Current Affairs

The town of Plattsburgh, New York, has become the first in the US to place a moratorium on cryptocurrency mining. It’s not an outright ban, at least not yet — it doesn’t affect miners currently operating in the city, just new ones looking to set up shop, and it’s only in place for 18 months.

Why Plattsburgh, New York? It’s simple: the small town has the “cheapest electricity in the world,” as Mayor Colin Read told Motherboard. Mining involves using high powered computers to solve complex problems, and thus be rewarded with cryptocurrency. It generates a lot of heat and uses an inordinate amount of electricity. It makes sense that these mining enterprises would look for places with inexpensive electricity. The problem is that it’s resulted in higher electric bills for everyone else in the town.

Here is the full story, via the excellent Samir Varma.

Niger (U.S.) fact of the day

by on March 15, 2018 at 2:33 am in Current Affairs | Permalink

Green Berets working with government forces in Niger killed 11 Islamic State militants in a firefight in December, the American military acknowledged for the first time on Wednesday. The battle occurred two months after four United States soldiers died in an ambush in another part of Niger — and after senior commanders had imposed stricter limits on military missions in the West African country.

No American or Nigerien forces were harmed in the December gun battle. But the combat — along with at least 10 other previously unreported attacks on American troops in West Africa between 2015 and 2017 — indicates that the deadly Oct. 4 ambush was not an isolated episode in a nation where the United States is building a major drone base.

Here is the full NYT story, another mini-war it seems.  Probably I’ll be doing a wee bit more Africa coverage on MR than has typically been the case.

The very very highly rated but still underrated Chris Blattman was in top form, here is the transcript and audio.  We had a chance to do this one when he was in town for a week.  We talked about the problem with cash transfers, violence, child soldiers, charter cities, Rene Girard, how to do an Africa trip, Battlestar Galactica, why Ethiopia is growing rapidly, why civil war has become less common, why Colombia and the New World have been so violent, the mysteries of Botswana, and Chris’s favorite Australian TV show, among other topics, including of course the Chris Blattman production function.  Here is one excerpt:

BLATTMAN: There’s this famous paper on Vietnam veterans in the US where they find that being conscripted into fighting in Vietnam had positive effects on the wages of blacks and negative effects on the wages of whites. The reason was, it was really down to, what was your alternative labor market and training experience in the absence of this war?

We found something similar in Uganda, something eerily familiar, which is that the women economically weren’t so worse off. I wouldn’t say they were better off, but they weren’t necessarily affected adversely in an economic sense — they were adversely affected in other ways 5 or 10 or 15 years down the road — while the men were.

It spoke to just how terrible women’s options were. Being conscripted and abducted to be a rebel wife, to some degree, wasn’t that different than what your marriage opportunities looked like if there wasn’t a war.

For men, it just meant that you were out of the civilian labor market, getting a bunch of skills that had turned out not to be very useful. It was bad for them. A different war, a different context, and a different labor market, and that can switch.

COWEN: How many northern Ugandan child soldiers have you interviewed?

BLATTMAN: A few hundred. At least a couple hundred, maybe more. It depends if you count someone who’s involved for a month versus two years. Certainly, the long, long-term soldiers who were there for many, many years are few, maybe only a couple dozen.

COWEN: Those contacts, those conversations, how have they changed your outlook on life emotionally, intellectually, otherwise?


COWEN: True or false, most humans are bad at violence?

BLATTMAN: I think they learn quickly. Probably they’re bad at first.

COWEN: In the micro evidence on violence, and the more individual-level evidence, and then finally macro evidence — like will there be a civil war? — do you think there’s ultimately an overarching theory that ties these all together? Or are they just separate levels of investigation, where you have empirical results, and they stand somewhat separate, and they’ll always be distinct areas?

How optimistic are you about a grand unified theory of violence?

BLATTMAN: I think these individual, how I react in the moment, fight-or-flight-type mechanisms are quite distinct from the way that small groups or large groups or nations go to war. But once you get beyond that to the level of small groups and larger groups and nations, I see a lot of unity in the theory.

Do read or listen to the whole thing.  By the way, he says the Canadian political system is overrated.

Because of measurement issues and data limitations, Mexican Americans in particular and Hispanic Americans in general probably have experienced significantly more socioeconomic progress beyond the second generation than available data indicate. Even so, it may take longer for their descendants to integrate fully into the American mainstream than it did for the descendants of the European immigrants who arrived near the turn of the twentieth century.

That is from a new NBER working paper by Brian Duncan and Stephen J. Trejo.

That is the topic of my latest Bloomberg column, they chose a nice photo.  Here is an excerpt:

If North Korea and the U.S. simply talk, and nothing comes of it, that raises the status of Kim Jong Un, who then would keep improving his missiles anyway. So if the U.S. goes ahead with the talks, you might rationally infer that the risk of war has gone up. Furthermore, there is the risk that Trump or Kim could feel humiliated by a summit that yielded nothing, again raising the chance of war or miscalculation leading to disaster.

In chess there is a concept known as “zugzwang,” or “compulsion to move.” It’s used to describe the position of a player with no good options who would prefer to do nothing at all. That’s not a possibility in chess, so the unfortunate player faces a situation in which all roads involve a deterioration of his position.

There is much more at the link, only one scenario being even somewhat optimistic.

In this study, we argue that the perceived polarization of Americans along party lines is partially an artifact of the low response rates that characterize contemporary surveys. People who agree to participate in opinion surveys are more informed, involved, and opinionated about the political process and therefore hold stronger, more meaningful, and partisan political attitudes. This motivational discrepancy generates a bias in survey research that may amplify evidence of party polarization in the mass public. We test the association between response rates and measures of polarization using individual-level data from Pew surveys from 2004 to 2014 and American National Election Studies from 1984 to 2012. Our empirical evidence demonstrates a significant decline in unit response that is associated with an increase in the percentage of politically active, partisan, and polarized individuals in these surveys. This produces evidence of dissensus that, on some issues, may be stronger than exists in reality.

That is from a forthcoming piece by Cavari and Freedman in The Journal of Politics.  For the pointer I thank an anonymous correspondent.

And via Nathan, here is a relevant comment.

Educators in Britain, after decades spent in a collective effort to minimize risk, are now, cautiously, getting into the business of providing it.

Out went the plastic playhouses and in came the dicey stuff: stacks of two-by-fours, crates and loose bricks. The schoolyard got a mud pit, a tire swing, log stumps and workbenches with hammers and saws.

“We thought, how can we bring that element of risk into your everyday environment?” said Leah Morris, who manages the early-years program at the school in Shoeburyness in southeast Britain. “We were looking at, OK, so we’ve got a sand pit, what can we add to the sand pit to make it more risky?”

Now, Morris says, “we have fires, we use knives, saws, different tools,” all used under adult supervision. Indoors, scissors abound, and so do sharp-edged tape dispensers (“they normally only cut themselves once,” she says).

Limited risks are increasingly cast by experts as an experience essential to childhood development, useful in building resilience and grit.

I suppose I am skeptical of this approach, as it may lead to harm and furthermore the benefits of risk have to arise more organically.  It will in any case be interesting to see how the public digests these changes as they play out in the lives of children.

Here is the full story by Ellen Barry.  In any case, there is also a bingo revival in Britain, is that a sign of renewed passivity?

Ghana fact of the day

by on March 11, 2018 at 12:57 pm in Current Affairs, Economics | Permalink

After a sluggish period, Ghana seems to be doing well again:

…Ghana is on track to make a remarkable claim for a country mired in poverty not long ago: It is likely to have one of the world’s fastest-growing economies this year, according to the World Bank, the African Development Bank, the International Monetary Fund and the Brookings Institution.

Its projected growth in 2018, between 8.3 and 8.9 percent, might outpace even India, with its booming tech sector, and Ethiopia, which over the last decade has been one of Africa’s fastest-growing economies thanks to expanding agricultural production and coffee exports.

According to the I.M.F.’s projections, only Bhutan, with a minuscule economy, and Libya, whose war-ravaged economy plunged in recent years, may have a higher rate of growth this year.

The danger is that commodities — oil and cocoa — are driving the boom.  Here is more from Tim McDonnell at the NYT.

The show so far, an update

by on March 6, 2018 at 6:57 pm in Current Affairs | Permalink

Tariffs are bad, the anti-tariff Gary Cohn was good.  Cohn being gone is bad.  Bad relative to good has gone up.  That is bad.

Here is one account of what happened.

That is the topic of my latest Bloomberg column, here is one excerpt:

My radical proposal is therefore for the federal government to pre-empt as much occupational licensing as is possible. That’s right, these functions would be taken away from the state and local governments.

Unfortunately, I don’t expect the federal bureaucracy to usher in the reign of Milton Friedman’s Chicago School economics. But the federal regulatory process would likely pay less heed to local special interests, and it would produce a more homogenized and less idiosyncratic body of regulatory law more geared toward the most important cases, such as medicine and child care. The federal government is less likely than many state and local governments to obsess over licensing rules for fortune tellers, florists and athletic trainers.

A federal approach to these regulations would also bring standardization and uniformity across state lines, making it easier to move from one part of the country to another, and helping restore the great American tradition of mobility. As it stands now, imagine yours is a military family and you are transferred every few years or so, and your spouse works in a profession that would require relicensing. What justification could there be for such a hardship and inconvenience?

I consider how legally difficult this would be, and toward the end I argue:

If my idea sounds too ambitious, a smaller first step against anti-competitive licensing would have state governments pre-empt requirements at the city level, as Tennessee did last year. That doesn’t raise major constitutional issues, and at least it limits the possibility that American cities become a crazy patchwork of mobility-limiting interventions.

Keep in mind that the alternative to my suggestion is not the status quo but rather a regime where occupational licensing becomes progressively worse at multiple levels of government.

Do read the whole thing.

“They do what they want,” she says. “After the earthquake you would see [foreign workers] asking to have sex in exchange for supplies. I never did it, but I saw some people who did.”

A UN report, published in May 2015, found that members of its peacekeeping mission in Haiti traded sex for aid with more than 225 women between 2008 and 2014.

That is from Joe Parkin Daniels at The Guardian.

The National Assembly on Tuesday set in motion a process to amend the Constitution so as to allow for the expropriation of land without compensation.

The motion, brought by the EFF leader Julius Malema, was adopted with a vote of 241 in support, and 83 against.

The only parties who did not support the motion were the DA, Freedom Front Plus, Cope and the ACDP.

The matter will now be referred to the Constitutional Review Committee which must report back to Parliament by August 30.

That is from a South African website, and the story really does seem to be true.  Yet reputable Western outlets do not seem to have much interest in reporting on this, except for this piece on Quartz.

There has been more coverage of Cape Town possibly running out of water.  I do understand that foreign troubles often look worse from a distance, but still in an era when emerging economies have been booming, including in most of Africa, it is hard not to be put off by these developments.  I am not sure how to interpret the data quality issues, but it is not obvious that the median wage has increased since the fall of apartheid.

Politico is running an excerpt from my essay in the new Cass Sunstein book.  Here is one opening bit:

My argument is pretty simple: American fascism cannot happen anymore because the American government is so large and unwieldy. It is simply too hard for the fascists, or for that matter other radical groups, to seize control of. No matter who is elected, the fascists cannot control the bureaucracy, they cannot control all the branches of American government, they cannot control the judiciary, they cannot control semi-independent institutions such as the Federal Reserve, and they cannot control what is sometimes called “the deep state.” The net result is they simply can’t control enough of the modern state to steer it in a fascist direction.

…Surely it ought to give us pause that the major instances of Western fascism came right after a time when government was relatively small, and not too long after the heyday of classical liberalism in Europe, namely the late 19th century. No, I am not blaming classical liberalism for Nazism, but it is simply a fact that it is easier to take over a smaller and simpler state than it is to commandeer one of today’s sprawling bureaucracies.

…the greater focus of the night watchman state, for all its virtues, is part of the reason why it is easy to take over. There is a clearly defined center of power and a clearly defined set of lines of authority; furthermore, the main activity of the state is to enforce property rights through violence or the threat of violence. That means such a state will predominantly comprise policemen, soldiers, possibly border authorities, Coast Guard employees and others in related support services. The culture and ethos of such a state is likely to be relatively masculine and also relatively martial and tolerant of a certain amount of risk, and indeed violence. The state will be full of people who are used to the idea of applying force to achieve social ends, even if, under night watchman assumptions, those deployments of force are for the most part justified.

Do read the whole thing, the article has points of interest, and the essay in the book even more.

“There is not an epidemic of school shootings,” he said, adding that more kids are killed each year from pool drownings or bicycle accidents.

James Alan Fox, the Lipman Family Professor of Criminology, Law, and Public Policy at Northeastern.

School shootings are actually down since the 1990s (with a lot of variability). Fewer students are carrying weapons to school and fewer students report having easy access to guns (data here).

It’s been said that we live in an increasingly divided media universe but on many issues I think we live in an increasingly uniform media universe. Social media is so ubiquitous and the same things sell so widely that I suspect the collective consciousness is less fragmentary than in the past. Does anyone not know about Parkland? Contrary to common wisdom, mass shootings also occur in European countries. I suspect, however, that the Finnish media don’t cover German shootings as frequently as shootings in Florida are covered in Nebraska–as a result the larger the media-market the greater the extent of availability bias. In other words, the larger the media market the greater the over-estimation of rare but vivid events. (Someone should test this theory.)

I worry about turning schools into prisons and what kinds of citizens this will create. My letter to my son’s high school principal was sent before the recent shootings but I stand by it now more than ever:

Dear Principal _____,

Thank you for requesting feedback about the installation of interior cameras at the high school. I am against the use of cameras. I visited the school recently to pick up my son and it was like visiting a prison. A police car often sits outside the school and upon entry a security guard directs visitors to the main office where the visitor’s drivers license is scanned and information including date of birth is collected (is this information checked against other records and kept in a database for future reference? It’s unclear). The visitor is then photographed and issued a photo pass. I found the experience oppressive. Adding cameras will only add to the prison-like atmosphere. The response, of course, will be that these measures are necessary for “safety.” As with security measures at the airports I doubt that these measures increase actual safety, instead they are security theater, a play that we put on that looks like security but really is not.

Moreover, the truth is that American children have never been safer than they are today. Overall youth mortality (ages 5-14) has fallen from 60 per 100,000 in 1950 to 13.1 per 100,000 today (CDC, Vital Statistics). Yet we hide in gated communities, homes and schools as never before.

When we surround our students with security we are implicitly telling them that the world is dangerous; we are whispering in their ear, ‘be afraid, do not venture out, take no risks.’ When going to school requires police, security guards and cameras how can I encourage my child to travel to foreign countries, to seek new experiences, to meet people of different faiths, beliefs and backgrounds? When my child leaves school how will the atmosphere of fear that he has grown up in affect his view of the world and the choices he will make as a citizen in our democracy? School teaches more than words in books.

Yours sincerely,

Alex Tabarrok

California regulators have given the green light to truly driverless cars.

The state’s Department of Motor Vehicles said Monday that it was eliminating a requirement for autonomous vehicles to have a person in the driver’s seat to take over in the event of an emergency. The new rule goes into effect on April 2.

California has given 50 companies a license to test self-driving vehicles in the state. The new rules also require companies to be able to operate the vehicle remotely — a bit like a flying military drone — and communicate with law enforcement and other drivers when something goes wrong.

That is from Daisuke Wakabayashi at the NYT, via Michelle Dawson.