Current Affairs

U.S. counterterrorism officials reported in February that more than 20,000 foreign fighters have joined the fray in Syria to fight with the rebels, with most going to help the Islamic State. Of these, 150 or so are from the United States and over 3,000 are from the West.

According to British scholar Peter Neumann, the Syria conflict has generated more foreign fighters than Afghanistan, post-2003 Iraq, Somalia, Mali and other fields of jihad combined.

That is from Daniel Byman at Monkey Cage, with other points at the link.

London Scout poses for her mother, Sai De Silva, in Dumbo for her Instagram account.  The 4-year-old has more than 100,000 followers.

That is the photo caption to this NYT story.  And just so you are not confused, “London Scout” is a name, and “Dumbo” is a part of New York City.

Robert Pears of the NYT writes:

Obama administration officials, urging people to sign up for health insurance under the Affordable Care Act, have trumpeted the low premiums available on the law’s new marketplaces.

But for many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage.

“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance, but can’t afford to use it.”

In many states, more than half the plans offered for sale through, the federal online marketplace, have a deductible of $3,000 or more, a New York Times review has found. Those deductibles are causing concern among Democrats — and some Republican detractors of the health law, who once pushed high-deductible health plans in the belief that consumers would be more cost-conscious if they had more of a financial stake or skin in the game.

My previous column on related issues, “Obamacare not as egalitarian as it appears,” is here.

So many questions…

by on November 14, 2015 at 12:01 am in Current Affairs | Permalink

What will turn out to be the exact backgrounds and personal stories of the attackers?

And how much will that matter? (Syrian refugee backgrounds are probably the worst case scenario, illegal “invaders” the best case scenario)

How much will this strengthen the French National Front?

What will the response be of the French government?  The American government?  (Don’t forget the NATO treaty obligation.  And will this mean Obama has to back off in the South China Sea?)

How much will it weaken Merkel, or possibly split the alliance with CSU, or strengthen AfD?

How much does it weaken the position of Schengen?

Will concealed carry become a more popular idea in the United States?

So few answers…

This topic feels over-covered by other sources, but still I would like to see these points receive more attention:

1. I don’t trust early media reports on such matters, and so I am reluctant to offer judgment on a variety of the specifics.  That includes Yale, Mizzou, and other places.  For most or maybe even close to all readers, the proper context probably is missing and perhaps some of the facts are being garbled.

2. Universities have the right to regulate speech and also behavior on their premises, just as a corporation does or a hotel might do.  There is no infringement of freedom of speech when a university acts in this manner.  Public funding does introduce some complications, but even there residual regulatory rights exist.

3. Subtle linguistic cues, social barriers, bigotries of expectations, and segregations can in fact harm students and shape their future life prospects.  That said, I am mostly skeptical about the ability of universities to undo these social mechanisms by conscious social engineering of the immediate environment.  Some gain can be achieved, and some of the worst harms can and should be avoided, but it is a mistake to expect too much from universities in this regard.

4. My personal preference is to see controversial ideas discussed and debated openly on campuses,more so than is currently the case.  Those ideas are going to be out there anyway, so let’s have universities contribute to shaping the broader social discourse.  For instance imagine that more advanced forms of genetic engineering someday become possible, and parents can selectively abort an embryo with a higher chance of being gay.  Do we really want to be in a position where universities have shied away from discussing this issue for decades?  I say no, realizing that in the meantime some peoples’ feelings will indeed have ended up being hurt.  If you are gay, and sitting in a classroom discussion of this topic, or maybe you just have a gay friend — whatever — I doubt if there is a fully comfortable way for this discussion to proceed.  Yet the rest of the world is going to be talking about this, the internet above all, and making the university a “safe space” won’t make the broader world one, if anything the contrary.

5. The natural tendency for administrators is to want to minimize internal disruption, even if that is sometimes at the expense of having a broader world impact.  I thus believe many administrators overinvest in political correctness, at least from a Benthamite, utilitarian point of view.  See #4.

6. The upshot of this all is that lower tier administrators will be sending fewer all-student emails in the future.  And some presidents may be less interested in improving the quality of their football teams, or starting such teams in the first place.  I’m not sure that’s a bad thing.

7. Most of the world knows very, very little about the details of these events.  They see there is a mess, and they think something is wrong with universities, students, parents, administrators — everyone.  No matter what happens from this point, universities have messed up and lost this round rather badly.

For this post I am indebted to a discussion with Stephen Macedo and two of his students, but of course they are not to be implicated in my opinions one way or the other.

How is China doing?

by on November 12, 2015 at 12:01 am in Current Affairs, Data Source, Economics | Permalink

From Fathom Consulting, here is the latest, based in part on momentum indicators:

Contrary to the picture painted by the official statistics, we believe that China’s economic growth rate has more than halved since the beginning of early last year, from just over 6% to less than 3%. Indeed, our preferred measure of economic activity — our China Momentum Indicator (CMI) — slipped 0.2 percentage points to 2.8% in September.

Looking at the individual components of our CMI, rail freight volumes reached a six-and-a-half year low, while electricity production also fell — down 3.1% in the twelve-months to September. The third and final component, growth in bank lending, has been broadly stable at around 15% per annum over the past four years.

In response, the PBoC has eased policy on no fewer than six occasions in the past twelve months. We see further substantial cuts in China’s policy rates of interest over the next year, not least because in real terms they remain stubbornly high.

As benchmark interest rates continue to fall in China, capital outflows are likely to rise, putting further downward pressure on the currency. Back in August, the RMB was allowed to fall by 3.0% against the USD in the space of a week – the biggest one-week move in 20 years.
Last Friday’s appreciation aside, we view further devaluations as more or less inevitable. Accordingly, we see the RMB falling at a pace of 2.0% to 3.0% a quarter over the next two years as China attempts to export some of its pain.

In my admittedly biased view, signs of “good news” coming from China, especially on the asset price side, are often bad news.  They are signs that the government is not allowing markets to adjust, or does not feel politically strong enough to get certain transitions over with.  Here is the FT on what is keeping the Chinese economy going at whatever growth rate it may be at:

Beijing has ramped up fiscal spending to fill the gap. Fixed-asset investment by local governments rose 10.6 per cent in the year to October.

Be careful what you wish for of course.

A key question in reading a lot of China indicators is how to think about changing prices.  Imports are plunging in value terms, in part because the prices of commodities are falling, but imports in pure volume terms are rising.  Which matters more?  We usually count the value figure. and besides, some of those prices are falling because Chinese demand began to decline at the older prices.  Measuring the value of the imports will make you much more pessimistic than merely considering the volume.

Indonesia’s anti-drugs agency has proposed building a prison on an island guarded by crocodiles to hold death row convicts, an official said, an idea that wouldn’t be out of place in a James Bond film.

The proposal is the pet project of anti-drugs chief Budi Waseso, who plans to visit various parts of the archipelago in his search for fierce reptiles to guard the jail.

“We will place as many crocodiles as we can there. I will search for the most ferocious type of crocodile,” he was quoted as saying by local news website Tempo.

Waseso said that crocodiles would be better at preventing drug traffickers from escaping prison as they could not be bribed — unlike human guards.

There is more here, via Charles Klingman and Mark Thorson, try this Bond movie clip too.

What if the entire town moves?:

When independent traders in a small Welsh town discovered the loopholes used by multinational giants to avoid paying UK tax, they didn’t just get mad.

Now local businesses in Crickhowell are turning the tables on the likes of Google and Starbucks by employing the same accountancy practices used by the world’s biggest companies, to move their entire town “offshore”.

Advised by experts and followed by a BBC crew, family-run shops in the Brecon Beacons town have submitted their own DIY tax plan to HMRC, copying the offshore arrangements used by global brands which pay little or no corporation tax.

The Powys tax rebellion, led by traders including the town’s salmon smokery, local coffee shop, book shop, optician and bakery, could spread nationwide.

The article is here, via John Chilton.  Georgists of the world unite!

Questions that are rarely asked

by on November 9, 2015 at 2:28 pm in Current Affairs | Permalink

49% of UK trade is with EU; 14% of EU’s trade is with UK. Who would be most desperate to do a deal post Brexit?

That is from Hugo Dixon on Twitter.

It is going slowly, to say the least:

Heaving under mountains of paperwork, the government has spent more than $1 billion trying to replace its antiquated approach to managing immigration with a system of digitized records, online applications and a full suite of nearly 100 electronic forms.

A decade in, all that officials have to show for the effort is a single form that’s now available for online applications and a single type of fee that immigrants pay electronically. The 94 other forms can be filed only with paper.

This project, run by U.S. Citizenship and Immigration Services, was originally supposed to cost a half-billion dollars and be finished in 2013. Instead, it’s now projected to reach up to $3.1 billion and be done nearly four years from now, putting in jeopardy efforts to overhaul the nation’s immigration policies, handle immigrants already seeking citizenship and detect national security threats, according to documents and interviews with former and current federal officials.

The article is here, hat tip goes to Felix Salmon.

Here is my latest NYT Upshot column, on the topic of the Affordable Care Act.  Here is what is to me the key excerpt:

But there is another way of looking at it, one used in traditional economics, which focuses on how much people are willing to pay as an indication of their real preferences. Using this measure, if everyone covered by the insurance mandate were to buy health insurance as the law dictated, more than half of them would be worse off.

This may seem startling. But in an economic study, researchers measured such preferences by looking at data known as market demand curves. Practically speaking, these demand curves implied that individuals would rather take some risk with their health — and spend their money on other things — partly because they knew that even without insurance they still would receive some health care. These were the findings of a provocative National Bureau of Economic Research working paper, “The Price of Responsibility: The Impact of Health Reform on Non-Poor Uninsureds” by Mark Pauly, Adam Leive, and Scott Harrington; the authors are at the Wharton School at the University of Pennsylvania.

One implication is that the preferences of many people subject to the insurance mandate are likely to become more negative in the months ahead. For those without subsidies, federal officials estimate, the cost of insurance policies is likely to increase by an average of another 7.5 percent; even more in states like Oklahoma and Mississippi. The individuals who are likely losers from the mandate have incomes 250 percent or more above the federal poverty level ($11,770 for a single person, more for larger families), the paper said. They are by no means the poorest Americans, but many of them are not wealthy, either. So the Affordable Care Act may not be as egalitarian as it might look initially, once we take this perspective into account.

I should stress that, at this point, I don’t see any realistic alternative to trying to improve ACA.  Still, I find it distressing how infrequently this problem is acknowledged or dealt with, probably from a mix of epistemic closure, a “health insurance simply has to make people better off” attitude, and a dose of “let’s not give any ammunition to the enemy.”  In fact, I think a lot of Democratic-leaning economists and commentators are doing a real disservice to their own causes on this one.

It’s worth noting that Kentucky, one of the best-functioning ACA state exchanges, just elected a Republican governor who very explicitly pledged to tank the current set-up as much as possible, Medicaid too.  I think it’s time to admit this is not just Tea Party activism or Hee Haw political stupidity, rather a large number of the people subject to the mandate simply are not better off as would be judged by their own preferences.  And that is not a secondary problem of Obamacare, it is a primary problem.

Interestingly, I found the NYT reader comments on my piece to be fairly supportive, which is not always the case.  There’s a good deal of “this happened to me, too,” and not so much raw invective about whatever defects I may have.

I think it is a big mistake to argue Obamacare is on the verge of collapse, or whatever other exaggeration of the day may be at hand.  Still, I don’t find the current set-up of the exchanges to be entirely stable, at least not in terms of ongoing popularity, much less consumer sovereignty.

A key question is what happens moving forward.  One option, which I had not initially expected, is for the exchanges to narrow and evolve into an expanded version of some of the earlier plans for a segregated high-risk pool.  In that case, the argument would morph from “don’t worry, enough people will sign up for the exchanges” into “the welfare effects here are still positive, because fortunately not everyone signs up for the exchanges.”  The high risk pool would then at some point require additional subsidies.  In the past, I argued that the penalties for not signing up were too low, but under this scenario it may be desirable to lower rather than raise those penalties.

We’ll see.  The piece covers other issues as well, do read the whole thing.

Here is Megan on the costs of ACA plans.  Here are some interesting calculations from Jed Graham.

Against Salafist jihadis in Sinai, as well as Hamas in Gaza, Egypt and Israel are working together more closely than at any time since the peace treaty was signed. In many respects Egypt and Israel now consider themselves to be closer allies to each other than each is to the United States. Jordan recognises that Israel is a guarantor of its security, the regional power most likely to intervene on its behalf should it face a serious threat.

That is from Nathan Thrall at LRB.

If you pulled over one hundred people on the street, and asked them to state a religious belief they hold, I’m not sure you would get any answer more plausible than “the pyramids were built for the storage of grain.”  Would you now?

Yet we mock Ben Carson for this, but we do not make fun of those who believe openly in the Trinity, Virgin Birth, ex cathedra, and many other beliefs which are to my mind slightly less plausible claims.  It’s not so different from the old prejudice that Mormon beliefs are somehow “weirder” than those of traditional Christians, except now it is secularists picking and choosing their religious targets on the supposed basis of sophistication.  The Seventh Day Adventists, Carson’s church, are of course weirder yet.

I doubt the storage claim is true as a dominant explanation, but should there not be some storage — of something — in a profit-maximizing or rent-maximizing model of pyramid supply and inventory management?  Maybe Ben’s economic intuition confirmed what he had heard in church.  And what about Coase’s durable goods monopoly model?  In that treatment the monopolist stores grain, admittedly for the pyramids variable Coase was hermetic in his exposition, perhaps properly so given how much is at stake here.  And “remains of storage pests have been found in grain recovered from pyramid tombs.”  Further argumentation along these lines can be found in F. Zacher’s classic 1937 article “Vorratsschädlinge und Vorratsschutz, ihre Bedeutung für Volksernährung und Weltwirtschaft” (Cowen’s Second Law), which by now has been cited over nineteen times (twenty in fact).

The Quran notes that the pyramids were made of baked clay, when instead according to many standard accounts much of the pyramids are made of quarried limestone (yet even that question is murky and I would not entirely count out the Quranic exposition).  Presumably many Muslims, who ascribe a holy status to the Quran, would defend the baked clay proposition in some manner.  How often is that thrown in their faces?

Might Joe Lieberman, an Orthodox Jew, possibly hold some views about Joseph which are not literally true?  After all, those stories do come from the Torah.

Besides, our Founding Fathers had some pretty strange notions about pyramids.  Most of them did a pretty good job in office.

What Ben Carson has done is to commit the unpardonable sin of talking about his religion as if he actually takes it seriously.

Loyal MR readers will know that I am myself a non-believer.  But what I find strangest of all is not Ben Carson’s pyramids beliefs, but rather the notion that we should selectively pick on some religious claims rather than others.  The notion that it is fine to believe something about a deity or deities, or a divine book, as long as you do not take that said belief very seriously and treat it only as a social affiliation or an ornamental badge of honor.

Bully for Ben Carson for reminding us that a religion actually consists of beliefs about the world.  And if you’re trying to understand his continuing popularity, maybe that is the place to start.

China revision of the day

by on November 5, 2015 at 2:08 am in Current Affairs, Data Source | Permalink

“Illustrating the scale of the revision, the new figures add about 600 million tons to China’s coal consumption in 2012 — an amount equivalent to more than 70 percent of the total coal used annually by the United States.”

From Angus there is more here.

Here is the Stanford report of his passing, well done, and here are previous MR mentions of Girard.  He was one of the world’s great thinkers.