Current Affairs

American adults had sex about nine fewer times per year in the early 2010s compared to the late 1990s in data from the nationally representative General Social Survey, N = 26,620, 1989–2014. This was partially due to the higher percentage of unpartnered individuals, who have sex less frequently on average. Sexual frequency declined among the partnered (married or living together) but stayed steady among the unpartnered, reducing the marital/partnered advantage for sexual frequency. Declines in sexual frequency were similar across gender, race, region, educational level, and work status and were largest among those in their 50s, those with school-age children, and those who did not watch pornography. In analyses separating the effects of age, time period, and cohort, the decline was primarily due to birth cohort (year of birth, also known as generation). With age and time period controlled, those born in the 1930s (Silent generation) had sex the most often, whereas those born in the 1990s (Millennials and iGen) had sex the least often. The decline was not linked to longer working hours or increased pornography use. Age had a strong effect on sexual frequency: Americans in their 20s had sex an average of about 80 times per year, compared to about 20 times per year for those in their 60s. The results suggest that Americans are having sex less frequently due to two primary factors: An increasing number of individuals without a steady or marital partner and a decline in sexual frequency among those with partners.

Here is the article, by Twenge, Sherman, and Wells, via the excellent Kevin Lewis.

That is the title of a recent paper in the Journal of Development Economics (NBER version here, 2013 ungated version here), and although the piece does not feel dramatic at first it is one of my favorite articles of the year.  It pins down some critical features of economic underdevelopment better than any study I know.  The subtitle, by the way, is “The Successes and Limitations of Bureaucratic Reform in India,” the authors are Iqbal Dhaliwal and Rema Hanna, and the work is set in rural Karnataka.

It is not easy to excerpt from, so I will summarize the narrative:

1. Using biometric technology — thumbprints — to monitor absenteeism induces staff attendance for public health workers to rise by almost 15 percent.

2. That in turn leads to a reduction in low-birth weight babies.

3. Yet the government proved not so interested in monitoring attendance on a more regular basis, not even to enforce their pre-existing human resource policies.  Potential penalties against late or absent doctors were not, for the most part, enforced.

4. Following the implementation of monitoring, the doctors showed the least improvement in attendance of all the workers, in fact virtually no improvement.  The entire positive effect came from nurses, lab technicians, and lower level staff.

5. The government was reluctant to continue the monitoring because it feared staff attrition and staff discord, especially from the doctors.  There is growing private sector demand for doctors, and many doctors are considering leaving these clinics for superior pay elsewhere, and perhaps also superior location.  Therefore the doctors are given, de facto, a very lenient absence and lateness policy, in lieu of a pay hike.

6. It is already the case that many of these doctors moonlight on the side, or have separate private practices, and that spending more time at the public clinic is not their major priority.

7. It is not easy for the underfunded local government to pay these doctors more, and thus a high level of lateness and absenteeism continues.  I wonder also what would be the morale costs on the non-doctors, if the monitoring were to be continued to be enforced in this differential manner over a longer period of time.

How would the Trump-Clinton debates have been perceived if the genders had been reversed? Two professors worked with trained actors to duplicate not just the words but also the mannerisms of Trump and Clinton–only with a female actor playing Trump, now called Brenda King, and a male actor playing Clinton, now called Jonathan Gordon.

[The professors] began the project assuming that the gender inversion would confirm what they’d each suspected watching the real-life debates: that Trump’s aggression—his tendency to interrupt and attack—would never be tolerated in a woman, and that Clinton’s competence and preparedness would seem even more convincing coming from a man.

What happened, however, was quite different. Audiences in two sold out performances were shocked. They liked Brenda King and distrusted Jonathan Gordon!

We heard a lot of “now I understand how this happened”—meaning how Trump won the election. People got upset. There was a guy two rows in front of me who was literally holding his head in his hands, and the person with him was rubbing his back. The simplicity of Trump’s message became easier for people to hear when it was coming from a woman—that was a theme. One person said, “I’m just so struck by how precise Trump’s technique is.” Another—a musical theater composer, actually—said that Trump created “hummable lyrics,” while Clinton talked a lot, and everything she was was true and factual, but there was no “hook” to it….Someone said that Jonathan Gordon [the male Hillary Clinton] was “really punchable” because of all the smiling. And a lot of people were just very surprised by the way it upended their expectations about what they thought they would feel or experience.

Here’s a clip:

That is the focus of my latest Bloomberg column, here is one bit from it:

Under one somewhat-neglected feature of [one version of] the tax, companies could no longer deduct advertising, interest, rent and employee benefit costs from their bills for tax due. This is a recipe for major tax dodges and the further politicization of government-business relations.

To think through these problems, note that under circulating versions of the tax reform a company still can deduct its asset acquisition and inventory costs. So, to cite one potential problem, if a company acquires a building it can deduct that expense, but not if it rents a similar building. The result is that the rental market would suffer badly. Some companies would put up their own structures, but others might engage in temporary “repurchase” agreements so they are owning their space (“asset acquisition”) rather than renting it. That’s just one example of the big loopholes the new tax code could create.

There is no single canonical account of how a border adjustment tax would work, so maybe that loophole won’t apply to your preferred version. (Here is a 2016 outline, but expect further changes and details; this KPMG document is useful on options.) But the general point is this: By creating such a sharp distinction between deductible and nondeductible business expenses, the opportunities for tax arbitrage and tax-code lobbying are huge. The suspicion is that most business expenditures could, one way or another, be converted into forms that allow for full and immediate expensing.

How about a version of the tax that allows for deductibility of newly constructed but not purchased buildings? Well, that would encourage overinvestment in new construction. You can also imagine building purchases accompanied by overbilled site modifications (with some of that money being returned in another associated transaction), so the refitted structure could count as new construction.

As I say in the piece, please do note that many people have their particular favored versions of the tax, sometimes designed to avoid various specific problems that are raised.  But I don’t think any version of the tax will avoid these problems in general.  Full and immediate expensing is a potent lure, and it will attract a great of gamesmanship.

Here is Ezra Klein on the new health care bill.  Avik Roy doesn’t seem entirely crazy about it either.  I don’t have anything to add to their two fine reports.  Read Bob Laszewski too.

That is my new piece in The American Interest, here is one excerpt:

When I ponder why the American electorate turned to such an unorthodox President as Donald Trump, I think first of the idea of control.

…To date, the commentary on Trump has focused on perceived losses of control, such as 9/11 or diminishing global influence on the foreign policy side, and the loss of manufacturing jobs, real wage stagnation, and rising use of opioids on the domestic side. Those events all did raise the background level of anxiety, but the bigger picture is that the rise of Trump actually coincides with America righting its ship, at least to some extent, especially in economic matters.

And:

In other words, Trump’s main policy is his rhetoric, and his very act of promising to restore control to the “deplorables” is a significant signal of control itself. In essence, Trump supporters are diagnosing America’s problems in terms of deficient discourse in the public sphere, as if they had read George Orwell and the Frankfurt School philosophers on the general topic but are drawing more on alt-right inspirations for the specifics of their critique.

And:

I was struck when one of my friends (a Trump supporter) described Trump’s policy positions as not so different from Dwight Eisenhower’s. At first the assertion shocked me, because I typically think of Trump as so erratic and Eisenhower as so extremely reliable. On reflection it occurred to me that the world Trump actually wants does bear a lot of resemblance to what Eisenhower loved and fought for, even if most Americans have moved on and accepted or embraced most of the social changes the nation has accumulated since that time. Consider how much the world of Eisenhower looks like the dream of Trump: There were hardly any Muslims living in America under Eisenhower’s presidency, he deported significant numbers of illegal Mexican immigrants, tariffs (but also taxes) were higher, and there was no NAFTA or TPP.

We are used to conceptualizing political positions in relative terms, in part to help us judge people’s social status. So if someone (say Ike) was a “moderate” back in the 1950s, we instinctively think of that person as in some way similar to today’s moderates. But an alternative perspective, bracing at times, is to simply to compare positions in absolute terms, and that makes a lot of Trump’s views resolutely ordinary in the broader sweep of American history.

Do read the whole thing.

Adjusting for changes in population, Nevada’s real output is a staggering 21 per cent below its 2006 peak, and more than 10 per cent below its level from two decades ago — a performance only comparable to Greece

That is from Matthew C. Klein at FTAlphaville.

Oxford University has launched a summer school aimed at white British boys, in an effort to increase its intake of working class students.

It is the first time the university has ever specifically targeted this demographic, which is one of the most underrepresented groups in higher education.

Under a new partnership with the Sutton Trust, a social mobility charity, male students from rural and coastal communities will be recruited for summer schools hosted at Oxford University.

…Research by the Sutton Trust charity shows that white British boys who are eligible for free school meals – a key measure of poverty – achieve the lowest GCSE grades of any major ethnic group, with only a quarter (24%) gaining at least five C grades including English and maths.

This compares to around a third (32%) of white British girls on free school meals who achieve this benchmark, making them the lowest performing major female ethnic group.

Here is further information, via the excellent Jeff H.

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

Take the famed Selma civil-rights marchers of 1965, when the protesters had obtained the legal right, through petition, to conduct a 52-mile, five-day march down an interstate highway. Of course, that blocked the highway and inconvenienced many motorists and truckers. America’s NIMBY mentality would most likely prevent a comparable event today.

Starting in the 1970s, the federal courts began to assert that public spaces are not automatically fair game for marches and demonstrations, and so local governments have sought to please the users of such facilities rather than marchers and protesters. For instance, during the 2004 Democratic National Convention, numerous would-be demonstrators ended up being confined to a “demonstration zone,” which one federal judge described as analogous to Piranesi’s etchings of a prison. The zone was ringed by barricades, fences and coiled razor wire.

Here is the closer:

Could we not have kept public demonstrations and protests more alive as a vital and nonbureaucratized tradition?

For a long time, most people ignored this issue, but I wonder if it won’t start to seem urgent once again.

Do read the whole thing.

Here is the link, a very nice spread, here is an excerpt:

Cowen’s concerns about withdrawing from the TPP are far graver than that. “I think it’s saying [to the other countries], ‘We won’t be there for you,’” he says. “It’s signaling there is no pivot to Asia, America will go back into its shell. And I think 50 years from now, through largely intangible factors, that will mean a much worse world…. It’s [about] the whole vision of America engaging with the world.”

For example, Cowen points to both Japan and South Korea and the domino effect this could have on them. “If you’re South Korea and your best and biggest ally just told you, ‘We’re not even going to run this trade agreement,’ [but] they’re still telling you, ‘We’re gonna defend you against North Korea,’ I think at some point you start doubting that,” he says. “And [with] Japan, [if] the U.S. says, ‘No, you don’t need to build nuclear weapons — we’ve got your back,’ I think, as Japan, you need to start doubting that. I’m not sure either of those are things that will change overnight, but if we don’t reverse the unraveling perceptions, you’ll find those countries looking for their own solutions. South Korea would probably cut a deal with China. Japan might rearm more.”

…Cowen, for his part, hopes that Trump and his advisors come to their senses and figure out a way to continue some sort of free trade. “The best-case scenario is that Trump’s advisors go to him and say, ‘Look, you promised to renegotiate NAFTA. TPP does that. You’re very willing to tell people lies. Why not just tell people this is a new and better TPP? If need be, change some cosmetic things in it so it’s not a strict lie and then call it your own, rename it, and pass it,’” Cowen says. Though he doesn’t expect that to actually happen, he believes it would be a big win not only for America but also for Trump, the Republicans in Congress, and the businesses that would benefit from it. “I think it’s a pure political win.”

Self-recommending….

India’s GDP figures were just released and lo and behold they are great! Quarterly growth for Oct-Dec (demonetization, the banning of 86% of India’s cash, hit on Nov. 8) was 7% on an annual year over year basis. Many analysts and critics had predicted a significant slowdown. Prime Minister Modi took the opportunity to take a dig at economists like Amartya Sen who had sharply criticized demonetization saying “Hard work is more important than what Harvard thinks.” (Sen teaches at Harvard). Modi’s BJP party also seems to be doing well in the important elections in Uttar Pradesh suggesting a second term for him.

The GDP statistics may be off, David Keohane runs down some numbers, but I think the basic story is that the people who were hurt most by demonetization simply didn’t generate much GDP to begin with.

Further studies will fine point the cost but I think it safe to say that we now know that the cost to GDP was low. The only question that remains is what was the benefit?

  1. What, then, is the one “must-know fact” about “Big Government” in America today?

It is that “Big Government” in America today is both debt-financed and proxy-administered.

The first half of that essential fact is well known, much discussed, and much debated.  For all but five post-1960 years, the federal government has run deficits, and the national debt is now bordering on $20 trillion.  But the latter half of that essential fact—rampant proxy administration—is little known, poorly understood, and, except in certain moments of crisis, ignored.

…Congress, the keystone of the Washington establishment, has spent half a century promising us that, so to speak, we can all go to heaven without needing to die first.  The American way of “Big Government” has produced massive deficits, both financial and administrative.

That is from John J. Dilulio, Jr., recommended throughout.

Average hourly wages in China’s manufacturing sector trebled between 2005 and 2016 to $3.60, according to Euromonitor, while during the same period manufacturing wages fell from $2.90 an hour to $2.70 in Brazil, from $2.20 to $2.10 in Mexico, and from $4.30 to $3.60 in South Africa.

Chinese wages also outstripped Argentina, Colombia and Thailand during the same time, as the country integrated more closely into the global economy after its 2001 admission into the World Trade Organisation.

…Manufacturing wages in Portugal have plunged from $6.30 an hour to $4.50 last year, bringing wage levels below those in parts of eastern Europe and only leaving them 25 per cent higher than in China.

That is from Steve Johnson at the FT.

From Dan Wang:

Let me take this opportunity to register a complaint with the term “open-minded,” which is increasingly praised as an important virtue.

I’ve started to dislike the term. First of all, it’s unobjectionable—who would profess he is not open-minded? More importantly, it’s not always clear what the term refers to, and this is worth thinking through. It might indicate the state of being “soft-minded,” in which one would readily be swayed by better arguments. But often it tends to connote “empty-minded,” in which one accepts anything and retains little. Many people are indeed open to different cultures and ideas, but they’re not necessarily conceptualizing their experience, nor active in seeking new experiences out.

I would like for everyone to be “hungry-minded,” in which one realizes that there is so much to know.

Much (by no means all) of the post is a review of The Complacent Class.  Dan of course is an excellent reader:

By introducing little oddities in the text, Cowen makes room for claims that are too difficult to baldly state; in other cases, watch for occasions in which he’s offering commentary on something other than what he’s directly writing about.

I am envious that Dan is now in Kunming again…

The big news was that China actually started to apply real pressure to North Korea, namely ceasing to buy their coal for the rest of the year.  That may prove a phantom or reversed piece of news, but still it is real progress of some kind, if only in expected value terms.  Did Trump’s antics and also his courting of Abe have anything to do with this?  We don’t know.  Was Obama’s THAAD missile deployment to South Korea a factor?  Probably.  I say score one for them both.  Keep in mind that is probably the world’s #1 foreign policy problem, and otherwise progress has been hard to come by.  Their KL airport assassination also may end up as a relevant PR disaster, costing them further foreign support.

Closer to home, outright Obamacare repeal seems increasingly unlikely.  Since I never favored Obamacare, you might think I am unhappy, but as I see it they were likely to replace with something unworkable and worse.  So this is, if not good news outright, at least the opposite of bad news.  Whether through brilliance or incompetence, Trump simply isn’t leading on this issue and so major changes won’t get done, maybe not even minor changes.

Republicans in state governments are running away from fiscal conservatism rather rapidly.  The Michigan legislature turned down a tax cut and there was a significant revolt in Kansas.  That was an under-reported story, namely a reversal of Tea Party influence on Republican-controlled state governments.

The Border Tax plan appears to be dead or on life support.  Flynn is gone and replaced by the apparently excellent McMaster.  There is talk (fact?) again of Kevin Hassett as CEA chair — a great idea — and Russia seems increasingly disillusioned with our president, also a nicer place to be.

The new Executive Order on regulation has some upside deregulatory potential.  Whether or not you favor a federal role in the matter, I thought it was a good sign to see Betsy DeVos sticking up for transgender rights.

Proposed policies on trade and immigration, as well as rhetoric toward the press, remain awful, plus various “background problems” continue, but overall I thought this was a very good week for Trump, with Flynn out to pasture and the North Korea news far outweighing the rest.