Privacy vs. control

It is often suggested that Facebook, Google, and the other major tech companies violate the privacy of their users, and of course the companies are criticized on those grounds.  Yet I never see those critics go after other sources of privacy violations, such as say the friends and acquaintances who gossip behind our backs.  If privacy were so important, you might expect the overall campaign to be “pro-privacy” rather than just “anti-corporate” or “anti-tech.”

One possibility is that service users don’t see much of a chance that the “Zip files” assembled on them by the algorithms stand much chance of harming their fortunes or even being released in decipherable form.

Still, people are made vaguely uncomfortable by some of what is going on.  Could it be a “control” issue rather than a privacy issue?  That is, people do not like “feeling out of control” when it comes to their lives, including their personal data.  They used to “feel in control” and now they do not, in part because of the very media critics who view themselves as solving the privacy problem.

If it is a control problem, the chance that placebos will improve matters is higher, because I do not see our privacy losses as being reversible, or people even caring all that much.  What is the cheapest placebo that can help us address the control problem?  Passing some meaningless piece of legislation?  Self-reforms from the media?  The right kinds of proclamations from the tech companies?  All of the above?

I believe public discourse would be improved if we realized “privacy problems aren’t always about privacy,” to paraphrase Robin Hanson.

A new Emergent Ventures tranche

I am pleased to announce a new and special tranche of the Emergent Ventures project at Mercatus.  I describe it as a new allocation of funds specially dedicated to:

“advancing humane solutions to those facing adversity – based on tolerance, universality, and cooperative processes”

So if you have a relevant project along these lines, I would very much encourage you to apply.  The rest of Emergent Ventures will continue to operate as before.

So you think you know diet?

For every 100,000 inhabitants, Okinawa has 68 centenarians – more than three times the numbers found in US populations of the same size. Even by the standards of Japan, Okinawans are remarkable, with a 40% greater chance of living to 100 than other Japanese people.

Little wonder scientists have spent decades trying to uncover the secrets of the Okinawans’ longevity – in both their genes and their lifestyle. And one of the most exciting factors to have recently caught the scientists’ attention is the peculiarly high ratio of carbohydrates to protein in the Okinawan diet – with a particular abundance of sweet potato as the source of most of their calories.

People, I am not trying to claim this is true!  As is so often the case, I am trying to confuse you and persuade you that maybe you know less than you think.  Here is the full story.  Here are other pieces on why Okinawans live so long, none to me very convincing.

Short-term lending in response to the government shutdown

Gridlock in Washington over President Donald Trump’s plans to build a wall on the border with Mexico has deprived hundreds of thousands of government employees and contractors of their wages. As a result, some have turned to specialist consumer-finance companies to bridge gaps between earnings and outgoings. Shares in World Acceptance, a South Carolina-based short-term lender, are up 22 per cent since the shutdown took effect about a month ago. EZ Corp, a pawnshop operator based in Austin, Texas, is 20 per cent higher over that period. In both cases, the rises are much more than benchmarks, suggesting investors could be betting on a surge in demand to cover unexpected expenses.

…Chad Prashad, chief executive of World Acceptance, said his company was seeing demand in Texas and the south-east of the US where there were big airports employing government workers. In response to the shutdown, World Acceptance is offering cash-strapped government employees deferrals on their loans without interest or fee penalties. New customers can get up to $1,250 in a 10-month loan with 0 per cent interest and no fees.

Here is the full FT article by Nicole Bullock.

Shout it from the rooftops

Many top earners during the high-rate era, such as politicians Dwight Eisenhower and Ronald Reagan, entertainer Jack Benny and librettist Alan Jay Lerner, didn’t pay the top rates. In 1952, for example, when the top rate was 92%, the highest-earning 1% of taxpayers had an average rate of 32%, according to Elliot Brownlee, a tax historian and emeritus professor at the University of California, Santa Barbara.

“When top tax rates were high, there was always a large gap between the stated rates and what the highest earners actually paid as a percentage of their income,” says Joel Slemrod, an economics professor at the University of Michigan.

This one would not work today:

Gen. Dwight Eisenhower also successfully argued that $635,000 he earned from his 1948 memoir, “Crusade in Europe,” should be treated as a capital gain, saving him as much as $400,000 of tax, says Joseph Thorndike, a historian with Tax Notes magazine.

Here is the Laura Saunders WSJ piece.

In India Everyone Gets Affirmative Action

India has long affirmative-action-like programs for members of scheduled castes, scheduled tribes and other backward classes (yes, that is the official name). The programs typically reserve a certain number of political seats, government jobs, and educational placements for members of historically disadvantaged and discriminated against groups, hence the the term reservations. Over time, the number of reservations has been increased and the category expanded to more and more groups. In fact, under a new reservation program just announced, virtually everyone will be covered by one reservation or another!

The new program will cover household income of less than 8 lakhs which is $11,000, far above India’s GDP per capita! The new program is meant to benefit middle and upper castes who have chafed under reservations for the historically discriminated against. The fact that the program is open to so many people, however, means that it’s really not much of a benefit at all.

Moreover, ultimately reservations mean very little if there aren’t private-sector, wealth-creating jobs which is India’s primary challenge.

What should I ask Ed Boyden?

I will be doing a Conversations with Tyler with him, no associated public event.  Here is his MIT bio:

Ed Boyden is Y. Eva Tan Professor in Neurotechnology at MIT, associate professor of Biological Engineering and Brain and Cognitive Sciences at MIT’s Media Lab and McGovern Institute for Brain Research, and was recently selected to be an Investigator of the Howard Hughes Medical Institute (2018). He leads the Synthetic Neurobiology Group, which develops tools for analyzing and repairing complex biological systems such as the brain, and applies them systematically to reveal ground truth principles of biological function as well as to repair these systems. These technologies include expansion microscopy, which enables complex biological systems to be imaged with nanoscale precision; optogenetic tools, which enable the activation and silencing of neural activity with light; robotic methods for directed evolution that are yielding new synthetic biology reagents for dynamic imaging of physiological signals; novel methods of noninvasive focal brain stimulation; and new methods of nanofabrication using shrinking of patterned materials to create nanostructures with ordinary lab equipment. He co-directs the MIT Center for Neurobiological Engineering, which aims to develop new tools to accelerate neuroscience progress.

Here are other Ed Boyden links.  So what should I ask him?

The ongoing death of football?

From the NFL to rec leagues, football is facing a stark, new threat: an evaporating insurance market that is fundamentally altering the economics of the sport, squeezing and even killing off programs faced with higher costs and a scarcity of available coverage, an Outside the Lines investigation has found.

The NFL no longer has general liability insurance covering head trauma, according to multiple sources; just one carrier is willing to provide workers’ compensation coverage for NFL teams. Before concussion litigation roiled the NFL beginning in 2011, at least a dozen carriers occupied the insurance market for pro football, according to industry experts.

The insurance choices for football helmet manufacturers are equally slim; one helmet company executive said he was aware of only one. Pop Warner Little Scholars, which oversees 225,000 youth players, was forced to switch insurers after its longtime carrier, a subsidiary of the insurance giant AIG, refused to provide coverage without an exclusion for any neurological injury.

“People say football will never go away, but if we can’t get insurance, it will,” Jon Butler, Pop Warner’s executive director, lamented to colleagues after discovering that just one carrier was willing to cover the organization for head trauma, according to a person who was present.

Here is the full ESPN article.  It is substantive throughout, a very good piece, and hockey and soccer are having insurance troubles too.

Via John Chamberlain.

Friday assorted links

The polity that is Sikkim

High in the Himalayas, Sikkim is one of the tiniest states in India. But it is about to embark on an experiment of global interest.

Sikkim’s ruling party has announced an ambitious plan to implement a universal basic income for every one of its 610,577 citizens.

If successful, the scheme would represent the largest trial run anywhere in the world…

Here is the WaPo article, overall I am most bullish about the UBI idea for very poor countries, where the humanitarian upside is greater and the incentive to work still remains.  Elsewhere, Buddhist poker player donates $600,000 to charity.

I don’t actually favor the “citizen dividend” side of a carbon tax

The carbon tax idea makes perfect sense to me, and I have endorsed the proposal for some time, but why return the revenue to citizens in the form of dividends?  It strikes me as economists thinking they know what makes good politics, something which economists are rarely good at.  Arguably it makes the policy seem less important, and mainly about the dividend, in a slightly cynical, Chavez-like sort of way.  Furthermore, it tries to make a carbon tax a free lunch, which it is not, no matter how great the longer-term gains.  I don’t believe in economists tricking people, even though I will admit tricking people can be useful.  The tricking is somebody else’s job!  Finally, if the carbon tax is revenue-neutral, just sending money to everyone (in what proportions?) doesn’t give them anything in return as measured by real resources.  Maybe it would give Jay Powell a slight headache, however, since he and others at the Fed would have to decide whether and how to do an offset, or not.

We economists are in any case not in charge, so let’s push for what is actually best.  I would suggest using the revenue to either help solve the problem at hand (climate change, or whatever connected problems might be relevant), or simply to pay down the debt.