Month: August 2015
A few of you wrote in and asked me to match this Guardian list of the top one hundred English-language novels of all time. (It is notable how many second-rate English novels made that list, and how few second-rate American ones did…) Well, one hundred is too many but here is twenty, in no particular order:
James Joyce, Ulysses
Jonathan Swift, Gulliver’s Travels
Herman Melville, Moby Dick
Charles Dickens, Bleak House
William Faulkner, Light in August, Absalom, Absalom, As I Lay Dying, The Sound and the Fury
Joseph Conrad, Nostromo
Virginia Woolf, To the Lighthouse, The Waves, Mrs. Dalloway
Nabokov, Pale Fire
Henry James, The Golden Bowl
Thomas Hardy, Jude the Obscure
J.R.R. Tolkien, Lord of the Rings
Lewis Carroll, Alice in Wonderland
Sterne, Huxley, Lawrence, Beckett, and Wharton are all knocking on the door and probably would have rounded out a top twenty-five. Scott and Trollope too, more Hardy. I consider the omission of Austen to be my flaw, not hers, but I just don’t love them.
You’ll note I made no attempt to be “balanced.” I gladly would have awarded all twenty spots to the same author, had such a choice been justified. There is also no attempt at racial, ethnic, gender, or geographic balance, none whatsoever. I simply picked what I think are the best books.
And if you think there are some obvious omissions, they probably are intentional. There are plenty of fine books, but no I don’t put 1984 in the top twenty, and while America has many very good novels from the latter part of the twentieth century, only a few (V?) would receive my serious consideration for a top thirty list or even top forty list. Not many are better than Ford Madox Ford’s The Good Soldier, or for that matter John Galsworthy.
The German economy is only about five percent bigger today than in 2008. And they are usually considered one of the winners.
In Finland gdp has shrunk in eight out of the last twelve quarters.
Output in France, Italy, Netherlands, and Austria is just barely growing.
And that is with a lot of QE (more than a trillion), a weaker euro, and a favorable oil price shock.
Overall the eurozone economies are one percent smaller than they were in 2008.
Pretty much anyone can be a ‘rock star’ these days — except actual rock stars, who are encouraged to think of themselves as brands.
That is from Carina Chocano, the entire article is good.
1. The Quay twins are leading a marginal revolution. “In a sense we are obsessive, and anything that we do, read, or any music that we listen to, we always look to each other and say, can that be — we use the word cinematized — can it be “cinematized”? And there’s nothing more that we like than to coax new material out of something that almost doesn’t have a potential. We could never do adaptations of famous pieces. We need the marginal. Whenever we’re reading a book, if it’s a research book, we always find that it’s the footnotes that open up new chapters of imagination.”
2. Uber plus randomized Yelp, you could toss in randomized Tinder too. What else?
4. William MacAskill’s doctoral dissertation (pdf), and MacAskill on “the infectiousness of nihilism.” In addition to his work on effective altruism, MacAskill is in the running to become one of the world’s most interesting moral philosophers.
5. The superb Matt Rognlie on the minimum wage and the likelihood of perfect offset, very good points.
That is the title of my current column at The Upshot. I very much enjoyed my read of William MacCaskill’s Doing Good Better: How Effective Altruism Can Help You Make a Difference. The point of course is to apply science, reason, and data analysis to our philanthropic giving.
I am more positive than negative on this movement and also the book, as you can see from the column. Still, I think my more skeptical remarks are the most interesting part to excerpt:
Neither Professor MacAskill nor the effective-altruism movement has answered all the tough questions. Often the biggest gains come from innovation, yet how can a donor spur such advances? If you had a pile of money and the intent to make the world a better place in 1990, could you have usefully expected or encouraged the spread of cellphones to Africa? Probably not, yet this technology has improved the lives of many millions, and at a profit, so for the most part its introduction didn’t draw money from charities. Economists know frustratingly little about the drivers of innovation.
And as Prof. Angus Deaton of Princeton University has pointed out, many of the problems of poverty boil down to bad politics, and we don’t know how to use philanthropy to fix that. If corruption drains away donated funds, for example, charity could even be counterproductive by propping up bad governments.
Sometimes we simply can’t know in advance how important a donation will turn out to be. For example, the financier John A. Paulson’s recently announced $400 million gift to Harvard may be questioned on the grounds that Harvard already has more money than any university in the world, and surely is not in dire need of more. But do we really know that providing extra support for engineering and applied sciences at Harvard — the purpose of the donation — will not turn into globally worthwhile projects? Innovations from Harvard may end up helping developing economies substantially. And even if most of Mr. Paulson’s donation isn’t spent soon, the money is being invested in ways that could create jobs and bolster productivity.
In addition, donor motivation may place limits on the applicability of the effective-altruism precepts. Given that a lot of donors are driven by emotion, pushing them to be more reasonable might backfire. Excessively cerebral donors might respond with so much self-restraint that they end up giving less to charity. If they are no longer driven by emotion, they may earn and save less in the first place.
On Paulson, here is Ashok Rao’s recent post on compounding returns.
That is today’s FT “Lunch with” piece, by John Thornhill, and of course she is an economist at Sussex. I hope the article is not too gated for you. Here is one bit:
As professor in the Economics of Innovation at Sussex University, Mazzucato is much in demand on the international lecture circuit for her iconoclastic views about how wealth is generated and the public sector’s vital role in promoting innovation. She is as forthright in her opinions as she is eloquent in expressing them.
She also has four children and I can testify she is what they call “a commanding presence.” In Singapore not long ago I told her she should have her own TV show, and I would not be surprised if this someday came to pass. Here is more:
Even Silicon Valley’s much-fabled tech entrepreneurs are not as smart as they like to think. Although Mazzucato lavishes praise on the entrepreneurial genius of the likes of Steve Jobs and Elon Musk, she says their brilliance tells only part of the story. Many of the key technologies used by Apple were first developed by public-sector agencies. Most of the key technologies that do the clever stuff inside your iPhone — including its geo-positioning system, the Siri voice-recognition service and multi-touch screen — were the offspring of state-funded research. “Government has invested in basic research, it has invested in applied research, it has invested in concrete companies [such as Tesla] all the way downstream, doing what venture capital should be doing if it was really playing the role it says it plays,” she says. “It is an incredibly active, mission-oriented role.”
In my view she overstates what are essentially some worthwhile points. For more you can read her book The Entrepreneurial State. Here is her home page. Here is her Wikipedia page. Here is her TED talk. She is here on Twitter.
From the interview, I enjoyed this line:
I walk in as an economist and I walk out as a life coach…
She ordered the soup and the duck.
8. Oliver Sacks on his cousin Robert Aumann. And other things.
The Brazilian macroeconomic situation is undoubtedly poor and the medium-term trend for fiscal sustainability is alarming. However, the numbers don’t support an imminent financial crisis, despite it being ‘a tradition’. It’s still an investment grade credit for now.
Gross borrowing requirements/GDP are relatively high at 16.1%, but its is structured with limited foreign currency exposure and the non-resident share of local currency debt is a modest 18.3%. It has large FX reserves ($368bn) – (short term external debt + maturing LT external debt)/FX reserves = 32%, which is ample cover against external financial shocks. The CA deficit, ~4% GDP, are covered by FDI inflows so that (CA +FDI)/GDP ~ -0.3%.
In addition, the banking system is sound. The level of NPLs is relatively low 2.9% and average baseline credit assessment score is investment grade baa3, despite economic weakness. Capital and liquidity ratios have been consistently high.
This being the case, where do you see this financial crisis coming from?
On Twitter, MarketUrbanism makes a separate point:
Canada. Click the “Prices against rents” tab: http://www.economist.com/blogs/dailychart/2011/11/global-house-prices … Huge exposure to oil and China.
The culture and polity that is Germany:
Officials in Stuttgart were among the loudest protesters against the labour minister Andrea Nahles’ new workplace safety regulations, which stated that the lifts could only be used by employees trained in paternoster riding.
“It took the heart out of this place when our paternoster was brought to a halt, and it slowed down our work considerably,” said Wolfgang Wölfle, Stuttgart’s deputy mayor, who vociferously fought the ban and called for the reinstatement of the town hall’s lift, which has been running since 1956.
“They suit the German character very well. I’m too impatient to wait for a conventional lift and the best thing about a paternoster is that you can hop on and off it as you please. You can also communicate with people between floors when they’re riding on one. I see colleagues flirt in them all the time,” he added, celebrating its reopening at a recent town hall party to which hundreds of members of the public were invited.
…In officialese the lifts are referred to as Personenumlaufaufzüge – people circulation lifts – while a popular bureaucrats’ nickname for them is Beamtenbagger or “civil servant excavator”. The name paternoster – Latin for “our father” – is a reference to one of the prayers said by Catholics using rosary beads, which are meditatively passed through the hand, just as the cabins are in perpetual motion around the shaft.
To some analysts’ surprise, books from Karl Marx, Immanuel Kant, Friedrich Hegel, Confucius and many other philosophers are more popular than before.
There is more here about some other aspects of the Fair.
1. Did carbohydrates drive brain growth? (trolling the paleos…)
5. My podcast with Erik Torenberg discusses economics, politics, chocolate ice cream, and I diagnose his dating strategy.
One of the most common mistakes people make looking at Chinese data is distinguishing between absolute and relative data. $3.6 trillion is a large amount of reserves in absolute terms but much smaller in relative terms. According to my calculations, reserves relative to nominal GDP for 1997-8 Asian tigers is 23% compared to China’s current 34.7%. However, if you compare reserves to M2 money supply the picture is much different. By that measure, China only has reserves equal to 17% of M2 versus 28% in 1997-8 Asian tigers. Given the large demand to move assets out of China, primarily by Chinese firms and individuals it should be noted, the $3.6 trillion in reserve assets looks much smaller against the enormity of its wealth and asset base. If Chinese investors and individuals start to feel significant concern about the RMB, the demand for foreign assets could turn into a flood rapidly if the PBOC fails to arrest the decline. $3.6 trillion is a large number but in the world second largest economy with 1.3 billion, that should be thought of as a small $3.6 trillion.
That is from Christopher Balding.
I was startled by these calculations for New Jersey, for example: Cutting in half the number of people sent to prison for drug crimes would reduce the prison population at the end of 2021 by only 3 percent. By contrast, cutting the effective sentences, or time actually served, for violent offenders by just 15 percent would reduce the number of inmates in 2021 by 7 percent — more than twice as much, but still hardly the revolution many reformers seek.
New Jersey could reduce its prison population by 25 percent by 2021. But to do it, it would have to take the politically fraught step of cutting in half the effective sentences for violent offenders.
In other words, the real debate over how to deal with criminals has hardly begun.
The low-hanging fruit on this issue seems to be in Kentucky, Missouri, and Texas most of all. But keep in mind another point: to the extent prison overcrowding eases, many judges will be giving longer sentences to many of the more violent offenders.
Sorry people, but Ukraine and Venezuela and Argentina are not eligible for this designation, any more than you can give “Most Likely to Succeed” to LeBron James. Have I mentioned lately that emerging market corporate debt doubled over the course of 2012-2014? But where exactly is the pot most likely to boil over next?
Here are a few contenders:
The currency declined nine percent last month, prompting reactions such as:
“It is incredible to see how dauntingly fast things are deteriorating,” Enestor dos Santos, an economist at BBVA, said from Madrid. “It’s been hard to nail down a projection.”
According to some polls, seventy percent of the population favors the impeachment of President Rousseff; political dysfunction adds to the brew and the various scandals only seem to be growing worse. Moody’s has downgraded the country to Baa3, right on the margin of junk. The economy is expected to contract 1.7 percent this year and the current account deficit is coming in higher than forecast. Financial crises are a tradition.
The country is headed for snap elections, in light of ongoing political instability, while fighting a two-front war and it has a growing current account deficit. Hmm…
That said, the economy grew at 2.4 percent last year, exports are relatively diversified, and I suspect the current dire situation will prove manageable. The Greek and Turkish ten-year yields are now about the same (which country should be happy with that comparison?). On the down side, the country is especially dependent on short-term financing, which can prove volatile.
The Russian economy shrank by 4.6 percent in the quarter ending June. Although the media has focused on the stability in Moscow and maybe St. Petersburg, the economic decline in Russian provinces has been much more serious.
Debt in Russia’s 83 regions has risen by 100 to 150 percent since 2010. Russia’s economic minister suggested that possibly 60 of those 83 regions are in crisis mode, and 20 may have already been defaulting on their debt.
The economy still hasn’t recovered from the 2008-2009 crisis, and it doesn’t seem the price of oil will be bouncing back anytime soon.
A few days ago Ivan Krastev wrote: “The Kremlin is populated not by mere survivors of the post-Soviet transition but by survivalists, people who think in terms of worst-case scenarios, who believe that the next disaster is just around the corner, who thrive on crises, who are addicted to extraordinary situations and no-rules politics.”
On the bright side, they have $541 billion in reserves. I say that’s overrated when everything else is turning sour.
The economy shrank 3.3 percent in the first half of this year, and the government responded by increasing borrowing. For further information, see Russia.
They are hanging on, and the freeing up of previously held government payments will deliver the economy a decent burst of stimulus. Still, they are one EU spat, or one coalitional collapse, away from being back in the doghouse with closed banks, Grexit, higher austerity, and plummeting exports. That said, the Not Very Serious People turned out to be the Not Very Serious Person and things are looking much better than they did a few weeks ago. Even the Finns are on board with the bailout. Staying in the euro may not be good for Greece in the longer run, but for now it means they are unlikely to win this particular tournament.
For all the current problems, I still don’t think they are next in line. Their production is crashing, but that’s not the same as a financial crisis. They don’t seem to have their debt distributed “in just that right way.” The $3.6 trillion in foreign exchange reserves — down from $4 trillion I might add — doesn’t hurt either. Still, this year China is on the list of nominees, and for the first time.
The bottom line: I’ve got to go with Russia and Belarus. Runner-up is Brazil.
Honorable mentions include Indonesia, Jamaica, and Belize (decent growth but a widening current account deficit). The dark horse pick? Colombia, with a peso down 36 percent against the dollar in the last year and a heavy dependence on oil exports. Alternatively, Malaysia. Thailand isn’t doing well, but it seems like more of a slow burn. South Africans are economically miserable, but the country does not really fit the financial crisis profile.
Here is my discussion from 2014, Ukraine ended up as the exemplar. The sad thing is that this year’s post is longer than last year’s.