Thursday assorted links

1. Does adjusting for household production make the great stagnation worse yet?

2. Can an Indian billionaire sell cricket to the United States?  (No, says I)

3. MIE: Domino’s pizza now offers a wedding registry service, to ease the ordering of pizza.

4. Regional average is over.

5. Scott Sumner on the stronger vs. weaker dollar.  I say imagine that foreigners decided to remit 1% of every dollar-connected foreign exchange transaction to me and Scott.  Yes there are second best possibilities, but I still think the likely answer is that America is better off.  I don’t so much worry about higher real wages that result from higher wealth.  What’s hard is specifying the ceteris paribus conditions properly, so that other changes don’t have a chance to offset the initial wealth gains.

6. Does the conflict minerals ban make sense?

Comments

Here's how I tend to think about the dollar question. When the US dollar appreciates due to an unexpected tight money announcement, the US stock market typical falls. When the US dollar appreciates due to stronger economic growth, the stock market typically rises. Yes, the stock market is far from a perfect indicator of what's best for America (think corporate tax cuts), but in these two cases I think it does pretty accurately reflect the overall impact on America.

+ 1

"Never reason from a price change"

of course, I am quoting you.

Sir, all trolling and kidding aside, this is pure nonsense. There are so many factors involved in Fx--I once saw no less than a dozen listed in a Barron's outline of economics--that the ceteris paribus condition is impossible to satisfy. Thus any prediction you make is bogus. For that reason Fx markets are a random walk.

Instead, tell us how you feel about this: "I say imagine that foreigners decided to remit 1% of every dollar-connected foreign exchange transaction to me and Scott."

Dumb. When there is a sudden and dramatic currency shift at the moment of an announcement you can't attribute that to the announcement? You don't even understand what a random walk is, do you?

@Cliff -obviously you don't know random walk. The stock market jumps around all the time, up and down, and short term it's random. Now granted I use the word "random" a bit loosely, since the distribution of the stock market, like the Fx market, is not Gaussian but Cauchy-Levy-Mandelbrot (fat tails). But it's largely random. And oh, do check out Stockman and Baxter's 1989 paper, which shows despite large Fx movements, real GDP and real variables don't change much at all, pace Dr. Sumner's comment. Money is neutral.

In the short run, the market is a voting machine but in the long run, it is a weighing machine. --Benjamin Graham

I would think that the stronger/weaker dollar issue were "settled science."

I find worthy of comment world interest rates. The 10 year UST bond trades at around 2.4% while the Portuguese is about 0.3%. What gives? Surely the creditworthiness of Portugal is not that far above the US.

@Richard the meat-market vendor - nothing in economics is settled; the closest might be the benefits of free trade (and even that's not unchallenged). Go here and check some of the past polls of famous economists on various issues: http://www.igmchicago.org/surveys/ten-year-budgets

>think corporate tax cuts

Right. How awful that would be for America. Because nobody here wants jobs, or cheaper goods!

Jesus man, get a clue.

The point is that corporate tax cuts cause the stock market to appreciate, regardless of their 'real' economic effects.

It is not a commentary on whether they are bad or good.

I must ask, what's the fake tweet count? This post has been up fifteen minutes with zero comments, and yet 60 people have apparently tweeted it. Soon it will be thousands...

This is one of the most popular blogs in economics in the world. Tens of thousands of people read it (check Alexis) yet you see the same small number of commentators here. That's because 99% of the people reading don't read the comments and the simply retweet the main news article. That's the alternative fact and I'm buying the party line of newspeak (or is that News-speak?). See more here: https://en.wikipedia.org/wiki/Newspeak

As of this hour, searching the url on twitter gives 5 tweets. So I think it is mostly fake.

Set aside the improbability of people tweeting a list of various links, the engagement with MR's own tweet on the post shows zero replies, zero retweets, zero hearts. And, as Jason notes, you can search prior links and find basically zero hits despite these posted counts in the thousands.

Who to believe? You, 'too hot for MR', or Alexa?

Stats for marginalrevolution.com:
Rank in United States 17,053

stats for penthouse.com:
Rank in United States 27,225

MR > Porn. SCORE one for TC and AlexT!

Just FYI, you picked the wrong pornsite: pornhub.com rank in US: 30.

If I'd have thought anybody was reading these comments besides us I wouldn't have been posting comments here for almost 8 1/2 years.

If you had a time machine and could visit a Kansas City drugstore circa 1955 you might see one of those revolving book stands that held about 5 columns of books with about 8 books (3 deep) top to bottom - so about 120 different books. Some were by then-famous people whose names are still familiar - Louis L'Amour, Georgette Heyer, Max Brand - but most were by people whose names and pseudonymous names mean nothing to anyone now who is not a unique and ambitious scholar of true ephemera. My guess is that of the 120 different books on that 1955 stand no more than 15 will be read for pleasure this year by a single human being on this planet, and of those 15 less than half will be read for pleasure by a single human being in the year 2067, 50 years from now. Yet every single one of those authors lived in an apartment or a house, often a nice apartment or a nice house, at some point between 1950 and 1955 (not counting the posthumous authors), and every single one of those authors was able to secure a book contract of some sort - no small achievement for many of them, having been born in poverty and obscurity .... while, on the other hand, there is no apparent entry cost to commenting here.... that being said: Now, my favorite authors are people like Proust and Joyce (well, on the technical side anyway, I don't really expect much deep human feeling from them) but I have to say that some of the greatest lines of English I read that were published in the last 15 years were in immediately forgettable pulp-level Star Trek novels (a description of a starship deep in dark gold-tinged space at the beginning of one novel, a character's hesitation at remembering - or not remembering - if the last time he had seen a crewmate from an earlier mission they had said the meaningful words he thinks they had said, or whether that was only a dream). My favorite comment sections here include the ones on cheap food beautifully prepared and the ones on authors who I think may be more inspired than I think but who probably are not. The comment section on a Mozart post from a few years back (Tyler or Alex talked about their favorite Mozart, commenters chimed in) was great, even uber-great, as Shaggy's pal would say. Some day an AI bot, sort of a great-grand child of that weird app that tells you that you should listen to Sara Maclachan because you like Amy Grant, may scoop up a few hundred posts and comments from here for you if you say, Dear Bot: I have been daydreaming lately about **insert weird and obscure object of thought - Saint Augustine's views on physics - was it just Calvin and Hobbes level verbalizing or was it actually worth thinking about? - that sort of thing**. Or else some EMP pulse will fry all this and 100 years from now, at best, two or three things said here will constitute the actual basis of some obscure reference in some future Shakespeare's oeuvre, nothing more than that. Julia Child, were she to read this comment, would explain whether or not those pulp authors on that Kansas city drugstore revolving bookshelf, mostly unread now, would have been likely to have spent their advances on good food and good wine or not: I do not have her knowledge.

As for me, I prefer commenting on Youtube videos. You say what you want to say, a couple days later, you humbly delete it.

Acts 8:26-35; so many sad commenters on Youtube who need cheering up by those who know that "This is the Day the Lord has made, let us rejoice and be glad!"

la verdad es la dicha de la inteligencia: gracias amigo

One hopes, by default of better hopes, for those whom one cares about: "[hace algo] first out of pride, then out of humility". Youtube>MR, in that very technical sense...

4. The good part of cities creating wealth is that cities are creating wealth. The bad part is that you can (and @chris_arnade does) find very sad stories of the left behind. A different kind of Left Behind book.

I really don't think macroeconomics, let alone trumpeconomics, can really target the distributed rural poor.

I think you need programs. But that is "progressive." Sadly many forms of utilitarianism, even those highly respectful of individual rights, are "progressive."

There's a link on the blog to a commentary about Caterpillar executives leaving Peoria for downtown Chicago. Supposedly its only a few hundred people out of the over 10,000 employed in the Peoria area, but still.

According to Wikipedia, the Peoria metro has a population of 373,590,while the city proper has a population of 115,828. In continental Europe, that would be enough to sustain a prosperous mid-sized city, provided that city has a long tradition, skill-set and conglomeration effects (in the case of Peoria, that would be construction equipment, other industries, local universities, health care and administrative functions).

I am not saying Peoria will degenerate into Detroit overnight, or even ever, but I am genuinely curious about what the future holds for small and midsized US cities, if all of the top brass and associated patronage and benefits (e.g. Caterpillar World Visitors Centre, Caterpillar's support of local arts, universities and foundations, lobbying of government officials etc.) centre around 2-3 dozen major conurbations?

Do autonomous cars make the Peoria-Chicago commute feasible? Not ideal mind you, but it opens up the range of solutions to the professional two body problem, which one suspects underlies concentration of careers in larger metros. My impression has been that the Champaign Chicago Amtrak route is already commuter rail.

Really a lot of the rural nonpoor are drivers of one thing or another. Add autonomous vehicles and you have a really terrible mess.

5. Is America better off by being a skimmer, collecting 1% of dollar-connected foreign exchange transactions? Sure, it means higher wealth for those doing the skimming (bankers including services we don't think of as banking such as those provided by Paypal), but what of the rest of us, are we better off? Having a strong dollar and the trade deficits that are implied means that foreigners don't purchase goods produced in America, they purchase financial assets produced in America. America: the banker to the world's plutocrats. Not every economist agrees, including at least one graduate from GMU, Mark Calabria, who opposes securitization. What's a foreign billionaire to do with his profits from selling goods to Americans if he doesn't have high yield financial assets produced in America in which to invest? There is an alternative: a weaker dollar and the trade surpluses that are implied, a surplus Americans could invest in other countries, spreading both the benefits and the brand of free enterprise for which America was at one time known.

But what about "tech"? Can't American prosperity be be based on "tech" as well as banking. California is certainly prosperous. Yes it is, and so are the smart people who work in "tech". But there's a problem: "tech" generates almost all of its revenues from advertising, advertising goods manufactured in the world of atoms (to use Thiel's metaphor), manufactured (as a whole or in part) outside America. "Tech" is very much like the bankers: both are skimmers, collecting a small percentage of the world's transactions. Question: does "tech" prefer a strong dollar or a weak dollar?

Your idea of "tech" is a distorted. Silicon Valley employs 8% of US coders. The car you drive has an ECU, a.k.a. car computer, running on software written on C. Heard about manufacturing robots? Also code. Most of media we consume? Not from Silicon Valley.

https://www.wired.com/2017/02/programming-is-the-new-blue-collar-job/

Yes, and here is an article about GE that offers lots of optimism about the future of the real "tech" to which you refer. https://www.nytimes.com/2016/08/28/technology/ge-the-124-year-old-software-start-up.html But that "tech" is in manufacturing, manufacturing that is discouraged by a strong dollar.

One of the problems here is that we don't have a good vocabulary to distinguish between different tiers of software work. It'd be like if we called everyone from the hospital orderly to the head of pediatric neurosurgeon a "doctor". Similarly there are many people working as "programmers" in corporate middle America, but they're largely technicians. Basically just hooking up one piece of pre-developed framework to another out-of-the-box service. Maybe copy-and-pasting some code from Stack Overflow.

In contrast engineers, in the true sense of the word, people who architect complex systems from scratch, are disproportionately in the orbit of Silicon Valley tech companies.

Everybody copies from Stack Overflow. The high value coders turn it around as a solution to a company wide crash in 17 seconds.

The high value coders turn it around as a solution to a company wide crash in 17 seconds.

The high value people don't have company wide crashes...

No, they fix other people's. Like the nitwit who is a star because he does "fast turnaround," only to commit at 2 am and bring down the live site by 11 am, when he is no longer available.

Missed point: strong dollar, weak dollar.

Yes, not everyone software is Dennis Ritchie, Linus Torvalds or Matt Mullenweg. We read this blog because of Matt, don't hate me for comparing him to the allmighty C & Unix creator.

The issue here is that people that "just hooks up one piece of pre-developed framework to another out-of-the-box service." have a nice salary above US median. Boring, unsexy work but so what?

The numbers in #2 seem to be a bit messed up, which makes me question the credibility of the article. I also don't think cricket will take off in the USA, as there is already a perfectly good equivalent in baseball, plus what sports people like is highly path dependent, since in essence most team sports are equivalent in any possible way you might imagine.

On the weaker vs stronger dollar, this is much less of an important question since we moved to fiat currencies. Clearly at any one point a change in exchange rate is of little importance to most people. Poorer people mostly have consumption and sell their services in their home currency so as long as there is no immediate increase in inflation, they are likely insulated. Richer folks, whose consumption through foreign holidays and luxury goods might be more exposed to weaker or stronger currency effects tend to also have investments which even if they are formally not invested overseas contain many multinationals who are foreign currency earners. So you will immediately see, as Scott says, a stock market adjustment of quite a large amount when there are big currency swings. So in the short term currency changes are no big deal in terms of consumption. Longer term, we can expect that any longer term effects are arbitraged out as well - if it really is the case that a stronger dollar makes a company less efficient, they will adjust wages etc to regain competitiveness so any increase in wealth is offset against lower wages.

#2 I wait for the resident commodore troll comment....

Hear, hear, a rousing cheer.

#2 - I think it might work, because there are a lot of Hindu and Pakistanis in the US and they want a sport that their kids can play without getting demolished by their bigger, stronger peers.

One sport I'd love to learn more about is curling. I think the Olympic competition draws a pretty decent number of eyeballs. And I confess I only watch the women's event.

Is there a reason curling is sex-segregated?

Twice as many medals to win

Exactly. He may not be able to sell cricket to non-Asian-Americans, but immigrants from the subcontinent aren't totally insignificant.

Also anyone from West Indies, Britain, Australia, New Zealand, South Africa etc ...... Even Afghanistan has a good team now.
Perhaps more countries compete for World cup cricket ( including preliminaries) than do for Baseball.
TV audience overa period of time would not be insignificant.

"Is there a reason curling is sex-segregated?"

So men can watch without the inevitable erection leading to soul-searching.

I am a major cricket fan (Australian-Malay) and I'm sceptical but not dismissive.

His success is really going to depend on: the viability of the facilities as non-cricket facilities (unless he's going to build in an area where there is a large South Asian population (e.g. North Atlanta) the attendances will potentially be low); his ability to attract headline IPL players to the US; the time difference between US games and Indian high-rating Indian tv slots.

One of the reasons he may be looking to the US is that cricket (like soccer) is tightly controlled internationally by the International Cricket Council (ICC), similar to FIFA. The ascendant (and most profitable) form of cricket now globally is the IPL (Indian Premier League). IPL has nothing to do with the ICC. There is acrimony between the two bodies.

The ICC also recently suspended the US member body. So, there is now the possibility of an international non-ICC competition.

This makes me think of sports monopolies more broadly and how they work, and I confess I'm generally ignorant as to how they emerge and are sustained.

"there are a lot of Hindu and Pakistanis in the US". You mean Indians and Pakistanis. Not all Indians are Hindus.

#1. "When [women] entered the labor force, they produced less of that something."

With the exception of child-care, I'm not sure how true this is. By the time of the post-war years, a lot of the strenuous, skilled, time-consuming labor women used to do in the home had already been automated by a combination of home appliances and mass production. It used to be a thing to worry about bored housewives with way too much time on their hands spending their afternoons watching soap operas.

I'm not sure that Douthat is understanding the situation very well, either. How do women get back into the work force after a 5-10 year layoff (seeing 2-3 reasonably spaced kids to kindergarten), and where are these high quality part time jobs supposed to come from?

As a young parent, I can confirm that daycare is expensive. There is very much a sense in which the second working parent's salary pays for daycare. But this daycare is an investment in the second parent's career! The second parent can't take years off of their career path to have children and not give a lot up of money, and there aren't that many jobs that you can enter after a huge break in working and have a hope of advancing to even a schoolteacher quality payscale.

Second, Douthat wants the second parent to go back to work after a certain amount of time; sure, as Slocum says above, bored housewives watching soap operas is hopefully not what stay-at-home mom support is aimed at. But I would argue that high levels of grade school parenting, when your kid can actually read and stuff, is more important than involved toddler parenting, when high quality parenting would mean seeking out pre-school-like playgroups to get your kid social interaction. So you would ideally have a part-time job that pays a wage that is not a total waste of time. Can someone give me an example of such a job? Schoolteacher maybe used to be one of these, and perhaps still is for elementary, but certainly is not for high school or middle school.

Fwiw, I think Douthat is correct that expanded child tax credits are better than subsidized daycare, and I of course want more child tax credits for myself! (I would also argue that we should incentivize more births from high ability people, and child tax credits are the best mechanism I can come up with for that.) I just don't think that either does very much to address his diagnosed problem.

100% of childcare costs should be fully tax deductible. This would increase high-skilled workers, increase revenue, and increase fertility of high-skill workers. Win-win-win

That said, once your kids are in grade school your job as a parent is basically done. Once they are a fully actualized human being who can take care of themselves it's all playing board games and watching movies.

Healthcare careers of most descriptions do offer women the flexibility to go half time for a few years with only modest long term opportunity cost.

#6: The market may work in this case. Never knew about the ban on conflict minerals but I've seen in jewelry shops the Conflict Free Gold Standard. These guys say the analyze case by case artisanal gold producers to determine if money is supporting war or not. They promise the standard implementation is assessed by independent audits.... http://www.gold.org/gold-mining/responsible-mining/conflict-free

Mr. Drum forgot to write this: the ban may not be optimal but the objective is worth. So, if the ban has an implementation problem, the market solution is there. Also, about a year ago Apple announced they have audited all their suppliers and they stopped buying minerals from the ones related to conflict.

5. Upshot: economists don't agree on the issue, so it is a reasonable thing to wonder about.

But Cowen and Sumner are outliers here.

There are also economists who support a large minimum wage hike.

#6...Just for once can we do this yes or no? Like the bonehead questionnaire concerning a guaranteed income the University of Chicago used polling its list of economic experts. I guess Irwin Corey had already passed away when they asked that question.

#2...No...https://m.youtube.com/?tab=w1#/watch?v=dEH4ahCCrJo

#4

Isn't the story here about the regulatory state. The more regulations we're drowning in, the more critical it is to have the right connections to influence government policy. We'd expect the most connected companies and individuals to be predominately located in "top-tier" metros. Phone calls from San Francisco get taken in DC a lot more than phone calls from West Virginia. The industries and firms in the best cities are favored, or at least not as dis-favored. The industries and firms in podunk parts of the US have to live under insanely burdensome rules.

Obama destroys the coal industry by executive fiat, and no one bats an eyelash, because the victims are inarticulate and unattractive. Trump considers stopping the tech industry from blatantly flagrantly breaking the law about H1Bs (e.g. posting ads requiring 10 years of experience with 5 year old technology), and it's a national crisis.

Wouldn't Texas and California say no? Despite quite different regulatory philosophies and regimes, both grow in cities.

A map of United States counties by per capita income:

https://en.wikipedia.org/wiki/List_of_United_States_counties_by_per_capita_income

Natural gas killed the coal industry, not Obama. It's a flyover state civil war.

Nat gas certainly didn't help. But I'd still maintain Obama regulations had at least an equal, if not greater impact than falling gas prices. Maybe you'd dispute this, and it's debatable. But even if you do let me re-frame this. The drop in coal employement has not nearly been made up for by petroleum employment. And there's a simple reason, both industries are extremely regulated at an increasing rate. A heavily regulated that should be booming, barely produces any jobs. A heavily regulated industry that should be contracting is imploding.

To make a blue state analogy, imagine if finance and software were regulated as cavalierly as coal and gas. Nearly every single investment bank would be shut down, New York would look like Detroit. The tech industry would be bullish, but it would have barely any more jobs than ten years ago, and incomes in the Bay Area would be stagnant.

But production isn't down, right? Might it just be automation?

Bingo. Boonton has the figures but I believe the coal industry went from employing 200,000 people to 100,000...in the 1980s. So Reagan was the real enemy of coal.

Obama has plenty of things to criticize, killing the coal industry isn't one of them.

I would argue that when Summer blames/credits the dollar for stock market change he
is crediting/blaming the wrong thing. It is monetary policy not the dollar that causes the stock market to rise/fall. The same monetary policy is most likely the cause of the dollars change, not the other way around.

Spencer, I agree. That was my point.

#2 while the US would probably be the last place in the world where cricket could become dominant due to the nationalistic attachment to baseball, there are enough people in the US that only a small fraction of them would be enough to support an 8 team professional league. A season atttendance of 500,000 with TV season viewership of 20 million can provide 8 teams of players with a living similar to a teacher. It could exist.

First time I've seen the term "artisanal mines". How is that different from a hole in the ground?

As an Australian drenched in cricket culture, let me say honestly that baseball is a better game. More fun to play, more fun to watch.

I think Twenty20 with timframes similar to a Baseball game is proving quite popular. As to playing , yes you are probably correct , cricket needs a lot of gear etc.

Since we talked sports today, let me say: get rid of replay in every sport. It is terrible. I want to be able to cheer without wondering if the TD/turnover/goal/run is going to be overturned.

The NHL allowing challenges of goals for being offsides was the final straw.

+10

Can't wait for expanded too many men on the ice calls.

Boo this man!

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