Year: 2016
Very good sentences for MLK day
…it is remarkable to consider that 1/6 or 1/5 of total U.S. growth in income per worker may be due to greater economic opportunity. In short, reducing discriminatory barriers isn’t just about justice and fairness to individuals; it’s also about a stronger U.S. economy that makes better use of the underlying talents of all its members.
From Timothy Taylor, that is for women and blacks over the last fifty years, and does not even measure gains for other disadvantaged groups over time.
Are queens more warlike?
There is a reason chess evolved the way it did:
…we find that queenly reigns participated more in inter-state conflicts, without experiencing more internal conflict. Moreover, the tendency of queens to participate as conflict aggressors varied based on marital status.
Among married monarchs, queens were more likely to participate as attackers than kings. Among unmarried monarchs, queens were more likely to be attacked than kings. These results are consistent with an account in which queens relied on their spouses to manage state affairs, enabling them to pursue more aggressive war policies. Kings, on the other hand, were less inclined to utilize a similar division of labor.
This asymmetry in how queens relied on male spouses and kings relied on female spouses strengthened the relative capacity of queenly reigns, facilitating their greater participation in warfare.
As Chris Blattman tells us, that is from “A new paper, Queens, by Oeindrila Dube and S.P. Harish.”
Monday assorted links
1. The Hillary Clinton autism plan seeks to diagnose everybody: not a good idea.
2. “In June 2015, officials in Wisconsin changed the rules on therapy animals after a woman walked into a fast food restaurant with a baby kangaroo.” Link here. Photos you are not expecting, recommended, it’s not Thanksgiving.
3. David Warsh reports on the AEA meetings. Chris Bertram reports on Ferrante.
4. The European Commission will launch formal “rule of law” procedures against Poland. A sign of a broken system…both of them.
5. Claims about fraud in tennis (speculative), and pushback from Djokovic and Federer.
What I’ve been reading
1. Robert Trivers, Wild Life: Adventures of an Evolutionary Biologist. A wild memoir, full of tales of bipolar, murders in Jamaica, study at Harvard, marijuana, knee symmetry as a key variable in sprinting success, and the Black Panthers. It has sentences like “Best way to put it, nobody fucked with Ernst Mayr.” From one of the leading evolutionary biologists, recommended if you are up for the offbeat and the exotic and not obsessed with coherence. Burial instructions are included.
2. R.W. Johnson, How Long Will South Africa Survive?: The Looming Crisis. A stunning yet deeply pessimistic book about why the country is doing so badly. The rot seeps more badly than I had realized. The corruption, collapse of the legal system, and dismantling of the use of the government public to spend on public goods all are out of control and getting worse. Recommended. A bit idiosyncratic, but conceptual and original throughout.
3. C.L.R. James, Beyond a Boundary. Many people consider this the best book on cricket ever written. I cannot judge that, but it is a stellar sports book, colonialism book, and most of all a Caribbean Bildungsroman (Trinidad), definitely recommended to anyone with interests in those areas. Beautifully written, I read this one to prepare for Kareem.
4. Timur Vermes, Look Who’s Back. I don’t usually read books with “the Hitler gimmick,” but this recently translated German novel caught my eye in a London bookstore. Imagine that Hitler comes back (an unexplained plot twist), no one believes it is “the real Hitler,” and he is given his own TV show as a kind of crank celebrity imitator. It’s an interesting meditation on the commercial trivialization of evil, and how the modern world can process virtually any kind of message. Relevant for American politics today, I even laughed at some parts and I don’t usually find novels funny.
5. Amiri Baraka, SOS Poems 1961-2013. Is he actually one of America’s better poets? Imagine a mix of Walt Whitman, Ezra Pound, and the Black Panthers. Truly original and full of energy, here is his NYT obituary.
6. James Baldwin, Collected Essays. My favorite Baldwin, not the novels. The biggest surprise in here is his film criticism, most of all the short essay on Bergman, or on Porgy and Bess. Here is an Atlantic piece appreciating Baldwin as a movie critic. Or how about this sentence?: “He [Langston Hughes] is not the first American Negro to find the war between his social and artistic responsibilities all but irreconcilable.”
The truth about Chinese rebalancing toward services
The optimists point to the rise in the share of services in nominal GDP, and the corresponding decline in industrial sectors, as shown in the above left graph. Measured in current prices, the rebalancing appears to be well underway, with the share of industrial sectors falling from 47 per cent in 2011 to 40 per cent now.
However, almost the whole of this rebalancing in nominal terms has occurred because of a large drop in the relative price of industrial products compared to services. In real, inflation adjusted terms (above right graph), there has been no rebalancing whatsoever in the past decade taken as a whole (though there has been a percent or two in 2014-15). The needed shift in real resources – labour and capital – out of the moribund sectors has therefore barely started.
That is from the excellent Gavyn Davies, file under “Ouch.”
Addendum: Scott Sumner comments.
Arrived in my pile
The Age of Stagnation: Why Perpetual Growth is Unattainable and the Global Economy is in Peril, by Satyajit Das, and
The End of Average: How We Succeed in a World that Values Sameness, by Todd Rose.
I have a keen interest in both topics…
Sunday assorted links
1. The culture that is Dutch: “Militarism on rise in Netherlands! A full 24% of Dutch now say they’d fight to defend their country (up from 15%)”
2. Are liberals or conservatives more simple-minded?
3. Schelling conventions in the London Tube.
4. I thought The Revenant was mostly dull, and it reminded me too much of The Man in the Wilderness, which I saw when I was nine years old. They even stole from Lucas and the ice planet Hoth cut the belly open scene.
5. “Interesting to see “The Social Network” movie in 2010 end with ‘@Facebook is now valued at $25 billion’. Today, $FB market cap is $280b.” Tweet here.
6. New York values, booth version. They don’t do this in Iowa.
Filipino doughnut markets in everything
The Filipino restaurant Manila Social Club, in Brooklyn’s Williamsburg neighborhood, just made a splash with a confectionary creation that makes people crazy: a shiny, $100 doughnut covered in 24-carat gold.
There is more from the WSJ here, via Samir Varma. If nothing else, it makes the other prices on the menu seem reasonable…
Here is another account.
What’s going on?
The vigorousness of the Taiwanese election cycle puts to rest the myth that somehow the Chinese do not have the cultural capital for democracy.
DanC wrote to me:
Could the desire of the Saudis to have an IPO for Aramco be a way to hedge the risk of a revolt? Future revenues only have value to the royal family if they remain in charge. The greater the threat of ISIS, or some other group, causing a change in government, the greater the desire to sell some of their land locked assets today.
I say watch for who is exposed to the sudden weekend ten to fifteen percent devaluation. Lots of other EM currencies have gone down by about that amount, why should China be so different or immune? The Chinese government isn’t going to spend trillions of dollars on fighting a losing battle in the currency wars, they are simply waiting for the right time for this to happen. Don’t be caught off-guard.
I still think Ted Cruz will be the Republican nominee, as for some while he has been focused on becoming President and he has the requisite level of talent. Many Democrats are underestimating how rapidly he will be able to shift to the center. Hillary calling him a flip-flopper will set peoples’ minds at ease, not turn them against Cruz.
I’m glad we played it cool with Iran this time around but let’s be clear — it’s them playing us, not vice versa.
Saturday assorted links
1. Long profile of Richard Posner, more than just the usual.
2. Can robots be lawyers? A serious, detailed look, goes well beyond the usual.
3. Can editors and journalists be competitors? A serious, detailed look, with some not entirely pessimistic answers. In the meantime it is like academia, if academia had to compete.
4. Ed Glaeser reviews Robert Gordon; my own review will be coming out in Foreign Affairs.
5. The culture that is Canada: “I analyzed N.H.L. data from 1980 to 2007 for 737 professional players born in the Canadian prairies. The players share a common environment in the ice rink, but those who were born in areas historically outside the reach of the Mounties were penalized more often — an average of about 1.4 minutes per game — than those who were not — an average of about 1 minute per game. That 0.4 minute difference actually amounts to about 100 additional penalty minutes over a player’s career.” Link here.
*The Hateful Eight* (no spoilers)
I don’t like most Tarantino movies, except for Reservoir Dogs and Kill Bill, vol.I.; I usually find his style too mannered and self-conscious. And I read so many negative or lukewarm reviews in the American press. But more positive evaluations started to trickle in, as the British Guardian, Telegraph, and FT all gave it five stars, and some of my friends seemed to like it. One of my canonical views is that when critics have split views on a talented director, you should go see the movie. I am very glad I did.
Think of the film as a retelling of John Locke’s social compact story, except the individuals are not tabula rasa in terms of history, but rather they bring ineradicable racial and historical backgrounds to the table, epistemically uncertain backgrounds as well. The game-theoretic solution concepts unfold accordingly. The setting and details of the story are then set up to spoof Agatha Christie and the British haunted house tradition, except with snow, guns, and the American West as props.
Recommended, even for skeptics, Straussian throughout.
Why is a falling oil price bad for many asset markets?
But there is, I believe, something else going on: there’s an important nonlinearity in the effects of oil fluctuations. A 10 or 20 percent decline in the price might work in the conventional way. But a 70 percent decline has really drastic effects on producers; they become more, not less, likely to be liquidity-constrained than consumers. Saudi Arabia is forced into drastic austerity policies; highly indebted fracking companies find themselves facing balance-sheet crises.
Or to put it differently: small oil price declines may be expansionary through usual channels, but really big declines set in motion a process of forced deleveraging among producers that can be a significant drag on the world economy, especially with the whole advanced world still in or near a liquidity trap.
That is from Paul Krugman, speculative (as I think he would admit) but worth a ponder.
Another possibility is simply that, along with China and ongoing terror attacks, investors are realizing they don’t understand the world nearly as well as they thought they did. Or perhaps the rapidly falling price means one set of investors is learning from another just how soft the demand curve is, thus spreading bearish sentiment.
Addendum: Izabella Kaminska adds comment.
Walmart tweet of the day
Walmart to close 154 stores. Yes! Think how much taxpayers will save by not subsidizing all those low wage workers.
That is from Alex, yes our Alex. But a mere day ago, before the closing news, here was Bernie Sanders on Twitter:
I say to Walmart: Get off of welfare. Start paying your employees a living wage!
Hmm…
Does it matter that to some extent banks are commonly owned?
There is now a paper on this topic by Azar, Raina, and Schmalz, the main result is this:
We document a secular increase of deposit account maintenance fees and fee thresholds with a new branch-level dataset, as well as substantial cross-sectional variation in these prices and in deposit rate spreads. We then examine whether variation in bank concentration helps explain the variation in prices. The standard measure of concentration, the HHI, is not correlated with any of the outcome variables. A generalized HHI (GHHI) that captures both common ownership (the degree to which banks are commonly owned by the same investors) and cross-ownership (the extent to which banks own shares in each other) is strongly correlated with higher maintenance fees, fee thresholds, and deposit rate spreads. We use the growth of index funds as a source of exogenous variation to establish a causal link from GHHI to higher prices for banking products.
In other words, if companies are owned by the same pension and mutual funds, why should they compete against each other? Imagine managers given financial incentives for greater stability rather than greater risk-taking, so this does not require a publicly traceable conspiracy.
The first paper on this general question was in fact written by me and Ami Glazer about twenty-five years ago, although we never managed to get it published. Our biggest problem was perhaps the lack of clear evidence at the time. This is the best evidence I have seen so far, although I still file this under “speculative”…
For the pointer I thank Uri Bram.
Lunch with the FT, Roland Fryer
Here is one bit:
Do they take a data-driven approach to parenting, I wonder? Fryer confesses to owning a Dropbox folder called “the science of kids”, with data to cite in arguments over sleep training. They also plotted their daughter’s weight on a spreadsheet for a couple of weeks. “But then it was too tiring. There’s nothing like your own child to make you want to throw data out of the window,” he jokes.
He admits he has slowed down from his most workaholic phase but I suspect we’re talking fine margins.
Interesting throughout, I fear it is gated for you, very sad do subscribe. I link to it anyway as a show of expressive support for both Fryer and the FT and also John McDermott.