Month: November 2013

*Tune In: The Beatles: All These Years, volume I*

That is the new book by Mark Lewisohn, and I was so keen to finish it that I neglected to see the Ender’s Game movie yesterday.  944 pp. and you only get up to 1962 and the beginnings of the first LP!  Despite the length, it is gripping throughout.  In addition to the obvious angles on The Beatles, it is a study of Liverpudlian history, the nature of poverty, why educating even really smart people can be problematic, why relative age matters so much for young people, how groups gel, the importance of practice, the importance of management, and the importance of origins, among a variety of other more general topics.

This work is one of my five favorite non-fiction books of the year.  And if you are wondering, it is not just me: the book has received very positive reviews elsewhere.

NBA predictions time

It’s that time of year.   Against the conventional wisdom, I’m going to opt for the Brooklyn Nets.  They have an excellent front line, a very good starting five, and a deep bench.  Garnett and Pierce still have something to prove, although my hypothesis does require an attitude upgrade from Deron Williams.  They are more like some of the old Pistons teams than a “single best player team.”  A healthy Miami Heat is a stronger contender but Wade is already being rested for back-to-back games, which does not augur well for a long playoff run.  Chicago needs a more creative offense and Indiana doesn’t seem quite ready to win a title, though they may knock off Miami in a playoff series.

The most overrated team is the Los Angeles Clippers (Griffin is more a spectacular player than a great player and Chris Paul is bad for team morale).  So who will win the West?  When in doubt, and when it seems no one deserves to win, ask these two questions: a) does the team have world-class defense?  b) which is the team with the single best player?  That leaves you with San Antonio and Oklahoma as the two units with the best chances.  Each seems too weakened to take home an entire title.

By the way, here is a new study of where NBA players come from, note this: “Growing up in a wealthier neighborhood is a major, positive predictor of reaching the N.B.A. for both black and white men.”

The increase in residential segregation by income

Via Kevin Drum:

Via Harrison Jacobs, here’s a recent study showing the trend in income segregation in American neighborhoods. Forty years ago, 65 percent of us lived in middle-income neighborhoods. Today, that number is only 42 percent. The rest of us live either in rich neighborhoods or in poor neighborhoods.

There is more here.

Restructuring the Social Sciences

Very interesting paper (pdf) from Gary King with practical advice on reorganizing centers and departments for the information age:

The social sciences are undergoing a dramatic transformation from studying problems to solving them; from making due with a small number of sparse data sets to analyzing increasing quantities of diverse, highly informative data; from isolated scholars toiling away on their own to larger scale, collaborative, interdisciplinary, lab-style research teams; and from a purely academic pursuit to having a major impact on the world. To facilitate these important developments, universities, funding agencies, and governments need to shore up and adapt the infrastructure that supports social science research. We discuss some of these developments here, as well as a new type of organization we created at Harvard to help encourage them — the Institute for Quantitative Social Science.  An increasing number of universities are beginning efforts to respond with similar institutions. This paper provides some suggestions for how individual universities might respond and how we might work together to advance social science more generally.

The Fanfare classical music meta-list for best recordings of the year

Fanfare is the leading periodical for classical music reviews, and every year it asks numerous critics — this time 45 of them — for their top five classical music picks of the year.  In turn, each year I present a meta-list, which simply is a list of all the works selected by more than one critic.  This year we have:

1. Meanwhile, by Eighth Blackbird., assorted contemporary pieces.

2. Haydn,  The Creation, conducted by Martin Pearlman.

3. Arvo Pärt, Adam’s Lament.

4. Bellini’s Norma, with Cecilia Bartoli.

I just ordered 1-3 of those, for the Bellini I am still stuck on Maria Callas.  My personal picks of the year, in classical music, would be:

1.  Shostakovich string quartets, Pacifica Quartet, several volumes, including some other Soviet compositions as well.  I find these more powerful than Emerson, Manhattan, Brodsky, or the other classic sets of Shostakovich.

2. Arvo Pärt, Creator Spiritus.

3. Klára Würtz and Kristóf Baráti, Beethoven sonatas for violin and piano.

4. The Art of David Tudor, seven disc box set, caveat emptor on this one.

From the comments, John Goodman on health insurance subsidies

Commenting on yesterday’s post, John Goodman writes:

Two points:

1. The premium the individual pays is not fixed as a percent of income. The subsidy is fixed, based on the second lowest silver plan premium and that amount is based on income. But the consumer is free to buy any plan. Remember, the second lowest priced silver plan may be a really lousy plan. It might have a very narrow network, for example. So, all the plans are competing against each other, with one fixed subsidy and an array of premiums. The premium an insurer charges will matter very much. 2. After 2018, the out-of-pocket premium for the second lowest priced silver plan will no longer be fixed as a percent of income. Premium subsidies as a whole will grow no faster than GDP + 0.5%, the same rate of growth that is in the Obama budget for Medicare.

The thread has some other good comments as well.

How many time zones does America need anyway?

Allison Schrager writes:

This year, Americans on Eastern Standard Time should set their clocks back one hour (like normal), Americans on Central and Rocky Mountain time do nothing, and Americans on Pacific time should set their clocks forward one hour. After that we won’t change our clocks again—no more daylight saving. This will result in just two time zones for the continental United States. The east and west coasts will only be one hour apart. Anyone who lives on one coast and does business with the other can imagine the uncountable benefits of living in a two-time-zone nation (excluding Alaska and Hawaii).

And why?:

It sounds radical, but it really isn’t. The purpose of uniform time measures is coordination. How we measure time has always evolved with the needs of commerce. According to Time and Date, a Norwegian Newsletter dedicated to time zone information, America started using four time zones in 1883. Before that, each city had its own time standard based on its calculation of apparent solar time (when the sun is directly over-head at noon) using sundials. That led to more than 300 different American time zones. This made operations very difficult for the telegraph and burgeoning railroad industry. Railroads operated with 100 different time zones before America moved to four, which was consistent with Britain’s push for a global time standard. The following year, at the International Meridian Conference, it was decided that the entire world could coordinate time keeping based on the British Prime Meridian (except for France, which claimed the Prime Median ran through Paris until 1911). There are now 24 (or 25, depending on your existential view of the international date line) time zones, each taking about 15 degrees of longitude.

Now the world has evolved further—we are even more integrated and mobile, suggesting we’d benefit from fewer, more stable time zones. Why stick with a system designed for commerce in 1883? In reality, America already functions on fewer than four time zones. I spent the last three years commuting between New York and Austin, living on both Eastern and Central time. I found that in Austin, everyone did things at the same times they do them in New York, despite the difference in time zone. People got to work at 8 am instead of 9 am, restaurants were packed at 6 pm instead of 7 pm, and even the TV schedule was an hour earlier.

There is more here.

Bots in everything

Aaron Beppu writes:

But some bots are driven by somewhat more trolly motives. A prime example is @StealthMountain, which searches for people using the phrase “sneak peak” and replies with “I think you mean ‘sneak peek'”. Effectively, a coder somehwere has used twitter to greatly leverage his ability to be a grammar Nazi. But worse, it appears that the bot exists just to rile people. While most people seem to take this correction in stride, @StealthMountain’s favorites list (which is linked from his bio line) is populated with some of the recipients’ more colorful reactions. You too, dear reader, can laugh at those victims, and their absurd, futile anger towards the machine.

At the most outrightly hostile end of the spectrum, we find the now defunct bot @EnjoyTheFilm, which searched for mentions of particular films or television shows, and replied with plot spoilers. This is a bot designed to actively try to ruin people’s evening, just for the fun of it.

There is more here, including a proposal for a “Feel Better bot,” via Eric Jonas.

*The Internal Enemy*

The author is Alan Taylor and the subtitle is Slavery and War in Virginia, 1772-1832.

This is one of the best history books I have read, ever.  Every sentence is excellent (is there higher praise?).  And let me add: 1) I hate reading books about Virginia, and 2) I feel “I’ve read enough books about slavery.”

I learned a great deal about a variety of topics including The War of 1812, how the British used escaped slaves against the Americans, the tensions between western and Tidewater Virginia, the early Virginia debates about how to eventually deport the slaves.  But that hardly gets at what makes this book special.  More importantly than any of those specifics, it brings an entire period to life in a memorable manner.

I read this one because Jon Elster urged me too.  Don’t forget, by the way:

In 1819 Virginia remained the preeminent slave state, home to nearly a third of the nation’s one and a half million slaves.

Very highly recommended, I hope it wins the National Book Award and it will be prominent on my forthcoming best books of 2013 list.

Do subsidies protect Obamacare against the adverse selection death spiral?

Jonathan Cohn writes:

What you may not realize (because few people do) is that the subsidies, by design, protect people from rising premiums. The law basically dictates what these folks pay for the typical, “silver-level” Obamacare plan, no matter what the insurer charges. This is critical. It means that rising premiums won’t affect the willingness of those people to enroll—which means, in turn, they’d still have incentive to sign up next year, as long as the technological bugs were gone and Obamacare online was working. (Subsides were a missing element of those ill-fated reform experiments in New Jersey and elsewhere.)

The economics here are tricky.  Insurance companies set prices both for those who receive subsidies and for those who do not.  Furthermore, the subsidy — when there is a subsidy — is determined by a process akin to a second-price auction, rather than matching the highest price in the market.  (How much collusion is there anyway, once all these prices are posted?)

One question is this: pre- “pressures for adverse selection death spiral,” where is the price sitting?  I don’t see an a priori answer to this query, so let’s work through two possibilities.

One option is that, at the margin, the price is already high enough that further price hikes would lower insurer profits and subsidies won’t make up for enough of that difference.  So the scenario goes like this.  A smaller number of “invincibles” sign up early on than initially had been expected, in part because of negative publicity about the exchanges.  Providers respond by lowering service quality rather than by raising posted prices.

Think of this as the “price stickiness scenario.” One big reason for holding back on the price, and instead lowering network quality, is the adverse selection problem itself.  If some of the invincibles are paying part of the price hike, higher prices will put them off.  Yet, if indeed they are invincibles, vague rumors about inferior network access may not put them off much at all.  They don’t expect to be using the network anyway.  But of course for sick people this change in quality and access will be a problem.

On top of that, might there be some stickiness in the posted price?  Many macroeconomists stress price stickiness even under normal circumstances.  And that means very often sticky in the upwards direction too, for fear of alienating customers.  Prices are all the more sticky in heavily regulated industries and in sectors which are under a good deal of policy debate and media scrutiny and where suppliers are not all that politically popular.  Prices are even stickier when there are easy ways of raising “true net price” by lowering quality, raising wait times, restricting access and delivery speed, and so on.  Those dimensions of the problem are harder for customers, regulators, and also media-mongers to monitor.

Access restrictions are also a way of checking ultimate financial risk in a way that price increases cannot be.  We can thank Joseph Stiglitz for this insight, as Joe pointed out that not only are prices sticky, but quantities can be sticky too, and risk-averse firms may wish to limit how much they are on the hook for.

I see a good chance that the price stickiness scenario holds.  And in that case the problem is not so much a price spiral but rather network quality moves to a much lower level and sits there.

I call the second and simpler scenario the “subsidies make up the difference” scenario.

In that scenario, the initial prices are low enough that they can be raised and the subsidies pick up the difference.  The companies don’t try to game the adverse selection problem with quality decreases and most would-be buyers are covered by the subsidies at the relevant margin.  The thought experiment then runs like this.  The initial quality of pool applicants suddenly worsens, but this time the main effect is that posted prices go up.  Because of the subsidies the real net prices to potential purchasers do not change very much and all still seems OK.

We do not know which scenario will occur, or to what extent, or in which states.  But I hardly think the law is in the clear in this regard.