Year: 2016
Peso says the debate was a draw
The betting market had Trump go up from 16.8 to 19.0, with Pence falling by a fair amount. Stock market called it a draw. The peso observation comes from a tweet by Noah Smith.
Sunday assorted links
1. How about a “guaranteed jobs” program?
2. Has California become the intellectual capital of conservatism? And Ross Douthat on the post-liberals.
3. Twenty questions with Hilary Mantel.
4. Is there now a path out of Brexit?
5. The new NFL?: “Urschel is pursuing a PhD in math at MIT during the offseason and last year published a paper titled “A Cascadic Multigrid Algorithm for Computing the Fiedler Vector.” Ringoir is studying economics at the University of Maryland Baltimore County and captains its powerhouse chess team, which has won six national collegiate championships.”
The Dizzying Grandeur of 21st-Century Agriculture
Our industrialized food system nourishes more people, at lower cost, than any comparable system in history. It also exerts a terrifyingly massive influence on our health and our environment. Photographer George Steinmetz spent nearly a year traveling the country to capture that system, in all its scope, grandeur and dizzying scale.
That is the introduction to an excellent NYTimes photo essay on farming. I liked this photo showing a machine for dumping cranberries from a truck: simple but awesome.
Mr. Trump and the Republicans: a game-theoretic approach
That is my latest Bloomberg column on what is going on right now, here is an excerpt:
Right now, another collective-action problem may be damning the Republicans to a worse fate yet. If the Trump candidacy has no chance of winning or holding close, Republican turnout may collapse, thereby endangering party control of many lower political offices.
Republican turnout, and thus electoral success, might be helped if all the Republicans simply pretended that the Trump gaffe hadn’t happened. But politicians often look to their own self-interest. After Trump appears unacceptable enough in the eyes of enough relevant voters, political candidates and other party members will seek to distance themselves from him so they can try to rebuild their reputations once Trump is no longer on the ballot. You might say those individuals are finally doing the right thing, but under another reading a lot of them are acting in their personal self-interest yet again, and again to the detriment of the Republican party (though perhaps not the American citizenry).
In other words, the Republicans have been on the wrong side of game-theory logic twice, first in delaying their opposition and then later in enacting it. Those are hardly examples of getting Adam Smith’s “invisible hand” metaphor to work in their favor.
There is much more at the link. For related analyses, here are remarks from Sam Wang. Here are tweets from Megan McArdle. Here is Paul Gowder, drawing on Timur Kuran.
The economics of mobile homes
…the problem is almost wholly that land is too expensive. Reduce the size of a new, modern house by 50%, Rybczynski notes, and houses in metropolitan areas will still cost over $200,000.
That’s the secret to the extreme affordability of a mobile home—take land out of the equation.
…“a mobile home park is by definition a parking lot. Legally, our parks are no different from a parking lot by an airport.”
This is why used mobile homes only cost $10,000-$20,000. They make it possible for someone to buy a home but not the earth it’s parked on. As a Times profile of Rolfe reported, his average tenant pays $250 to $300 in monthly rent. If the tenant doesn’t own her home, she might pay another $200 or $300, with the option to apply half of that toward purchasing a mobile home.
“We’re the cheapest form of detached housing there is,” says Rolfe. “You can’t do cheaper.”
In fact it’s an entirely acceptable way to live.
For the pointer I thank the estimable Chug.
Do you like your neighbours?
That is “Bridging Home,” from Korean artist Do Ho Suh.
Saturday assorted links
1. Bucket markets in everything.
2. Link to the Alan Krueger paper on where the workers have gone. Note that pain is not a contemporary invention, yet it seems to be playing a larger role in joblessness than before.
3. Kroszner reviews Sebastian Mallaby.
Is corporate thinking too short-term?
That is the topic of my latest Bloomberg column, here is one bit:
Still, it’s not been established that American corporations are on average more short-term in their thinking than they ought to be.
Perhaps most importantly, it is often easier and better to plan for the shorter term. In information technology, the average life of a corporate asset is about six years, in health care it is about 11 years, and for consumer products it runs about 12 to 15. Very often it is hard for a company to plan its operations beyond those time periods, as the U.S. economy is no longer based on durable manufacturing machines. Production has shifted toward service sectors with relatively short asset lives, and that may call for a shorter-term orientation in response.
There are many other points of interest. I would note that from a social welfare function point of view, everyone thinks in too short a term. But from an agency point of view, I also see a lot of excessive long-term thinking in corporations:
Many tech startups have high valuations even though revenue is zero or low. Again, those judgments may or may not be correct, but clearly investors are trying to estimate longer-run prospects. During the dot-com bubble of the 1990s, there was too much long-run, pie-in-the-sky thinking and not enough focus on the concrete present.
Why do governments call referenda?
Haven’t you been wondering that lately? Tridimas has a paper (link here scroll down) on that question, here is one empirical observation:
During the period 1957-2006, out of a total of 43 integration referenda, 23 were not constitutionally required but were called at the discretion of the incumbent government; 18 of these 23 resulted in a pro-integration vote as the incumbent government had sought. France has held three EU-related non-required referenda, all initiated by the President of the Republic. The UK approved EEC membership in 1975 in a non-required referendum, the only national UK referendum thus far. In 2003, seven of the nine referenda held by the new entrants to approve membership were not required. Again, none of the four referenda held in 2005 by Spain, France, the Netherlands, and Luxembourg to ratify the EU Constitutional Treaty were constitutionally mandated.
And the theory?:
In politics, some issues cause deep intra-party splits between the elected representatives of the same party rather than inter-party divisions among different parties. Constitutional issues, which concern questions of governance and national sovereignty of a state, are a prime example. It is then unlikely that the standard system of parliamentary politics will be able to resolve all those issues. On the contrary, it is more likely that the leader of the party in office will call a referendum to decide them. Ratifying changes to constitutional arrangements in a referendum confers legitimacy to their adoption (or rejection) by taking the decision away from parochial parliamentary majorities and putting it into the hands of the citizenry.
Ah, but there is risk! Still, it is not crazy to call the referendum, even though you might rationally prefer that the whole issue disappear.
I would add a further point to that model. Let’s say you think the core issue won’t go away of its own accord, arguably the case with both Brexit and the failed Colombian peace agreement. The choice is not “referendum vs. no referendum,” but rather “referendum today vs. giving my successors an option on future referenda.” And since a referendum can strengthen an incumbent, you realize that some future government might call one for self-interested reasons. In which case you might consider risking disaster now, responding to a kind of collective action problem through time. You may even fear that one of your successors will be irrational. And so some moment will feel like an optimal trigger point, though of course that will involve risk and probably more risk than is socially optimal. But is there not a preferred time to make your leap from the burning building? The pain of landing on your arm rather than your butt is not per se an argument for nixing the choice altogether.
Alternatively, consider the Italian referendum on reforming the Senate, due in December. The incumbent government may well lose the vote, but precisely because this is not a fundamental issue I predict they can simply continue in power, noting they didn’t have a strong mandate for change in the first place.
Pain medication and labor force participation
A large share of American men between the ages of 25 and 54 who aren’t in the labor force may suffer from serious health conditions that are “a barrier to work” and suffer physical pain, sadness, and stress in their daily lives, according to research being presented next week by Princeton University labor economist Alan Krueger.
“Nearly half of prime age NLF [not-in-the-labor-force] men take pain medication on a daily basis, and in two-thirds of cases, they take prescription pain medication,” according to Krueger’s paper, Where Have All the Workers Gone?
Here is more from Peter Coy. Here is the paper.
Friday assorted links
1. Did Singapore’s National Service improve you?
2. Research position at GiveWell. And is Norway taking too much from its sovereign wealth fund?
3. Is materialism and interest in “stuff” in decline?
4. Should we regulate medicine like public utilities?
5. It is sad how much they play Steely Dan on satellite radio — could it be some strange form of payola?
What should I ask Steven Pinker?
That is the next Conversation with Tyler, October 24th, at George Mason in Arlington, you can register here.
What should I ask him? I thank you all in advance.
Americans Believe Diversity is Our Strength
Surveys from the Pew Research Center show that Americans are much more positive about diversity than Europeans. Remarkably only 7% of Americans think that diversity makes America a worse place to live–the next closest on that score is Spain where more than three times as many people think diversity makes Spain a worse place to live.
Liberals are more positive about diversity than conservatives but close to a majority of American conservatives (47%) think that diversity makes America better–which would make American conservatives more positive about diversity than most European liberals.
Optimism about diversity is one of America’s most admirable qualities.
Diversity can reduce trust and a society that combines distrust and a powerful central government threatens to oscillate between civil war and authoritarianism. Under limited government, however, a little distrust can not only be managed it’s a positive. If America were more homogenous, for example, we would have abandoned freedom of speech and religion a long time ago. It’s precisely because we can’t agree on what to say that we let everyone say what they want.
Hat tip: Cardiff Garcia.
The market for truck drivers
Getting a signing bonus is often associated with top young athletes. Now, taking a job driving a chemical truck in the U.S. can earn you a signing bonus of as much as $5,000 — and then there are also recruiting bonuses, retention bonuses and safety bonuses.
Those are the tactics that Randy Strutz, president of Quality Carriers in Tampa, Florida, is using to fill positions as unemployment lingers near the lowest level since before the last recession. The situation is cropping up across more industries in the U.S., as businesses feel increasing pressure to offer better wages and incentives to attract workers.
“It’s been a challenge to get good, qualified drivers,” said Strutz, who supervises about 2,500 truckers at the company owned by private-equity firm Apax Partners. “I expect we’ll probably have to spend more money to find applicants.”
That is from Patricia Laya. What does it say about the job prospects for the remaining able-bodied, male unemployed? There has been some recent coverage of video games, and incarceration, now it is time for more consideration of “can’t pass a drug test.”
The rich are also different from one another
That is my latest Bloomberg column, here is the introductory section:
The richest Americans are much less likely to have inherited their wealth than their counterparts in many supposedly more egalitarian countries. They’re not remarkably rich in degrees from elite universities. Rich Democrats have more social connections than rich Republicans.
These are some surprising insights from a new study of the very wealthy by Jonathan Wai of Duke University and David Lincoln of Wealth-X, based on data on 18,245 individuals with a net worth of $30 million or more.
The study portrays high-net-worth individuals as a more idiosyncratic and diverse group than reductionist cliches about “the 1 percent” might suggest.
Looking globally, extreme wealth is most closely connected to elite education in South Korea, Chile, and South Africa, and least so in Ukraine and Qatar. The U.S. is near the bottom of the top third of the country rankings for the tightness of this connection. Germany is close to the bottom, reflecting how German paths to riches run through forms of manufacturing and medium-sized business that are not so closely tied to elite higher education.
And:
For all the talk of Sweden and Austria as relatively egalitarian societies, they are also the countries where the greatest proportion of high-net-worth individuals inherited their wealth: 43.8 percent and 49.6 percent, respectively. In the U.S., inherited wealth accounts for only 12.6 percent of the very wealthy individuals in the study’s sample.
There is much more at the link.