Month: December 2015

Monday assorted links

Senators Cruz and Lee Introduce Reciprocity Bill

Senators Ted Cruz (R-Texas) and Mike Lee (R-Utah) have just introduced a bill that would implement an idea that I have long championed, making drugs, devices and biologics that are approved in other developed countries also approved for sale in the United States. Highlights of the “Reciprocity Ensures Streamlined Use of Lifesaving Treatments Act (S. 2388), or the RESULT Act,” include:

  • Amending the Food, Drug and Cosmetic Act to allow for reciprocal approval of drugs, devices and biologics from foreign sponsors in certain trusted, developed countries including EU member countries, Israel, Australia, Canada and Japan.
  • Encouraging the FDA to expeditiously review life-saving drug and device applications, this legislation would provide the FDA with a 30-day window to approve or deny a sponsor’s application….
  • The HHS Secretary is instructed to approve a drug, device or biologic if the FDA confirms the product is:
    • Lawfully approved for sale in one of the listed countries;
    • Not a banned device by current FDA standards;
    • There is a public health or unmet medical need for the product.
  • If a promising application for a life-saving drug is declined Congress is granted the authority to disapprove of a denied application and override an FDA decision with a majority vote via a joint resolution.

In explaining why he introduced the bill Senator Cruz argued:

We continue to lose far too many of our loved ones to the “invisible graveyard,” as economist Alex Tabarrok has described: lives that could have been saved but for a bureaucratic barrier that rejects medical cures and innovation…The bill I am introducing takes the first step to reverse this trend. It provides for reciprocal drug approval, so that cures and medical devices that are already approved in other countries can more expeditiously come to the U.S.

Do compensating differentials play a key role in boosting inequality?

Isaac Sorkin is a job candidate from the University of Michigan, and he has some fascinating new research on that question.  Here is the abstract:

Firms account for a substantial share of earnings inequality. Although the standard explanation for why is that search frictions support an equilibrium with rents, this paper finds that compensating diff erentials are at least as important. To reach this finding, this paper develops a structural search model and estimates it on U.S. administrative data with 1.5 million firms and 100 million workers. The model analyzes the revealed preference information contained in how workers move between firms. Compensating di fferentials are revealed when workers systematically move to lower-paying fi rms, while rents are revealed when workers systematically move to higher-paying firms. With the number of parameters proportional to the number of firms (1.5 million), standard estimation approaches are infeasible. The paper develops an estimation approach that is feasible for data on this scale. The approach uses tools from numerical linear algebra to measure central tendency of worker flows, which is closely related to the ranking of firms revealed by workers’ choices.

The paper is here.

Here is Adam Ozimek on the research.  I would put it this way: very often when workers switch jobs, they take a pay cut, voluntarily, in return for better amenities.  In this regard “true inequality” is lower than measured income inequality would suggest.

See also Isaac’s paper on the long-run effects of the minimum wage.

Rhetoric so often fails to achieve what we wish to achieve

Mr. Obama also said, “It is our responsibility to reject religious tests on who we admit into this country.” But negative searches about Syrian refugees rose 60 percent. Searches asking how to help Syrian refugees dropped 35 percent. The president asked us to “not forget that freedom is more powerful than fear.” But searches for “kill Muslims” tripled during his speech.

There was one line, however, that did trigger the type of response Mr. Obama might have wanted. He said, “Muslim Americans are our friends and our neighbors, our co-workers, our sports heroes and yes, they are our men and women in uniform, who are willing to die in defense of our country.”

After this line, for the first time in more than a year, the top Googled noun after “Muslim” was not “terrorists,” “extremists” or “refugees.” It was “athletes,” followed by “soldiers.” And, in fact, “athletes” kept the top spot for a full day afterward.

That is from a fascinating new piece by Evan Soltas and Seth Stephens-Davidowitz.

Further Sunday assorted links

No Good Men Among the Living

Anand Gopal’s No Good Men Among the Livinghis new and shocking indictment demonstrates that the failures of the [Afghanistan] intervention were worse than even the most cynical believed. Gopal, a Wall Street Journal and Christian Science Monitor reporter, investigates, for example, a US counterterrorist operation in January 2002. US Central Command in Tampa, Florida, had identified two sites as likely “al-Qaeda compounds.” It sent in a Special Forces team by helicopter; the commander, Master Sergeant Anthony Pryor, was attacked by an unknown assailant, broke his neck as they fought and then killed him with his pistol; he used his weapon to shoot further adversaries, seized prisoners, and flew out again, like a Hollywood hero.

As Gopal explains, however, the American team did not attack al-Qaeda or even the Taliban. They attacked the offices of two district governors, both of whom were opponents of the Taliban. They shot the guards, handcuffed one district governor in his bed and executed him, scooped up twenty-six prisoners, sent in AC-130 gunships to blow up most of what remained, and left a calling card behind in the wreckage saying “Have a nice day. From Damage, Inc.” Weeks later, having tortured the prisoners, they released them with apologies. It turned out in this case, as in hundreds of others, that an Afghan “ally” had falsely informed the US that his rivals were Taliban in order to have them eliminated. In Gopal’s words:

The toll…: twenty-one pro-American leaders and their employees dead, twenty-six taken prisoner, and a few who could not be accounted for. Not one member of the Taliban or al-Qaeda was among the victims. Instead, in a single thirty-minute stretch the United States had managed to eradicate both of Khas Uruzgan’s potential governments, the core of any future anti-Taliban leadership—stalwarts who had outlasted the Russian invasion, the civil war, and the Taliban years but would not survive their own allies.

Gopal then finds the interview that the US Special Forces commander gave a year and a half later in which he celebrated the derring-do, and recorded that seven of his team were awarded bronze stars, and that he himself received a silver star for gallantry.

From a 2014 review by Rory Stewart in the NYReview of Books. Have a nice day.

Is there actually good news on carbon emissions?

From a recent issue of Nature, from Robert B. Jackson, et.al.:

Rapid growth in global CO2 emissions from fossil fuels and industry ceased in the past two years, despite continued economic growth. Decreased coal use in China was largely responsible, coupled with slower global growth in petroleum and faster growth in renewables.

I would call that speculative, most of all because we don’t know how much of China’s current economic and thus coal-burning slowdown is cyclical rather than structural.  Still, it might be true.

How much news has this received, relative to the Paris meetings?  Less than a hundredth, I suspect.  Typical readers and viewers are far more interested in the deliberate actions of high-status political leaders than they are interested in underlying structural developments, even when the latter are probably of more import.  We need dramatic stories with prestigious protagonists, leading the way.  Even if some hate those individuals and their status, at least they then have someone to rail against, as indeed you will find in the comments section of this blog, among many other places.

This is just one way in which I feel the world I live in is a delusion and shadow play, relative to the truth.

The original pointer was from Marc Andreessen, with later re-emphasis from Noah Smith.

China’s workforce could rise rather than fall

That is the subject of a new FT article by Steve Johnson.  I’ve already covered this on MR, but here is a recap of some of Johnson’s points:

1. Official pension ages in urban areas are 50 for blue-collar women, 55 for white-collar women and 60 for men.  Those could be raised by the government thereby boosting the labor force.  For instance, in terms of actual practice, at age 60 only 55 of urban Chinese men are still in the labor force, and just one-third of urban Chinese women are still in the labor force.

2. Chinese pension policy penalizes late retirement and this easily could be changed.

As Johnson writes: “…if China adopted measures to retain older workers in the labor force, its working population would barely fall at all until at least the mid-2030s.”

With more women working, China in 2040 might have a labor force as large as it has today.  If the retirement issue and the gender issue are both solved, China’s labor force in 2040 likely will be 10 percent higher than it is today.

So the common meme of “the Chinese labor force is about to start shrinking” doesn’t really have to be true.  The Chinese economy has many problems, but I think this one is overrated.  And we haven’t even talked yet about possible productivity increases.

A few takes on the Paris deal

Here is Brad Plumer.  And Michael Levi at CFR.  And CarbonBrief on the agreement.  And Bjorn Lomborg.

Overall, it seems to set up a framework for future deals, without being so much of a deal itself.  Here is an excerpt from Levi:

Rather than enforcing these through international law (which has proven to be toothless for climate) the Paris Agreement aims to mobilize political pressure. It does that mainly by mandating a set of transparency measures and a process for regularly and publicly reviewing each country’s progress (though much of the detail on each remains to be developed).

It also establishes a process under which each country is supposed to put forward stronger national emissions reduction plans every five years.

Let’s hope for the best…

Saturday assorted links

From the comments, on mass shootings

The comments were numerous, here is one from Malcolm Gladwell:

I see that someone included a link to my recent piece in the New Yorker on this very topic–trying to understand the rash of school shootings. In that piece, I used Mark Granovetter’s theory of riots. Granovetter’s original article is well worth reading: http://vserver1.cscs.lsa.umich.edu/~spage/ONLINECOURSE/R2Granovetter.pdf

Gladwell’s original piece is here.  And here is a comment from Peter Turchin:

Hi all,
My explanation of why the rate of indiscriminate mass murder increased 18-fold between 1960 and 2010 is developed in a series of blog posts. The first one is here:
http://peterturchin.com/blog/2012/12/15/canaries-in-a-coal-mine/
and links to the rest are at the end of the first post.

See also Steve Sailer’s varied comments on the evolution of serial killers, and related matters.  There are other interesting comments as well.

How to visit Singapore

Two different people have asked me this question this week, so I thought I would write out my answer. My approach is slightly unorthodox, but here goes:

1. Go to the top of Marina Bay Sands hotel and get a view of the skyline, the harbor, and the Straits.  Watch the ships queuing.  This is one of my favorite views in the whole world.  Most of all I am struck by the contrast between what Singapore has achieved so quickly and also its continuing ultimate vulnerability; the view captures both of those.  If you can afford it, stay in the hotel and swim in the Infinity Pool.  That alone justifies dragging your body all the way to Singapore.

2. Organize the rest of your trip around food.  For Malay food, visit the hawker centre at Geylang Serai Night Market.  For Indian food, go to the hawker centre at the entrance to Little India, and walk around the adjacent shopping bazaar as well.  For Singaporean food, there are many good choices, depending on your location.  The optimal time to arrive is by 10:30, before most of the queues start.  Ask cabbies for the best chili and pepper crab.

3. Eat at David Thompson’s Thai restaurant, in the mall next to Marina Bay Sands.

4. Once it is dark, and edging toward 9 p.m., walk around the Merlion area and the bridge, where the city comes to life.

5. Spend the rest of your time seeking out “retro Singapore” as much as possible.  Haw Par Villa is one place to start, but there are multiple substitutes, including the hawker centres away from downtown and their special dishes.

6. The Asian Civilizations Museum is by far the best museum in town.  The zoo and the bird park are first-rate.

7. Much as Singapore calls itself a “city-state” I think of it as a “suburb-state,” unlike Hong Kong which is a true city.  I consider this high praise, but Singaporeans often are slightly insulted when I put it this way.  Your mileage may vary, but I say enjoy it as you would a suburb.

8. Talk to as many Singaporean civil servants as you can.

9. Take a day trip by cab or bus into Johor Bahru, in neighboring Malaysia, a thirty minute trip if there are no delays.  The food there is even better and you will learn some political science.  Read this book for background on both countries.  Read Lee Kuan Yew.

Here is my earlier post “Why Singapore is special.”   In a nutshell, it’s one of the world’s greatest trips, safe and easy to deal with too.

Very good sentences, very true sentences

This is not a libertarian moment. Still, I think that libertarians have a lot to contribute to the public debate. What we should do is remind others that (a) the political process almost never adopts an ideal policy or executes a policy well and (b) policies that seem good today can have unintended consequences tomorrow.

Those are from Arnold Kling.  In the meantime, Arnold asks you: where would you put your chips?