. In some places, families in public housing aren’t much different from the rest of poor families, but in SF things are a lot worse and extreme. You can read stories of life in SF public housing in news articles. Consider the crime rate of SF , which like Oakland, is extreme for its demographics of poverty/race… compared to other cities of similar percentages of poverty and racial makeup. Is it true that the very bottom of society that haven’t really moved from SF, while the ‘working poor’ have mostly left?

Conversely, I wouldn’t be surprised if NYC’s poor black children do better than average, because the black population in NYC is different (immigrants) from the national average.

The stats sometimes miss the differences within a sampled population… my point is that not all poor people of [insert race] are the same in every metro area in social indicators. Seeing a statistical discrepancy and automatically blaming the school system seems lazy and biased.

24 Dain November 14, 2017 at 4:23 pm

But the kids in SF’s few charter schools do better, apparently. On par with non-SF black and Latino students.

25 anon November 15, 2017 at 1:56 pm

Is the selection random enough, given such a small portion of the student body? If it’s not random who gets into a charter school, the differences will be amplified if the charter population is smaller. I’m not familiar with the current status on this. Years ago the ‘random’ selection could still be influenced by things like the more ambitious parents being more likely to respond to being offered.

26 Floccina November 14, 2017 at 5:10 pm

I agree especially with this: “Conversely, I wouldn’t be surprised if NYC’s poor black children do better than average, because the black population in NYC is different (immigrants) from the national average.”

Selection problems.

27 Floccina November 14, 2017 at 5:15 pm

But Democrats do seem surprisingly bad at heading up city ans state Governments.

28 Dick the Butcher November 14, 2017 at 2:18 pm

#2 – U of Chicago politics: The study of politics – deceit and coercion.

Only read the extract. It’s really not economics. It concerns the electorate’s (behavioral – based on deceit) decision-making processes relative to the mortgage interest deduction and how that may affect support for “redistributive taxation.”

The majority (57%) of Americans either rent or own with no debt their homes. As of July 2017, 63.9%, fewer than two-thirds of Americans, own homes. And, a significant portion (say one-third) of homeowners have no mortgage debt. Two-thirds of 64% is 43% of Americans owe mortgage debt on their homes.

Two questions: Is “redistributive taxation” code for higher taxes/”eat the rich?” Is the right purpose of taxation the collection of necessary monies to fund acts/items that benefit (nearly) all citizens, not to tax Peter to pay Paul?

Anyhow, government is the common agreement we make among ourselves to in unison commit crimes.

In conclusion, taxation is theft.

29 Viking November 14, 2017 at 2:25 pm

First: Amen.

Second, even to homeowners that own their home free and clear, suddenly abolishing mortgage interest deductions would have a detrimental value on their home value. Would not matter if they are planning to stay forever, but sometimes that is not feasible or desirable.

30 Dick the Bitcher November 14, 2017 at 5:39 pm

Truth. Likely, a large number of taxpayers will be too angry to be sold on more redistributive taxes.

The idiot Congress (redundant see Twain) apparently only looked at the CBO read and listened to their corporate, Wall Street, Chamber of Commerce, etc. paymasters.

Who can say what will be the adverse impacts on housing/real estate prices; consequently on construction industries, home ownership rates, the financial services industry, etc.? The $500,000 mortgage limit on deducting mortgage interest (down from $1 million); the end of second home tax deductibility; the $10,000 limitation on state and local taxes will do material harm, especially in several already near-bankrupt high-tax blue states.

My “jury” is out on the tax bill. I will lose almost $5,000 in local, real estate tax deductions; I’m fairly sure I lose (the wife and I) about $8,000 with the end of the personal exemption – it’s being ended, right? My mortgages are below $500,000; one below $40,000. Unless my rates are way down, I’m paying more.

In addition to taxation being theft, the power to tax is the power to destroy. That principle may have been behind deductibility of sate and local taxes, tax exemptions for churches/religions, etc. They amended the Constitution to institute the individual income tax thus making novelists, fabulists, and criminals of millions of Americans.

31 JWatts November 14, 2017 at 2:20 pm

I’m sure Brazil will save us all ! 😉

32 A Truth Seeker November 14, 2017 at 2:23 pm

Yes exactly! The Prophet Bandarra has written that Brazil will rise like a lion and cruxh the serpent with its heel.

33 A Truth Seeker November 14, 2017 at 2:28 pm

Stop your impersonating, it is not funny. We are talking about civilization’s survival.

34 msgkings November 14, 2017 at 5:11 pm

It’s actually really funny. Especially since I can’t tell you apart.

35 A Truth Seeker November 14, 2017 at 2:28 pm

You would not need to be saved if you were not greed Almighty Dollar worshippers who exchange your freedom and dignity for a mess of pottage and cheap underwear and toys. Make no mistake, Brazil is ready to act unilaterally if necessary. As Mr Salazar said, “alone, proudly alone!”.

36 JWatts November 14, 2017 at 3:37 pm

” As Mr Salazar said, “alone, proudly alone!”.”

So you have no pride, when acting in concert with others? Well then maybe the world should continue to ignore Brazil.

37 A Truth Seeker November 14, 2017 at 4:09 pm

The world does not ignore Brazil, it has its eye on us and yearns for our leadership. The point is, one must defend what is right, nit what is popular. As Chinese commumist leader Mao Zedong said, rebelling is righteous.

38 JWatts November 14, 2017 at 5:17 pm

So, I’m confused. Is Brazil going to do something and if so what? And if not, then why are you indicating they will do something? Or is Brazil impotent, desiring to do something, but not actually capable?

39 Sorry to ask November 14, 2017 at 5:18 pm

What is ‘Brazil’?

40 mkt42 November 14, 2017 at 2:51 pm

8: Hmm. All I have to go on is the abstract, which seems to say use OLS instead of IV? I would’ve expected it to say that all the estimates are unreliable if they lack good instruments, but it says that OLS is not “substantively biased”. What about other techniques such as propensity scoring?

41 Matt November 14, 2017 at 3:49 pm

6: “Unlike the aforementioned cities, San Francisco Unified is extremely unwelcoming to high-quality charter schools.”

Democrats have a tendency toward hostility to charter and private schools. SF is highly Democrat. This is not terribly surprising. The question of school performance is highly complex, and I get suspicious of anyone trying to boil it down to one or two things, especially the public vs charter vs private vs home school debate. But if the author is at all confused about SF’s hostility toward charter schools, the answer to that is far simpler.

42 poorlando November 14, 2017 at 5:21 pm

Poor Democrats are very hostile to private school while rich Democrats do whatever they can to send their kids there.

43 Matt November 15, 2017 at 7:39 am

While still being hostile to non-public schools. As it turns out, people can be very good at justifying doing things that are contrary to their professed beliefs and opinions.

44 chuck martel November 14, 2017 at 4:14 pm
45 mobile November 16, 2017 at 10:34 am

Q. What is the difference between white collar and blue collar?

A. When you’re white collar, you wash your hands after you go to the bathroom.

46 BC November 14, 2017 at 5:08 pm

#1) Good tonic for anyone that still believes there is no such thing as meritocracy. In fact, “Average is over,” is synonymous with, “The world will become more meritocratic.” Also, please try to convince me that this gentleman would be equally ambitious in a socialist world.

47 Just Another MR Commentor November 14, 2017 at 6:22 pm

“Also, please try to convince me that this gentleman would be equally ambitious in a socialist world.”

But you know what, what good is he even doing actually? I read the thread, he went to work for AirBnb? What will he actually be doing? Developing better targeted advertisements?

48 Dan Lavatan-Jeltz November 14, 2017 at 8:19 pm

AirBnb is actually the least stupid of those companies, and thankfully not ‘advertiser’ supported. Maybe he can make it so all the Bnbs show up on the map at the same time or feedback requests get sent during the day in whatever time zone you are in. Or maybe he can give a discount if your stay is being recorded by Nazis or something.

49 Massimo Heitor November 14, 2017 at 11:06 pm

AirBnb expects $2.8B in revenue in 2017. That’s $2.8B that others are voluntarily paying them. They have to be providing value or others wouldn’t buy their serivce. They hire a ton of software developers. HomeAway is a similar company with large profits and tons of staff on salary.

50 Just Another MR Commentor November 15, 2017 at 4:47 am

I’ve used AirBnB myself that’s not what I’m saying. Given that their core service is already well established, what more could they possibly develop that’s much beyond better tweaking and targeting of promotions or whatever? Their effectively just marketing/advertising firms at this point.

51 Greg November 18, 2017 at 12:15 pm

Luckily, the market economy doesn’t depend on whether a random bystander can come up with valuable things for a company to do.

52 A Truth Seeker November 14, 2017 at 6:58 pm

Does it matter? One thing is farmers hidding their grain and killing their cattle or no one caring about building a decent waxing machine or refrigerator, but Silicon Valley… Does the world really need Facebooks?

53 anon November 15, 2017 at 1:58 pm

In countries that don’t even have proper land line infrastructure for phone or internet service, what devices and software do you think people use to communicate?

54 Zach November 14, 2017 at 5:48 pm

“What sorts of workplace-related issues have been suppressed by 3-4 decades of a tough environment for workers?”

General dissatisfaction with the amount of time and money required to enter the workforce. I get the impression that there are a lot of people who feel slightly ripped off by their college / graduate school / professional school, but didn’t see any alternatives. Tighten the labor market a little, and suddenly those folks are going to have some choices that they haven’t had in a while.

55 Just Another MR Commentor November 14, 2017 at 5:50 pm

I feel a lot more than slightly ripped off.

56 A Truth Seeker November 14, 2017 at 6:20 pm

Oppose the red bandits!

57 Oh my god November 14, 2017 at 9:23 pm

Would you please shut the f*** up?

58 Hana November 14, 2017 at 9:54 pm

Was it Shiekh Djibouti? It could have been. I’m zapped out.

59 TR5749 November 14, 2017 at 10:51 pm

#4 Djibouti is also the headquarters of the famed French Foreign Legion

60 Massimo Heitor November 14, 2017 at 11:31 pm

#7: Is there a consensus to move health service away from fee-for-service to some abstract measure of quality?

One hopeful point of reducing health care costs is Amazon doing prescription drugs.

61 mobile November 16, 2017 at 9:56 am

San Francisco is not any good at educating the not poor kids, either. Middle income parents who care about such things move to the suburbs as soon as their children reach school age, and the high income parents enroll their kids into the many elite institutions of lower education throughout the city.

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