Current Affairs

That is the theme of my latest Bloomberg column, here is the concluding bit:

As for 2017, I have been concluding that I should raise my relative opinion of business and lower my view of government. I’m still waiting for millennials — a relatively left-leaning generation — to reach a similar position.

Sometimes we forget about companies, in part because it is the business of business that we don’t notice it too often for the wrong things. And don’t forget that most of the weird stories about Trump or politics refer to a pretty small slice of our world, further amplified by social media.

In a war between the boring and the weird, don’t be surprised if the weird commands the most notice. But the normal and the boring have enormous powers of inertia on their side, not to mention human goodwill, and they are doing better than it might at first seem. So if you think America is falling apart, give the corporate world another look.

I believe that right now we are all too entranced by the “news of the weird.” On the side of business, there are problems with productivity growth and perhaps excess monopoly, but arguably those are about the most normal problems you could have.  I suspect the world of American business is these days a bit too normal, and could use a marginal dose of some more Elon Musk.

As you might expect, they came up with a good photo for the column.

Our World in Data has an excellent writeup of earlier research by Eisensee and Strömberg. 

How many deaths does it take for a natural disaster to be newsworthy? This is a question researchers Thomas Eisensee and David Strömberg asked in a 2007 study. The two authors found that for every person killed by a volcano, nearly 40,000 people have to die of a food shortage to get the same probability of coverage in US televised news. In other words, the type of disaster matters to how newsworthy networks find it to be. The visualizations below show the extent of this observed “news effect”.

In other words, the famine you haven’t heard much about is more important than you think.

By 8 p.m., the party was in full swing when the couple took to the stage, the front of a sign pressed up against Ms. Pienkowski’s chest. The crowd quieted…The D.J. took a musical pause.

“You’ve been so patient about the date of our wedding,” she said. “We promised we would tell you tonight when it will be. I hope people are ready to pack their bags and get excited, because …” She then paused to turn over the sign, which read, “Surprise! Welcome to the wedding of Lauren & Corey, March 18, 2017.” “It’s today.”

And:

…such weddings are becoming popular among couples who can’t pin down a date months in advance, are overwhelmed by the prospect of planning a huge gala, or want to save a bundle on doing an out-of-season event (sometimes without having to provide dinner).

And:

“I overhead someone screaming to their date: ‘Put more money in the card, it’s a wedding. It’s. A. Wedding!’” he said. “People were screaming: ‘Oh my God! Oh my God!’ We really nailed this.”

Here is the NYT story, of course not everyone wants to limit rent-seeking and excess signaling.

What else should we do on a surprise basis?  Tenure votes?

Here is the government’s own answer:

No.  The President’s clemency power is conferred by Article II, Section 2, Clause 1 of the Constitution of the United States, which provides:  “The President . . . shall have Power to grant Reprieves and Pardons for Offenses against the United States, except in Cases of Impeachment.”  Thus, the President’s authority to grant clemency is limited to federal offenses and offenses prosecuted by the United States Attorney for the District of Columbia in the name of the United States in the D.C. Superior Court.  An offense that violates a state law is not an offense against the United States.  A person who wishes to seek a pardon or a commutation of sentence for a state offense should contact the authorities of the state in which the conviction occurred.  Such state authorities are typically the Governor or a state board of pardons and/or paroles, if the state government has created such a board.

Solve for the equilibrium!

I thank J. for a relevant pointer.

Adam Ozimek asks me:

How should we think about this in a meta-rational sense? https://www.theverge.com/2017/7/20/16003766/elon-musk-boring-company-hyperloop-nyc-philadelphia-baltimore-dc

…What should we make of it?

To be clear, I have never had interaction with Elon Musk, so I intend these as general possibilities, rather than as commentary on his individual personality:

1. There are some people who on Twitter will just “fuck with us.”  Precisely because they have done a lot in the so-called “real world,” they just don’t take Twitter that seriously.

2. Some very successful people are programmed to rhetorically overreach.  This makes them the center of attention and furthermore keeps them motivated.  They don’t apply the same kind of “reality filter” to their rhetoric that a scientist might.

3. Sometimes exaggeration is used to distract from pending failures, a’la Trump, and this process may include self-distraction.  (Tesla?)

4. Exaggeration is a way to keep the hyperloop on the agenda and in the mindset of the nerdy public.  Eventually that will help make the hyperloop possible.  Speakers with this motive often think of themselves as bootstrapping the reality, rather than “making stuff up.”

Most of talk isn’t about reporting the truth! In this sense the tweet isn’t surprising at all.

And what the heck is “verbal government approval” in a world with federalism, multiple layers of environmental review, NIMBY homeowners, and courts of varying jurisdictions? I like to think the tweet might be an act of sarcastic protest, or Straussian meta-commentary born out of frustration, but somehow I suspect neither of those is the case.

A Toronto man who spent $550 building a set of stairs in his community park says he has no regrets, despite the city’s insistence that he should have waited for a $65,000 city project to handle the problem. The city is now threatening to tear down the stairs because they were not built to regulation standards.

Retired mechanic Adi Astl says he took it upon himself to build the stairs after several neighbours fell down the steep path to a community garden in Tom Riley Park, in Etobicoke, Ont. Astl says his neighbours chipped in on the project, which only ended up costing $550 – a far cry from the $65,000-$150,000 price tag the city had estimated for the job.

“I thought they were talking about an escalator,” Astl told CTV News Channel on Wednesday.

Astl says he hired a homeless person to help him and built the eight steps in a matter of hours.

Astl’s wife, Gail Rutherford, says the stairs have already been a big help to people who routinely take that route through the park. “I’ve seen so many people fall over that rocky path that was there to begin with,” she said. “It’s a huge improvement over what was there.”

The city says the stairs are unsafe and has cordoned them off, banning their use:

“We just can’t have people decide to go out to Home Depot and build a staircase in a park because that’s what they would like to have.”

Here is the article, with photos, via Rob Gray.

The largest city in North America has done away with one of the biggest hidden subsidies for driving: minimum parking requirements.

Mexico City eliminated requirements that force developers to build a minimum number of parking spaces in each project. The city will instead cap the number of parking spaces allowed in new development, depending on the type and size of the building. Existing parking spaces can also be converted to other uses.

Mexico City Mayor Miguel Mancera signed the new regulations into effect last week.

The policy change applies to every land use and throughout the entire city of 8.8 million residents. It promises to make housing more affordable, reduce traffic, and improve air quality.

…The old rules mandated parking even though only about 30 percent of Mexico City residents own cars and the city has a well-developed subway system.

There are now parking maximums in place instead of minimums…

Within the central city, the new rules also require developers to pay a fee if they build more than 50 percent of the maximum parking allowed…

Revenues from the parking fee will be used to improve transit and subsidize housing.

Here is the story, via John Chamberlin.  Here is my earlier NYT column on this topic.

Chad R. asks me:

Which of our public policy institutions are working well right now?

It seems there are plenty of takes about *why* our institutions are under extreme stress, but precious few about which are still working properly.

The Supreme Court comes to mind…

I say plenty of them are working well:

1. The CBO remains independent and effective, even though I think they are treating the health care mandate incorrectly and overestimating its impact.

2. As for the courts, they remain powerful and effective.  But note: while I strongly disagree with Trump’s travel ban, some of the lower courts overstepped their bounds by taking away too much power from the executive, relative to law.  It’s as if the courts have become too strong — perhaps optimally so — in a kind of overshooting model.

3. The Senate.  Even though one party controls all branches of government, a variety of bad health care bills have come to naught, and that is after many earlier votes to repeal Obamacare.  It is less clear to me how the House is working, but that’s why we have bicameralism.  I don’t care how stupid you might think the process is, so far it is generating acceptable results.  Yum, yum, yum, I just love that democracy!

4. The media as investigators have been excellent, though as summarizers of what is really going on I see their performance as much weaker, due to selective reporting.

5. Think tanks: the lack of Trump infrastructure at this level has raised my estimate of think tank importance.  That said, I am not sure how many think tanks are influencing policy right now, but if nothing else the inability to have or assemble a good think tank is indeed important.

6. The bureaucracy, for the most part, including the Fed.  Admittedly, some parts of the bureaucracy, such as the State Department, are being throttled by the Executive branch.

What’s not working well?

I say the executive branch and the White House.  Destroying or limiting the value of alliances is one of the easiest things for a blundering president to do.  I also see a significant opportunity cost from not having a legislation-oriented, detail-savvy White House.  Still, they are doing a good job on regulatory reform and an excellent Supreme Court appointment has been made.

Most of all, the appointments process is not working well, some of that being the fault of the Senate too.

The main lesson?  American government isn’t quite the train wreck you might think, and I haven’t even touched on the states, counties, and cities.

On a recent episode of the popular podcast Chapo Trap House, co-host Will Menaker used a memorable metaphor in addressing calls for unity on the left. “Republicans in control of politics, that’s the problem,” he began. “However, to the pragmatists out there and the people who don’t like purity in politics, yes, let’s come together. But get this through your fucking head: You must bend the knee to us. Not the other way around. You have been proven as failures, and your entire worldview has been discredited. You bend the knee to us and then let’s fucking work together to defeat these things, not with fucking means testing or market-based solutions but with a powerful social democratic message.”

That is reported by Jeet Heer at The New Republic.

Here is the podcast and transcript (no video), Atul was in top form.  We covered the marginal value of health care, the progress of AI in medicine, whether we should fear genetic engineering, whether the checklist method applies to marriage (maybe so!), whether FDA regulation is too tough, whether surgical procedures should be more tightly regulated, Michael Crichton and Stevie Wonder, wearables, what makes him weep, Knausgaard and Ferrante, why surgeons leave sponges in patients, how he has been so successful, his own performance as a medical patient, and much more.

Here is one excerpt:

COWEN: A lot of critics have charged that to get a new drug through the FDA, it takes too many years and too much money, and that somehow the process should be liberalized. Do you agree or disagree?

GAWANDE: I generally disagree. It’s a trade-off in values at some basic level. In the 1950s, we had no real FDA, and you had the opportunity to put out, to innovate in all kinds of ways, and that innovation capability gave us modern cardiac surgery and gave us steroids and antibiotics, but it also gave us frontal lobotomies, and it gave us the Tuskegee experiment and a variety of other things.

The process that we have regulation around both the ethics of what we’re doing and that we have some safety process along the way is totally appropriate. I think a lot of lessons about when the HIV community became involved in the FDA process to drive approaches that smoothed and sped up the decision-making process, and also got the public enough involved to be able to say . . . That community said, “Look, there are places where we’re willing to take greater risks for the sake of speed.”

People are trying to treat the FDA process as a technical issue. When what it is, is it’s an issue about what are the risks we are genuinely willing to take, and what are the risks that we’re not?

And:

COWEN: The idea of nudge.

GAWANDE: I think overrated.

COWEN: Why?

GAWANDE: I think that there are important insights in nudge units and in that research capacity, but when you step back and say, “What are the biggest problems in clinical behavior and delivery of healthcare?” the nudges are focused on small solutions that have not demonstrated capacity for major scale.

The kind of nudge capability is something we’ve built into the stuff we’ve done, whether it’s checklists or coaching, but it’s been only one. We’ve had to add other tools. You could not get to massive reductions in deaths in surgery or childbirth or massive improvements in end-of-life outcomes based on just those behavioral science insights alone. We’ve had to move to organizational insights and to piece together multiple kinds of layers of understanding in order to drive high-volume change in healthcare delivery.

Definitely recommended, this was one of my favorite “episodes.”

“The message from the leadership last weekend was very clear — financial stability is now regarded as an important element of national security,” said Raymond Yeung, the Hong Kong-based chief economist at Australia & New Zealand Banking Group Ltd.

An editorial in the Communist Party’s People Daily newspaper on Monday pointed to the seriousness of the campaign, warning of potential “gray rhinos” — a variation on the black swan events popularized during the global financial crisis, with the difference that the danger from a charging rhino is more immediate and the animals are less rare.

Here is the Bloomberg story, via Bill Bishop’s excellent China newsletter.

According to PFC Energy, a Washington DC consultancy, Venezuela requires an oil price of $95 a barrel to ensure macroeconomic security, Saudi Arabia $55.  Qatar, however, could still remain financially stable even with oil below $10 a barrel…It is the only significant oil exporter that was less dependent on higher oil prices in 2008 than in 2000.

That is from the new and useful book by Allen J. Fromherz, Qatar: A Modern History, updated edition, recently published by Georgetown University Press.

The coming of WalMarts took away or weakened various downtown communities, but it turns out that when Walmart leaves a region there are some similar kinds of effects:

Economic losses are only one aspect of the hurt felt locally as a result of Walmart’s passing. There is something intangible, less material – and more chilling – about the fallout, something that seems to flow from the dependency the people of McDowell County developed on the retail magic conjured up inside that big box…For Dan Phillips, Walmart was a way of coping with bereavement after his wife died a few years ago. ‘If you were lonely and had nothing to do, you’d go to Walmart to talk to folk. It was a great social network.’ Being a schoolteacher, Phillips has a theory for what happened when the store closed. ‘Socialization. We lost our socialization factor. Now it’s hard to keep track of people, there’s no other place like it where you can stand and chat.’

Here is the full story, via the excellent Kevin Lewis.

As their budgets strain, communities have begun questioning how much money and effort they should be spending to deal with overdoses, especially in cases involving people who have taken near-fatal overdoses multiple times. State and local officials say it might be time for “tough love”: pushing soaring medical costs onto drug abusers or even limiting how many times first responders can save an individual’s life.

“It’s not that I don’t want to treat overdose victims, it’s that the city cannot afford to treat overdose victims,” said Middletown Council Member Daniel Picard, noting this industrial town in northern Butler County might have to raise taxes in response to the crisis.

Often, the only thing separating whether an overdose victim goes to the hospital instead of the morgue is a dose of naloxone, also known by the brand name Narcan, a medication that can reverse the effects of opioid overdoses.

Two doses of an injectable form of naloxone, Evzio, cost $4,500, up from $690 in 2014. The price of other forms of the drug, including the nasally administered Narcan, typically range from $70 to $150 per dose, officials say.

…Here in Ohio, first responders say it’s not uncommon for overdose victims to have previously been revived with naloxone at least a half-dozen times.

…Picard, the council member, has proposed a controversial three-strikes policy in which first responders wouldn’t administer Narcan to repeated overdose victims.

Here is the Tim Craig at WaPo story.  I do not know what is the proper response to such opioid cases, or how much money should be spent.  I do know that somewhere, somehow a line has to be drawn.  And if you are reading a discussion of health care policy that does not acknowledge such a line, and set out possible standards for it, beware of sophistry and illusion.

Probably not, or so I argue in my latest Bloomberg column.  Here is the closing bit:

It is again time for the West to learn from China. The emotional force of nationalism is stronger than we had thought, stability is not guaranteed, and the Western democratic status quo ex ante is less of a strong attractor than many of us had believed or at least hoped for.

In other words, we have our work cut out for us.

As I point out in the column, the world is getting richer but the number of democracies is shrinking.