Month: April 2018

Arbitrage, by economics departments

Foreign STEM graduates (the acronym stands for science, technology, engineering and mathematics) can get visa extensions for three years of practical training (ie, work). Those from other disciplines are allowed only a year.

Two more years working in America means more earnings. It also means a better chance of finding an employer willing to sponsor an application for an H-1B visa, the main starting-point for skilled foreign workers who hope to settle permanently. In 2012 the Department of Homeland Security expanded the list of STEM courses. Now any reasonably crunchy economics degree can count as STEM with a tweak to its federal classification code, from economics (45.0601) to econometrics and quantitative economics (45.0603).

Economics departments appear to be catching on. Yale and Columbia have both changed the code for their economics major in the past few months; five of the eight Ivy League Universities have now done so. Students at Pennsylvania and Cornell are agitating for a switch.

Here is more from The Economist.

Sunday assorted links

1. Is the scientific paper obsolete?

2. Solve for the goat equilibrium.

3. They are still not telling us what happened in Havana (or elsewhere).

4. Prosecution before Roe vs. Wade.  And a British case.  And Ross Douthat on Kevin Williamson.  And Henry on said topic and conservative intellectuals more generally.

5. “Subvocalization signals are detected by electrodes and turned into words using AI.”

6. Jonathan Zittrain on a fiduciary approach for Facebook (NYT).

What is Skim Milk? The FDA versus Dairy Farmers

FDA food regulation isn’t as high stakes as FDA drug regulation but it can be both costly and absurd. A case in point. The FDA controls how foods are labeled with the goal of ensuring that they are “properly” labelled. It’s important that consumers not be misled but what does one say, for example, about soy milk? Is that label proper? (The FDA so far has declined to rule on that issue but the “Defending Against Imitations and Replacements of Yogurt, Milk, and Cheese To Promote Regular Intake of Dairy Everyday Act (DAIRY PRIDE) act may force their hand.)

The FDA’s control over labeling is more powerful than it appears because it can be used to define what a product is. The FDA, for example, can’t force milk producers to add vitamins to milk but by defining milk as including certain vitamins they can say that milk without these vitamins is mislabeled! This is exactly the case with dairy farmer Randy Sowers and South Mountain Creamery. South Mountain Creamery sells skim milk, i.e. milk with the fat skimmed off. The FDA, however, wants skim milk to contain as many vitamins as whole milk so they define skim milk as including vitamin A and D. If farmers want to sell skim milk and call it “skim milk” they have to add vitamins. To avoid prosecution the FDA is requiring South Mountain Creamery to label their skim milk, “imitation skim milk”! Yes. War is Peace. Freedom is Slavery. Real Skim Milk is Imitation Skim Milk. Sowers and the Institute for Justice are suing on First Amendment Grounds.

The FDA has a history of losing First Amendment cases and will probably lose this case as well. A Federal appeals court in Florida has already ruled in a very similar case that labeling skim milk, “skim milk” is not deceptive.

A simple point about Conversations with Tyler

As you may know from the series, I put in a good amount of preparation for each guest, generally absorbing as much of their life’s work as I can get my hands on.  Even for authors where I have read plenty of them before, I try to reread them fairly comprehensively and all at once, plus some of the secondary literature, criticisms, and the like.  And of course hardly anyone else does this in such a concentrated manner, even if they over time have read everything an author has produced.

Virtually everyone I have done this with has gone up in my eyes as a result.  Both as a content creator and as a “carrier of a career.”

Just keep that in mind the next time you are tempted to criticism a well-known person harshly.  Or for that matter a less well-known person.

You don’t understand them as well as you might.

*A Quiet Place* (the only spoiler is about the basic premise)

Yes this is a horror movie but no you don’t have to like horror movies to want to see it, you only have to like original movies.  I am not giving away much by telling you this is largely a silent movie, as the humans know if they make sounds or speak they will be hunted and killed.  (Which family member’s relative bargaining power increases when talk is relatively difficult?)  It is one of the most implicitly Christian movies I have seen, though no reviewer seems to have noticed.  Think monasticism, devils, baby Moses, the unwillingness to consider abortion as an option, silos of grain, and Shyamalan’s (underrated) Signs.  It’s also one of the most insightful films on disability issues, although further explanation there would indeed give you too many spoilers.  Here are various reviews, mostly full of spoilers.

Saturday assorted links

1. “These results show that boasting about performance is rarely associated with value creation and is consistent with executive narcissism.

2. “The 1970 census found 42% of black households owned their own homes. Today, the number is also 42%.”  Link here.

3. Puffin beaks are fluorescent and we had no idea discovery by accident.  By the way “”They can see colours that we can’t comprehend,” Dunning said.”

4. At 800k a night, I hope guests can figure out how to turn the lights on and off and have enough outlets for recharging devices.

5. The world of Cecil Taylor.

6. In fact, the NYC subway makes you early, not late (NYT).

How gender relations define American politics

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

I view the national-level Republican Party, at least in its current incarnation, as putting forward a vision of strong sexual dimorphism. That is, the underlying presumption is that men and women are very different, and there’s a belief that in terms of norms, behavior and the law, men and women should be very different.

The symbols emanating from the White House reflect this vision. The Trump cabinet and advisory teams have been well-stocked with traditional white men in business suits. There doesn’t appear to have been much deliberate attempt to pursue gender balance. Trump’s manner projects an older American vision of masculinity; he even married a fashion model. His broader patterns of behavior with women are well-known, and very far away from being gender egalitarian.

And the conclusion?:

So how will this turn out? There is a tendency on the progressive left to think that enlightenment eventually arrives, and that egalitarian visions will outcompete the attempts to ramp up gender dimorphism. I’m not so sure. I’m struck by recent research that in wealthier economies men and women tend to show greater personality differences, and that women are less likely to pursue STEM degrees. If we wished to give this story a Shakespearean close, it could be said that politics and sex are two topics that usually surprise us.

Do read the whole thing.

More arguments against blockchain, most of all about trust

Here are more arguments about blockchain from Kai Stinchcombe, here is one ouch:

93% of bitcoins are mined by managed consortiums, yet none of the consortiums use smart contracts to manage payouts. Instead, they promise things like a “long history of stable and accurate payouts.” Sounds like a trustworthy middleman!

And:

Auditing software is hard! The most-heavily scrutinized smart contract in history had a small bug that nobody noticed — that is, until someone did notice it, and used it to steal fifty million dollars. If cryptocurrency enthusiasts putting together a $150m investment fund can’t properly audit the software, how confident are you in your e-book audit? Perhaps you would rather write your own counteroffer software contract, in case this e-book author has hidden a recursion bug in their version to drain your ethereum wallet of all your life savings?

It’s a complicated way to buy a book! It’s not trustless, you’re trusting in the software (and your ability to defend yourself in a software-driven world), instead of trusting other people.

Here is the full essay, via Chris F. Masse.  Here is Kai’s earlier essay on blockchain.

What I’ve been reading and not reading

Linda Yueh, What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today’s Biggest Problems.  Think of this as the updated Heilbroner.

John Blair’s Building Anglo-Saxon England is a remarkable look at the archaeological and historical evidence on what went on before 9th century A.D.  This is not a book of irresponsible generalizations.

Sebastian Edwards has a new, forthcoming book American Default: The Untold Story of FDR, the Supreme Court, and the Battle Over Gold.

Adam Winkler, We the Corporations: How American Businesses Won Their Civil Rights, is a useful and readable treatment of the history of how businesses acquired various kinds of “personhood.”

Michael J. Piore and Andrew Schrank, Root-Cause Regulation: Protecting Work and Workers in the Twenty-First Century is an interesting book, written under the premise that the Continental model of labor safety and labor market regulation is a good thing, including for Latin America.

David C. Engerman, The Price of Aid: The Economic Cold War in India.

I have only browsed Fawaz A. Gerges, Making the Arab World: Nasser, Qutb, and the Clash that Shaped the Middle East, but it looks quite good.

Ge Zhaoguang, What is China?: Territory Ethnicity Culture & History is the result of a China scholar considering all the questions suggested in the subtitle.  I was not ever astonished, but it is about time we all read more books by the Chinese about China.

Self-recommending is Richard Sylla and David J. Cowen, Alexander Hamilton on Finance, Credit, and Debt.

I spotted several intellectual and emotional fallacies in Zadie Smith’s Feel Free: Essays.

Friday assorted links

1. Do hierarchical Bayesian models of delusion succeed?  And embedding beneficial regularities does not seem to make visual search easier.  Hardly any of you should read these links or even click on them.

2. How is Chinese governance changing?

3. Did the Confederacy not inflate enough?

4. Cecil Taylor has passed away; he was one of the greater jazz musicians and one of the three or four best concerts I have seen.

5. A rundown of all the supplementary resources available with Modern Principles of Economics.

The Kevin Williamson/Atlantic fracas

Many of you are asking my opinion of what happened.  I’d like to answer a slightly different question.  As you may know, America does in fact (partially) restrict a woman’s right to an abortion beyond a certain stage of her pregnancy.  I believe Roe vs. Wade specified up until the 22nd to 24th week for the relevant right, and as of a few years ago eleven states had imposed legal restrictions.

I believe I have never read a piece, much less a good piece, on how these restrictions are enforced in practice, and what happens when such laws are broken.  I’ve also never read a good piece, from any point of view, on how these laws should be enforced, given that a particular law is in place (I have read pieces on what the laws should be).

My suggestion is this: do not focus your emotional energies toward revaluing Kevin Williamson or The Atlantic.  Ask yourself what are the relevant topics you have yet to read good pieces on, and then try to find them and read them.  Over time, your broader opinions will then evolve in better directions than if you focus on having an immediate emotional reaction to the events right before your eyes.  The more tempted you are to judge, the higher the return from trying to read something factual and substantive instead.

Cross-cultural digital instruction

Comparative ethnographic analysis of three middle schools that vary by student class and race reveals that students’ similar digital skills are differently transformed by teachers into cultural capital for achievement. Teachers effectively discipline students’ digital play but in different ways. At a school serving working-class Latino youth, students are told their digital expressions are irrelevant to learning; at a school with mostly middle-class Asian American youth, students’ digital expressions are seen as threats to their ability to succeed academically; and at a private school with mainly wealthy white youth, students’ digital skills are positioned as essential to school success. Insofar as digital competency represents a kind of cultural capital, the minority and working-class students also have that capital. But theirs is not translated into teacher-supported opportunities for achievement.

Here is the AJS piece, by Matthew H. Rafalow.  For the pointer I thank Kevin Lewis.

Dulles Amazon northern Virginia cricket fact of the day

Loudoun County’s growth over the past three decades has been driven in part by Asian Americans, who have flocked there to work for AOL and other tech companies that have set up shop in the area. Today 18 percent of the district’s residents are Asian American. Nearly half of those are Indian American; between 1990 and 2010, the number of Indian Americans in the county grew by a factor of fifty. Drive past a park on a summer evening, and you’ll see cricket matches under way—the Loudoun County Cricket League has forty-eight teams and more than 1,200 players.

Here is more, via the excellent Kevin Lewis.

The economics of the Border Adjustment tax

Lastly, border taxes increase government revenues in periods of trade deficit, however, given the net foreign asset position of the U.S., they result in a long-run loss of government revenues and an immediate net transfer to the rest of the world.

That is from a new working paper by Omar Barbiero, Emmanuel Farhi, Gita Gopinath, and Oleg Itskhoki.  By the way, this does mean the idea doesn’t actually work.