Current Affairs

That’s the hullaballoo of the day (NYT here):

Facebook workers routinely suppressed news stories of interest to conservative readers from the social network’s influential “trending” news section, according to a former journalist who worked on the project. This individual says that workers prevented stories about the right-wing CPAC gathering, Mitt Romney, Rand Paul, and other conservative topics from appearing in the highly-influential section, even though they were organically trending among the site’s users.

That’s not exactly what I would have suppressed, but I can’t say I am broken up about this.  Most media bias in journalism is demand-driven, and I suspect this feature of the article selection and elevation “algorithm” is perceived by Facebook as demand-driven as well.  Overall I think of Twitter as radicalizing, and Facebook as calming and connecting.  The “censored” right wing sources don’t fit the chummy, nostalgic socializing mood so well, and therefore Facebook wanted to keep them away.  A clear minority is sufficiently interested in those stories to get them trending initially, but that’s not the overall image Facebook wants to present to either its marginal or median user.

Maybe such algorithms mean that social ideas are too slow to change, because user demand depends in part on what Facebook pushes.  Right now I’m more worried about American ideas getting worse than American ideas getting better, so a status quo, don’t offend anybody bias I can live with.  And frankly, a lot of right-wing news sources just aren’t very good — I suppress them myself, without any aid from Facebook.

There is also this:

“People stopped caring about Syria,” one former curator said. “[And] if it wasn’t trending on Facebook, it would make Facebook look bad.” That same curator said the Black Lives Matter movement was also injected into Facebook’s trending news module. “Facebook got a lot of pressure about not having a trending topic for Black Lives Matter,” the individual said. “They realized it was a problem, and they boosted it in the ordering. They gave it preference over other topics. When we injected it, everyone started saying, ‘Yeah, now I’m seeing it as number one’.” This particular injection is especially noteworthy because the #BlackLivesMatter movement originated on Facebook, and the ensuing media coverage of the movement often noted its powerful social media presence.

In those two cases I see the change in coverage as bringing net content gain rather than loss.  The cynical underlying reality is that Facebook does not wish to appear heartless, but does not (yet) have the more subtle manipulative institutions that newspapers and TV stations have developed over decades or even centuries.  They clumsily act in a politically correct manner, without proper institutional camouflage, and now they are being called on it.  They will refine their bias, and make it subtler and harder to criticize, thereby becoming more like most other media outlets.  Ultimately this is more of a social conformity story than a monopoly power dilemma.  I am more worried about pervasive ennui and complacency than the political bias per se.

Let’s ask Guido Menzio, who perhaps knows something about random.  Here is one of his papers, with Mikhail Golosov (pdf):

We propose a new business cycle theory. Firms need to randomize over firing or keeping workers who have performed poorly in the past, in order to give them an ex-ante incentive to exert effort. Firms have an incentive to coordinate the outcome of their randomizations, as coordination allows them to load the firing probability on states of the world in which it is costlier for workers to become unemployed and, hence, allows them to reduce overall agency costs. In the unique equilibrium, firms use a sunspot to coordinate the randomization outcomes and the economy experiences endogenous and stochastic aggregate fluctuations.

In other words, by coordinating with each other, if only implicitly, employers make the firing threat more fearful.  You don’t have to interpret this paper literally as an entire explanation for cyclical unemployment, only that it may have something to do with the story.

And here is his about to appear JPE piece with Greg Kaplan (pdf):

We propose a novel theory of self-fulfilling unemployment fluctuations. When a firm increases its workforce, it increases the demand facing other firms—as employed workers spend more than unemployed workers—and decreases the extent of competition facing other firms—as employed workers have less time to search for low prices than unemployed workers. In turn, the increase in demand and the decline in competition induces other firms to hire more labor in order to scale-up their presence in the product market. The feedback between employment and product market conditions generates multiple equilibria—and the possibility of self-fulfilling fluctuations—if the differences in the shopping behavior of employed and unemployed workers are large enough. Empirical evidence on spending, shopping and prices paid suggests that this is the case.

In general, not enough popular macro discourse asks the question of how much of the cycle results from self-fulfilling prophecies.  Furthermore what does that imply for policy? yes, “confidence” can be important, but confidence in what exactly?

That is the latest renaming at George Mason University, due to a very generous gift from Dwight Schar in support of public policy and political science.  Here is one account, congratulations to my school and its leaders, and of course a very sincere thanks to Dwight…

President Obama telling what I thought was a joke at the White House Correspondents Dinner:

They say Donald lacks the foreign policy experience to be president. But in fairness, he has spent years meeting with leaders from around the world: Miss Sweden, Miss Argentina, Miss Azerbaijan.

Apparently Donald was listening because yesterday in an interview with Bret Baier he made exactly the same point but this time as argument:

Bret Baier: About Russia, you were asked yesterday if you’ve ever spoken to Vladmir Putin. And you said, “I don’t want to say”:

Donald Trump: Yeah, I have no comment on that. No comment…I was in Russia….I know Russia well. I had a major event in Russia two or three years ago. Miss Universe contest which was a big, big, incredible event. Incredible success. I got to meet a lot of people….

It is commonly held up as a model of dietary paternalism, but the most recent trends suggest a reversal of sorts:

Coca-Cola Femsa SAB, the country’s largest Coke bottler, said last Wednesday that its Mexican soda volumes rose 5.5% in the first quarter from a year earlier. Arca Continental SAB, the No. 2 Coke bottler, reported soda volumes surged 11%.

The turnaround began last year, when Mexican soda-industry volume rose 0.5% after falling 1.9% in 2014, said data service Canadean.

Consumers also aren’t flocking to untaxed zero-calorie sodas. The market shares of full-calorie Coca-Cola and Pepsi-Cola inched higher last year to 48% and 11%, respectively, according to Euromonitor, another data service.

Antisoda groups aren’t ready to declare the tax a failure and say sales got a boost from unusually warm weather.

And note this:

Even the initial downturn [in soda consumption] only lowered the average Mexican’s daily caloric intake by 6 to 7 calories, or 0.2%, according to the study.

I do not think the correct conclusion is “Mexico’s soda tax is failing,” rather “it can take a very long time to discover whether or not policies are working well.”  For instance the tax may be step one in a longer-run beneficial shift in norms, or going the other way the tax may end up as irrelevant or possibly even counterproductive, if individuals end up substituting into something even less healthy.  This point about the long run is relevant for assessing the ACA, minimum wage hikes, the euro, various tax cuts, financial regulation, and many many other policies.  Relative price effects, secondary consequences, and “chances” of gaming the system are all much higher in the long run than the short.

As of earlier this month, there were more than 2,819 CHAdeMO DC rapid chargers installed across the country, far more than the 1,532 installed in the whole of Europe or 854 found in the U.S.

That massive number of accessible, reliable charging stations combined with lower-power level 2 charging provision — both private and public — now means there are more dedicated charging stations in Japan than there are gas stations.

Far more in fact: over 40,000 says Nissan, versus the 34,000 gas stations currently trading in Japan.

Japan is blanketed with charging stations.

Source here.  It is fair to say that some fundamental innovation finally is coming to cars.

Relying on diversity measures computed at the apartment block level under conditions of exogenous allocation of public housing in France, this paper identifies the effects of ethnic diversity on social relationships and housing quality. Housing Survey data reveal that diversity induces social anomie. Through the channel of anomie, diversity accounts for the inability of residents to sanction others for vandalism and to act collectively to demand proper building maintenance. However, anomie also lowers opportunities for violent confrontations, which are not related to diversity.

A sentence from the conclusion explains that last bit more clearly: “…fractionalization has no effect on public safety, diversity being associated with social anomie within the housing blocks rather than violent confrontations among neighbors — helped as well by an increase in municipal policing in municipalities of high diversity.”

The paper also offers a useful but brief survey of what we know about ethnic diversity and social capital.  Here is an earlier ungated copy (pdf).

Here is the latest:

Google is sufficiently confident about its technology that its staff have discussed launching a fully autonomous taxi service in Mountain View as soon as next year, according to people familiar with the company’s thinking. The service may initially be restricted to Google employees, which might get around any legal and regulatory issues. Google has already run some tests with employees who are trained drivers.

I enjoyed this bit too:

Yet real life brings surprises no-one can anticipate. Last year, a Google car rounded a corner to find a woman in an electric wheelchair chasing a duck with a broom in the middle of the road. “We’d never tested the car against a woman and a duck,” Mr Urmson says, “and it was able to understand this was unusual, slow down, let that thing play out and then get on its way.”

Here is the Tim Bradshaw FT piece, and for the pointer I thank Michael Gibson.  And Ted Craig sends me this:

General Motors Co. and Lyft Inc. will begin testing a fleet of self-driving Chevrolet Bolt electric taxis on public roads within a year, a move central to the companies’ joint efforts to challenge Silicon Valley giants in the battle to reshape the auto industry.

And here is Viv, which is supposed to be better than Siri.  And here:

A robot is being designed to compete with 12th graders during the college entrance examination in 2017 and get a score qualifying it to enter first-class universities in China, according to Huaxi Metropolis Daily.

The robot will not be connected to the internet.  And from the world of photography, here are robot portraits.  And yet more from the FT:

US researchers have developed what they say is the world’s first surgical robot that can outperform human surgeons when operating autonomously on soft tissues such as intestines, paving the way for clinical trials.

Or this:

Airbus is working with French and Japanese researchers to develop humanoid robots able to work alongside humans on its assembly lines and inside aircraft, in what would be a step change in the use of industrial robotics.

That is a lot of robot news for a day and a half.

trump (v.2) Look up trump at Dictionary.com“fabricate, devise,” 1690s, from trump “deceive, cheat” (1510s), from Middle English trumpen (late 14c.), from Old French tromper “to deceive,” of uncertain origin. Apparently from se tromper de “to mock,” from Old French tromper “to blow a trumpet.” Brachet explains this as “to play the horn, alluding to quacks and mountebanks, who attracted the public by blowing a horn, and then cheated them into buying ….” The Hindley Old French dictionary has baillier la trompe “blow the trumpet” as “act the fool,” and Donkin connects it rather to trombe “waterspout,” on the notion of turning (someone) around. Connection with triumph also has been proposed. Related: Trumped; trumping. Trumped up “false, concocted” first recorded 1728.

trompe

Here is more, via DK.  Here are related comments from Scott Sumner.

European countries that refuse to share the burden of high immigration will face a financial charge of about €250,000 per refugee, according to Brussels’ plans to overhaul the bloc’s asylum rules.

The punitive financial pay-off clause is one of the most contentious parts of the European Commission’s proposed revision of the so-called Dublin asylum regulation, due to be revealed on Wednesday…

According to four people familiar with the proposal, this contribution was set at €250,000 per asylum seeker in Monday’s commission draft. But those involved in the talks say it may well be adjusted in deliberations over coming days.

“The size of the contribution may change but the idea is to make it appear like a sanction,” said one official who has seen the proposal. Another diplomat said in any event the price of refusing to host a refugee would be “hundreds of thousands of euros”.

Here is the full FT piece.  Elsewhere on the pricing front, there is talk that at some point Uber will move away from surge pricing.

Having been named as Mr Nakamoto once, unconvincingly, Mr Wright has a steep hill to climb to convince the world that he is indeed bitcoin’s founder. Evaluating his claim involves the application of a multi-step paternity test. First comes the factual evidence: can Mr Wright prove that he is in possession of cryptographic keys that only Mr Nakamoto should have? Second, does he have convincing explanations for the holes in the story which came to light when he was first outed in December? Third, does he possess the technical knowledge which would have enabled him to develop a system as complex and clever as bitcoin? And fourth, to what extent does he fit the image that people have of Mr Nakamoto; in particular, what do those software developers who have collaborated online with the founder of bitcoin think of Mr Wright’s claim?

Here is a very good Economist article, I say p = 0.415.  There is some legitimate evidence and some serious endorsers, but the whole thing still doesn’t smell right to me.  You?

Update from my iPad: uh-oh, http://www.economist.com/news/briefings/21698066-onus-on-craig-wright-provide-better-evidence-satoshi-nakamoto?fsrc=scn/tw/te/bl/ed/craigwrightsclaimsunderfire

True or false? A new nuclear power station in the south-west of the UK will be the most expensive object on Earth. That’s the claim about the proposed plant at Hinkley Point in Somerset – but has anything else ever cost so much to build?

“Hinkley is set to be the most expensive object on Earth… best guesses say Hinkley could pass £24bn ($35bn),” said the environmental charity Greenpeace last month as it launched a petition against the project.

…Even if you stick with the expense of construction alone, though, the price is still high – the main contractor, EDF, puts it at £18bn ($26bn).

Here is the story, via Tim Harford.  Being good Austrians, let’s put cost of production aside and focus on potential market value.  Might there be an object which would auction for at least this much, if it were put on the market?  If so, which one?  The Mona Lisa?  A pyramid?  How about St. Peters?  Worth more or less than a nuclear power plant?  The Grand Mosque in Mecca?  The Great Wall of China?

Going back to cost of production, the article also mentions:

But these are all exceeded by the $54bn (£37bn) Gorgon liquefied natural gas plant built by Chevron in Australia.

And (not on earth):

The International Space Station. Price tag: 100bn euros (£77.6bn, or $110bn).

Trading volumes of the most-traded steel rebar contract in Shanghai hit a record 1.3bn tonnes today, or enough to build the Sydney Harbour Bridge 24,621 times.

If skyscrapers are the preferred metric, fret not: trades today were also equivalent to approximately 41,401 Burj Khalifas.

…One could construct around 178,082 Eiffel Towers with the above-mentioned volume of steel rebar traded today in Shanghai.

Here is the FT story.  Hat tip goes to the ever-excellent Christopher Balding.

From a new Pew Study:

In our latest national political survey, released in March, 59% of the public say immigrants strengthen the country, while 33% describe them as a burden. In 1994, opinions were nearly the reverse: 63% said immigrants were a burden and 31% said they strengthened the country.

You will note that they views of Republicans and Democrats diverge after 2006.  Millennials are especially favorably inclined.

Pew

Last month, De La Rue, the world’s largest currency maker, sent a letter to the central bank complaining that it was owed $71 million and would inform its shareholders if the money were not forthcoming. The letter was leaked to a Venezuelan news website and confirmed by Bloomberg News.

“It’s an unprecedented case in history that a country with such high inflation cannot get new bills,” said Jose Guerra, an opposition law maker and former director of economic research at the central bank. Late last year, the central bank ordered more than 10 billion bank notes, surpassing the 7.6 billion the U.S. Federal Reserve requested this year for an economy many times the size of Venezuela’s.

…While the cash was still arriving — at times, multiple planeloads a day — authorities set their sights on the year ahead. In late 2015, the central bank more than tripled its original order, offering tenders for some 10.2 billion bank notes, according to industry sources.

But currency companies were worried. According to company documents, De La Rue began experiencing delays in payment as early as June. Similarly, the bank was slow to pay Giesecke & Devrient and Oberthur Fiduciaire. So when the tender was offered, the government only received about 3.3 billion in bids, bank documents show.

That is from Andrew Rosati.  Here is a sad and poignant post on the suicide of Venezuela, by Joel D. Hirst.