Month: July 2019
I will be having a Conversations with Tyler with her, no associated public event. She has a new book coming out The Education of an Idealist: A Memoir. So what should I ask her?
The young will experience the effects of policies passed today for the greatest length of time but this is not reflected in their voting power. Put differently, the time-horizon of (self-interested) older voters is short so perhaps this biases the political system towards short time-horizon policies such as deficit spending or kicking the can down the road on global warming. Philosopher William MacAskill offers an alternative, age-weighted voting.
…one way of extending political time horizons and increasing is to age-weight votes. The idea is that younger people would get more heavily weighted votes than older people, very roughly in proportion with life expectancy. A natural first pass system (though I think it could be improved upon) would be:
- 18–27yr olds: 6x voting weight
- 28–37yr olds: 5x voting weight
- 38–47yr olds: 4x voting weight
- 48–57yr olds: 3x voting weight
- 58–67yr olds: 2x voting weight
- 68+yr olds: 1x voting weight
Note that, even with such heavy weights as these, the (effective) median voter age (in the US) would go from 55 to 40. (H/T Zach Groff for these numbers). Assuming that the median voter theorem approximately captures political dynamics of voting, weighting by (approximate) life-expectancy would therefore lengthen political horizons somewhat, but wouldn’t result in young people having all the power.
… In this scenario, all citizens get equal voting weight, it’s just that this voting power is unequally distributed throughout someone’s life.
MacAskill asks the right questions:
- Do younger people actually have more future-oriented views?
- Does extending political horizons by 20 years provide benefits from the perspective of much longer timescales?
- Are younger people less well-informed, and so apt to make worse decisions?
- Is this just a way of pushing particular (left-wing) political views?
- What would actually happen if this were put in place, and how good or bad would those effects be?
- What’s the best mechanism for implementing age-weighting voting?
- What would be the best plan for making age-weighting voting happen in the real world?
See the whole thing for some brief suggestions on answers.
I don’t have a major objection to the proposal, I just don’t think it would improve politics very much. Rational ignorance means that voters don’t know much and rational irrationality means that they don’t care to know more. The problem is collective decision making per se rather than the time-horizon of the non-existent median voter. Still the space of possible governance designs is far larger than the space that we have investigated, let alone used, so I applaud exploration in the design space.
I have met their kindred before, in other glittering places. They run the institutions that hold center stage in our society, but look on the world as if from a walled mountain fortress, where every loud noise from beyond is interpreted as risk and threat. They disagree about minutia, but mostly move in lockstep, like synchronized swimmers, with word and thought. They are earnest but extraordinarily narrow. In a typical complaint, one speaker blamed the public for hiding in an “information bubble” – yet it occurred to me, as I sat through the conference, that the bubble-dwellers controlled the microphones there.
The same unmodulated whine about present conditions circled around and around, without even the ambition to achieve wit, depth, or originality…
Here is the full post.
By Nadia Urbinati, I think of this book as the next step after Martin Gurri. Here is one bit:
…the massive usage of the internet — which is an affordable and revolutionary means of interaction and information sharing by ordinary citizens — has supercharged the horizontal transformation of the audience and made the public into the only existing political actor outside institutions born from civil society.
But more significantly, populism is so diverse and the word is so often misused, how should we best understand it? First, by breaking down parties, the new internet populism raises the status of personalized individual leaders, such as Trump and also AOC. Thus:
…populism in power is actually a new form of mixed government in which one part of the population achieves a preeminent power over the other(s). As such, populism competes with (and, if possible, modifies) constitutional democracy in putting forth a specific and distinctive representation of the people and the sovereignty of the people.
Populism also has a hard time giving up power, because the rhetoric is purifying, and the pretense is that the current government does in fact represent a more or less unitary “will of the people,” enemies of the people aside of course. Elections are about revealing a majority opinion that (supposedly) already exists, and thus populism does not fit entirely easy into standard democratic practice.
Here is more:
As such, populism is more than merely a movement of contestation or mobilization, and it should not be confused with social movements in civil society. Populism is a movement of contestation against the existing political establishment, but one that seeks a majority that would rule with unchecked ambitions and plan to remain power for as long as possible, though without revoking political liberty or eliminating adversaries. The “benign” aspects of populism in power include its dwarfing of the opposition and minorities by humiliating them and creating an overwhelming propaganda campaign that endlessly reinforces the power of majority opinion.
Populism is not just a style of politics, so you can’t expect a successful and truly left-wing populism, nor will populists end up as a successful vehicle for “right-wing” ideas either. Beware!
There is too much political science jargon in this book, and many of the paragraphs are too long or too circuitous, and furthermore much of the best content is difficult to summarize. Nonetheless this book makes more sense to me than the treatments of populism I read in the mainstream press or in “intelligent” magazines, and I found it genuinely insightful throughout. Recommended, at least if you are up for a particular kind of read. You can pre-order the book here.
That is the column subtitle, the actual title is “The Lesson of Bretton Woods.” Note that yesterday was the 75th anniversary of the signing of the final agreement. Here is one excerpt:
The Bretton Woods arrangements also seemed highly unlikely until they were in place. They involved a complicated system of exchange rate pegs, capital controls and a “gold pool” (and other methods) to control gold prices and redemption ratios. What’s more, the whole thing was dependent on America’s role as global hegemon, both politically and economically. The dollar still was tied to gold, and the other major currencies tied to the dollar, but as the system evolved it required that no one was too keen to redeem dollars for gold (the French unwillingness to abide by this stricture was one proximate cause of the collapse of Bretton Woods).
I don’t think a monetary economist from, say, 1890 could have imagined that such an arrangement would prove possible, much less successful. Yet the Bretton Woods arrangements had a wonderful track record, as the 1950s and 1960s generated strong economic growth for both the U.S. and Western Europe.
At the same time, once Bretton Woods ended in the early 1970s, few people thought it was possible to turn back the clock. The system required the U.S. to be a creditor nation, to hold much of the world’s gold stock, and for countries such as France to defer to American wishes on gold convertibility. Once again, the line between an “imaginable” and “unimaginable” monetary arrangement proved to be a thin one.
As I point out in the piece, today’s arrangements of fiat currencies and (mostly) floating rates were unimaginable to most previous thinkers, including Keynes. Here is the column’s closing bit:
So as you consider the legacy of Bretton Woods this week, remember that core lesson: There will be major changes in monetary and institutional arrangements that no one can even imagine right now. Assume the permanency of the status quo at your peril.
1. Health care and Medicaid effectiveness: “We find a 0.13 percentage point decline in annual mortality,
a 9.3 percent reduction over the sample mean, associated with Medicaid expansion for this population. The effect is driven by a reduction in disease-related deaths and grows over time…”
That is the title of a new and important paper by Andrea L. Eisfeldt, Antonio Falato, and Mindy Z. Xiaolan. It seems that perhaps the share of labor in gdp has not fallen much after all:
The widespread and growing practice of equity-based compensation has transformed high-skilled labor from a pure labor input into a class of “human capitalists”. We show that high-skilled labor income in the form of equity claims to firms’ future dividends and capital gains has dramatically increased since the 1980s. Indeed, in recent years, equity-based compensation represents almost 45% of total compensation to high-skilled labor. Ignoring such income results in incorrect measurement of the returns to high-skilled labor, with important implications for macroeconomics. Including equity-based compensation to high-skilled labor cuts the total decline in the labor share since the 1980’s by over 60%, and completely reverses the decline in the high skilled labor share to an increase of almost 1%. Correctly measuring the return to high-skilled labor can thus resolve the puzzling lack of a skill premium in recent data, as well as the corresponding lack of evidence of complementarity between high-skilled labor and new-economy physical capital. Moreover, tackling the capital structure question of who owns firms’ profits is necessary to provide a link between changing factor shares and changing income and wealth shares. We use an estimated model to understand the rise of human capitalists in an economy with declining capital goods prices. Finally, we present corroborating cross section and time series evidence for complementarity between high-skilled labor and physical capital using our corrected measure of the total return to human capitalists.
Since smart people are bearing more and more risk, this may be another reason why income inequality is rising.
Via the excellent Kevin Lewis.
1. Christopher Tyerman, The World of the Crusades: An Illustrated History. The best and most engrossing history of the crusades I have read. By the way, the “children’s crusade” probably didn’t have that much to do with children. The periodic topic-specific two-page interludes are especially good.
2. Tobias Straumann, 1931: Debt, Crisis, and the Rise of Hitler covers a critical episode in European history, and one which has not entirely faded into irrelevance. The author is a financial historian rather than an economist, so think of this book as scratching your history itch, in any case recommended.
3. Jim Auchmutey, Smokelore: A Short History of Barbecue in America is the most current of the best histories of barbecue and it is more bullish on the barbecue future than most treatments.
4. Chris Miller, The Struggle to Save the Soviet Economy: Mikhail Gorbachev and the Collapse of the Soviet Economy. One of the best books on the beginnings of the reform era, with a special focus on whether the Soviets could have chosen a Chinese path (no, too many embedded interest groups, so does that mean Mao is underrated?).
5. Katherine Eban, Bottle of Lies: The Inside Story of the Generic Drug Boom. A “worth reading” look at what the title promises, but all the best parts are about how the FDA tries to regulate generic drug production in India.
6. Roger L. Geiger, American Higher Education Since World War II. Not as sprightly as I might have wished for, nor does it cover the controversial issues in the conceptual fashion I was hoping to find, but nonetheless an extremely useful resources for teaching you the basic facts of how the sector has evolved.
New out from Princeton University Press is Robert J. Shiller, Narrative Economics: How Stories Go Viral & Drive Major Economic Events.
There is Heather Boushey’s new How Inequality Constricts Our Economy and What We Can Do About It.
Yale has published a new translation of Book of Job, translated by Edward L. Greenstein, very likely worth a read.
It is rare that anyone wishes to broach this general topic, on either side of the debate. This is from a new working paper by Geoffrey Heal and Wolfam Schlenker:
We highlight important dynamic aspects of a global carbon tax, which will reallocate consumption through time: some of the initial reduction in consumption will be offset through higher consumption later on. Only reserves with high enough extraction cost will be priced out of the market. Using data from a large proprietary database of field-level oil data, we show that carbon prices even as high as 200 dollars per ton of CO2 will only reduce cumulative emissions from oil by 4% as the supply curve is very steep for high oil prices and few reserves drop out. The supply curve flattens out for lower price, and the effect of an increased carbon tax becomes larger. For example, a carbon price of 600 dollars would reduce cumulative emissions by 60%. On the flip side, a global cap and trade system that limits global extraction by a modest amount like 4% expropriates a large fraction of scarcity rents and would imply a high permit price of $200. The tax incidence varies over time: initially, about 75% of the carbon price will be passed on to consumers, but this share declines through time and even becomes negative as oil prices will drop in future years relative to a case of no carbon tax. The net present value of producer and consumer surplus decrease by roughly equal amounts, which are almost entirely offset by increased tax revenues.
Here is an earlier MR post on the same topic, and it gives more of the theoretical intuition.
In recent years I have substantially increased my estimate of the deadly nature of air pollution. It’s not that I had a contrary opinion earlier but the number and range of studies showing surprisingly large effects has raised this issue in relative importance in my mind. I would not have guessed, for example, that the introduction of EZ Pass could reduce pollution near toll booths enough to reduce the number of premature and low birth weight babies. I also find the following result hard to believe yet also hard to dismiss given the the accumulating body of evidence. Diane Alexander and Hannes Schwandt find that Volkswagen’s cheating diesel cars increased the number of low birth weight babies and asthma rates. Here are some details:
In 2008, a new generation of supposedly clean diesel passenger cars was introduced to the U.S. market.These new diesel cars were marketed to environmentally conscious consumers, with advertising emphasizing the power and mileage typical for diesel engines in combination with unprecedented low emissions levels. Clean diesel cars won the Green Car of the Year Award in 2009 and 2010 and quickly gained market share. By 2015, over 600,000 cars with clean diesel technology were sold in the United States. In the fall of 2015, however, it was discovered that these cars covertly activated equipment during emissions tests that reduced emissions below official thresholds, and then reversed course after testing. In street use, a single “clean diesel” car could pollute as much nitrogen oxide as 150 equivalent gasoline cars.Hereafter, we refer to cars with “clean diesel” technology as cheating diesel cars.
We exploit the dispersion of these cheating diesel cars across the United States as a natural experiment to measure the effect of car pollution on infant and child health. This natural experiment provides several unique features. First, it is typically difficult to infer causal effects from observed correlations of health and car pollution, as wealthier individuals tend to sort into less-polluted areas and drive newer, less-polluting cars. The fast roll-out of cheating diesel cars provides us with plausibly exogenous variation in car pollution exposure across the entire socio-economic spectrum of the United States. Second, it is well established that people avoid known pollution, which can mute estimated impacts of air pollution on health (Neidell, 2009). Moderate pollution increases stemming from cheating diesel cars, a source unknown to the population, are less likely to induce avoidance behaviors, allowing us to cleanly estimate the full impact of pollution. Third, air pollution comes from a multitude of sources, making it difficult to identify contributions from cars, and it is measured coarsely with pollution monitors stationed only in a minority of U.S. counties. This implies low statistical power and potential attenuation bias for correlational studies of pollution (Lleras-Muney, 2010). We use the universe of car registrations to track how cheating diesel cars spread across the country and link these data to detailed information on each birth conceived between 2007 and 2015. This setting provides rich and spatially detailed variation in car pollution.
We find that counties with increasing shares of cheating diesel cars experienced large increases both in air pollution and in the share of infants born with poor birth outcomes. We show that for each additional cheating diesel car per 1,000 cars—approximately equivalent to a 10 percent cheating-induced increase in car exhaust—there is a 2.0 percent increase in air quality indices for fine particulate matter (PM2:5) and a 1.9 percent increase in the rate of low birth weight. We find similar effects on larger particulates (PM10; 2.2 percent) and ozone (1.3 percent), as well as reductions in average birth weight (-6.2 grams) and gestation length (-0.016 weeks). Effects are observed across the entire socio-economic spectrum, and are particularly pronounced among advantaged groups, such as non-Hispanic white mothers with a college degree. Effects on pollution and health outcomes are approximately linear and not affected by baseline pollution levels. Overall, we estimate that the 607,781 cheating diesel cars sold from 2008 to 2015 led to an additional 38,611 infants born with low birth weight. Finally, we also find an 8.0 percent increase in asthma emergency department (ED) visits among young children for each additional cheating diesel car per 1,000 cars in a subsample of five states.
Another surprising result is that on a global scale air pollution reduces life expectancy more than smoking. In part, because a single individual can’t quit air pollution.
Globally, the AQLI reveals that particulate pollution reduces average life expectancy by 1.8 years, making it the greatest global threat to human health. By comparison, first-hand cigarette smoke leads to a reduction in global average life expectancy of about 1.6 years. Other risks to human health have even smaller effects: alcohol and drugs reduce life expectancy by 11 months; unsafe water and sanitation take off 7 months; and HIV/AIDS, 4 months. Conflict and terrorism take off 22 days. So, the impact of particulate pollution on life expectancy is comparable to that of smoking, twice that of alcohol and drug use, three times that of unsafe water, five times that of HIV/AIDS, and more than 25 times that of conflict and terrorism.
A Pennsylvania school district is warning that children could end up in foster care if their parents do not pay overdue school lunch bills. The letters sent recently to about 1,000 parents in Wyoming Valley West School District have led to complaints from parents and a stern rebuke from Luzerne County child welfare authorities.
The district says that it is trying to collect more than $20,000, and that other methods to get parents to pay have not been successful. Four parents owe at least $450 apiece.
And worse yet:
The district’s federal programs director, Joseph Muth, told WNEP-TV the district had considered serving peanut butter and jelly sandwiches to students with delinquent accounts but received legal advice warning against it.
When I was a kid, we considered peanut butter and jelly sandwiches a privilege.
1. Musician. I don’t love Steve Tyler/Aerosmith, so what am I left with?
2. Author: I find John Irving unreadable, so does it come down to Russell Banks? Who else is there? Salinger lived in New Hampshire for a long time, so I’ll pick him, though it is also pretty far from my favorite. Here is my Catcher in the Rye review.
3. Sculptor: August Saint-Gaudens.
“Law Supported by Power and Love”
5. Poet: Robert Frost, who seems to be clear winner for the whole state. There is a scholastic version of Frost which is quite dull, don’t be put off if that is all you know of him.
6. Movie director: Brian DePalma, Dressed to Kill and Mission to Mars being my favorites.
7. Painter: Maxfield Parrish. I feel I’m being forced into many of these choices — I simply can’t think of anyone else.
8. Secretary of the Treasury: Salmon P. Chase. Chase is one of the few people to have had a major position in the executive branch, served in Congress, and sat on the Supreme Court.
The bottom line: For all of my grumbling, for such a small state it does pretty well.
6. Apple disruption.