Uncategorized

1. “For over a century, incomes across states converged at a rate of 1.8% per year…The convergence rate from 1990 to 2010 was less than half the historic norm, and in the period leading up to the Great Recession there was virtually no convergence at all.”

2. After subtracting housing costs, janitors in NYC now earn less than they do in the Deep South.  This was not the case for most of American history.

3. For NYC janitors, housing costs measure at 52% of their income.

4. Income differences across states are increasingly capitalized into housing prices.

5. “…income convergence declined the most in areas with [land] supply constraints.”

6. “Had [cross-state] convergence continued apace through 2010…the increase in hourly wage inequality from 1980 to 2010 would have been 8% smaller.”

That is from a new NBER working paper, “Why has Regional Income Convergence in the US Declined?”, by Peter Ganong and Daniel W. Shoag.  Here are earlier ungated versions.

Note that this paper contains “…the first national panel measure of land use regulations in the US.”

Tuesday assorted links

by on July 25, 2017 at 12:15 pm in Uncategorized | Permalink

I will be speaking on occupational licensing on Wed. July 26, 2017, 11:00 am – 12:30 pm at Heritage. You can RSVP here and there will also be a livestream.

Monday assorted links

by on July 24, 2017 at 2:49 am in Uncategorized | Permalink

Sunday assorted links

by on July 23, 2017 at 4:32 am in Uncategorized | Permalink

Saturday assorted links

by on July 22, 2017 at 12:30 pm in Uncategorized | Permalink

I am in Delaware only briefly.  I have not covered the state before, so here are some of my picks:

1. Chemicals manufacturer: I think that one has to go to the Duponts, I enjoyed the Gerard Zilg biography of the Dupont family and history.

2. Economic historian: Alfred Chandler.

3. Monetarist who studied policy instruments and uncertainty: William Poole.

4. Semi-libertarian journalist: Dave Weigel.

Hmm…music?  I don’t like George Thorogood.  A quality novelist?  How about a painter or sculptor?  Some big time NBA star?  Biden is my favorite of Obama’s VPs.  It is claimed that the movie Fight Club is set in Delaware.  So many special dishes too, in the local cuisine.

The bottom line: Small wonder it is!

Friday assorted links

by on July 21, 2017 at 11:51 am in Uncategorized | Permalink

Thursday assorted links

by on July 20, 2017 at 12:49 pm in Uncategorized | Permalink

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.

Wednesday assorted links

by on July 19, 2017 at 12:06 pm in Uncategorized | Permalink

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.”

No, I don’t approve of the second Putin-Trump meeting, but I’d like to consider this as a game theory problem without its current political connotations.

Why is it bad to attend such a meeting without your own translator?

Let’s say I meet with a Greek, to talk about debt renegotiation, and don’t bring my own translator.  You might think I am at the mercy of the other translator, the one hired by my Greek peer.

But how so?  If the Greek speaker wishes to mislead me, he doesn’t need a biased translator to do so.  He can just lie to me or otherwise mislead me in the original Greek.  Either translation, from an American or Greek translator, will communicate the same lie or deception.

Alternatively, assume I believe there is some “noise” between the Greek statement and its translation into English.  Some of this may stem from the imperfections of the translation process itself, or perhaps the translator has her own agenda.

If I bring my own translator, that removes the influence of the agenda of the Greek translator, but probably keeps the noise and imperfections.  But is that good or bad on net?

1. I now face risk from the agenda of my own translator.  That may be more biased or skewing than the agenda of the Greek translator, especially since it may relate to splits within American rather than Greek politics.

2. It might be better if I am fooled by a Greek translator who to some extent wishes to subvert the interests of her own government.  For instance, the Greek translator might wish to keep smooth relations by not communicating all of the cuss words behind a threat.

3. The Greek speaker might in fact know he is regularly subverted by his own translator, and adjust his words accordingly.  The “subverted” communication, as conveyed by the Greek translator, may in fact be the intended message, and thus there is little harm from the subversion.

4. By not having your own translator present, you are keeping as private information what and when you will reveal to your own countrymen.  That may put you in a stronger bluffing or bargaining position.

4b. In the other direction, note you may wish to have your own translator so that your negotiating partner can do without his!  That may put him in a stronger position with respect to his home interest groups and thus facilitate a deal.

Overall, it is not obvious that I am so much better off having my own translator.  In fact, it seems your own translator is there, to some extent, to constrain you, as is evident from some of the discussion of the Putin-Trump meeting.  For instance, it is being claimed Trump might have wanted to say things to Putin that no American functionary could be allowed to hear.  If that is true, it might be bad for America, but it need not be bad for Trump’s self-interest.

On this question, the economics of having your own note-taker, or your own taping mechanism, might be very different from that of translator, but that would be another post.

“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.

A coffin-making community group has popped up in Tasmania’s north-west, allowing people to make their caskets dirt cheap.

The Community Coffin Club meets once a week at the Ulverstone Community Shed, where mentors help people make coffins for themselves and their family.

Sheree Whittington has been working on her coffin for the past month.

“I’ve always had a bit of a morbid side to me and loved the Addams family and that sort of thing,” Ms Whittington said.

“When I found out about the Coffin Club I thought what better way: make my own coffin.”

Ms Whittington said she planned to put her coffin to good use before she needed it.

“It is going to be a coffin for when my time eventually comes, but in the meantime I’m going to have shelves put in it so I can use it as a CD and DVD rack.”

“It’s an actual, functional piece of furniture.”

Is this true?:

Facing death ‘easier if you’ve got coffin ready’

Maybe so:

“I don’t know what the funeral directors think about it, but we can make them for probably a tenth of the cost.”

When Mr Game’s is finished, his casket will have cost less than $200 to make.

Here is the full story, via NinjaEconomics.