Results for “tyrone”
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Tyrone cheers up Tim Harford

If you needed someone to cheer you up, would you not want my evil twin brother Tyrone?  Well, Tim Harford is a privileged fellow.  Tyrone read Tim’s recent FT column “Is life in the UK really as bad as the numbers suggest? Yes, it is“, and thought Tim could use a real bucking up.  Tyrone is such a cheery fellow himself, and I so thought I would let him jolly along Tim.  Here is Tyrone’s proposed letter to the FT:

Britain, Britain, Britain — how tears come to my eye each time I swim the Atlantic and stride on shore.  How many times have I returned and with such joy?

The high land rents in Britain are the first and foremost a sign life is really good there.  You get what you pay for!  And in Britain you pay a lot.  You must get a lot too.  For sure, the value of living here can be no lower than the entry fee.  Even much of northern England is not so cheap anymore, and calling it “tea” isn’t going to change that fact.

I hear you all screaming “NIMBY!” while eating your bangers.  Well, NIMBY is one reason why Britain — or some parts of it — are expensive.  But NIMBY doesn’t detract from the quality signal embedded in those high prices.

Let’s say you had a luxury hotel that mismanaged its staff, and so it only opened up three rooms when it should have opened up 300 rooms.  Furthermore, those three rooms are rented out for $3000 a night.  You wouldn’t say the guests paying $3000 a night are miserable in the hotel.  In fact you would conclude they really enjoyed the hotel, to the tune of at least $3000 a night.  They could be enjoying it more at lower prices and higher capacity, but that is like saying the Beatles should have put out more albums.  Both claims are true, but you wouldn’t conclude Britain had a miserable musical life.

If nothing else, the hotel analogy shows Britain has the potential to get oh so much better yet.

GPT tells me that before Brexit, 1.8% of the British population lived in other EU countries, with Spain being a clear first destination.  Was that outflow so high?  The sign of a ruined society?  Or a mark of complacency with a pretty good thing?  A lot of that was (or still is) retirees of course, yet another sign of how splendid British life can be.  What could be better than earning enough in Leeds to spend your declining years in Tavira, yet close enough to fly home and see the grandkids on Boxing Day?

It is not so hard for many British people to migrate to Australia, New Zealand, Canada, or sometimes even the United States.  Northern Ireland beckons too (and the homes there are pretty cheap).  Those acts of migration don’t require a new language, and you might keep the royal family on your money and also on your bestseller lists, wait no they are not the royal family any more.

Chat tells me that in 2019 the net migration from the UK to Australia was about 16,000, hardly a major rebellion against economic servitude.  In that same year, 26,800 Brits decided to leave the barbie and return home — clearly they missed something.  Brit migrants to Australia, unlike those to Provence, are not usually the wealthy.

Tyrone has not only met Tim, but he has observed Tim living and working and succeeding in the United States.  Since Tim left America, presumably he prefers Britain and the superior curries, country homes, and memories of empire.  Not to mention the bookshops.  Amenities!  Tim is hardly the only one moving into southern England.  The UK population more broadly just keeps on rising.  We would gladly have Tim back, but it seems he won’t have us, stars and stripes for never.

Maybe you think some of the high rents in Britain are due to foreigners buying up property.  That is true in some parts of London, but for the country as a whole?  Besides, if London and Oxford give some foreigners the risk protection benefits of their real estate, is that not the cosmopolitan policy my Effective Altruist friends have been urging on me?  It would be easy enough to tax them more for those benefits, any time the Brits need to.

Southern England seems geared to help the world, what with its vaccines, DeepMind, and the data on dexamethasone.  How many regions are grander than that?  No wonder people want to pay so much to live there.  Like yours truly — Tyrone, not to mention Tim — they most of all want to help other humans.

Besides, the UK has a higher birth rate than Switzerland, Norway, or Luxembourg — so where do the real riches lie?  Especially over time.

Put aside some minor problems with the health care system — my friend the very healthy Robin Hanson says it doesn’t matter much.  The evidence keeps mounting that the non-pecuniary benefits of being British hardly could be higher.  And they don’t even tax you on them.  Strawberry Fields Forever.

TC again: Is this the most serious Tyrone has been?  Is he turning over a new leaf?  Have all those weekends in the Lake District rubbed off on him?  But alas, he does not go to the Lake District, he prefers the darker corners of northern New Jersey.  As Herodotus noted, all men consider their own ways to be best, Tyrone not excepted.  And if Tyrone does not live in Britain, how can it possibly be best?


Tim Harford, I weep with you, put Tyrone out of your mind.  The fish and chips is better in New Zealand anyway.

Tyrone on crypto assets

Egads, what a fool this man is!  Nonetheless he has grown wealthier as of late, so I thought I would give him the indulgence of another MR post.  Little did I know what arrant nonsense he would come up with.  Here is what he started with, the transcription from the Pig Latin being mine:

“Tyler, let’s play the envelope game.  I give you an envelope with $100, and I tell you it is going to either double or half in value.  (Think of it like a floating exchange rate that either will go to 2-1  or 1-2, with equal probability.)  So you will end up with either $200 or $50, the expected value therefore being $125.  That is a good deal for you!  You started with $100, and you can expect now $125.

You would love to keep on playing this envelope game of course, except no one will play that envelope game with you even once.  Until now.

In essence, by “tolerating” cryptocurrency, big-time fiat money holders have agreed to keep on playing this game.  And so, if this continues, over time crypto will absorb more and more of the wealth in an economy.  Just by playing the envelope game!

After all, the indirect utility function is convex in prices and the rest of the world is creating a floating exchange rate game for us for free!  That is why so many different crypto assets keep proliferating!

The only joke about dogecoin is that it isn’t doing even better than it is.

What is philanthropy going to look like in five years’ time?  All life extension technologies?

The envelopes game, of course, doesn’t boost the quantity of real resources, so eventually the purchasing power of non-crypto holders will shrink, shrink, shrink.  That is why we will need a UBI, not because of AI.

Of course you might think that the fiat holders won’t tolerate the crypto game forever.  And maybe not.  But as long as there is any chance whatsoever that crypo assets turn out to have real value, at least some of those fiat money sows will be lining up at the trough to trade at some exchange rate…the envelopes game thus will continue!

At this point I had to push Tyrone down the stairs.  Such fallacies!  Such absurdities!  I even offered him an envelope of his very own if he would shut up, but to no avail.  I demanded that he write down the transversality condition for this fool game he had postulated, but all he could was recite the envelope theorem, another sign of his deep and utter confusion.

As he was falling down the stairs, he kept on insisting that Satoshi really was Satan, that all of the world’s wealth would fall into the hands of The Whales, that we all needed to reread Melville, and Johan Jensen, and ponder the Leviathan from Psalms, Jonah, and Job, and our sins, and that everyone trading with crypto holders was caught in a massive prisoner’s dilemma — collectively handing them volatile exchange rates and thus envelope games for free — and yes this was a long and deep stairwell…

Dear reader, I hope you never have to suffer under such sophistries and indignities again.

I return you now to your regularly scheduled programming, for however long it may last…at the very least writing this blog does not require much money.  Yes, my cherished reader, it is my UBI…and so crypto will be allowed to proceed…

Tyrone, your local Straussian, comments on “Trap House”

I took it to refer to a place where drugs are sold, but you might be trapped either by the police or by the attendant lifestyle and its appeals.  The Yale Federalist Society was proclaming itself comparable to such a trap house, and thus at the same time broadcasting both its appeal and its potential danger.

By calling itself such a trap house, in a funny self-referring way it became one.  A kind of opposite to the Liar’s Paradox.  How many other claims become true by the mere act of making them?  “I am making a claim now” would be one of them.

Tyler: So says Tyrone.  But he is very consistently wrong.  And if you don’t know what Tyrone is talking about in this incoherent, philosophically naive missive, it is not worth trying to find out.

Tyrone on clinical trials and how to keep them up and running

Tyrone — my evil twin brother — received so much hate and love mail from his recent pronouncements about QAnon that he felt emboldened to offer additional opinions.  As you might expect, he prefers to spew his hateful bile on matters of life and death.  In particular, he has been following the debates about Covid and whether new treatments should be accelerated in their availability.  Anyway, I told him I was willing to pass along another of his letters, as a kind of experiment (not quite a clinical trial) whether Tyler or Tyrone is a more beloved writer on MR.  I am sure you readers — and especially commentators — stand ready to defend my honor!

So here is his (as usual) fallacy-ridden missive:

Tyler, I don’t see why you let the defenders of FDA stalling get away with their dawdling.  They all end up with the same argument — if we let wonderful, salt of the earth Americans take beneficial medicines, treatments, and vaccines, we will not be able to set up informative clinical trials.  Why partake in the trial when you can just get the stuff through normal means?

That is so lame!  First, they could simply pay people to partake in those trials.  Isn’t that in essence what the NBA did with its Covid testing in the bubble?  If the value of those clinical trials truly is so high, it should be possible to internalize enough of those benefits to encourage participation.  If institutional barriers stand in the way there, let’s obsess over fixing those.

Why should we force so many Americans to be sacrificial lambs, just to subsidize the trial costs?  Let those costs be taken out of grant overhead!  (And admin. salaries, if need be.)

If the current medical establishment is not as able as the NBA, well OK, can’t they just admit it and plead patheticness?  We can send them to take care of Major League Baseball, and put Adam Silver and Lebron James in charge of our health care.

Second, there is another way to keep the trial up and running.  Approve use of the treatment, but allow the suppliers to charge very high prices!  Better yet, use the law to make them charge high prices and if need be forbid insurance coverage.

“What will it be sucker? Fifty percent chance of the placebo, or 100k for those monoclonal antibodies?”

I assure you Tyler that will restore a separating equilibrium.  Furthermore, in the meantime only the most meritocratic of wealthy men will get the treatment outside of the trial, all for the better.  If need be, you can pull away the price floor when the clinical trial is complete, in the meantime you have satisfied the Pareto principle.

And what about the Hippocratic Oath ?  “Do no harm”?  Is that not invoked so selectively by the public health commentators?  Surely you realize they court public opinion and high status by taking sins of commission far more seriously than the far less visible sins of omission?

Is it not harm to deny patients ready accessibility to a treatment with positive expected value?

Is it really such a great rejoinder to insist “We can’t let those patients improve their lot by raising pecuniary costs for the medical professionals running their trials!  That is true Hippocratic harm and must be avoided at all costs, because in fact we medical people would be too feckless to overcome that problem…”

Sigh.  At that point I had to stop reading and transcribing.  I am sorry readers, I didn’t know that Tyrone in his spare time was studying economics and indeed some logic as well.  Maybe he has even been reading MR.  That makes him less interesting, less funny, and maybe a bit too much like Tyler.  That is not why you come to read Tyrone, and indeed you might as well be reading Tyler.

What can I do to make Tyrone better and more eccentric again?  Perhaps try to get him premature access to some of those special treatments?  Stay tuned….

Tyrone joins…that group…

Many of you ask me for reports of my evil twin brother Tyrone, but of course I demur because I am too embarrassed to pass along his doings.  They get worse and worse.  Nonetheless, Tyrone said he was going public with this one, so I thought the damage was done in any case.  The sad news is that Tyrone is now an active proponent of QAnon.  How can he fall for such fallacies and stupidities?  He sent me this letter to explain his decision:

Dear Tyler:

You have yourself blogged about the import of child abuse, and asked why it is not condemned more widely, most of all among elites.  You even wrote that the right wing ignored the issue — I thought it is time to remedy that!  We needed a right-wing movement to protect the world’s most vulnerable citizens, and it turned out that looked like QAnon.  Besides, who is more of an elite than I am?

To be sure, the QAnon movement has its excesses, but do not all social movements?  At least it attacks criminals rather than defending them.  The key question is whether social movements shine a light on abusive practices that need further scrutiny, and there QAnon passes with flying colors.

QAnon truly has attracted attention — just look at all the complaints about Facebook enabling it.  In this world you haven’t arrived until someone can turn a criticism of you into a criticism of Facebook.

Jeffrey Epstein was convicted of…stuff…and the world’s elites continued to treat him as normal and to take his money and fly on his plane.  He wasn’t cancelled.

Roman Polanski had a successful and feted career after repeatedly doing very bad…stuff.

The sexual abuse of children has turned out to be rampant in the Catholic Church and also in Hollywood.

I saw the new HBO documentary Showbiz Kids: “In my experience, I know a lot of kids that grew up in the industry. And what surprised me when I got older was finding out that pretty much all of the young men were abused in some way, sexually.”

French intellectuals — and was there ever more of an elite than them? — petitioned to repeal age of consent laws so they can do…bad stuff…with less fear of the consequences.  (See?  Petitions really are wrong!)

By the way, Berlin authorities placed children with pedophiles for thirty years.  And that is in Germany, a country with relatively responsible governance.

This is all so sickening I can’t go on any further, and we haven’t even discussed all that goes on over the internet.

There is in fact an epidemic of child abuse, it ruins or seriously damages many millions of lives, and elites are complicit in covering it up and refusing to address the preconditions that generate so much of it.  These same elites often downplay or discourage the elevation of social conservatism, one of the few possible regulatory mechanisms society might have.  In the very worst situations, these elites are directly complicit in covering up the abuse of children.  Many of the elites partake in it themselves.

Which group has done more to publicize these failings than QAnon, the worthy successor to The Jerry Springer Show?

Yes, Yes I know.  I do not endorse all of their hypotheses concerning political economy.  Maybe Donald Trump will not in fact set all things straight, and perhaps the apocalypse is not around the corner.  No, the molesters do not worship Satan, but given their behavior they might as well.  Should we lock up all those journalists?  I don’t know.  Comet Ping Pong was never as good as Pupatella anyway.  But look — this is what you get when you build a mass movement.  The message does get dumbed down and the crazies climb on board, just as we have Antifa and some other weird groups and demands connected to what are otherwise valuable social marches.  Tyler — you have to get used to this new world of internet communications!  Walter Cronkite is gone.  Either compete or give up, and I’m not willing to do the latter.

For whatever structural reason, elite media seem less obsessed with child abuse as an issue than is “non-elite media.”  That is simply a reality we need to work with, and our unwillingness to discard traditional canons of journalism has led to the perpetuation of these abuses for centuries, indeed dating back to the very founding of the American nation.

Haven’t you read Marcuse on repressive tolerance?

And come on, this very serious guy just wrote this, but not about QAnon:

“But actually diving into the sea of trash that is social science gives you a more tangible perspective, a more visceral revulsion, and perhaps even a sense of Lovecraftian awe at the sheer magnitude of it all: a vast landfill—a great agglomeration of garbage extending as far as the eye can see, effluvious waves crashing and throwing up a foul foam of p=0.049 papers. As you walk up to the diving platform, the deformed attendant hands you a pair of flippers. Noticing your reticence, he gives a subtle nod as if to say: “come on then, jump in”.”

The rot runs much deeper than the fallacies of QAnon.

Besides, it seems that the guy behind QAPPANON (don’t ask) is “a New Jersey man in his forties with prominent roles in technical analysis and IT security for the banking sector.”  Could there be a more reliable source?

And Tyler, I know your criticize me for following these conspiracy theories. But you yourself have written of the need to imagine a future very different from the present and then bring it about? Is that not what a conspiracy tries to do?  Do we not need to counter these evil conspiracies with some more benevolent plans?

Most of all, when it comes to evaluating social movements, you can only elevate so many victims at once.  Isn’t the notion of children as the true victims the most universal and indeed the only vision that can unify this great nation?  People complain about the truth-stretching in QAnon, and OK I get that, but isn’t their real worry the revolutionary re-appropriation of which groups in society can be granted true, #1 victimhood status?  Just as Christianity accomplished a similar revaluation way back when?  (And look at some of the wacky stuff that they believe — ever read The Book of Revelation Tyler?)

I don’t want QAnon to be in charge, but what other tool do we have to force elites to deal with this issue?  Aren’t these just Saul Alinsky tactics?  QAnon isn’t going to control Congress anyway.

Besides, is not apophenia one of the roots of creativity?  Have not Millenarian movements played key and sometimes beneficial roles in Western history?  Is not Christianity itself a Millenarian movement?  How about all that weird ass shit on the back of your dollar bill?

Child abuse is the #1 issue in society right now so…pick your side!  If you don’t like it, stop your silly blogging and come up with a better anti-child abuse movement.

TC again:  See?  This is why Tyrone doesn’t appear much on this blog any more.  It used to be a funny or sometimes even thought-provoking schtick, but these days things are so out of control you’ve got to stick with message discipline.  You can’t just let one speculation lead to the next, because we have so many crazies with major league internet platforms.

Rationalism.  Fact-checking.  Only one family member at a time (sorry sis!).

Please return tomorrow, or perhaps later in the day, for a proper analysis of the incidence of property tax reform in eastern Colorado.  And perhaps there will be some new service sector jobs as well — you can apply!  In the meantime, let’s hope that Tyrone’s QAnon fandom isn’t one of them.

And no, I’m not going to try to reenter the Philippines.

Tyrone on polarization, polarization is good polarization is gone

For a few years now, a number of you have been asking me where Tyrone, my evil twin brother, has gone.  The truth is a sad one: I have had to put him away, because in these especially fractious times his particular brand of malfeasance is less funny than before.  His wisecracks cut too close to the bone, and so many matters on MR have become more somber — no more dating advice either!

Nonetheless, is there a stable equilibrium to be had?  If Tyrone receives little or no surplus, he becomes all the more…unruly.  And so, risking punishment, he snuck out this message to Alex T., and I agreed to print it, for fear that further transmissions would occur (I do respect the Laffer Curve, and at an optimal punishment level I still can get away with some editing of his words).  Here is the ridiculous nonsense that Tyrone reports this time around, and you can see he is gaming the message to encourage his own liberation:


Tyler and his media friends keep on reporting that political polarization has gone up.  But that’s wrong: it has radically fallen.  Just look at economic issues.  As of 2011, many Republicans were for some ostensible Tea Party version of economic liberty, or at least they pretended to be.  Now both parties are very bad on economic issues.  For instance, you’ll find protectionist ideas all over the political spectrum.

The wonderful thing about polarization was this: it forced people who didn’t really believe in economic liberty to act as if they did.  The resulting gridlock was better than letting people’s real instincts come out.

Trump of course used to be a Democrat, and our president himself draws bad ideas from both sides of the aisle.  Which party again was campaigning against NAFTA?  What is they say?: Look into trade as an issue. and you see a man’s soul.

What about abortion, that (supposedly) most polarizing of issues?  As Matt Yglesias noted:

About a third of Republicans are pro-choice and about a third of Democrats are pro-life.

Yes that is a real difference, but it hardly sounds like two worldviews, standing irrevocably cleaved and apart.  And a lot of those positions are in actuality fairly nuanced in their details.

According to Larry M. Bartels, about a quarter of the Democrats on cultural issues stand closer to the Republican party than to the average position of their own party.  And talking through the poll data on Christian black women — often Democrats but on average not exactly “progressives” — would require a lengthy missive of its own.

Nor do I see either party speaking up for free speech on campus, except in the most opportunistic terms.  Republicans are pushing bills to crack down on left-wing protests against conservative talks, while the left is trying to limit those same conservative talks.  Distinction without a difference, your Tyrone says, and he should know.  I yearn for the “good ol’ days” when the New Left was for free speech and the conservatives were largely more skeptical.  At least someone was for it, and in an oppositional kind of way.

Contrary to standard reports, the urban-rural divide has not really been growing.

Is the view that Asian-Americans have the wrong personality a Steve Bannon idea, or is it a Harvard idea?

Trump wants to change various governmental rules and norms to cement his own power, such as dumping the filibuster and perhaps reinterpreting the emoluments clause and expanding executive authority of trade and immigration.  Democrats talk of dumping the electoral college or, right now, bringing back FDR’s “court-packing” plan.

It is widely granted that traditional political parties are blowing up (NYT).  Plenty of people wanted Trump and Sanders to run together as a ticket.  And in just about every European country, immigration and terrorism poll as the major issues, neither of those being the traditional territory for previous polarization.

The thing is, when people really believe in something, they end up polarized.  Of course they don’t agree on everything, and so polarization ensues along the dimensions of difference.  Less polarization is a symptom of believing in less more generally, and don’t confuse the resulting obnoxious fractiousness with greater polarization.  Instead, it is a sign that ideas are no longer ruling the day.  And indeed, religious participation is down in America and the secularization thesis is finally beginning to bite.  Polarization, however unpleasant it may have felt at the time, meant order.

Tyler again:

What can I say people? Tyrone now opposed to obnoxious fractiousness?  In spite of his periodically reasonable tone this time around, don’t believe it for a moment — he hasn’t changed.  Nor is polarization down.  Polarization between Tyler and Tyrone clearly has gone up as of late, thus his enforced silence.  Tyler believes in free speech, and he knows that freedom from harm for others requires the silence of Tyrone.  And so is freedom realized, and to thunderous applause.

Who knows when you will hear from Tyrone again?  Maybe I’ll let him do a restaurant review instead.

Cherokee Gothic channels Tyrone on Brexit

Discombobulated by my anti-Brexit post, apparently Kevin has been receiving secret messages for some time now, he writes:

People, I just received the following Linkedin message from Tyrone which I reproduce here verbatim (apparently Tyler’s been really cracking down on poor Tyrone):

It’s a good thing Tyler wasn’t an influential blogger back in the 1770s. We’d all still be British subjects.

In 2016 he’s blogging Brexit and unsurprisingly, he’s again come out against change.

The end result he concedes would be good but the path rocky and “the path is everything”.

This from a man who believes the social rate of discount should be zero!

(and, just to hammer on this, if the discount rate is zero, the path is the opposite of everything)

Tyler’s against Scottish Independence, Catalan Independence, Brexit. I somehow feel like he’s even against Grexit (the path! the path!).

Apparently, change is bad.

People, I’m here to tell you Brexit is a no-brainer. The EU is a utility killing machine exponentially ratcheting up dumb regulations while ignoring or actively worsening the real problems that the group suffers. When I solve for the equilibrium I see a place where everything is either mandatory or banned.

Consider refugees as an example of idiotic EU policy.  Now that Kenya and Niger have seen that the EU is paying for poor countries to house refugees, they have quite rationally closed their existing camps and put out a call for bids. Niger has opened by asking for a cool billion or so to keep refugees off Europe’s beaches.

The UK’s per capita income is currently about 2/3 that of the US. They and most EU countries have been falling further and further behind the wealth frontier in the last decades.  The EU hasn’t exactly been a huge success story for them. In the long run, they will do much better on their own (better policies, closer relation to their former settler colonies, less regulatory crushing) and since the social discount rate really should be zero, the path, while perhaps rocky, is temporary while the new equilibrium is rosy and permanent.

Tyrone out.

This is Tyler again…Tyrone sent me his own message on LinkedIn, and he reminded me of this old Tyler  post from 2006, “Would I have supported the American Revolution?“:

These modal questions are tricky.  Which “Tyler” is doing the choosing?  (If I were an elephant, would pink be my favorite color?  Living in 1773, have I at least still read Jonathan Swift?  Would a modern teenage Thomas Jefferson have a crush on Veronica Mars?)

But think about it, wasn’t it more than a wee bit whacky?  “Let’s cut free of the British Empire, the most successful society the world had seen to date, and go it alone against the French, the Spanish, and the Indians.” [TC: they all seemed more formidable at the time than subsequently]

Taxes weren’t that high, especially by modern standards.  The British got rid of slavery before we did.  Might I have concluded the revolution was a bunch of rent-seekers trying to capture the governmental surplus for themselves?

Tyrone, of course, wishes we had sold off the entire North American British empire to the Spanish crown

Tyrone on why Democrats should vote for Donald Trump

I know that Tyrone, my evil twin brother, has been fairly silent in 2015, but that’s only because he’s been so busy whispering things in my ear.  He’s also been spending his profits from having shorted the Chinese stock marketAnd having shorted the Democrats.

Can you imagine his latest?  Electoral politics once again, his weakest area (not nearly as good as Tyrone the neo-Fisherian).  Well, I scribbled down some notes on a napkin, over lunch, so this is an imperfect rendition of what he really said.  Tyrone in fact didn’t want me to write this post, fearing people would take it the wrong way.  Here goes, here is Tyrone at his mischievous worst:

Tyrone: It is obvious that intellectual Democrats, especially those concerned with climate change, should vote for Donald Trump for President.  Furthermore they should welcome his ascent, as should intellectual Republicans.

Let’s accept the commonly argued premise that climate change, if not quite an existential risk, can drastically lower the quality of life on earth for generations to come.

There is some chance that Trump will in fact support some kind of comprehensive climate change legislation.  After all, he used to be a liberal, but perhaps more importantly he wants to think of himself as a savior.  The chance of this is higher than that of any other Republican, and he is hardly beholden to the standard lobbies.

Most importantly, the chance of Trump “going Nixon” is higher than Hillary’s chance of selling meaningful climate change legislation to an oppositional Republican Congress.  She’ll be unpopular from day one, and the salaries of Dutch kunstmatige land consultants will skyrocket; that would bring a new Dutch disease, not just the one you get in those pretty Amsterdam shop windows.

OK people, let’s say Trump sticks to the mainstream Republican position.  What will happen then?  Won’t greedy capitalists rape the earth, not to mention building that energy-consuming wall?

Well, in the short run, maybe.  (Don’t forget Lennon on the omelette and those broken eggs!)  But we all know how disastrous Trump’s economic ideas would be in practiceThey would lower the growth rate of gdp and impoverish the masses.  Even if you read Trump as a policy moderate, just imagine what his volatile temperament would do to the equity risk premium.  (Then they would have to give Robert Barro a Nobel prize!)  And so, four or maybe eight years later, — or is it two? — what we could expect to find?  A fully Democratic Congress and White House.  (And dear reader, is there any other way to get there?)  And thus would arrive comprehensive climate change legislation, just as we got Obamacare post-2008.  Voila!  That’s way more important than maintaining America’s status as a nice, well-respected, and tolerant country, isn’t it?

So Democrats, if you really care about Bangladesh and Vietnam, and don’t just have this silly mood affiliation fancy that Tyler has fabricated, you should promote the candidacy of Donald Trump.  The more Democratic you are, the better.  The more worried about climate change you are, the better.  Your man has arrived on the national scene.  Finally.

Remember the take of Borges on Judas?  He made the real sacrifice of his reputation, so that the rest of us could be saved by Christ.  It is time for you too to be like Judas…[TC: At this point the absurdities piled up so high I just had to cut Tyrone off.]


Tyler again: Readers, I am so sorry for this.  I receive numerous requests for more Tyrone, but usually I resist.  The only reason I occasionally oblige is to show you all, once again, how crazy he is.  How unreasonable he is.  How subject he is to his own mood affiliations, foibles, and quirks.  How little heritability can explain, once you look get past superficial sibling similarities and look more closely at the details of the intellect.

Tyler’s view — my view — is that good Democrats in fact should support…[at which points Tyrone cuts Tyler off, and the two tumble over the proverbial cliff]…

Tyrone says the Chinese stock market is not a bubble

James Surowiecki writes:

Of seventeen hundred stocks on the Shenzhen Exchange, only four have fallen this year, and more than a hundred have seen their shares rise more than five hundred per cent. The Shenzhen Index as a whole has doubled since January, and is up more than two hundred per cent in the past year. The action on China’s other major stock exchanges—in Shanghai and Hong Kong—hasn’t been quite as torrid, but they’ve had their share of extraordinary winners. The Shanghai Composite Index has risen a hundred and forty per cent since this time last year. In Hong Kong, Jicheng Umbrella Holdings (which makes, yes, umbrellas) went public in February: its shares are up almost seventeen hundred per cent.

Tyrone, Tyler’s evil twin, says buy, buy buy!  Borrow to buy, and then borrow to borrow!  Tyrone has read so many people in the last week calling the Chinese stock market a bubble, so the contrarian in him thinks you simply need to take the plunge as soon as possible.

Direct foreign investment has been allowed only as of late 2014:

The Shanghai-Hong Kong Stock Connect program will allow all investors to buy shares on the Shanghai Stock Exchange, while also permitting wealthy investors in mainland China to buy stocks listed in Hong Kong. The move allows investors access to companies with an overall market value of roughly $2 trillion.

“We think it is very significant. We plan to participate,” said Gary Greenberg, head of emerging markets at Hermes Investment Management in London, which managed $46.9 billion in assets as of June 30.

That’s a lot of foreign capital to push up the value of Ma and Pa Tofu, and indeed that flood of capital will validate your early investment.  And who amongst us is not tempted to diversify just a wee bit into the world’s second largest economy, indeed the very largest by PPP measures?  Surely the coming tidal wave of foreign liquidity will push aside all present minor worries.

On the domestic front, Chinese savings are currently real-estate intensive, and over time those funds be shifting into equities, especially as Chinese graduate students carry the lessons of Mehra and Prescott back home.  As prices fluctuate, the market is assessing how significant these effects will be, just as it once did with subprime.

Besides, the market went up 4.6% on Monday alone, and that is at a time when Chinese manufacturing seems to be slowing.  The Chinese government itself proclaimed the stock market to be “healthy,” and indeed many different parts of the government, including the media, have seconded this verdict.  Why bet against all of them?

Did you not know that the Chinese debt-equity ratio is too high?  Well, higher equity prices will help lower that ratio, as the government intends; new stock issues are being used to buy back corporate debt, some of it dollar-denominated.

If nothing else, return back to some patriotic context.  Was it not a good idea to buy American stocks when our country had a per capita gdp of 6-7k, and headed up?  With a 20-30 year time horizon, was it not a good idea to buy American stocks even in 1929?

To be sure, the forthcoming liquidity-based, foreign investor-driven price movements imply a non-horizontal demand curve for those stocks, and thus violate the stricter forms of EMH.  But who said a demand curve should be perfectly flat anyway?  Weren’t the Marxists referring to perfectly flat demand curves when they said competitive capitalism is the absolute loss of freedom?  And hasn’t China been moving away from Marxism?  Q.E.D.  So Tyrone says it is time to borrow to buy.  Someone out there — maybe even you — won’t regret it.

Tyrone on why the government shutdown and the debt ceiling crisis were brilliant Republican strategy

Tyrone, my evil twin brother, was in town visiting the other day, after a long absence.  He was upset that I gave so little space to the recent machinations in Washington, and that I assigned the events so little importance, so he asked if he could offer his own coverage in a guest post.  Since Tyrone is occasionally a lunch guest of ours, against my better judgment I said yes, so here is my dictation of his midnight sermon:

Tyrone:  I read what a strategic disaster the fracas has been for the Republican Party and for the Tea Party movement in particular, but I don’t see it.  Where I grew up, this counts as a successful stare-down.  Most of the time, the pit bull does not in fact lunge for your throat, but it is hardly a mistake for him to snarl, even if that raises his borrowing rates.

Look where we stand.  In real terms government spending has been falling.  Sequestration appears to be permanent, or it will be negotiated away by Republicans in return for preferred changes in tax and spending policy.  Leading Democratic intellectuals are talking about future fiscal bargains with no new taxes.  The American public polls as increasingly conservative.

With this sequence of events, combined with 2011, the Republicans convinced some of their opponents that they are crazy and irresponsible, without actually being crazy (though they were irresponsible, but that is the whole point).  I peaked once into Tyler’s Twitter feed, and I found several accomplished Democratic economists — yes brilliant economists, as all economists are — suggesting that any day now markets are going to notice the truly crazy character of the Republican House and price that into interest rates and stocks.  Oh what a tale!  (A more accurate reading of the more radical Republicans would in fact be more cynical and ordinary than most of the pablum served up by their critics.)  Imagine that you control only the House and can manage to convince your opponents that you are stronger and more dedicated to your cause than in fact you are.  Only the truly strong and dedicated can pull such a caper off!

Someday, if the Democrats wanted to raise the exemption level for the payroll tax, and pull in a lot of new revenue, what kind of opposition could they expect?  Probably they will shy away from that battle altogether, for fear of another Ted Cruz filibuster.

Yes, Virginia (literally), protecting the brand does sometimes mean going down with the ship.

In the longer run the Republicans will have changed the Doug Overton window on most of these issues.  (Tyler interjects: My apologies loyal MR readers, Tyrone has no Ph.d., not even a Masters, and thus he misuses terminology as would a mere child.)  Even if most Americans do not agree, it is now considered common to believe and to argue publicly that Obamacare represents the end of freedom in our time.  If Obamacare turns out to fail in the eyes of the public, that condemnatory view is being held in the back of people’s minds, whether they admit it or not, whether they agree or not.  They will start to agree more and more, the less generous their Medicare benefits look as time passes.  The future counterrevolution in redistribution is going to have to come from somewhere and it is a major victory to cement the word “Obamacare” as a hypostatized “thingie” in people’s minds, for future reference.

The Republican tactics understand the importance of skewed pay-offs.  In an age of political gridlock, the goal is not to maximize the expected value of your image, any more than you would do the same on a date.  Rather the goal is to maximize the chances of moving your agenda forward, conditional on the existence of world-states where that might be possible.  The harder it is to pull off change, the stupider your strategy will look in most world-states, but hey that is the price of admission to this game.  Capital is to be periodically run down, and if in politics, as in management more generally, if you always look good you are doing something badly wrong.

Another fallacy is that no DC crisis would have focused more attention on the failings of the Obamacare exchanges in a useful manner.  People, that is small potatoes.  No one is going to repeal or even modify ACA because of a few weeks’ bad publicity at the opening.  (Recall the Medicare prescription drug bill, which took weeks to get off the ground but now is beloved and is part of the permanent furniture of the universe, like Supersymmetry or quantum gravity.)  If Obamacare is really going to do poorly, it is better if we build up high or least modest expectations for it.  Imagine the Christmas present of learning you don’t really have insurance coverage after all.  Or the New Year’s resolution that after you have been billed three times for the same policy, you vow to pay for only one of them and live with the bad credit rating until it gets straightened out.  How about extreme adverse selection into the exchanges, resulting in 50-100% premium hikes in the first year of operations?  (The lower premia are now, the better!  Bread, peace, land!  Ach du grüne Neune!)  That’s what will get further traction for the Tea Party on Obamacare, not a bunch of bad reviews on opening day, as if the policy were no more than a mid-tier Jennifer Aniston movie (I can no longer refer to Sandra Bullock in this context), to be swatted down by mild tut-tuts of disapproval and inconvenience.

The very best victories are often described as ignominious retreats.

Tyler again: Readers, I am sorry to subject you to such rants.  But Tyrone insisted.  In fact he threatened that, if I did not comply with his request, he would write a lengthy review of Average is Over, for which outlet I am not sure, perhaps an average outlet.  He threatened to shutter our common household.  He prophesied that cats would lie down with dogs.  He even threatened to default on our joint credit card bill, ruining my credit rating forever.  And people, you now all know just how powerful such threats can be.

Tyrone’s top ten favorite movies

That was a request from Nick L.  My (longer) list is on my home page, scroll down a bit.  Tyrone of course is my long-lost brother and evil twin.  His list, in no particular order, is:

Pee Wee’s Big Adventure


Faster, Pussycat! Kill! Kill!


Wild Things

Ella Enchanted

The Cable Guy, Ace Ventura, The Nutty Professor

Booty Call

Flash Gordon

Pasolini’s Teorema

Tyrone runs monetary policy

Tyrone barely knows enough technical macroeconomics to bark out an opinion, much less defend it or specify coherent policies.  Nonetheless he suggested that I pass the following along to Ben Bernanke:

It seems there is not enough lending.  People would lend more if interest rates were higher or at least I think I learned that in Econ 101.  So let’s raise interest rates.  I’ve also heard we have banks buying T-Bills and the Fed and government buying claims to real businesses.  Can that be true?  Isn’t that backwards?  If they aren’t working properly, why not just recall all the T-Bills? (Didn’t General Motors do something like this once?  It seemed to work out for them.)  Then the banks would have to invest somewhere.  Give a bonus to any bank that does something real.  Let the others rot.  (Tyrone then called up Trudie, who told him: "Have the Fed announce it will go massively short in the T-Bill futures market, sometime in the near future and without further warning.  That would scare people out of government assets.")

What about that guy who set up the phony investment company?  Can the Treasury make a new one of those, only bigger?  He took money away from people and gave it to charities and the needy and the arts and higher education.  That sounds like stimulus so why are we sending him to jail?  Wasn’t he ahead of the curve?

Why don’t we increase the tax deduction for donations to any charity which manages to expand its spending on overhead or is the word infrastructure?  For every dollar given, let the donor deduct more than a dollar from taxes.  That’ll get the money out of the banks of those rich people and into the hands of real Americans.  Still, it’s not as good as the phony guy who’s been doing this for twenty years.  I guess we’re all trying to catch up to him.  It seems he had help from his family but Bernanke does not.  Makes all the difference.

Tyrone tells me, by the way, that soon he will try his hand at a restaurant review.  It can’t be any worse than this.

Tyrone on the fall in housing and asset prices

I was sitting here peacefully, weeping, when I received the strangest email from Tyrone:

Tyler, cheer up!  The decline in housing prices is a godsend.  Isn’t it a standard line — from both left and right — that we are spending too much on the elderly and not enough on the young?  Isn’t lack of upward mobility, for the generation on its way into the world, the new problem?  Aren’t the American poor to expect an even greater squeeze in the future?  There’s a simple remedy for all of these problems at once — lower housing prices!  Lower stock prices too!  You don’t even have to get a bill passed through Congress, or overcome AARP, and we all know how hard that is these days.  The housing stock is still there, the relatively established homeowners are a bit poorer, and those poor strugglers on the way up can now buy their dreams at lower prices.  Even better, lots of the laid-off construction workers are Mexican immigrants, who for years have been keeping wages down for low-skilled American workers.  This is an economic nationalist’s wish list, no?

Poor, poor, deranged Tyrone.  Isn’t this what you would expect from an abject failure who has never managed to buy a home?  Tyrone isn’t even subprime.

Tyrone on rent control

Johan Almenberg, a loyal MR reader, asked me to ask Tyrone why rent control is a good idea.  I walked over to Tyrone’s crawl space, knocked, and posed the query.  He ridiculed me and told me the question was really not worth his while:

You Troglodyte, surely you know the happiness literature shows that better or larger living quarters don’t make people much happier.  It’s one of the pleasures we most quickly get accustomed to.  So if rent control pushes everyone into a lower price, lower quality equilibrium for residences, that’s for the better.  If you want high cost living, go to Monaco or Aspen; low rents were what made New York City great.  The greatest American city, during the highest cultural peak of its existence, had lots of binding rent control.

Rent control also encourages new or refitted buildings to have a greater number of smaller units.  In other words, it brings more population to the city and we all understand the external benefits from having more people around.  Furthermore the external social benefits of cities are highest for the elderly poor, who can’t afford cars and would require external aid, and bagel-seeking young’uns, high in human capital, low in liquid wealth, and able to do great things for the world if only they are removed from the suburbs.  That’s exactly who rent control puts into your city.

Johan himself offers an interesting argument:

…if rent control makes it
harder to live in a particular city temporarily, this encourages long-term
commitments. This, in turn, could increase the repeated-game character of that
city, which in turn could be good for cooperation. These sort of arguments –
admittedly vague – tend not to get mentioned.

Did I mention that Tyrone is biased, because he lives under rent control himself?  That’s right, he lives upstairs in the crawlspace.  It is the strongest force in the world that won’t let me charge him a price any higher than zero.  And the resulting arrangement seems to work out just fine.

Tyrone on American unhappiness

Tyrone wrote to me:

1. It is a mistake to focus on the survey evidence on happiness; maybe at first it shocks Americans that their country doesn’t come in a clear first, but America is bound to end up in the top tier and that will prove hard to counter.  The Easterlin paradox, which turns purely on the meaning of words over time, is also weaker than is commonly believed and of course Tyler and Will were going to be ready for that.

2. Start with the disproportionately large number of Americans in prison.  They are not happy.  Furthermore they don’t get to answer most questionnaires.

3. Then ask: given how rotten prison is, why did those Americans take the chances that might put them in prison?  How many people were just as unhappy, or nearly as unhappy, but didn’t chance a crime or end up in prison?  What does the distribution of the process have to look like, and what are the implied levels of unhappiness, to place so many people in prison?  The answer to those questions will be ugly.

4. Then move to race and cite those studies showing that many white people say they wouldn’t want to be black for a million dollars.  There are a few different ways to interpret those answers, but none of them are favorable for the pursuit of happiness in America.

5. Cite statistics on how many Americans are obese.  Some of this is genetic variation, but still the happiness-generating process has to be pretty badly skewed to generate so many pounds.  Ask Tyler whether he thinks that most truly obese women are happy.

6. Ask Will to provide a running stream of consciousness of what runs through his mind when he visits a K-Mart in rural West Virginia.

7. Paint a convincing portrait of Americans as the people most prone to self-deception, self-puffery, and the most likely to lie about their own levels of happiness.  Attack the reliability of happiness studies.

8. Present moderation as a prerequisite of happiness, and argue that America is anything but a land of moderation.

9. Cite the millions of Americans — now one out of every ten women — who take Prozac or other anti-depressants.  Yes, there is strong evidence that Prozac makes people happier.  But surely such people can be said to have "failed in their pursuit of happiness."  They didn’t start off wanting to be happy by taking a drug.

10. Don’t push income volatility or poverty too hard.  It will collapse into "things aren’t perfect" and allow the other side to focus on America’s very considerable economic achievements.  Nor put too much blame on America’s relatively weak welfare state.  That is a symptom of American social illness, not a cause, and more fundamental is that the poor themselves don’t care enough about their own fate (so why then would anyone else either?).

11. And why do European women seem so much more self-assured than do American women?

Yes, that is what Tyrone thinks.  Poor, poor Tyrone.  No wonder he is so unhappy.  He thinks he is surrounded by so many other unhappy people.  That makes him contrarian by nature.

Some people say that the debates between Tyler and Tyrone are the most interesting of all.  But I know better.  When such debates end, Tyler is always happy, and Tyrone always unhappy.  Doesn’t that alone show that Tyler usually has the better of it?