A live stream version is posted here, slide to 6:00 to start, YouTube and podcast and transcript versions are on their way. I thought Jeff did just a tremendous job. We covered the resource curse, why Russia failed and Poland succeeded, charter cities, his China optimism, how his recent book on JFK reflects the essence of his thought, why Paul Rosenstein-Rodan abandoned Austrian economics for “big push” ideas, whether Africa will be able to overcome the middle income trap, where he disagrees with Paul Krugman, his favorite novel (Doctor Zhivago, he tells us why too), premature deindustrialization, and how we should reform graduate economics education, among other topics.
Collinson, Ellen, and Ludwig have a new and long NBER paper (pdf) devoted to that topic. Here are a few bits:
The United States government devotes about $40 billion each year to means-tested housing programs, plus another $6 billion or so in tax expenditures on the Low Income Housing Tax Credit (LIHTC).
Yet total subsidies for home ownership may run as high as $600 billion, most of those not going to the poor.
There are over twenty different federal subsidized housing programs and most of them are no longer producing new units.
I am speaking for myself here, and not for the authors, but I cannot imagine any better case for cash transfers than to read this 75 pp. paper.
How about this?:
In 2012, housing authorities nationwide reported more than 6.5 million households on their waitlists for housing voucher or public housing.
That to my eye suggests targeting this aid is not working very well.
I found this to be an interesting comparison (I am not suggesting it is being driven by these federal housing policies):
The median renter household in 1960 was paying approximately 18 percent of his/her total family income in rent; the equivalent figure today is 29 percent.
Overall, I would like to see more economists call for the abolition of these programs and indeed some approximation of laissez-faire toward housing more generally.
By the People: Rebuilding Liberty Without Permission, due out in May, here is some summary:
In this provocative book, acclaimed social scientist and bestselling author Charles Murray shows us why we can no longer hope to roll back the power of the federal government through the normal political process. The Constitution is broken in ways that cannot be fixed even by a sympathetic Supreme Court. Our legal system is increasingly lawless, unmoored from traditional ideas of “the rule of law.” The legislative process has become systemically corrupt, no matter which party is in control.
But there’s good news beyond the Beltway. Technology is siphoning power from sclerotic government agencies and putting it in the hands of individuals and communities. The rediversification of American culture is making local freedom attractive to liberals as well as conservatives. People across the political spectrum are increasingly alienated from a regulatory state that nakedly serves its own interests rather than those of ordinary Americans.
An AEI notice is here, and for the pointer I thank David Levey.
You will find it here. Here is one excerpt:
TYLER COWEN: New York City, overrated or underrated?
PETER THIEL: That’s massively overrated.
TYLER COWEN: Why?
PETER THIEL: We had a 25-year boom in finance, from ’82 to ’07. I think that’s slowly ebbing, slowly abating. It’s going to be increasingly regulated, and so if you want a long/short blue state trade, you want to be long California, short New York. The long/short red state trade, by the way, is you want to be long Texas, short Virginia.
If you ask, what do Virginia and New York have in common, and what do Texas and California have in common? Both Texas and California are very inward-focused places. California, both the Hollywood version and the Silicon Valley version, are very focused in on themselves. Texas is also a very inward-focused place.
What Virginia and New York, or let’s say DC and New York City, have in common is that they’re centers of globalization. Finance is an industry that’s fundamentally leveraged to globalization, and DC is fundamentally leveraged to international geopolitics.
I would bet on globalization slowly being in abeyance. I think with the benefit of hindsight, we will realize that 2007 was not just the peak year of the finance boom, but also the peak year of globalization, like maybe 1913. Happily, it hasn’t resulted in a world war, at least not yet, but I think we are in this period where globalization is steadily pulling back.
And so you want to be in places or industries that are levered to things other than globalization.
Self-recommending…The YouTube and podcast versions are here.
In 1944, the celebrated economist Friedrich Hayek was commissioned by the British Colonial Office to undertake a report on the economy of Gibraltar. His conclusion was that the government of Gibraltar should use market forces to relocate working class Gibraltarians into neighbouring Spain. Yet despite the libertarian credentials Hayek had established via his work of the same year, The Road to Serfdom, such a policy would have moved Gibraltarians into the dictatorship of General Franco.
In a study presented to the Economic History Society’s 2015 annual conference, Chris Grocott argues that Hayek’s proposal to relocate Gibraltarians into Spain shows an alarming lack of political astuteness on the part of the winner of the 1974 Nobel Prize for Economics.
In the first instance, the British Colonial Office conveniently lost Hayek’s report. When it re-surfaced in early 1945, the Colonial Office then sent the report to the Admiralty who, unimpressed with Hayek’s condemnation of educational facilities in Gibraltar’s dockyard, moved to delay its publication. Meanwhile, Hayek himself was on a lecture tour of the United States, promoting The Road to Serfdom, and oblivious to the dismay that his report has caused.
There is more here, via the excellent but under-followed Mark Koyama.
When Lyndon Johnson hosted Lester Pearson in 1965, he hauled the Canadian prime minister up by his lapels and shouted, “you pissed on my rug” after his guest criticised the Vietnam war in a speech during his visit to the US. And when Prime Minister Pierre Trudeau learned that Richard Nixon had called him “an asshole”, he responded: “I’ve been called worse things by better people.”
From Demetri Sevastopulo, there is more here at the FT. Alex and I, however, get along just great…
Ian Bremmer tweeted:
There will surely be cheating on the Iran deal. But I still consider it a better outcome than letting negotiations fail. Close call.
That seems about right to me.
The YouTube version is here, the podcast version is here.
I was very happy with how it turned out, as I deliberately set out not to copy the content of any of Peter’s other dialogues. You can learn how he thinks we will leave the “great stagnation,” whether the AI hype is justified, how he would boil his thought down to the smallest number of dimensions, whether NYC is over- or underrated, why globalization is likely to decline and what that means for different regions, the parts of the Bible which have influenced him most, “the Straussian Jesus,” to what age he thinks he will live, why Japan is special, how his German background matters, his favorite opening chess move, how and why company names matter, and even his favorite TV show, which he calls “schlocky.”
And much, much more, with commentary and questions from me throughout. A transcript is being prepared as well.
Timothy Hicks has a new and recently published paper:
It is argued in this article that the marketisation of schools policy has a tendency to produce twin effects: an increase in educational inequality, and an increase in general satisfaction with the schooling system. However, the effect on educational inequality is very much stronger where prevailing societal inequality is higher. The result is that cross-party political agreement on the desirability of such reforms is much more likely where societal inequality is lower (as the inequality effects are also lower). Counterintuitively, then, countries that are more egalitarian – and so typically thought of as being more left-wing – will have a higher likelihood of adopting marketisation than more unequal countries. Evidence is drawn from a paired comparison of English and Swedish schools policies from the 1980s to the present. Both the policy history and elite interviews lend considerable support for the theory in terms of both outcomes and mechanisms.
There are less gated versions here, and for the pointer I thank the excellent Kevin Lewis.
It is a busy morning, here is part of an email from Cato:
The Cato Institute welcomes Peter Goettler, a former managing director at Barclays Capital, as its new President and CEO, effective April 1. Current CEO John Allison is retiring after more than two exemplary years on the job.
Goettler retired in 2008 as a managing director and head of Investment Banking and Debt Capital Markets, Americas, at Barclays Capital, the investment banking division of Barclays Bank, PLC. He also served as chief executive officer for the firm’s businesses in Latin America and head of Global Loans and Global Leveraged Finance. He has been a member of the Cato Institute’s board since last year and a supporter of the Institute for 15 years.
Perhaps more information will pop up on their web site soon.
The problem is that Mr. Tsipras has not convinced his creditors that he is serious about reform or that his team is remotely on top of the detail. He needs a game-changer. This should, indeed, be a rupture — but with his left faction, not his creditors.
That is from Hugo Dixon, file it under “Scream it From the Rooftops.” You will note, by the way, that the far-left faction accounts for 30 to 40 of the 149 coalition seats in the Greek parliament, so such an action would not be easy. It is still not too late, however, if only…
Here is one excerpt from his very interesting post:
I get and very much like the skeptical, anti-theoretical thrust of Strauss. I like his deep wariness of ideal theorizing, his exhortations to pay attention to the political life we are always already living. He’s right to see reasoning with others about about how to live as an inherently political activity. He’s right to insist on honoring the distinctive excellences of those sensitive to the texture of real political life and expert in its ceaseless negotations. He’s right that social scientific theories about politics are less politically valuable then good political judgment, and that people who think they’re going to govern “scientifically” are dangerously stupid. (Paraphrasing, here.) And, yes, when philosophy is merely a handmaiden to the dogmas of our age, pursued under the “ecumenical supervision” of the universities, it is profoundly compromised. To be a philosopher is not to have a job you clock in and out of. To be a philosopher is simply to be, philosophically, always. Right! But the Socratic life is the one very best life? The naturally right, life? Nope. Nope. I’ve read and read and never quite follow how we end up there. I mean, I think this is a great life, beyond wonderful. But nope.
Anyway, Strausseans are strangely obsessed with this idea that the philosophical life, so construed, is the best human life, full stop, and are therefore obsessed with the tension between the best life, which is in the business of exposing bullshit, and the political life, which is built on it.
I am very happy to order this book in advance, I hope Will lets me know when that is possible.
I may not follow any of your suggestions, but just thought I should ask for advice, for my dialogue with Peter next week. I am the interviewer, he is the interviewee, more or less. #CowenThiel
That is the new and excellent book by Andrew G. Walder. Here is one excerpt:
The Communists’ contribution to the war effort was extremely modest. According to a December 1944 Soviet Comintern report, a total of more than 1 million Nationalist troops had been killed in battle, compared to 103,186 in the CCP’s Eighth Route Army and another several thousand in the New Fourth Army. The Communists suffered only 10 percent of total Chinese military casualties. One author has called Mao’s famous doctrine of people’s war one of the “great myths” about the period: “people’s war was hardly used in the conflict against the Japanese.”