Month: December 2016

Dan Klein reviews *Rogue One* (with spoilers)

He emails to me:

I thought it great. It brings something strikingly new to the Star Wars universe – new in a number of ways, good ways:

1. It’s a self-contained heroic tragedy. You know the new characters are doomed. A useful comparison is the Obi Wan-Anakin battle in III: The Rogue One feeling of tragedy is less powerful but more comprehensive.

2. The plot and the character development are based on dissension, conflict on the rebellion side. Even the “extremist” plays a vital role in the success.

3. The dedication of rebels to the rebellion is depicted as the best of bad options for making one’s life meaningful, and as something that one gets locked-in to.

4. Rebel activity appears brutal, as though the conventional IV-VI image of the rebellion is but the fanciful illusion of those caught in the day-to-day misery of prosecuting the rebellion. But still that illusion is sustained – in Rogue One we have the drama behind a piece of that larger story, a tragic, engrossing aside.

5. On the rebel side, the Force persuasion appears, not the sage wisdom of Alec Guinness, but more the religion of deplorables, a resort of desperation. Some of the rebels come across as fanatics.

Darth is sparse but still the heavy, more chilling than ever.

BTW, the “Pappa, pappa” scene was, I think, a tribute to the 1995 Cuarón masterpiece A Little Princess.

Here is a good piece on Star Wars and geopolitics.

In which I try to explain the logic of discontent

Or at least part of it:

Consistent with those points, I would say the road widening is wonderful for boosting throughput — that is, it gets more people and cars onto the road. Yet it’s mediocre or worse for improving the quality of life of the typical resident. An economist, engineer or technocrat typically believes that boosting throughput is important, but voters usually are less impressed.

Western democracies are encountering more problems that have this logical structure and bring an analogous clash of values…

It’s no accident that so many of the gains available today involve throughput. If you widen a road, more people will drive on it. If you open up a border, more foreigners will come. If you build more in a well-to-do city, new residents will pour in and make it more crowded. These days there is always someone knocking at the gates because of all of the global talent that has been mobilized.

And that is part of the logic that elected Donald Trump and drove Britons to vote to leave the European Union. It’s well known in economics that when prices and opportunities change, it is the elastic factors of production (those that can change their plans readily) that gain the most, and the inelastic factors that are most likely to bear losses. Insiders and long-term residents are so often the inelastic ones while outsiders and newcomers have the greater willingness or ability to adjust.

That is from my Bloomberg column, there is much more at the link.

My favorite things Nigeria

Yup, I’m here.  I made this list before setting off:

1. Popular music: Few from any country come close to Fela Kuti, the main question is how many you should buy, not which ones.  Most of them!  On the CD medium, that old series of “two albums on one CD” was the best way to consume Fela.  On streaming, you can probably just let it rip.  And rip.  And rip.  Other favorites are King Sunny Ade and I.K. Dairo, I don’t love Fema Kuti.  You also might try Nigerian psychedelic funk rock from the late 60s and early 70s, for instance found here.  Most of all, there are thousands of wonderful local performers in Nigeria, you can watch a few of them on the Netflix documentary on the Nigerian music scene, titled Konkombe, recommended and only an hour long.

There is now a good deal of hit Nigerian and Nigerian-American music, such as Wizkid.  It is enjoyable but does not compare to Fela in terms of staying power.

2. Basketball player: The Dream is one of my three or four favorite players of all time.  My favorite Hakeem was watching him pick apart David Robinson play after play after play…see the final clip on the immediately preceding link.

3. Novel: Chinua Achebe, Things Fall Apart.  Honorable mentions go to Wole Soyinka, Ben Okri, and my colleague Helon Habila.  There are also the Nigerian-American writers, such as Chimamanda Ngozi Adichie.  Teju Cole is worth reading, including his non-fiction.

4. Movie: Well, I’ve seen parts of some of them, and you should at least sample some Nollywood if you haven’t already.  It’s kinetic.  The documentary “Nollywood Babylon” (Netflix) gives you some background.  As for “Movie, set in,” I draw a blank.  “Album, set in and recorded in” would be Band on the Run, Paul McCartney and Wings.

5. Actor: Chiwetal Ejiofor, he starred in “Twelve Years a Slave,” and is from a Nigerian family in Britain.

6. Presidential name: Goodluck Jonathan.

7. Artist: Prince Twins Seven Seven, or more formally Prince Taiwo Olaniyi Wyewale-Toyeje Oyekale Osuntoki.  He received his nickname because he was the only surviving child from seven distinct sets of twins.

prince_twins_seven-seven_1

8. Food dish: At least for now I have to say jollof rice, a precursor dish to jambalaya, further reports to come however!

The bottom line: Lots of talent here, plenty more on the way.

Thomas Sowell is stopping his column

Here is his statement, excerpt:

After enjoying a quarter of a century of writing this column for Creators Syndicate, I have decided to stop. Age 86 is well past the usual retirement age, so the question is not why I am quitting, but why I kept at it so long.

It was very fulfilling to be able to share my thoughts on the events unfolding around us, and to receive feedback from readers across the country — even if it was impossible to answer them all.

Being old-fashioned, I liked to know what the facts were before writing. That required not only a lot of research, it also required keeping up with what was being said in the media.

During a stay in Yosemite National Park last May, taking photos with a couple of my buddies, there were four consecutive days without seeing a newspaper or a television news program — and it felt wonderful. With the political news being so awful this year, it felt especially wonderful.

This made me decide to spend less time following politics and more time on my photography, adding more pictures to my website (www.tsowell.com).

For a relevant pointer I thank Charles Jackson.

Mediterranean fact of the day

More than 90 migrants were feared dead after the two latest boat sinkings between Libya and Sicily on Thursday, the United Nations reported, bringing the number of migrants killed in 2016 as they attempted the journey to over 5,000, compared with the 3,771 deaths recorded last year.

“This is the worst annual death toll ever seen,” William Spindler, a spokesman for the United Nations refugee agency, told reporters in Geneva, adding that 14 people, on average, drowned in the Mediterranean every day this year.

Here is the full NYT story, possibly with video noise.

Tuesday assorted links

Top MR Posts of 2016

Marginal Revolution University grew tremendously in 2016 and I’m thrilled with our Principles of Macroeconomics course and excited about all the new videos that we will release in 2017–including videos from India where I will be working on sabbatical. It was a good year for me personally and professionally. But 2016 was a very bad year for the world and this was reflected by the posts on Marginal Revolution.

The number one post of the year said it all: What the hell is going on? As Tyler put it in that post, “Donald Trump may get the nuclear suitcase, a cranky “park bench” socialist took Hillary Clinton to the wire, many countries are becoming less free, and the neo-Nazi party came very close to assuming power in Austria.”

Looking back now, it is clear that Tyler foresaw where the world was going and he starting working hard to understand the trend long before others were forced to retrospect. All of the following posts were in the top 20:

The second highest viewed post was actually my post, Economist Removed From Plane for Algebra, which was rather clickbaity although at least it wasn’t a hoax. I had two other top-ten posts, both of which were substantive. First was India’s Demonetization–What is Next? which pointed to all the right issues on this still evolving monetary shock. A number of Indian bloggers and writers picked up on this post. Also in the top ten was the surprising, Homicide Data by Weapon.

My posts on housing, Collective Property in Palo Alto, Laissez-faire in Tokyo Land Use, and the Japanese Zoning System were all widely read. As was Economics on Buying versus Renting a House which led to Tyler and me debating the issue for Econ Duel.

Other widely read posts of mine were:

I have saved, however, the best to last. Coming in at number 50 was a strange, shocking, only Tyler could have written, post. At the time not enough people took it seriously but it bears repeated and careful reading:

Does Lucifer in fact inhabit the corpus of Hillary Clinton?

Yes, 2016 was that kind of year.

Floating exchange rates and tariffs

Not long ago I mentioned that a joint export subsidy and import tax would be offset by an appreciation of the real exchange rate.  It’s worth pondering whether such results are the same for fixed and floating rates.

In the simplest model, the choice of exchange rate doesn’t matter.  The real terms of trade adjust to the subsidy/tax mix under either regime, with the same final equilibrium.

That said, you might think that goods prices in international trade are nominally sticky in a way that exchange rates are not.  Indeed you would be right, noting we don’t have a completely clear idea how much delivery lags and service quality changes sub in for some of (not all)   the real price movements.

But there is a subtler difference as well.  In a world of floating exchange rates, terms of trade move around more, in real terms, than if exchange rates were fixed.  Call it noise, bubbles, or whatever, but sometimes nominal exchange rates have a “mind of their own,” and real exchange rates move much of the way with them.

For that reason, companies that engage in international trade have to be more robust to possible “taxes” — which include unfavorable exchange rate movements — than under the fixed rate regime.  As a quick shorthand, I would say those companies need to have more market power to put up with the exchange rate volatility, though you can give the required corporate properties a few different twists, typically involving fixed costs, sunk costs, option values and the like rather than just market power in its simplest conception (it’s complicated.)

In other words, floating exchange rates, especially when there is a historical experience of ongoing real exchange rate volatility, will mean companies are more tariff-robust.

This is one reason why the Trump protectionist talk, while it is 110% bad, and bad for American foreign policy as well, and bad for uncertainty, and bad bad bad bad bad, and sometimes connected to bad bad bad people as well (did I say bad?  It’s BAD!), won’t quite have the negative economic impact that many people think.

Think back to the mid-80s, when the USD went from 3.45 Deutschmarks to 1.7 Deutschmarks in what, less than two years’ time?  That was the equivalent of a huge tax on Mercedes-Benz as an exporting firm.  Did Mercedes like that?  No.  Did they manage?  Well, mostly, sort of.  Of course they had a fair amount of market power at the time, they would have less today.

A five percent tariff, relative to the built-in adjustments possible in light of changes in floating exchange rates, is for the most part manageable, at least on narrow economic grounds.  Much of that five percent ends up as a tax on the monopoly profits of exporters.  You can google and read up on “exchange rate pass-through.”

You will note that some of this argument draws on earlier research by Paul Krugman, though I am not suggesting he necessarily agrees with my application or interpretation; here are his recent remarks.

The foreign policy and presidential signaling and uncertainty-related issues, not the narrow economics, are still the main problem with a five or ten percent trade tax, and they are reason not to go down this route.  But it is worth being clear on the economics.  The oversimplified statement of the neglected insight here is “floating exchange movements tax trade all the time.”

What scientists think about scientists

Both male and female scientists felt that female scientists (light bars) were more objective, intelligent, etc. than male ones (dark bars), although the differences were larger when it was female scientists making the ratings.

I found this interesting too:

Strikingly, though, early-career scientists were rated as having less objectivity, integrity and open-mindedness than PhD students – or so thought the senior scientists.

Junior researchers, however, saw themselves as being slightly superior to PhD students…

Here is more, via the excellent Samir Varma.

Law and Literature, syllabus for Spring 2017

The New English Bible, Oxford Study Edition

Guantanamo Diary, by Mohamedou Ould Slahi

Petinal Gappah, The Book of Memory

Glaspell’s Trifles, available on-line.

Year’s Best SF 9, edited by David G. Hartwell and Kathryn Cramer, used or Kindle edition is recommended

The Metamorphosis, In the Penal Colony, and Other Stories, by Franz Kafka, edited and translated by Joachim Neugroschel.

In the Belly of the Beast, by Jack Henry Abbott.

Primo Levi, If This is a Man

Sherlock Holmes, The Complete Novels and Stories, Sir Arthur Conan Doyle, volume 1, also on-line.

I, Robot, by Isaac Asimov.

Death and the Maiden, Ariel Dorfman.

Juan Gabriel Vasquez, Reputations

Graeme Macrae Burnet, His Bloody Project

The Pledge, Friedrich Durrenmatt.

Ian McEwan, The Children Act

 

Movies: Difret, Court, The Chinese Mayor, A Separation