Month: July 2017
4. “The bottom line is that investors who follow target forecasted returns exacerbate mispricing and pay the price in terms of lower returns. This also helps to explain the persistence of anomalies.” I have not had a chance to look through this one, but the result is possibly of interest.
Canadian bills and coins are better than US bills and coins. Canadian bills are colorful, waterproof, partially transparent and holographic. Awesome. Canadian coins are also better. Who wouldn’t want a sterling silver and niobium Wolf Moon? And as if that weren’t enough the Canadian mint just started producing a glow in the dark coin for Canada’s 150th (shown at link) although it doesn’t match the great 2012 glow in the dark skeleton dinosaur (shown below).
Michele Fontefrancesco, an economic anthropologist and honorary fellow of Durham University, says: “Jobs have been getting more precarious in Italy since the late-1990s. What is becoming more and more common in Italy and other Mediterranean countries is the erratic movement of workers from firm to firm.”
He adds: “It’s becoming harder and harder to access professions with social capital. You study for three or four years longer than your father and you earn less money than him.”
For Agnese Bellieni, a 31-year-old resident of Alessandria, in Italy’s north-west, years of education are failing to pay off, and the eurozone recovery feels intangible. After finishing her doctoral studies in literature her dream was to become a full-time teacher, but in recent years she has been bogged down in a series of continuous but part-time, precarious work assignments — from market research, to Latin and ancient Greek tutoring — that, at best, have earned her €1,500 a month.
That is by Claire Jones in the FT, mostly about how the new eurozone jobs have lower wages and less job security.
A zoo in eastern China has erected a monument to the donkey that was pushed into a tiger enclosure and eaten alive.
A statue of the beast, titled “A Donkey’s Monument”, stands on a plinth in a corner of Yancheng Zoo in Changzhou, Jiangsu province. The inscription below, written in both English and Chinese, tells the sad tale of how the animal lost its life. There’s even a QR code for those who want to find out more.
She told Hawaii News Now that she considered protesting, but was scared to make a scene. “I started remembering all those incidents with United on the news. The violence. Teeth being knocked out,” she said.
Here is the full story. Basically the two-year-old toddler did not have his boarding pass properly scanned, the seat was given away to someone else, and he had to sit on his mother’s lap for a three-hour flight.
Supreme Court Justice John Roberts gave the commencement speech at his son’s 9th grade graduation. This section was striking:
Now the commencement speakers will typically also wish you good luck and extend good wishes to you. I will not do that, and I’ll tell you why. From time to time in the years to come, I hope you will be treated unfairly, so that you will come to know the value of justice. I hope that you will suffer betrayal because that will teach you the importance of loyalty. Sorry to say, but I hope you will be lonely from time to time so that you don’t take friends for granted. I wish you bad luck, again, from time to time so that you will be conscious of the role of chance in life and understand that your success is not completely deserved and that the failure of others is not completely deserved either. And when you lose, as you will from time to time, I hope every now and then, your opponent will gloat over your failure. It is a way for you to understand the importance of sportsmanship. I hope you’ll be ignored so you know the importance of listening to others, and I hope you will have just enough pain to learn compassion.
Whether I wish these things or not, they’re going to happen. And whether you benefit from them or not will depend upon your ability to see the message in your misfortunes.
That is the topic of my latest Bloomberg column, here is one excerpt:
When an empire is crumbling, and the rulers are very bad, the libertarian approach to secession makes good sense. That said, it’s not a fully general principle.
Sometimes a region wants to leave a country because of differences of ethnicity, religion, language or background culture, as is the case with the Scottish independence movement and the Catalonian secessionists. In those instances, it’s not obvious whether a unified or a newly independent government would result in greater liberty and prosperity. And for all the strong feelings you will find, I am not sure there is an objectively correct moral answer as to whether there should be one nation or two.
We do know, however, that political tensions rise and emotions tend to flare as such secessions approach the realm of possibility. For instance, there is a chance the government of Spain would react aggressively to what it perceives as an unconstitutional Catalonian secessionist attempt. Madrid might institute legal sanctions against Catalonian leaders or, in an extreme case, send in troops. The final result could be no independence and less liberty in all parts of Spain.
The problem is that people are often overly passionate about political boundaries, and an extra dose of irrationality isn’t exactly what the world needs right now. To cite another example of this problem, the Brexit referendum seems to have lowered the quality of debate and governance within the U.K.
There is much more at the link, including a discussion of why the American Revolution might have nonetheless been a good idea, and also why the libertarian approach needs to be supplemented with conservative ideas.
University spokeswoman Cheryl Roland said a small goat crew has been on campus this summer, but not to cut grass.
“For the second summer in a row, we’ve brought in a goat crew to clear undergrowth in a woodlot, much of it poison ivy and other vegetation that is a problem for humans to remove,” Roland said. “Not wanting to use chemicals, either, we chose the goat solution to stay environmentally friendly.
“The area is rife with poison ivy and other invasive species, and our analysis showed the goats to be a sustainable and cost-effective way of removing them,” she added.
The goats were formally introduced to the campus and local community on June 2 in parking lot 51 of the Sindecuse Health Center.
Garrett Fickle and his wife, Gina, the owners of Munchers on Hooves in Coldwater, rent out their four-footed “lawn mowers” to homeowners, commercial property owners and other clients.
…The goats are ahead of schedule, said Nicholas Gooch, a university horticulturist and the project leader.
The 400-member American Federation of State, County and Municipal Employees has filed a grievance contending that the work the goats are doing in a wooded lot is taking away jobs from laid-off union workers.
“AFSCME takes protecting the jobs of its members very seriously and we have an agreed-upon collective bargaining agreement with Western Michigan,” said Union President Dennis Moore. “We expect the contract to be followed, and in circumstances where we feel it’s needed, we file a grievance.”
Here is the full story, via Rayman Mohamed.
The adoration has clearly gone to Macron’s already swollen bonce. He’s acting like a ‘liberal strongman’, says Politico, seemingly intending it as a compliment – he’s setting out to defend the so-called liberal order while garbing himself in the pomp and power of the old French monarchy. On Monday he summoned parliament to the Palace of Versailles, echoing ‘Sun King’ Louis XIV’s pronouncements to the nobility. And his team are talking up his ‘Jupiterian’ approach – a reference to the supreme Roman god, standing above the fray with thunderbolts in hand.
It’s not just the imagery that’s autocratic. In his Versailles speech, he laid out plans to streamline parliament. He wants to cut a third of MPs from the National Assembly, restrict representatives to two-term tenures, introduce a ‘dose’ of proportional representation, and cut back on unnecessary lawmaking. These tinkering policies may not seem much on the face of it. But as one academic pointed out, all of this will serve to shore up executive power – emboldening bureaucrats over representatives, and filling parliament with newer, less battle-ready MPs.
Macron has styled himself as the successor to de Gaulle, the father of the Fifth Republic who redirected power to the French presidency amid times of imperial crisis and parliamentary gridlock. Under the guise of ‘getting things done’, and pushing through his controversial labour-law reforms, Macron is similarly seeking to disempower the parliament and boost the executive, which already has far fewer checks on it than, say, the US presidency. And yet for all the media fearmongering over Herr Trump, Macron’s machinations seem not to have worried commentators or the global elite.
That is all from Tom Slater. And here are brief remarks from Corey Robin. Once you understand endogeneity, it should come as not a huge surprise that “the candidate you want” so often ends up resembling “the candidate you don’t want” more than you had expected.
He has written a…dare I call it awesome…long dialogue, based on my earlier post on why I do not believe in God. Any paragraph would make an excellent excerpt, it is hard to choose, here is just one set of observations:
Instead, what I think you are looking for is a kind of black swan among revelations…
And, no surprise here, I think the combination of the Hebrew Bible and the New Testament is the darkest swan in the sea of religious stories — the compendium of stories, histories, poems and prophecies and parables and eyewitness accounts that most suggests an actual unfolding of divine revelation, and whose unlikely but overwhelming role as a history-shaping force endures even in what is supposed to be our oh-so-disenchanted world.
Ross also considers that if he were to play a kind of Bayesian game on reported personal revelations, treating all revelations equally (please read his whole discussion and don’t quote him out of context, as he is not actually advocating treating all revelations equally), he comes up with 45 percent for classical theism, “the pantheistic big tent” at 40 percent, gnosticism (hurrah!) at 6 percent, hard “no supernatural” deism at 4 percent, dualism at 3 percent, and finally “Which still leaves that two percent chance that Daniel Dennett has it right.”
There is much much more at the link, self-recommending, if there ever was such a thing.
P.s. Ross says yes, I should believe in God.
Despite being the richest state in the country, by per-capita income, Connecticut’s budget is a mess. Its pensions are woefully under-funded. Its deficit is projected to surpass $2 billion, or 12 percent of its total annual tax revenue. Hartford is approaching bankruptcy. Conservatives look at Connecticut and see a liberal dystopia, where high taxes have ruined the economy. Liberals, on the other hand, see a capitalist horror show, where the rich dwell in gilded mansions, ensconced in sylvan culs-de-sac, while nearby towns face rising poverty and bankruptcy. Why is America’s richest state floundering?
The first answer is: Corporations are leaving. Aetna, the insurance giant, is leaving Hartford, where it was founded 150 years ago. In early 2016, General Electric announced that it would move its global headquarters from Fairfield, Connecticut, to Boston.*
The second answer is: People are leaving. It’s rare for any state to actually shrink, but Connecticut’s population has been falling for three straight years. Meanwhile, only Michigan, Ohio, and Mississippi had slower job growth than Connecticut did over the last two decades, according to Jed Kolko, the chief economist at Indeed, a job site.
…The richest 0.02 percent of Connecticut households make more money than the bottom 48 percent, according to state reports. This 0.02 percent clusters along the Gold Coast and tends to work in finance.
In the last decade, Connecticut’s millionaires have accounted for as much as 30 percent of the state’s income-tax revenue. This is a problem, because the investment income of financiers is volatile.
That is from Derek Thompson at The Atlantic, interesting throughout.
2. Rough policy notes on bankrupt Italian banks. Very good, detailed, only for some of you.
3. Is social graph portability workable? I suspect it has to be quite seamless to bring strong competitive pressures, and this discussion, while quite good, doesn’t convince me the answer is yes.
Medicaid isn’t worth its cost–that’s not my evaluation that’s what people who use the program think, at least as far as we can tell from their actions. Joshua D. Gottlieb and Mark Shepard review the evidence at Econofact, which aims to be a dispassionate and non-partisan review of the evidence on a variety of issues. We have also covered these issues before but seeing it all together is valuable.
The cost is large:
The Medicaid program cost about $532 billion in 2015 to cover 74 million people, or almost one in four Americans. The average full-benefit enrollee cost about $6,400 per year to cover in 2014.
People with access to the program use a lot more healthcare than other similar people
The Oregon Experiment found that gaining Medicaid uniformly increased health care use: including hospitalizations (by 30 percent), emergency room use (by 40 percent), physician office visits (by 50 percent), and prescription drugs (by 15 percent). This evidence stands in contrast to the conventional wisdom that providing health insurance could reduce costs by eliminating ER visits. Of course, understanding whether this additional care is worth it requires a comparison of these real costs to the benefits provided.
The health benefits appear to be real but modest:
The evidence is mixed on whether having Medicaid improves beneficiaries’ health. The Oregon Experiment did not find statistically significant evidence of improvements in physical health measures, such as blood pressure and blood sugar after two years of coverage. But it did find large improvements in mental health and self-reported health. Other studies examining the introduction of Medicaid or its expansion over time have found that Medicaid reduces mortality (of infants during the expansion of Medicaid eligibility for low-income children between 1984-1992; of adults during the expansion of Medicaid coverage for childless adults in Arizona, Maine and New York between 2000-2005; of teenagers who benefited from expansions of Medicaid to children during the early 1980s; and of infants and children in the 1960s and 1970s following the introduction of Medicaid) and improves health later in life (for instance among teenagers who benefited from the expansion of coverage as children). But these studies lack the gold-standard randomized design of the Oregon Experiment so should be interpreted with greater caution.
Health benefits may not be the most important benefits:
One important role for Medicaid is to provide risk protection, shielding enrollees from the financial impact of particularly adverse health events, which is the most fundamental role of an insurance product. Researchers seem to agree that access to Medicaid does improve financial security.
So how does one evaluate the tradeoffs? One way is to look at how users value the program.
Recent evidence indicates that beneficiaries value Medicaid at less than its full cost. One source of evidence comes from Massachusetts’ low-income health insurance exchange, where researchers could observe how much charging higher premiums for Medicaid-like coverage led enrollees to drop out: at least 70 percent of enrollees valued insurance at less than their own cost of coverage. A second source of evidence used economic models to quantify how much beneficiaries valued the benefits of Medicaid in the Oregon Experiment. In this case, the researchers found that beneficiaries valued Medicaid at about one-fifth of its cost.
Benefits are valued at only one-fifth the cost! Why so low?
The literature suggests two explanations. First, Medicaid provides less complete choice of doctors and hospitals than other insurance, partly because of its low reimbursement rates (see this article for instance). Second, many of the benefits of Medicaid go to medical providers who would otherwise provide uncompensated or unpaid care to the same people.
The authors don’t mention this but if users don’t value the program highly because they would have gotten similar care for free in some other way, then the cost of Medicaid isn’t as high as it appears, because much of it is a transfer from taxpayers to medical providers or others who might otherwise foot the bill. Nevertheless we would probably design Medicaid very differently if we thought about it as (another) subsidy to medical providers rather than as a subsidy to the poor and sick.
It doesn’t follow from anything that has been said that Medicaid should be eliminated or even cut back (let alone that current efforts are the best way to do this). Nevertheless, if I told you that Program X costs $5 for every $1 in value transferred to recipients you would probably agree that Program X was in need of reform.
Addendum: Aaron Carroll and Austin Frakt offer a more optimistic review of the health evidence.
China’s energy companies will make up nearly half of the new coal generation expected to go online in the next decade.
These Chinese corporations are building or planning to build more than 700 new coal plants at home and around the world, some in countries that today burn little or no coal, according to tallies compiled by Urgewald, an environmental group based in Berlin. Many of the plants are in China, but by capacity, roughly a fifth of these new coal power stations are in other countries.
Over all, 1,600 coal plants are planned or under construction in 62 countries, according to Urgewald’s tally, which uses data from the Global Coal Plant Tracker portal. The new plants would expand the world’s coal-fired power capacity by 43 percent.
…Of the world’s 20 biggest coal plant developers, 11 are Chinese, according to a database published by Urgewald.
Here is the full NYT piece by Hiroko Tabuchi. Furthermore, China’s electric cars aren’t actually all that clean.
Keep this all in mind the next time you hear someone tout China as the new leader of the global green energy movement.