Friday assorted links

Comments

2) the review might be a bit optimistic, but this is what triggered my thoughts this morning, that resistance to debt might be a sticky value, out of sync with the accounting reality. Old people run privateand public institutions, their values are shaped by decades past conditions.

In the far distant past when dinosaurs roamed the earth Ontario bonds were paying 16%. Only really old people remember that far back. Mid 90's I think.

I'm one of them really old people, sonny. The higher rates were from say 1979 through the most of the 1980's.

I bought first house in 1979. Paid just under $50,000 with an 80% loan-to-value, 30 year, 6% fixed-rate loan. I sold the house for over $100,000 with a one-year adjustable rate loan at 10.5% (the 30 year fixed rate loan would have been 14.5%). I kept that Adj. rate mortgage and only had one or two years where I was worse with it than with a 30 year fixed rate. At the end say 2012, when interest was a very small part of the monthly payment, the one-year rates were about 2%.

I bought another house in August 2013 with a 30-year fixed rate, 3.875% loan which I will never let go.

"Mid 90’s I think"

Probably 1981-82.

Link #4 is a spectacular demonstration of the law of unintended consequences. We started locking more people up as a lagging response to scary high crime rates in the 90s, and a couple decades later, we've got a whole economy built up around keeping people locked up, so that locking fewer people up will cause a financial crisis in some places.

#4 is proof of how easily government projects turn into rent-seeking.

All of the money spent on prisons is unproductive overhead. That doesn't mean it isn't necessary, at some level, but it's fixing broken windows. These people are essentially complaining that society hasn't been breaking enough windows.

"These people are essentially complaining that society hasn’t been breaking enough windows."

Yes.

But what if every prisoner gets shovels and dig holes in the ground and fills them up all day long?

Well that would be good, but if they used spoons it would be even better!

It sounds that the counties want to keep slave labor.

Yep. And the state money flowing in.

You are quite generous. Any of this was unintended? Extracting money, locking classes of people away, using them for free labor - sounds much more like a plan. I quick look at who are the prisoners and who are the guards would tell the tale pretty clearly.

The situation in Mississippi should be taken as a perfect example of the rest of the country or of broader trends. Chris Epps, the longtime Commissioner of the DOC in Mississippi is currently in FBI custody for fixing contracts (including for housing inmates and private prisons). He and his pet lobbyist/bag-man Cecil McCrory are charged with 42 counts of public corruption which is high even by the very sad standards of Mississippi's governing norms. Furthermore, Epps and McCrory were caught by an FBI sting in 2013 bur indicted in 2014 only after wearing wires to gather evidence that virtually every contractor in the state was also bent.

The sale of patronage jobs, the gross mismanagement and theft of funds, the failure to create rehabilitation and training slots and the lousy jobs and inefficient contracts signed by the MSDOC are due to extraordinary and blatant corruption. Don't over-index from this example to draw larger conclusions about the rest of the country/ law enforcement/ the times we live in.

"Don’t over-index from this example to draw larger conclusions about the rest of the country/ law enforcement/ the times we live in."

Really? Why not?

6) I snickered. When Twitter is a healthier environment ..

#1: I'll just count the times it's said "e-sports are not real sport". come back to report later.

To the contrary! E-sports are EXACTLY like other sports except even worse, because they are even more tools of the patriarchy and capitalist oligarchs! Who knew??

That article started out somewhat interesting and then devolved into an unhinged rant that made no sense. Women don't play enough Starcraft so obviously they're being discriminated against!!!

It seemed like a pretty good introduction to the topic of e-sports and then suddenly he was talking about how the ruling class encourages sports to prepare men for war or some crazy shit.

I'm pretty sure there was at least four paragraphs about hitler and the olympics but I wasn't paying enough attention to know for sure.

It seems like their tinfoil hat got knocked off half way through the article.

The article did veer into strange territory, linking soccer/football with Mussolini and fascism. My first thought was "what about the playing fields of Eton?". But though the British were not fascist, they certainly were imperialist and male-dominant. So his observations about big-time sports may have a point. There may be only one mainstream big-time sport that doesn't fit the pattern: women's tennis.

Replace "e-sports" with "poker" and the arguments being made in that article look ridiculous.

No need to replace e-sports with poker, the arguments already look ridiculous.

#4..“It’s a game,” said Scott Strickland. “The commissioner of corrections wants raises for all his state employees, so he’s trying to cry wolf.”
"I think it’s political favors going around, the reason they’re doing that, but that’s neither here nor there,” Strickland said."

Is this for real? It's hilarious.

My question is what are you more afraid of:

1) Lobbying by the private prison companies.
2) Lobbying by country run prisons

It strikes me either one is bad.

The prison guard union was a big supporter of the three strikes law in California (although it was very popular and would have passed even without their lobbying).

Long running societal bias for jailing large numbers of minorities regardless of crime levels is the most scary item.

Is that in the article?

Once you have businesses, local governments, and individuals who make more money, the more people are in prison, it's pretty inevitable that you will have lobbying, both to:

a. Increase the number of people in prisons (harsher laws, longer sentences, etc)

b. Maximize the wealth that can be extracted from the prisoners (more money per prisoner from the state, lots of fees, making the prisoners work in some way that profits the local government or some private company, billing prisoners for their time in jail or on probation, make sure the prisoners have to pay insanely high rates for phone calls, etc.)

I live in a state where changes in the sentencing laws at the state level get a fiscal note on how much it will increase/decrease state spending on incarceration. Given the tightness of the General Fund for most of the last 20 years, the sponsors have to explain where they will cut spending in other areas in order to cover the costs of harsher sentencing. Very few changes that are simply harsher penalties get through the legislative budget committees.

Considering that the private companies are getting twice the rate for per diems than the counties, I'd say that the private prisons are "better at lobbying".

Perhaps if they could open a female ward to the prison, legalize prostitution as a profession, and then use prison labour to service the needs of visiting legislators, the county prisons would be more effective in raising their per diems? Or maybe the private prisons are fleecing the taxpayers (with the help of public officials, none of whom could possible have received any benefits for making such a decision ...) ?

#1 Mein Gott! What a load of hot garbage.

How is televised e-sports any different than televised poker and chess?

Watching televised computer games makes you a basement-dwelling loser.

As an economist, I have to proclaim The Other Patrick to be correct in his assertion. But not even a preference-neutral believing economist can actually disagree with Ryan here, who is obviously correct.

http://marginalrevolution.com/marginalrevolution/2013/02/cognitive-democracy-condorcet-with-competence.html is the context for #6. I vaguely remembered that thread.

Has anyone else noticed that politicians say one thing on the campaign trial yet do sometime different when they are elected?

#BaconForThought

"The inmates provides services". So Mississipi tried the stalinist model of development and it failed. When will it dissolve like the USSR?

Reminds me of people who say the recipients of a Basic Income will still be contributing to the economy because they are spending money.

Yes, technically true, but someone who is so focused on one tree they've missed the forest.

I think any kind of Basic Income should not be a Universal Basic Income. An expanded EITC would be far better.

Yes, I've supported and will continue to support my taxes going up to pay for an EITC boost. I'm very willing to help people who want to work.

But aren't you paying wages for corporations producing stuff to sell at lower prices to you and the the workers whose wages you are helping pay?

Of course, you are subsidizing the corporations to get cheaper stuff to buy by spending the money of your children and grandchildren because your tax cuts and the EITC corporate welfare spending are all paid for with Federal debt.

Without the EITC, corporations would have both lower sales and fewer reliable really low wage workers so they would produce of sell less, or they will pay more raising prices causing you to spend less since you believe consumer goods need to be subsidized for you, so you would consume less and out workers out of work.

After all, to keep selling to the really poor, the prices for the poor can't be increased much to pay higher wages, so the prices for upper middle class goods will be hiked the most.

What does it say about the legislators and voters that they would pay outrageous amounts to lock people up and make them work for free, but not modest amounts to pay the people directly to do the work?

Are their other fringe benefits of imprisoning the people first?

"Are their other fringe benefits of imprisoning the people first?"

Well, there's the whole locking criminals up so they don't contribute to crime aspect, that you might have missed.

Andre doesn't believe crime exists, its all pretext.

How many times have you been killed in your sleep by your pot crazed teenager?

That is why pot is illegal and people with pot are sent to prison for years to be recruited and trained to work in the only job they can get by checking the box, running coke, meth, and fentenyl laced heroine to supply you!

I might have been killed in my sleep a few times as a pot crazed teenager.

I'm all for locking up criminals so they don't keep preying on their fellow citizens. Ideally, we ought to decide how many people to lock up based on trying to balance the costs of crime (monetary and non-monetary) against the costs of locking people up. That's probably not all that easy a balance to strike, and I can definitely see how different people come to different conclusions on, say, whether we are locking too many people up now, or not enough, or just the right number.

But there is no way that decision is going to be *improved* by having a bunch of people who lobby for locking more people up, not to keep the streets safe, but rather to make sure they keep getting state money or free labor or jobs as prison guards.

Crime rates are more sensitive to the police census, to optimal deployment of police, and to best practices in police procedure. See the New York experience, which had great success. New York invested both in police and prison cells, but (compared to most states) it emphasized the former. Hence, New York, a heavily urbanized state with a per capita prison census about 40% below the national mean, has below-average crime rates. (It did require tripling the prison census over 30 years, however).

Complaints about 'mass incarceration' are all humbug, of course. Its a cover for objection to incarceration per se.

Yes everyone concerned with overincarceration is actually against any incarceration. LOL

I prefer to ignore data that goes strongly in one direction for very long periods of time, with results that make a country the most extreme outlier on the entire planet for a given statistic.

And "bah humbug" on the fools who think that generations of one-directional change in a variable and being the most extreme outlier on the planet makes it "mass anything".

Instead of "mass incarceration", I think I'm going to start using the term "the highest rates of incarceration of any advanced country any where any time in history". Apparently some people have difficulties understanding the "mass" part of that situation.

#1 "e-sports have provided my ego with regular injections of toxic masculinity to keep me from facing the full implications of my femme genderqueerness." Well, at least the author reveals his/her/its motivation and purpose within this pile of "just so" stories strung together to support the claim being made. The same can't be said of DeLong's #3; a similarly sized and evidence-free pile of words. If he had come clean it might have read something like this: "The West just got lucky and then evil incarnate, racism, came into the world and through its unworldly power made the Indians and Chinese migrate southward thereby doubly screwing those stuck in resource-poor environments. I must believe this with all my might because otherwise the harpy yells at me all night."

@Thanatos Savehn

I have rarely enjoyed an MR comment as much as this one.

Willie Osterweil is a writer, editor and agitator based in Brooklyn. Willie is an editor at the New Inquiry, and is the author of In Defense of Looting, coming out from Verso Press in Spring 2017.

I recommend people steal the book when it comes out.

# 3 1/2 I find Kremer's -- the second Delong link -- argument that the real driving force behind the British industrial revolution was expensive labor interesting. This is in line with the old argument that the black death, by reducing the supply of labor was a driving force behind the end of the medivel era and the birth of the modern era. These argument certainty are in direct conflict with the libertarian argument pushed at GMU that the answer to everything is cheap labor. I still find it hard to accept their belief that lowering the population's wages or standard of living is good for a countries economic development. Cheap labor just seems to me to be a downward spiral.

Now you're thinking like a businessman. In fact, economists want people to believe in just perfect competition, which by definition insures you will nearly die of starvation and be kept alive just enough to perpetuate the cycle. By contrast, real businessmen look to get into or make a business that has wide moats, aka monopoly power, with patents, esoteric know-how and product differentiation being common tools to achieve this.

Re #3, DeLong's argument failed when he kept harping how industrial machines are so easy to export (they are not) and he was nailed in the comments section correctly. It takes an entire ecosystem to get industrialization right; it's not just 'having the right machine which anybody can have since the machine can be export anywhere in the world' as DeLong believes. It's not an accident that the UK, US, rich countries got it right. Further, DeLong fails to understand a lot of "western crops" like fruit cannot be grown in the tropics, as they require a certain climate (including a change in seasons for fruits like apples) that are lacking in the rain-soaked tropics. From a western point of view, the tropics are great for growing stuff like bananas, rice, coconuts, mango, tropic fruit, but not much more. So actually the South is doubly disadvantaged. Diamond has it right: geography matters, and Porter has it right: culture matters.

Hown can you have high profits if you don't have cheap labor. The working poor are the backbone of a robustly growing economy with middle class consumers.

It's a good thing middle class consumers have houses inflating in price they can refinance to pay for their consumption, the wealth effect, because the working poor just burn the money they are paid. Better to pay taxes to pay for welfare like EITC to pay the poor to buy stuff because workers just drag the economy down.

Brad de Long's essay on why certain countries are rich and good at manufacturing and others not reminds me of those pamphlets written by celibate priests on how to have a healthy sex life. I am sure Brad has never set a foot on a factory floor in the U.S. nevermind in a developing country.

Is setting foot on a factory floor required to develop an "intellectual toolkit?"

I think the broader question would be: "Is having experience in the subject required to develop an “intellectual toolkit?”

Yes, as someone whose worked on a factory floor I find this judgment persuasive. I didn't understand much of what de Long was arguing beyond that there are significant first mover advantages that are quite sticky and possibly irremovable, sort of like that plastic adhesive at station 4. This is the wisdom of the floor.

It's 1980. You're looking for a photocopier. What`s the first company you check?

First mover advantage. With all those resources (profits) rolling in, you might even stay ahead.

What will the factory floor contribute to general principals here?

+1. Also DeLong fails to understand western produce cannot grow easily in the tropics. Too much rain, too hot, and no change in climate necessary to make western fruits like apples (among others) grow properly, not to mention lettuce (but pot plants grow great in the tropics, lol). It the tropics it's tough to just survive, let alone thrive, so Diamond has it right: geography matters.

'I am sure Brad has never set a foot on a factory floor in the U.S. nevermind in a developing country.'

Well, why not just ask him in his comment section? After all, he is famed for how he handles questions.

Makes one appreciate MR, doesn't it?

#6 How many women have advanced degrees in economics? What is the fraction of professional economists who are women? How many economics blogs exist? You know, stuff like that. Uh, I think they call that "analysis", and math is involved; which probably answers her question. (I probably shouldn't mix my criticism with sarcasm, but I couldn't resist - I mean did you read her suggested 3 explanations?!?! hilarious!)

Li Zhi,

Suggesting that the issue be analyzed analytically... Using facts and data...

You have confessed to blatant sexism...

That's what I said!

Peter,
Get a fucking life, man. Someone asks themself a question and muses on some of the issues involved. You act as though someone is trying to cut your balls off.

Really dig your wife's sword-swallowing act. Not too keen on the black eyes you gave her, though.

4. "...the counties would get good jobs guarding them."

We've been hearing this for years, that being a prison guard is a "good job". If so, why aren't there high school courses in prison guarding? Seems like just the position for a well-educated, motivated young grad. Hang around the saloon in downtown Lewisburg, PA after the shift change and see what kind of folks are pushing the buttons and rattling the keys at the federal pen.

In Québec (Canada), the college where I teach has a degree in "Techniques carcérales" (Incarceration technique), the way police officers must follow a three-year college course. But then Canada is such a loser place would say the Donald...

Well it takes about 5 minutes to teach someone how to inflame a situation worse. But 3 years to teach them to make it better? Maybe just a little overboard. I'd think they'd do better to mix more training on the job than to put so much up front for a trade that isn't exactly very theoretical in nature.

I'm pretty sure you've sucked cock in just about all of Rio's favelas.

6) Here is a new one: https://sanukriti.wordpress.com/

#3 DeLong:

"(1) The Protestant Wind that blew in 1688 and a century before in 1588 created in Great Britain an ideologically mobilized ruling class willing to commit previously unheard-of resources to first defensive and then imperialist war.
(2) The resulting fiscal-military state coupled with the fact that Great Britain is an island created the first British Empire and funneled the maritime trade profits of the world into the island."
(3) The resulting high wages coupled with the extremely low price of coal made the R&D to invent and deploy the first generation of technologies of the coal-steam-iron-cotton-machinery complex profitable."

This series of steps sounds highly dubious. Funneling "the maritime trade profits of the world"? Is that where the high wage structure and higher median wealth even came from?

Migrants from China and India went to the tropics. China and India were both then in the down-phase of the Malthusian cycle, with emigrants thus being willing to accept barely more than raw biological subsistence wages to move to the world's Malaysias and East Africas. Their pressure pushed wages in tropical migrant-recipient economies down, and pushed the world market prices of the tropical-zone commodities that they made and sold down. That meant that even tropical economies that did not receive immigrants from China and India found their relative wage levels collapsing as well.

Er...? I thought the Chinese Malays and East African Gujuratis were, well, relatively wealthy. I didn't think they pushed wages down so much as brought entrepreneurship and skills.

Plus wouldn't that emigration relieve population pressure and push China and India up? China and India being much larger parts of the "Global South" and at any rate therby important for talking about the prosperity of the Global North and South than Brazil and Malaysia and Kenya.

Further the fraction of migrating Chinese and Indians does not even seem that large to be a major determinant of anything much, other than by bringing new skills and expertise.

pushed the world market prices of the tropical-zone commodities that they made and sold down....rapidly divided by migration and the world labor market into a Global North producing high-price temperate and a Global South producing low-price tropical agricultural products

Agricultural employment and food prices were going down in inflation adjusted terms though?

It sounds like an odd story of Britain getting rich, in terms of wages, because of a uniquely militaristically capable trade dominating state (eh?), wealth and higher wages from successful British early industrialisation spreading to the rest of Europe and North America because they could grow wheat and wool rather than rice and cotton (eh?) and then an odd story of blaming Chinese and Indian migrants depressing wages wherever they could migrate (eh?).

I tried, but couldn't leave this at Claudia's blog:

"Claudia, I used to enjoy your comments at MR, I'm sorry you do not comment any longer. I think you have it wrong about the treatment you got. Commenting is a bit rough and tumble, and you were just treated like one of the guys.

Guys tend to throw insults at each other when they argue. These are pretty much all about the taboo things - race, sexual orientation, height, weight, and ethnicity. We are all guys, so gender is not involved, until a woman is there. You just add an additional avenue that wasn't there before to insult someone - nothing personal. Some women are too sensitive about their gender - like the commenter above who was attacked for being just a blogger, and relates that back to being female. Quite a jump there.

Anyways, miss you at MR, you always had an interesting insight."

#7 Good review of Robert Gordon's book by William Nordhaus here:

http://www.nybooks.com/articles/2016/08/18/why-economic-growth-will-fall/

There has been a lot of work on behavioral macro. I dont see Gaibax's paper as all that unique.

This is old news.

"what we have heah is a failyuh to incarcerate..."

Remote neural monitoring reads "evoked potentials" and transmits this a a signal which a computer can decode into vocalization (words), then use "microwave auditory transmissions" to transmit the sounds back into your head (this can have many different kinds of effects on the psychology of the individual).

For "them", the act of repeating it out loud may help to serve as a sort of duplicate oral "transcription" to run alongside the computer-driven data analysis.

Consulting speed of light, data processing time, etc., in the range of "faster than you'd notice" should apply, although for some specific observations (after accounting for the fact that the brain pre-processes a lot of stuff before you bcome aware of it, so it'd have to be something truly out of the blue) it becomes possible to rule out more distant locations by mere virtue of speed of light, distances to satellites, etc.

FYI, imo maybe relevant, riffing on your "name" ...

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