Month: November 2017

Is offshore banking underrated?

That is the topic of my latest Bloomberg column, here is the closing bit:

Perhaps it’s not always an appetizing thought, but in many contexts wealth aids liberty, and the freedom to keep one’s wealth can limit political degeneration.

There are many possible outcomes here, and it is also possible that offshore finance can make tyranny worse.  But it seems to me opinion has turned against these institutions, without much serious consideration of the political economy issues.  By the way:

The top five countries on this list, [offshore wealth] measured as a percentage of GDP, are United Arab Emirates, Venezuela, Saudi Arabia, Russia and Argentina, based on estimates from 2007.

Worth a ponder.

Thursday assorted links

The Good Wife

Steffanie Strathdee, [is] the associate dean of global health science at the University of California, San Diego. In 2016, she helped revive her husband from a coma with a combination of phage therapy and antibiotics after he’d come back from Egypt with an untreatable bacterial infection, and she’s since become a kind of phage activist, helping others, like the Smiths, coordinate their own phage hunts.

That’s just a sidenote in an article on phages, viruses that kill bacteria. Seems like there’s a movie there.

Phages were long used in the Soviet Union to treat bacterial infections but are only now being studied in the West as bacteria evolve resistance to antibiotics.

Addendum: Dallas Weaver makes excellent points in the comments.

Is Bitcoin just a bubble?

Some people think so, in the associated video clip Joe Stiglitz says Bitcoin should be banned.  Here is some FT skepticism from Jean Tirole.

I used to think Bitcoin was a bubble, but I no longer hold this view.  If nothing else, put all the more complicated factors aside and think of Bitcoin as competing for some of the asset space held by gold and also to some extent art.  Gold, too, in its hedging functions is a “bubble,” though not a bubble.  It is hard to ship, but has some extra value because it is perceived as a focal asset and one that does not covary positively in a simple way with the market portfolio.  The same is true of Bitcoin, yet that kind of focality-based “bubbliness” can persist for centuries.  Note by the way that gold has become less of a hedge, partly because inflation has been low and partly because China and India dominate the gold market more than a few decades ago.  So new and better hedges are needed.  And what a backstory Bitcoin has, making it a strong competitor in this regard.

I am not saying that is the Bitcoin story, it is simply a Bitcoin story, a minimalist account that can appeal to skeptics.  And you can buy this story and still think the current price is either too high or too low.

This estimate claims there is $241 trillion of wealth in the world, make of that what you will (there is something nonsensical about such aggregate measures because they are not traded against anything).  If you imagine people wish to hold one quarter of one percent of that in crypto form, that gets you to about $600 billion in value.  Currently crypto assets (on good days) hover near $300 billion in market capitalization.  Is that so crazy?  I genuinely don’t know, but that is one way of thinking about market cap in this sector.

I will continue to watch with interest.

Another unpopular idea about blockchains, from the comments

1 – My favorite unpopular blockchain ideas: 99% of corporate experiments regarding blockchains are better handled with Apache Kafka and multiple archivers. Anything that attempts to be a fast, global ledger has to accept the reality that global ordering is a limitation, not a feature, and instead use logical clocks. The intersection between blockchain enthusiast and distributed system researchers is close to zero. When we look back 100 years, Bitcoin itself will be seen as far more relevant in retrospect than blockchain technologies.

That is from MR reader Bob.

*Troublemakers: Silicon Valley’s Coming of Age*

That is the new and excellent history by Leslie Berlin, substantive throughout, here is one good bit of many:

In March 1967, Robert and Taylor, jointly leading a meeting of ARPA’s principal investigators in Ann Arbor, Michigan, told the researchers that ARPA was going to build a computer network and they were all expected to connect to it.  The principle investigators were not enthusiastic.  They were busy running their labs and doing their own work.  They saw no real reason to add this network to their responsibilities.  Researchers with more powerful computers worried that those with less computing power would use the network to commandeer precious computing cycles.  “If I could not get some ARPA-funded participants involved in a commitment to a purpose higher than “Who is going to steal the next ten percent of my memory cycles?”, there would be no network,” Taylor later wrote.  Roberts agreed: “They wanted to buy their own machines and hide in the corner.”

You can buy the book here, here is one good review from Wired, excerpt:

While piecing together a timeline of the Valley’s early history—picture end-to-end sheets of paper covered in black dots—Berlin was amazed to discover a period of rapid-fire innovation between 1969 and 1976 that included the first Arpanet transmission; the birth of videogames; and the launch of Apple, Atari, Genentech, and major venture firms such as Kleiner Perkins and Sequoia Capital. “I just thought, ‘What the heck was going on in those years?’ ” she says.

Here is praise from Patrick Collison on Twitter.

My Conversation with Douglas Irwin, podcast

Because Doug’s book is just out, we are rushing out the podcast, here is the audio, most of all about trade, trade history, and trade policy.  We covered how much of 19th century American growth was due to tariffs, trade policy toward China, the cultural argument against free trade, whether there is a national security argument for agricultural protectionism, TPP, how new trade agreements should be structured, the trade bureaucracy in D.C., whether free trade still brings peace, Smoot-Hawley, the American Revolution (we are spoiled brats), Dunkirk, why New Hampshire is so wealthy, Brexit, Alexander Hamilton, NAFTA, the global trade slowdown, premature deindustrialization, and the history of the Chicago School of Economics, among other topics.

Here you can buy Doug’s Clashing over Commerce: A History of U.S. Trade Policy.

The polity that is Denmark, let’s root for Brooke Harrington

An American citizen who teaches in Denmark, she may be charged with a crime and kicked out of the country for violating the terms of her work visa, carrying a criminal record for the rest of her life.  Her sin?  Giving a talk to Danish Parliament:

Laws barring nonpermanent Danish residents from holding side jobs, paid or unpaid, have been in effect for some time. But Harrington said public scholarship is hardly a side job for an academic. Moreover, a separate Danish law mandates that university faculty members publicly share their research. Ironically, on the day Harrington learned of her criminal charges, she was notified that she’d received an award for research dissemination from the Danish Society for Education and Business.

And no matter that Parliament invited Harrington to speak — it’s facing scrutiny, too, for being unaware of laws preventing academics from speaking outside their universities without first obtaining explicit permission to do so from the Danish Agency for International Recruitment and Integration. That permission process is lengthy, by the way; Harrington said applying for a recent one-day work permit to give lecture to a political group took 15 hours.

Here is the full story.

Why isn’t “stereotype threat” stronger in the data?

From a recent survey by Pennington, Heim, Levy, and Larkin:

This systematic literature review appraises critically the mediating variables of stereotype threat. A bibliographic search was conducted across electronic databases between 1995 and 2015. The search identified 45 experiments from 38 articles and 17 unique proposed mediators that were categorized into affective/subjective (n = 6), cognitive (n = 7) and motivational mechanisms (n = 4). Empirical support was accrued for mediators such as anxiety, negative thinking, and mind-wandering, which are suggested to co-opt working memory resources under stereotype threat. Other research points to the assertion that stereotype threatened individuals may be motivated to disconfirm negative stereotypes, which can have a paradoxical effect of hampering performance. However, stereotype threat appears to affect diverse social groups in different ways, with no one mediator providing unequivocal empirical support. Underpinned by the multi-threat framework, the discussion postulates that different forms of stereotype threat may be mediated by distinct mechanisms.

Or from Wikipedia:

Whether the effect occurs at all has also been questioned, with researchers failing to replicate the finding. Flore and Wicherts concluded the reported effect is small, but also that the field is inflated by publication bias. They argue that, correcting for this, the most likely true effect size is near zero (see meta-analytic plot, highlighting both the restriction of large effect to low-powered studies, and the plot asymmetry which occurs when publication bias is active).[

Earlier meta-analyses reached similar conclusions. For instance, Ganley et al. (2013)[10] examined stereotype threat on mathematics test performance. They report a series of 3 studies, with a total sample of 931 students. These included both childhood and adolescent subjects and three activation methods, ranging from implicit to explicit. While they found some evidence of gender differences in math, these occurred regardless of stereotype threat. Importantly, they found “no evidence that the mathematics performance of school-age girls was impacted by stereotype threat”. In addition, they report that evidence for stereotype threat in children appears to be subject to publication bias. The literature may reflect selective publication of false-positive effects in underpowered studies, where large, well-controlled studies find smaller or non-significant effects:

Personally, I find stereotype threat to be a very intuitive idea with a fair amount of anecdotal support.  So why aren’t these meta-results more convincing?

The North Korean defector

Lee said he had never seen such an extreme case of parasitic infection. The soldier had worms not seen in South Korea since the 1970s, but they appeared to be somewhat common north of the border. In a 2014 study, South Korean doctors sampled 17 females who escaped North Korea and found that seven of them were infected with parasitic worms, according to the BBC. They also had higher rates of diseases such as hepatitis B and tuberculosis.

What was just as curious were the raw corn kernels found in Oh’s [the defector’s] stomach, which shocked many South Koreas. North Korean soldiers typically have a higher ranking on the food-rationing list, so it was alarming that the soldier had been eating uncooked corn.

Some reports claim that North Korean soldiers have been ordered to steal corn from farmers to fend off hunger.

Here is further information.

Sex Offender Hysteria

Illinois Public Radio has an astounding story on sex offenders who have completed their sentences but are still behind bars because they can’t find a place to live. How hard can it be to find a place to live? Sex offenders in Illinois cannot live close to:

  • Elementary and High Schools
  • Day Care Centers
  • Public Parks
  • Pools
  • Libraries
  • Malls

In addition, they can’t live in a house with a minor. One convicted offender could not return to his mother’s house because his sister was 17 (his conviction did not involve the sister). Sex offenders also cannot live in houses with devices that can access the internet including computers, smartphones and televisions.

Contrary to popular belief, sex offenders have low rates of recidivism relative to many other crimes. It’s almost impossible, however, to argue against a law that is supposed to protect the public from sex offenders. What kind of monster could argue against a law preventing a convicted sex offender from living near a day care center? And who would want a pervert at the mall? Add up every semi-reasonable law, however, and the result is unreasonable and unconscionable. Many people remain in prison for years after their sentences are complete because they cannot find a place to live that satisfies all of the restrictions. Madness.

Tuesday assorted links