Wednesday assorted links


4. Capitalizing the cost of IPP rather than treating it as an expense (which is what the BEA started doing in 2013) would mean that the amount capitalized would be added back to earnings (except to the extent the cost is amortized in the particular year), so there's an asset now on the balance sheet (IPP) that previously wasn't and more earnings to apportion among the assets (including the IPP). My question: are all of those additional earnings being apportioned to IPP? If so, that explains the huge increase in IPP (capital) share. Whether it's accurate to apportion the earnings to IPP (capital) is another issue that the accounting identity doesn't answer.

4 confuses me. Are they saying that it is literally protected intellectual property (copyright) that creates the difference, or is it that creative output (movies) have a different labor content? I imagine that it takes fewer people to make a billion dollars worth of Star Wars movies (with residuals) than to make a billion dollars worth of farm tractors.

I'm surprised the damage to the Trump brand isn't more visible. I would certainly expect all supporters of the other Republicans, all Democrats, all Muslims, all immigrants, etc. to boycott not only all Trump properties for life, but to start going after his suppliers/partners so that people won't deal with him on the very favorable terms he is used to and his capital-intensive buildings all stand empty.

That said, I never even considered using any of his products before the campaign. I considered him an idiot since the airline and I was probably about 10 at the time - probably nobody intelligent has ever been among his customers. The man can make millions selling hats when everyone else loses money on a campaign, so maybe he will be fine.

I like Trump hotels.

Meh. I certainly don't agree with most of his politics, and find him pretty personally detestable. But when I visit Chicago, the Trump is still the nicest hotel in the city (plus conveniently located to the Loop for business travelers). It's not really worth re-arranging life choices because of some personal animosity towards a man I've never met. Even if, the "Trump brand" is still tens of thousands of people. What if, on average, each of them on average were a tad bit nicer than the Donald, cancelling out the badness of the organization? Anyway, there are celebrity brands that survive well-supported rape allegations, so how much can a little political demagoguery really cost?

Wow - one cannot even leave a comment referring to Kling, it seems.

Let's try again -

4. - How well does Kling do explaining why Germany remains the premier manufacturing and exporting economy in the world, after having inheriting that position from America sometime in the 70s? (Unions and strict environmental regulation are a non-starter, by the way.)

Let us be honest - Kling is a high school teacher, and if not for the incessant charity on display from the director and general director of the Mercatus Center, he would likely be a non-entity on the Internet.

Unlike Prof. Williams with his Rush Limbaugh understudy role (and one hopes that any link to Prof Williuams, a man whose presence at the GMU Econ dept. predates Prof. Cowen's is not filtered from any reference to wikipedia -

Germany might be in third place

With 80 million people? Not on a per capita basis, and German industrialists are loving how weak the euro is. Which just might explain why Prof. Cowen's favored eurogeddon scenario has yet to occur - the lower the euro, the higher the profits for the German manufacturing economy, Not that German mercantilists are likely to explain this in a language easily ready by their competition.

Kling has an economics Ph.D. from MIT. He is a very unusual "high school teacher" in that respect (also very unusual in the GMU orbit).

Also, he didn't write the paper in question. He merely cited the abstract.

He also started one of the first mortgage web sites in the late 90s, drawing on his expertise from working at Fannie Mae, and sold it for quite a bit of money. And he wrote this book partly about that experience:

Stop interfering with Prior's sneering!

Not on a per capita basis

So what? Germany's industrial mix is more manufacturing-oriented than Britain's. This is of significance just why? Germany is still a less affluent country than a mess of others, including the United States.

Germany's GDP per capita is 85% that of the U.S. with lower inequality.

This is a tie for second among major European countries (i.e. tiny Norway and Ireland don't count) and about 10% higher than France, the U.K. and Japan.

Workers' share of GDP has fallen in Germany as well as the US. Also, it's not clear what implications the IP hypothesis has for a Germany-US comparison, without knowing how both the levels of IP capital and the changes in those levels compare. (Does your comment have anything whatsoever to do with the the quoted article, or is it just an obligatory invocation of the "Socialist Germany good, capitalist USA and it's defenders bad" trope?)

"Or is it just an obligatory invocation of the “Socialist Germany good, capitalist USA and it’s defenders bad” trope?"


Always this.

4. – How well does Kling do explaining why Germany remains the premier manufacturing and exporting economy in the world,

He doesn't need to because it's not true. Value added in manufacturing amounts to $2.1 tn in China, $1.7 tn in the United States, $980 bn in Japan, and $680 bn in Germany.

Weighted for size of economy? Emphasis on premier, as in quality, I think.

I don't see how anyone can believe the statistics about German companies, considering what a bunch of lying cheaters the Germans are when running them.

7. "What is the continuing role of the qualitative in an era devoted to data?" Yeah, what indeed? Numbers are required for computer models and spreadsheets, even though they're mind-numbing. Simply relating the role of people in the course of events is so 19th century. If Tom Wolfe had been a sociologist he'd have been expected to keep a record of how many gallons of moonshine Junior Johnson distilled per annum. But it must be necessary to comb through Goffman's book looking for discrepancies if sociology is to be on the same level as physics or chemistry.

RE: Tyler's comment on the Monkey Cage. It is worth noting that many political scientists would argue that "less unified method" and "less closely connected to business and money" are positives, not negatives.

Exactly. At GMU they pride themselves on not being part of the quantitative herd but here Tyler takes a dig at Pol Sci because it doesn't all agree on one approach.

And how many economist saw 1) US great recession or 2) China's slow down? They can't even agree that China is in fact slowing down let alone predicting prior to happening.

A sentence made up of that many partial quotes is suspicious.

And what exactly do economist agree on? That when price goes up quantity demanded goes down? Bravo for such a rigorous discipline.

Economist do not have the track record to be so arrogant. You can't even agree on the effects of a minimum wage.

And despite all of that, most economist is merely testing asinine hypothesis that are, from a mathematicians perspective, highly suspect.

That demand curves slope downward seems to be a pretty important discovery to have formalized (although savvy business people always intuitively knew this), one which many people (including politicians) today still reject. Has political science produced anything as remotely useful as basic price theory or marginal thinking?

Are you serious? Do you mean to tell me that you're arguing that until economist came along, the rest of us underlings all assumed that it was only us who wanted more of a product when a price decreased?

And if politicians still reject the law of demand, how is it "useful"

Re-read my first sentence " have formalized (although savvy business people always intuitively knew this)". Basic price theory formalized a lot of implicit knowledge, while marginal thinking and other basic concepts provides a fairly powerful explanatory framework.

And how is that "useful"

Business leaders already knew it and consumers acted as if they did.

Buyers and sellers might understand it, but alas, the politicians often do not.

No, politicians do understand the law of Supply and demand. They just promise to shift the consequences of interfering to other.

@Joe, you may be right. I suppose I prefer to think of politicians as benignly destructive rather than outright charlatans.

6. Scott Adams says that Trump will be Prez, presumably the customers will then come flooding back:

He also thinks he can hypnotize thousands of people via blog post. He belongs in the loony bin.

He's predicted Trump's success as well as the likely trajectory of the other Republican candidates with far more accuracy than the pundit class. In particular he said Carly Fiorina had peaked immediately after that one debate and explained exactly why.

He has a good track record, which shouldn't be ignored, but also isn't a substitute for an explanation of why he's right.

He says "identity beats analogy" and links to an article about Clinton talking about how she'd be a better leader because she's a woman.

The argument I can suss out of that is that men won't vote for her. But that same argument says that women will vote for Clinton because she's one of them. (And I have heard women in public with each other make that specific justification for voting for her.) If identity is the most important, why doesn't Clinton win?

One can have more than one identity. It just depends on which one is triggered when you're in the voting booth. In peacetime a woman may identify as a nurturer. Right after a terrorist attack she may identify as a grizzly mama.

Even if they don't come back, will he think it's a bad trade? I suspect not.

If Trump's net worth is $5-10 billion, I think he'd be willing to trade 1/2 or more of it for being President. For a guy with a big ego who likes to be the center of attention, be seen to be "winning", be part of the action at the top table, etc., being POTUS is probably worth more than all his billions (at least beyond the first one). There are many obscure billionaires, but only a half a dozen Presidents or ex-Presidents at one time.

Just look a him - he's having the time if his life, and whatever happens will have more money than he can spend in his lifetime.

7. Excellent? Seems to me like just another example of waggon-circling around the ideological ally. Take this paragraph:

"What has united her critics, academic and otherwise, is the accusation that in going ‘‘deep enough’’ to disregard laws, she did in fact lose herself in the process and confuse her own ethnographic standing with actual membership in the community she studied. This comes to the fore in the book’s final scene, the nighttime drive to find Chuck’s killer. The legal and journalistic position would stipulate that either the last scene occurred as it was initially written, as a manhunt, or it occurred as she later described it — as a mourning ritual and face-­saving ceremony.

But what her critics can’t imagine is that perhaps both of the accounts she has given are true at the same time — that this represents exactly the bridging of the social gap that so many observers find unbridgeable. From the immediate view of a participant, this was a manhunt; from the detached view of an observer, this was a ritual. The account in the book was that of Goffman the participant, who had become so enmeshed in this community that she felt the need for vengeance ‘‘in my bones.’’ The account Goffman provided in response to the felony accusation (which read as if dictated by a lawyer, which it might well have been) was written by Goffman the observer, the stranger to the community who can see that the reason these actors give for their behavior — revenge — is given by the powerless as an attempt to save face; that though this talk was important, it was talk all the same."

It is to the law what some SJW looking at the scene from afar thinks, if the participants think they are on a manhunt, they are on a manhunt. Their only defense is the insanity defense. Perhaps Goffman should consider using that as a defense for her violations of ethics. Here's another excerpt that led me to doubt either her sanity or honesty:

"At the gate in Newark, Goffman unshouldered a bulky zippered tote bag. ‘‘I’m so happy,’’ she said with visible and somewhat exaggerated relief, ‘‘that I didn’t give you this to take through security yourself.’’ Over the course of our correspondence, I had asked her from time to time if she had any book artifacts that escaped destruction. In this tote was some material she had forgotten about: unpaid bills, bail receipts, letters from prison and a few extant fragments of hastily scrawled in situ field notes. But it wasn’t until the security line that she remembered what the tote probably once held, memorabilia from her time on Sixth Street: bullets, spent casings, containers for drugs. She passed safely through the scanner in a state of agitation, not about the risk she took but by how blithely she was treated by T.S.A. agents.

‘‘And who did they stop?’’ she said. ‘‘Not me and my bag of contrabandy stuff, but a young man with brown skin. I tried to exchange a look of solidarity with him, but he wouldn’t look at me. Compare that to the interactions I’ve had at this airport — people smiling at me, holding the door for me. You don’t think, as a white person, about how your whole day is boosted by people affirming your dignity all day long. This isn’t news. But it is stuff that, for me, at the beginning. ...’’ She didn’t finish the sentence."

She walks into an airport and "forgets" she has bullets in her bag? I highly doubt the legal system would be kind to a regular Joe(or regular Muhammed) who made that kind of mistake and got caught. Of course, this could be just one more example of Goffman's anti-White lies. Bringing bullets into an airport is a crime, right? Maybe Goffman should Do the Right Thing and go turn herself in for her crime, as well as her conspiracy to commit murder. She seems like a perfect example of a member of a privileged race* who unjustly gets away with crime.

*Goffman self identifies as White but her father was Jewish and her mother was Gillian Sankoff, possibly Jewish.

While in some states you can carry guns and bullets into an airport,("open carry") you won't be able to carry them into the part bound by the scanner, that's the point of the scanner.

Jason Bayz January 13, 2016 at 2:16 pm

7. Excellent? Seems to me like just another example of waggon-circling around the ideological ally.

Indeed. What she actually did or did not do is irrelevant. She is the daughter of Someone Important. She comes to the Right Thinkful conclusions. No one is going to let ethics or legal violations get in the way of a Harvard Chair.

She walks into an airport and “forgets” she has bullets in her bag?

But she doesn't have bullets in her bag. She makes a drama out of it to make a political point. What does the author say?

But it wasn’t until the security line that she remembered what the tote probably once held, memorabilia from her time on Sixth Street: bullets, spent casings, containers for drugs.

Probably. Once Held. As in, not "does now hold". She may have made it up. All that matters is the political statement. The Man oppresses Da Brothers. The facts are not looked into. Did the reporter ask to see the bag to check?

I'm a white woman with TSA Precheck privileges and even I occasionally get stopped for a TSA pat down and bag check. It's not just for dark-skinned guys. And from what I've seen of TSA employees, they don't seem likely to have it in for black people.

"and even I occasionally get stopped for a TSA pat down..."

I'll bet you do.

I didn't notice that, the author quotes Goffman in the next paragraph as saying ""Not me and my bag of contrabandy stuff, but a young man with brown skin." So does her bag have contraband in it or not?

I would have thought the penalty for bringing a gun into the restricted portion of the airport would have been higher than described in this article, a mere fine of up to 7,500$ for a loaded gun or 3,000$ for an unloaded one:

"Goffman self identifies as White but her father was Jewish and her mother was Gillian Sankoff, possibly Jewish."

Why even bother typing up a long comment to end it like this? I can't imagine that you are so out of touch that you don't realize what the impact of a sentence like that is.

Heresy, I know.

The fact that you care discredits you, I think is the point.

What bothers me is different. ed uses the word "race" in two mutually inconsistent ways, so that the sentence implies Goffman cannot be both white and Jewish when, in fact, that's exactly what she is.

The NYT piece on Goffman left me depressed, epitomized by this quotation by the rather uncritical writer of the piece:

"This was a book about men whose entire lives — whose whole network of relationships — had been criminalized, and she did not hesitate to criminalize her own. She threw in her lot."

Yes, she did, a bit too much like a star struck teenage rock star groupie. And these men, the criminalized men, aren't they criminalized because, well, they are drug dealers, felons and armed lowlifes etc?

The piece left me thinking sociologists are weird, in the sense that they themselves see a tension between things that are true, and things that they can say.

Perhaps like the Anthropologists, the sociologists have been waging a losing war on reality for too long?

It could have been worse:

The nice thing about the book is she admits that there are young Black men who live decent lives, don't sell drugs, stay in school and do alright. She is not that interested in those. She is interested in the thugs.

Yes, I know the type.

The black population is largely working class and huge swaths live outside high concentrations of blacks. It's a revelation only to kunckleheads that most of them are not gangbangers and welfare queens.

To strengthen your point, would you be willing to provide some population counts? I would have assumed (for example) that at least 80% of African Americans live in "high concentration" areas, defined as something like "70% or more of your neighbors self-identify as having the same racial background as you do," with "neighbors" being defined as the set of all people within a radius of 1 mile (urban) or 10 miles (rural), perhaps proxied by zip codes which encompass those radii. But if "huge swaths" live outside such concentrations, 80% would be too high, wouldn't it? So what's the number?

I don't have any numbers, but I'd be surprised if the average was as high as 80%.

I grew up in the Genesee Valley, which comprehends two metropolitan settlements (one with a population of 600,000 and one with a population of 50,000) and a mess of rural and small town territory. The total population is about 1.1 million. About 1/3 of the black population lives outside the principal central city in a mess of suburban, exurban, small town, and rural territory wherein the black population is around 4% of the total. About half the black population lives in census block groups with a black share over 47% and about half lives in census block groups with shares under 47%. Only about 13% of the black population lives in census bloc groups wherein the black share exceeds 80%.

The employment to population ratio among blacks is about 11% lower than that of the general population, suggesting a lumpenproletarian element somewhat north of 15% of the total. Index crime rates for blacks are about 4x those for the general population, which suggest a lumpenproletarian element of about that size as well. We can check the granular BLS data, but I believe the share of the black workforce which is in salaried employment and small business is about 15% of the total. The wage earning element would thus be 70%, which is not much higher than is the case for the general population.

Well, OK, sure. But maybe working-class and middle-class blacks are not all that interesting if your goal is to understand and remedy underclass criminality and misery.

#4. FWIW Australia has similar declining labor share, but dissimilar industry component explanation.

"The Mining sector had a profound effect. In a sense, it alone contributed all (strictly, a little more than all) of the gap between growth in the reward ratio and growth in the capital-labour ratio at the market sector level.3
Mining’s contribution came, in large part, from a very strong contribution to growth in the market sector capital-labour ratio, as a result of the industry’s heavy capital investment. However, with strong growth in returns on the back of higher resource rents, Mining also made a strong negative contribution to the wage-return ratio."
page 88 at

Doesn't sound so much different really than Bezos and Amazon. How much of Amazon capital is in IPP?

#6 seems like bs; show me evidence that people are buying less Trump stuff, or that occupancy rates at his hotels are down, and I'll believe it. But this survey isn't convincing. I also suspect that Trump's brand was never truly aimed at the over $100,000 crowd - they (we) see him as declasse and always have. It's not investment bankers watching the Apprentice. It's guys making $30 or $40K.

Well, not when he started at least:

Welp, time to shut up about everything forever. If you told me that one of the Apprentice and Arrested Development was #1 among rich, young people in 2005, and the other was #17, I would have bet literally everything I own on Arrested Development being #1.

We don't know what the most popular TV show among "the rich" is. The survey quoted by Fox covers households with income over $125,000. That barely gets you into the top third of the population. Rich, my a**.

I would guess "Downton Abbey" for the actual rich.

?? $125K is much higher than top 1/3, unless we're talking about Westchester county. Probably around the 88th percentile for the country as a whole.

3. Do we really need more political advice from a bunch of smug urban, liberal, east coasters who never ventured into the world of reality? The legacy of Ted Kennedy.

7. Excellent NYT long read on Alice Goffman.

Unless it analyzed her credibility problem, took her apart for her hankering after rough trade, and asked what has happened to American sociology that this decadent cretinette is celebrated within it, it is not 'excellent'.

If you look at capital income share net of depreciation (as Matt Rognlie has pointed out that you should if you're connecting this to inequality) then the impact of the revisions discussed in #4 are marginal at best, because depreciation increases almost 1 for 1 with the new capital income.

The problem I had with the Goffman piece was it it treats as equivalent the inside view of tiny number of sociologists that she lacked distance from her subjects with the real problems of misrepresentation and illegality alleged more recently. The first is so minor as to be hardly worth mentioning the second so serious that if true ought to completely discredit her work. I was also less than impressed by the way the author endorses Goffman's reply knowing we will never be able to read it. It's hardly surprising that the NYT takes her side but the article wasn't exactly balanced.

You get congenial treatments of Alice Goffman and recommendations to read Corey Robin's latest pensees, even though these two are dubious low-rent characters.

The Claremont Review has been mentioned once in this forum in about a dozen years. The Weekly Standard merits three references in a dozen years (one of which is an attack). National Review merits one mention a year (about a third of which are attacks). George Will has garnered one mention in a dozen years. Jonah Goldberg has garnered two (one of which was an attack). Victor Davis Hanson merited two mentions, both sideswipes. Stanley Kurtz has been mentioned once. Mackubin Thomas Owens, Robert George, John McAdams, and Ronald Radosh have all received no attention at all. Thomas Sowell (lapsed academic with a PhD from UCLA) merits about one mention a year (20% of which are attacks). Bruce Bartlett, a journalist with no graduate training in economics, merits 3x the attention and little criticism

It's almost as if someone is very self-conscious about something or simply not in the business of critiquing his immediate environment.

Il n'est jamais trop tot pour parler a un être humain. Françoise Dolto. it (Il) is not (n'est) ever (jamais) too soon (trop tot) to (pour) talk (parler) to a (a un) être humain ( a being which has an attribute of humanity). Ny, ili kto-to ili nikto, tak, kazhetsa, kto-to. (Exoteric Russian: Well, somebody or nobody, therefore, it seems, somebody).

7 - It's difficult to imagine in a first world country a substantial part of the population so disaffected or disenfranchised that is unable to explain itself and the challenges it faces. The mentally ill might be one such group, but African-Americans are not. Also, hybrids like academia/advocacy journalism are inherently compromised in ways that are difficult to analyze easily, which reduces the value of the data underlying the project.

7. Goffman's technique, such as it is, seems to be as much New Journalism as anything. That's not a criticism - the New Journalism produced many excellent pieces. (Of course, the vast majority of them were written by two people, Tom Wolfe and Hunter S. Thompson, but who's counting...) So maybe she should have titled the book "Sixth Street: A Strange and Terrible Journey to the Underbelly of America", donned some mirror shades and a cigarette holder and a white suit, and hit the book and lecture circuit while giving the sociologists the finger. Might have been more intellectually honest. Just sayin'...

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