Tuesday assorted links

by on March 7, 2017 at 12:15 pm in Uncategorized | Permalink

1. Dylan Matthews on a Give Directly UBI experiment in Kenya.

2. Mackerels are a medium of exchange in some U.S. prisons (short video).

3. Yuval Levin reviews The Complacent Class: “Cowen’s book is rich in thought-provoking insights and is a testament to his own voracious curiosity and open-minded intelligence. There is more to it than any summary could hope to capture.”

4. Bob Luddy reviews The Complacent Class in American Spectator: “The Complacent Class defines the daunting challenges of our times.”

5. Facts about blue-footed boobies (NYT).

Immigrant Doctors

by on March 7, 2017 at 9:01 am in Uncategorized | Permalink

One percent of all the physicians in the United States come from the six countries targeted in Donald Trump’s new Executive Order. I found that a surprisingly high number. According to the Immigrant Doctors Project, those 7000 physicians provide 14 million doctors’ appointments each year and many of them are located in the poorer, whiter, and rural parts of the country.

I don’t see this as a knockdown argument against the policy but it does illustrate a surprising cost and also how much the United States benefits from the immigration of the highly-skilled and educated.

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.

Here is the second video based on The Complacent Class:

 
Here is the first video and a way to sign up for the whole series.

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.

That is the part of Northern Ireland along the northern coast, renowned for its scenery.  What is the best way to drive there from Dublin, and what is best to see along the coast?

GIANTS-CAUSEWAY-Image-4-Causeway-3

I thank you all in advance for your guidance, and your extreme intelligence and humility.

Monday assorted links

by on March 6, 2017 at 11:46 am in Uncategorized | Permalink

1. How to wiretap Trump Tower.

2. Economist Dorothy Rice passes away (NYT).  And The Economist on feminist economics.

3. Underrated explanations for understanding the rise of Trump (NYT):

Historians will long ponder the factors behind Mr. Trump’s unlikely rise to the presidency. Most analyses cite his advocacy for the economically disaffected, his rejection or embrace of one form of identity politics or another, or his preternatural ability to connect with “Middle America.”

But another factor deserves attention: a bipartisan approach to national security focused on terrorism that has distorted America’s understanding of its interests.

4. The real story of Japan’s Bond Girl (NYT).

5. Atlantic Business on The Complacent Class: “[The Complacent Class] provides an open invitation for the reader to think deeply.”  And Arnold Kling reviews Complacent Class: ” There is a lot to the book. You should read it. Even though it is getting a lot of coverage, don’t just assume that you can pick up its contents by osmosis. But prepare to disagree with him at times.”  And a review by Dalibor Rohac.

6. Some elephants sleep only two hours a night.

Here is the link, all are welcome…

Theft! A History of Music

by on March 6, 2017 at 7:13 am in Books, Economics, Law | Permalink

Theft! A History of Music is a graphic novel by James Boyle, Jennifer Jenkins and the late Keith Aoki. It’s about musical borrowing and the laws that have attempted to regulate musical borrowing and inter-mixing over the past 2000 years.

The history in this book runs from Plato to Blurred Lines and beyond. You will read about the Holy Roman Empire’s attempts to standardize religious music with the first great musical technology (notation) and the inevitable backfire of that attempt. You will read about troubadours and church composers, swapping tunes (and remarkably profane lyrics), changing both religion and music in the process. You will see diatribes against jazz for corrupting musical culture, against rock and roll for breaching the color-line. You will learn about the lawsuits that, surprisingly, shaped rap. You will read the story of some of music’s iconoclasts—from Handel and Beethoven to Robert Johnson, Chuck Berry, Little Richard, Ray Charles, the British Invasion and Public Enemy.

Theft! is informative and quite fun. I enjoyed it a lot. You can buy a paperback or get a free download. Here’s one page:
Theft_173

Should we tax robots?

by on March 6, 2017 at 12:23 am in Economics, Web/Tech | Permalink

That idea was suggested recently by Bill Gates, though I think you can debate with what degree of literalness.  It’s worth a ponder in any case, and here is a recent Noah Smith column on the idea, and here is Summers in the FT, WaPo link here.  And here is Izabella Kaminska.

Put aside the revenue-raising issue (which will require some taxes on capital, most likely, including on robots): if we have taken in optimal revenue, is there a separate and additional argument for an additional robot tax?  In this context, I would consider “robots” to be capital that is especially substitutable for human labor.

Presumably the claim is that there is either a distributional or an “externalities from a happy human being” reason to slow the rate at which capital is substituted for labor.  But if we accept that assumption, should we tax robots or subsidize wage labor?

One reason not to tax the robots is that employers might substitute away from robots and toward natural resources rather than toward domestic human labor.  Maybe that doesn’t sound intuitive, but think of paying the energy costs to outsource to another nation and transport the outputs back home.

But the main issue is probably one of incidence.  A general problem with a wage subsidy is that sometimes much of its value its captured by employers.  For instance if the subsidy takes an EITC form, employers could pay less to their workers, but perhaps many eager workers still would seek the job to capture the somewhat higher net total wage, namely the employer portion plus the benefit.  If enough workers are keen to get the pay, employers can claw back much of the EITC boost and still get the work force they need.

Now consider the incidence of a tax on robots.  If the elasticity of the demand for robots is high, there will be a big shift away from robots and toward labor (and land and other resources).  It is at least possible that workers capture more of the gains this way than from the direct subsidy to their wages.  On the downside, the employer fares less well under this scheme.

So it depends on how labor and robot elasticities relate to each other.  I don’t know what relationship between the parameter values is likely, but typically in these scenarios just about any result is possible.  The robot tax would seem to do best when the elasticity of demand for robots is high, but the corresponding elasticity of demand for labor is low (and differentials in supply elasticities do not offset this).  As robots and labor become more substitutable, that difference in demand elasticities is likely to diminish.  So if you are going to do this, maybe it is necessary to do it soon, precisely when it does not seem needed.

Your call, but that is the basic set-up of the problem.

What makes one song, TV show, or consumer product a hit, and the other not?  Derek’s new book is probably the very best exploration of this question.  Perhaps not surprisingly, I interpret much of his answer in terms of complacency: people want something that appears a bit different, but actually is deeply conservative and keeps them running in place (my take, not exactly his).  In any case, what is the right blend of new and old to captivate an audience?

HITmakers

Here is one good review of the book.  You can buy it here.

Maersk had found that a single container could require stamps and approvals from as many as 30 people, including customs, tax officials and health authorities.

While the containers themselves can be loaded on a ship in a matter of minutes, a container can be held up in port for days because a piece of paper goes missing, while the goods inside spoil. The cost of moving and keeping track of all this paperwork often equals the cost of physically moving the container around the world.

That is by Nathaniel Popper and Steve Lohr, mostly about blockchains, via Ángel Cabrera.

Sunday assorted links

by on March 5, 2017 at 7:31 am in Uncategorized | Permalink

In the last two weeks I’ve heard the new George Harrison box set mentioned so often on channel 26 Sirius satellite radio — accompanied by the playing of Harrison songs — that I’ve concluded some form of payola is going on.  In its early days, satellite radio was critical of the mainstream radio stations for this practice, but now it’s jumped on board.  And you know what — no one cares!  Even on the internet, there is hardly anyone complaining.  Hard to believe, I know, but that is maybe one indirect advantage of the current political polarization.

And why should you complain about satellite radio payola?  Without payola, the stations choose songs (directly or indirectly, through dj instructions) to pull in the marginal subscriber.  With payola, payments from IP holders become a separate influence on program content.  Those payments are most likely to come from IP holders whose products show a high elasticity of demand with respect to advertising.  In other words, the influence of producer surplus rises, relative to consumer surplus.

Intuitively, that seems to me “music that a lot of listeners already are familiar with, even if they don’t know that a new boxed set just has been released” is how that category translates into satellite radio circa 2017.  Or, in other words, George Harrison.

Perhaps the most underrated George Harrison song is “You.

Addendum: Interestingly, payola in earlier parts of the 20th century seemed to favor music for the young, black music, and new, previously undiscovered artists.  It’s worth thinking through why this has changed.  For 1950-2000, there is no “marginal subscriber to radio” the way there is for satellite radio, rather most listeners are in the relevant network.  Furthermore, today’s satellite radio listeners are I believe considerably older and somewhat wealthier than the typical radio listener, either now or earlier.  When more or less everyone was on the “free radio network,” the high elasticity of profits with respect to advertising was for the artists who otherwise wouldn’t get much exposure.  In contrast, today it is for “golden oldies,” where the taste for the product already is there but information about availability may be lacking.

Here are previous MR posts on the economics of payola.