Month: January 2017
2. Greg Mankiw seems to favor the new Republican tax plan. And Krugman comments. I say anything complicated they will just screw up, and the lack of transparency in the plan means eventually it will lead to a tax hike and furthermore a good deal of favoritism and rent-seeking along the way. Best hope is simply that they cut the corporate tax rate and don’t do much else on that front.
Regionalism, and redistribution through the medium of job creation, says I, in my latest Bloomberg column. Now, I don’t think that will work, given the current configuration of ideas and personnel and the weakness of the procedural in recent times. Still, I think people are underestimating how much the underlying policies pose a potential danger to the redistributive program of the Left. On the border adjustment tax:
As a libertarian-leaning economist, I don’t favor either of those changes, or their combination, but still there is a logic here worth considering. Think of this policy as taxing the consumption of elites and throwing that money, and more, at job creation, in this case through corporate subsidies. It’s a bigger and bolder gamble than just making some marginal adjustments in current transfer payments. In essence Trump has outflanked the left by packaging plans for redistribution of wealth with a revamped mercantilism, combined with a macho mood, media-baiting and incendiary rhetoric about who deserves what. It is an underlying fear of the left that a right-wing-flavored redistribution might prove more popular with voters than the left’s preferred egalitarianism and identity politics.
There are further points, including a discussion of why the Obamacare replacements are not nearly as stupid as they sound. But here is my summary:
I still think Trumponomics won’t work. It is too divisive; it will be applied politically, targeting favorites and enemies, rather than in accord with the dictates of efficiency; it may destroy rather than create jobs on net; and most of all it badly damages the U.S.’s global reach by cooperating less on issues of trade and migration. I think of the program as a whole as cashing in on the capital asset of America’s foreign reputation and redistributing some of those rents to Trump-supporting regions. That is a form of shortsightedness, and a sign of the decay of our republic.
Mr Navarro said one of the administration’s trade priorities was unwinding and repatriating the international supply chains on which many US multinational companies rely, taking aim at one of the pillars of the modern global economy.
Instead of thinking about how to protect the hotel and taxi industries, policy makers should be thinking about how to make it easier for the next Airbnb or Uber to compete. They could require, for instance, that key application program interfaces remain open to competitors, just as some utilities are required to allow alternative energy companies to send electricity through their networks.
Likewise, it’s not obvious that requiring Uber to contract with drivers as employees rather than as independent contractors is a good idea, even for the drivers. Lots of people are willing to drive for Uber, which suggests that Uber is providing drivers with opportunities superior to those that they can find elsewhere. The first rule of the regulator’s oath should be: “Do not destroy mutually profitable exchanges.” Banning the independent-contractor model could also make it harder for cash-strained startups to compete with Uber. Uber might even accept new regulations as a way of raising the costs of its rivals and locking in its monopoly. From upstart to rent-seeker in just seven years—the speed is astounding, but the arc is commonplace.
Read the whole thing.
On this week’s Odd Lots podcast, we speak with Giovanni Mastrobuoni about the relationship between salary and educational attainment in organized crime. He’s the co-author of a paper titled “Returns to Education in Criminal Organizations: Did Going to College Help Michael Corleone?” Based on data sets from the first half of the 20th century, Mastrobuoni and his colleagues were able to show that mafia members who got more education also got paid more in the underworld.
Up from Central Square towards Harvard Square is a stretch of Massachusetts Avenue that is mixed residential and commercial, with metered parking. A few weeks ago I needed to stop at the UPS store there and ship a heavy package. There were no free parking spots so I soon found myself cruising up and down along about a 100 meter stretch, waiting for one to open up. The thought occurred to me that if I had had a level 4 or 5 self driving car I could have left it to do that circling, while I dropped into the store.
Such is the root of anti-social behavior.
(1) People will jump out of their car at a Starbucks to run in and pick up their order knowingly leaving it not in a legal parking spot, perhaps blocking others, but knowing that it will take care of getting out of the way if some other car needs to move or get by. That will be fine in the case there is no such need, but in the case of need it will slow everything down just a little. And perhaps the owner will be able to set the tolerance on how uncomfortable things have to get before the car moves. Expect to see lots of annoyed people. And before long grocery store parking lots, especially in a storm, will just be a sea of cars improperly parked waiting for their owners.
(2) This is one for the two (autonomous) car family. Suppose someone is going to an event in the evening and there is not much parking nearby. And suppose autonomous cars are now always prowling neighborhoods waiting for their owners to summon them, so it takes a while for any particular car to get through the traffic to the pick up location. Then the two car family may resort to a new trick so that they don’t have to wait quite so long as others for their cars to get to the front door pick up at the conclusion of the big social event. They send one of their cars earlier in the day to find the closest parking spot that it can, and it settles in for a long wait. They use their second car to drop them at the event and send it home immediately. When the event is over their first autonomous car is right there waiting for them–the cost to the commons was a parking spot occupied all day by one of their cars.
They are seeing the technical possibilities and not seeing the resistance that will come with autonomous agents invading human spaces, be they too rude or overly polite.
Mandalay was the best Burmese food I’ve had, probably ever (NB: I’ve never been to Myanmar). Get the noodle dishes and soups, not the meat-based curries. In the Richmond neighborhood.
Angor Borei is very good Cambodian, I enjoyed the pumpkin curry. Then you can walk down Mission and spot dozens of other interesting ethnic places. Along that stretch is Prubechu, the first Guam restaurant I’ve seen (NB: I’ve never been to Guam).
Banana House, Thai food at Kearny and Bush, surprisingly good for such an unfruitful part of town; get the duck salad.
Al’s Place, expensive with one Michelin star, is the best and most original set of vegetables I can recall eating in this country. But when they tell you to eat the salad with your fingers, is that a sign of pretension or lack of pretension? If you have to ask, the answer is pretension. Still, on both the tastiness and originality scale this place ranks highly.
Amawele’s South African Kitchen, serves Durban food more than anything else. Right in the heart of downtown, charming, imperfect, but where else in this country can you get Bunny Chow (NB: not made of bunnies)?
2. “In summary I’d say the most important and mysterious unanswered question of economics is the point from #2: which cooperative norms are chosen to be enforced and how does this come about?” Link here.
The recent fall of labor’s share of GDP in numerous countries is well-documented, but its causes are poorly understood. We sketch a “superstar firm” model where industries are increasingly characterized by “winner take most” competition, leading a small number of highly profitable (and low labor share) firms to command growing market share. Building on Autor et al. (2017), we evaluate and confirm two core claims of the superstar firm hypothesis: the concentration of sales among firms within industries has risen across much of the private sector; and industries with larger increases in concentration exhibit a larger decline in labor’s share.
That is from Autor, Dorn, Katz, Patterson, and van Reenen.
Stanley Pignal, the new Mumbai-based South Asia correspondent for The Economist, tweeted:
Having landed two hours ago, I’m upgrading myself from “India novice” to “India watcher”. Tomorrow “expert”, next week “veteran”
With that in mind as also applying to me, here are some initial thoughts:
People in India drive on the wrong side of the road and I’m not talking about the fact that they drive on the left.
It’s easier to find a good Indian restaurant in Fairfax than in Bandra.
The quality of the intellectual class relative to GDP per capita is the highest of any country I know.
The quality of the intellectual class at the top is as high as Singapore but in Singapore the intellectual class runs the government.
You can take a 1-hour UBER ride for a $5, A taxi is even cheaper. A 10-minute auto-rickshaw drive is 50 cents.
Google FI worked right off the airplane. If you are coming to India for a week or two it’s great. Oddly, however, all of the Indian apps for food delivery, calling the Indian equivalent of UBER or paying with digital cash only accept an Indian telephone number so I am going to have to get a SIM card. Unfortunately, for reasons unknown, getting a Sim card is a bureaucratic hassle although apparently it’s scheduled to get better.
English is fine for getting around. The surprise is the number of Indians who don’t speak English and yet have to operate in a world in which advertising, signage, operating instructions, and so forth are in English.
Inequality as measured by a standard Gini index is actually lower in India than in the United States. As measured by what you can see, however, inequality is very high. It’s easy to step out of a Louis-Vuitton boutique and over a child sleeping in the street. Doesn’t appear to be causing a revolution, however.
Crime is low. Much lower than in the United States.
Pollution is high, much higher than in the United States, and at levels that do not seem optimal even give low GDP per capita.
In the developed world you go outside for fresh air. In India you go inside for fresh air. (Many homes and businesses have air purifiers with hepa air filters. I bought two.)
PM Modi wants to bring Elon Musk’s hyperloop technology to India. Delhi to Mumbai in an hour. Mumbai to downtown Mumbai in an hour and a half…on a good day. Start simple!
Retail, one of the largest sectors in many economies including India, is very inefficient. You have to go to a dozen small stores in different parts of town to get half of what you need. I was surprised to see a Walmart in Mumbai on Google maps. Great! I took an Uber. It was fake.
Parts of Mumbai are reminiscent of Havana–elegant buildings put up in earlier times including some art-deco buildings, that are now falling apart and even abandoned due to rent control and poor land use policy. At the same time, Mumbai looks like Miami with much new construction interwoven with the older decay. Capitalist shoots pushing out of socialist pavement.
That is an MR reader request, namely:
One issue that it appears we’ll discuss more in the future is genetic experimentation – the sort heralded by CRISPR. How do you suggest we prepare for this technology? What should be reading? Discussing?
Read my book The Age of the Infovore, to better understand the importance of human diversity, and also ponder my earlier post on whether genetic engineering will lead to excess human conformity. Then investigate what kinds of sperm and eggs are most popular and thus most expensive on the current market; that’s tall, smart people who look a bit like the parents. That might give us an idea of what kind of genetic engineering people are trying to accomplish. Then watch or rewatch Star Trek II: The Wrath of Khan. If you still have spare time, dip into the New Testament again.
Then read about extensive Chinese efforts in this area. Consider also how slow advances have been in genomics, and how difficult manipulability will be for most issues. Then study Moore’s Law and Big Data. Then read about how unlikely regulation will be able to stop advances in this area (the biggest intellectual gap in this set of instructions). Then read or reread Aldous Huxley and any Greek tragedy centering around the idea of hubris.
Mix together, stir, shake, and sit down and cry.
I very much enjoyed this book. Think of it as a substance-rich, original on every page exploration of how the space program interacted with the environmental movement, and also with the peace and “Whole Earth” movements of the 1960s. Most of all it is a social history of technology. If I heard only that description I might think this is a mood-affiliated load of recycled crud, but in fact it is the best non-research-related book I’ve read in the last month. Here is one excerpt:
“There is the problem of designing and fitting a spacesuit to accommodate their particular biological needs and functions,” explained one NASA official during the fall of 1960. The Apollo spacesuit, added another spokesperson more than a decade later, “would be damaging to the soft structures of the feminine body.” There was also the issue of bodily waste. By the mid-1960s the space agency had already spent millions of dollars developing a urinary collection device that slid over each crewman’s penis, but the female anatomy, NASA administrators claimed, presented additional engineering difficulties in the weightlessness of space. “There was no way to manage women’s waste,” argued NASA’s Director of Life Sciences, David Winter. “If you can’t handle a basic physiological need like that, you can’t go anywhere.” The national media became obsessed with this particular issue, publicizing NASA administrators’ concerns to the broader American public.
Recommended, pre-order it here.
You may have read that the recent Executive Order also applied to those who hold dual citizenship in any of the specified nations. I haven’t yet seen it fully explained how pernicious this is. A lot of countries don’t easily let you renounce their citizenship, they may still claim you, or at the very least they will not issue documentation confirming you are not a dual citizen, no matter what the fact of the matter may be. Very often there is no “fact of the matter” as to who is a dual citizen. Say you were born in Iran, and your parents brought you to the United States or Canada at age two. Let’s say the Trump administration then asks you to prove you are not a dual citizen of Iran. How are you supposed to do this? Leave the country and try to get confirmation in Iran itself, noting you might have to prove you have not broken any laws and have paid all back taxes and fees? Who knows?
How do you like these apples?:
Based on Article 41 of the constitution, Iran does not recognize dual citizenship, and if an individual acquires the citizenship of another country, his or her Iranian nationality will be revoked. This, however, requires certain legal procedures that if not pursued will result in the individual’s foreign citizenship not being officially recognized.
3. Peter Lawler on me and Charles Murray and other stuff (pdf): “Now, what perplexes Cowen most is that anyone would choose to be brutish rather than be nice.” I still say the modal scenario is that the deplorables end up disengaged. Here is another good passage from Lawler:
The key objection to niceness amounts to the fact that it’s not really a virtue. You can’t rely upon it as the foundation for the duties required of friends, family members, or fellow citizens. A nice person won’t fight for you; a nice person wouldn’t even lie for you, unless there’s something in it for him. A nice person wouldn’t be a Good Samaritan, if it required genuine risk or an undue deployment of time and treasure. A nice person isn’t animated by love or honor or God. Niceness, if you think about it, is the most selfish of virtues, one, as Tocqueville noticed, rooted in a deep indifference to the well-being of others. It’s more selfish than open selfishness, because the latter accords people the respect of letting them know where you stand. I let you do—and even affirm—whatever you do, because I don’t care what you do as long as it doesn’t bother me. Niceness, as Allan Bloom noticed, is the quality connected with flatness of soul, with being unmoved by the relational imperatives grounded in love and death.
I enjoyed this too:
The point of Clint Eastwood’s instant classic American Sniper is our failure to properly respect our guardians, who put their lives on the line for their own. It’s also about the increasing distance between the relatively honorable, violent, and God-fearing South and the rest of the country.
I praise Lawler’s work on Tocqueville in my The Complacent Class.
A pop-up in Helsinki, Finland might have just stumbled upon the answer to a question nobody was really asking: How can I order delivery and also go to a restaurant at the same time? Sure, table service restaurants kind of do that already if you look at them from far away — customers enter a restaurant, they order, and food is delivered to their table — but the AmEx-sponsored Take In goes a step further.
With no kitchen, guests at Take In choose from a curated selection of dishes from roughly 20 restaurants via an app called Wolt, the other sponsor of the pop-up. Guests eat their dinner in the Take In dining room. Take In offers bar service, and “hosting service,” helping get orders to the correct table. Guests who just want to drop in for a drink are welcome to do so. While it seems like a concept designed for solo diners, a Wolt spokeperson tells Monocle that the restaurant offers a solution for groups who can’t decide on what they all want to eat. The Take In pop-up started at the beginning of November, and will run through April 2.
Here is the full story, via Steve Rossi.
Thanks to an increase in people using their smartphones, an app named Hire Me Plz has been created to help men look for fake girlfriends.
Single men are able to hire girlfriends for as little as 1 yuan (12p) to 1,999 yuan (£230) an hour.
However during Chinese New Year prices can surge to up to 10,000 yuan (£1,154) a day.