Friday assorted links

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3. Wolves?

Only if from Europe or Asia, like the horses.

"The ranching groups say they had come to believe the opposite — that Congress, regularly besieged by impassioned pleas from horse lovers, would never permit the culling of a symbol of the American spirit."

The American spirit is immigrants who cause havoc?

The only thing ranchers hate more than wild horses are native bison, which defined America outside the Americas along with beavers, which are only getting some limited respect from farmers and ranchers for providing year round water to areas which are arid without them.

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The answer is 7.62x51, or similar full-powered rifle cartridge of your choice. These are animals and it's our responsibility to manage them. The emotional reaction certain rich white people have to horses is illogical. If they want to live out some excessively empathic fantasy, let them buy land and keep wild horses on it.

Why are wild horses not ok to shoot but elk, hogs or deer are? Moreover why is it ok for enlightened Swedes to sell horse meat in grocery stores ("hamburgerkoett"), but we can't hunt and butcher horses? Horse meat is potentially delicious, if nothing else it's a totally legitimate game meat. The rules for hunting horses should be the same as for feral hogs.

A real American would say .308

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#7 Pathetic. The improvement in the standard of of living due technology in the 45 years before 1973 was much greater than the years after as well as greater increases in real income.

But it was too costly and killed jobs before 1973!

Notice how most of the improvement were for things we import, which being cheaper means lots more, higher paying jobs. Right?

Since 1973, conservatives have screwed over non-elite conservatives, those living in working class, generally rural areas.

Smartphones and computers work well in the urban, leftist areas. High speed internet is readily available in all but the lower class urban areas, but almost never in rural areas. This is the same as in the 20s when the revolution in communication was readily available in urban areas, but not in rural areas.

While technology has improved in many areas, access to the "standard" level of tech has plunged in rurzl areas.

So, the way to live the better life if to move from the parts of the US stuck in the 70s to the urban areas where the liberal elites use big government to provide access to the highest levels of tech.

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2. Not enough time has elapsed since the last Perell love letter to Thiel. I will wait until the next one. [That's not to say I didn't enjoy the last love letter, I very much did; but love letters lose their impact if sent too often.]

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3. Have the local fire department collect them, then force them to swim before selling them?

Maybe that is a bit too much of an Eastern Shore (no, not NJ) solution to wild horses. 'Chincoteague and nearby Assateague Island are known for their free-ranging herds of wild horses. An annual pony swim in the summer between the two spots draws thousands of visitors.

The event is run in large part by the local fire company. The day after the swim foals are auctioned, and officials said that helps to keep the herd from overexpanding. Plus, the event raises money for the fire department, which cares for the ponies on the island.' https://www.washingtonpost.com/dc-md-va/2019/07/24/ponies-swim-chincoteague-annual-virginia-tradition/

Demand for these horses is a big part of the problem. BLM is currently subsidizing the adoption process and even considering a $1000 payment to help encourage adoption. Even killing is expensive as carcass disposal isn't cheap or pleasant. There's a strong public sentiment against export for slaughter. Disclosure I did the cited economic analysis. Without predators there probably isn't a stable equilibrium that doesn't have serious management costs. But ranchers complain about wolves and lions more than horses.

Allow hunting and the hunter takes care of slaughter and butcher. Or just shoot them and leave them. Ants and vulchers need to eat too.

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Why on earth continue to promote Thiel when there are dozens of higher quality interviews and podcasts to promote? There is no reason to think that Thiel has anything both distinctive and worthwhile to say outside his immediate areas of success and experience.

'Why on earth continue to promote Thiel'

Because Emergent Ventures is directly tied to Thiel Foundation funds? Just spitballing, in typical public choice economist fashion.

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Actually, Peter Thiel is one of the foremost (Cowen says the foremost) public intellectuals. I may disagree with him on many questions, but he has a lot to say about a lot of important subjects, much of it profound (and novel). As for the inertia that Cowen believes has infected the rich and powerful, Thiel has been spared.

Rather than reading the words of the current public intellectuals, we'd be better off rereading the words of the best past public intellectuals.

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Name one novel thing he has said. They are rehashes of everything before like Girard or the usual critiques of the left and right. This interview is more of the same platitudes:

"When everybody is at everybody’s throat, the violence doesn’t just resolve itself, and maybe it gets channeled against a single scapegoat"
The 10000th reference to Girard from Thiel.

"only something that’s different from the present and very concrete can have any sort of charismatic force."
No $hit.

Thiel peaked around the time of Facebook's IPO. His move towards politics was a disappointing one, not necessarily because of Trump, but because playing pseudo-profound pundit making the rounds of the speech and podcast circuit is a much less suitable role for someone of his capabilities. He's also not much of a politician. He stutters, mumbles, and lacks the charisma of one. If he still had some gas left in the tank, he would be doing more work in the private sector like his fellow cofounder and friend Elon who is displacing the internal combustion engine, working on a rocket to Mars, and wants to remake American infrastructure. Instead of being in the same pantheon as Gates, Jobs, Bezos, or even Musk, Thiel is putting himself in league with the likes of Tucker Carlson or the numerous blue checkmarked Twitterati who try to sound smart in 150 characters or less.

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Whatever his "importance" as a "public intellectual" consists in, the substance in this interview is sophomoric drivel. When it comes to the Enlightenment, religion, reason, 21st century norms, etc. Tyler could've promoted any of dozens of better and more expert thinkers

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Tyler does plenty of other interviews. No one is forcing you to listen to all of them.

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'Share buybacks don’t inflate executive pay'

Somebody seems to not know about executive compensation packages. As shown here - 'This typically increases earnings per share (EPS), a common metric in executive bonus contracts. Thus, executives might use buybacks to trigger bonus payouts – even scrapping profitable investment projects to find the cash.' It isn't about the bonus contracts, it is about the share price itself.

'The research aimed to answer two main questions.' neither of which involves executives being able to profit from an increased share price.

A PDF of the actual report can be found here - https://bit.ly/2lHZlI3

But all investors can benefit from increased stock price...so everyone wins in that scenario. After all, the executives' mandate is shareholder return.

"But all investors can benefit from increased stock price...so everyone wins in that scenario".

Whenever I encounter the question "do share buybacks increase executive pay" (or similarly phrased questions), I always ask myself "compared with what"? The most common and logical alternative to the share buyback is a cash dividend payment. If a cash dividend of $1 is paid one expects that the share price will drop by roughly $1 immediately after the right to that payment accrues. Are shareholders hurt by this? If, however, that same dollar were used to buy back shares, one might expect the share price to increase by roughly $1. Given the two scenarios and the effect on the stock price, it's clear to me which benefits executive pay (especially options) the most. It is not clear to me which benefits shareholders the most. I don't think the researchers addressed this point but it is the point most relevant to the discussion about share repurchases and executive pay.

'I don't think the researchers addressed this point'

No, they did not, if only because it would be too easy to actually show how the game has been working for a generation at this point.

'but it is the point most relevant to the discussion about share repurchases and executive pay'

Of course it is - which is also the easiest explanation for why they did not actually explore it.

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I've been a bit too stylized with my facts---the amount spent to repurchase shares almost certainly would not increase the share price as much as a dividend would decrease it; but, the point remains: for a typical executive and his or her compensation package, the share repurchase is far more beneficial than a cash dividend. It is not clear which is better for the shareholder. And, keep in mind the fact that a large percentage of shares repurchased are simply turned around to deliver to executives exercising their options. If reducing the number of outstanding shares is supposedly so beneficial, the opposite must be true of giving them out to company execs!

As a shareholder, I have no complaints when executives are incentivized to raise the stock price.

I'd rather have buybacks than dividends for stocks I own...I want to be in control of the taxable event, not have one forced on me.

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Besides the point that share price increases are generally a good thing, the study was focussed on the UK. In the UK share options are now rare and performance share awards attract dividends for each share that vests so the executive is essentially neutral between dividends and share buybacks in UK executive pay designs.

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You neglect taxes. Share buybacks allow shareholders to defer taxes and pay lower capital gains tax rates than taxes on ordinary dividends.

Taxes on ordinary "qualified" dividends and long term capital gains have been the same for individuals since 2003 and the holding period for a qualified dividend is easier to meet than for a LTCG. Where have you been all those years?

Obviously I've gotten more senile since 2003. But the tax deferral is a benefit. I don't know how significant that it is for most shareholders.

My guess is that just as many shareholders, if not the majority, would prefer to have access to some cash without having to sell shares and incur (in most cases) capital gains taxes and commissions to access the same amount of revenue. That's just my guess, but a somewhat educated one, I think. The point, not to be-labor it, is that the normal executive compensation arrangements strongly incentivize the executive to prefer buybacks over cash dividends. And, incentives do matter...

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If the Board's Compensation Committee is even semi-competent they will exclude increases in EPS from executive bonus calculation when the Board approves the buyback.

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Most of us favor rising stock prices.

In recent years, stock buybacks have largely overtaken dividends in corporations' means to return cash to owners, and support share prices.

It's fashionable to whip executive compensation and squawk about income inequality.

Of course, stock compensation/option plans are material parts of many execs' compensation packages. Buying stocks in the market increases the prices of those stock incentives. And, all shareholders benefit from higher share prices.

There are issues with stock buy-backs. To the extent that corporations borrow to fund stock repurchases, they increase leverage and reduce capital protection in bad economic times. And, funds used to buy back stocks are not available for capital expenditures to expand the business, increase profits, or increase the enterprise value of the corporation. Stock buy-backs may be counter to long-term shareholders' interests.

Certainly share repurchases can make good financial sense (for shareholders and executives) when the shares repurchased were intrinsically undervalued by the market. That assessment on an individual basis is rather subjective and speculative and I find the market to usually be the best current measure of intrinsic value. Executives have a lot of incentives built into their compensation packages (notably options) to ignore that basic rule and favor repurchases over dividends for the simple reason I outlined above. You wrote: "In recent years, stock buybacks have largely overtaken dividends in corporations' means to return cash to owners, and support share prices.". This may be true; however, is it because "in recent years" shares have been intrinsically undervalued? I tend to be rather skeptical...

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3. Horses are expensive to maintain. During the Great Recession, abandoned horses running wild became a big problem. A few islands to the south has a large population of wild horses, brought to the island hundreds of years ago by the Spanish. For a long time, the island was owned by one of the country's richest industrialists, but the island now belongs to the state (a few descendants of the industrialist are the only full-time residents). The horses are a sad looking lot (matted hair, sickly), not the robust wild horses one expects to see. From time to time the conservators of the island consider ways to reduce the population of the wild horses, but it never happens, those wanting to "protect" the horses coming to their "rescue". This is a little different from the wild horses in the west, but only a little.

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#7 I’m going for the 1970’s package with five times my current salary, the internet is nice but not that nice! The biggest advance since then is medicine of course, but if you don’t smoke and keep fit that is probably worth more than all the other medical advances put together.

The thought experiment is with your current nominal income, not five times your current nominal income.

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+1

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4. THE ENLIGHTENMENT

"The medievals believed in the weakness of the will but the power of the intellect. Modern people tend to believe in the power of the will and the weakness of the intellect."

This bit is good. Even if it is not literally true, it does align with a recent acceptance of cognitive limits. "Descartes' Error." "Irrational Exuberance." "Predictably Irrational." All of behavioral economics.

I don't think the turn to violence and scapegoats was as useful. That's the outcome without the mechanism. If we really are, as a species, less "rational" than was once believed, outcomes are going to be messy. And the need for elegant solutions is reduced.

History may be one darned thing after another.

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4. THE STATE OF THE WORLD

To be honest, I think this section is defining who Thiel and/or Perell see as "we."

And if pull your head up and look around, not everyone is in that "we."

Elizabeth Warren isn't.

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4. FAITH AND REASON

Fine.

4. THE STATE OF THE WORLD 2

The idea that, if you believe strongly in comparative advantage, you can just go zero tariff unilaterally is legit. You can(*), and anyone who does not is self-harming.

* - with some border adjustment to balance tax burden with internal production.

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7. Is it a coincidence that Roberts chose 1973, the year of the oil embargo? I was in college in 1973. I was driving a Datsun, not the Honda Roberts depicts, but his point about the Japanese cars back then is well taken: they were more like go-carts than cars. Roberts' obsession with 12 channel 1973 televisions is odd, since there were only three stations anyway. Are we better off with 120 stations? It's true, America is a much wealthier nation today than in 1973, but the cost of the opportunity to participate in that wealth was far less back then: I never paid more than $500 tuition per semester, even in law school. Would I prefer to return to 1973? If I were a college student, damn right. Well, to be on the safe side, 1974 (that's when the draft ended).

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"1. “Bos G Farm’s entire herd of 60 yaks went missing on the eve of the owners’ retirement.”

That's a yakastrophe!

+1 or yaktastrophe

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A yakaclysm!

+1 Yaktastic

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I hope everyone turned up for the Global Climate Yaction Strike

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What are we yakking about?

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5. Every state should try, through moderate investment in state universities, to create at least mini tech hubs. I think Noah Smith has shown that even when they don't win big, they at least win some. Positive ROI.

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6. "Perhaps the most striking finding was that, over the 10 years studied, not a single FTSE 350 firm successfully used share buybacks to meet an EPS target. Specifically, there was no firm that ended up above its EPS target that would have been below had it not repurchased shares. Moreover, firms that ended up above their EPS target bought back fewer shares than those that ended up below – inconsistent with concerns that they hit the target through buybacks." Pretty crazy finding. I am curious if things are different in the U.S.

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#4...Just as it's finally becoming clear the GOP and the Right in the US have never read, understood, or agreed with Hayek, his incisive comments concerning policies and principles have provided us with a warning about those governing today...

"A great deal more might be said about the close connection between conservatism and nationalism, but I shall not dwell on this point because it may be felt that my personal position makes me unable to sympathize with any form of nationalism. I will merely add that it is this nationalistic bias which frequently provides the bridge from conservatism to collectivism: to think in terms of “our” industry or resource is only a short step away from demanding that these national assets be directed in the national interest. But in this respect the Continental liberalism which derives from the French Revolution is little better than conservatism. I need hardly say that nationalism of this sort is something very different from patriotism and that an aversion to nationalism is fully compatible with a deep attachment to national traditions. But the fact that I prefer and feel reverence for some of the traditions of my society need not be the cause of hostility to what is strange and different. Only at first does it seem paradoxical that the anti-internationalism of the conservative is so frequently associated with imperialism. But the more a person dislikes the strange and thinks his own ways superior, the more he tends to regard it as his mission to “civilize” others—not by the voluntary and unhampered intercourse which the liberal favors, but by bringing them the blessings of efficient government. It is significant that here again we frequently find the conservatives joining hands with the socialists against the liberals..."

Instead of trying to reanimate the corpse of socialism, now is the time to read Hayek, Simons, Knight, Burke, and Oakeshott, if you are indeed a liberal.

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#5) I wish people would stop counting numbers of patents. You can patent all kinds of useless stuff. The question is whether the patent actually leads to productivity.

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6. Everyone in Finance knew this to be true. It took whacko leftists who know nothing about Corporate Finance to create these baseless myths. They argue that the excess cash should be used to make products cheaper. Yes, they actually said this, as if corporations dont already have a profit motive to do so.

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7.The Russ Roberts video is a lot better than the other PolicyEd videos.

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3. Use their genetic superiority against them, which is the real lesson of this story:

http://www.wallisandmatilda.com.au/man-from-snowy-river.shtml

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#5. Well that's depressing. At best the gains that come from burning billions of dollars on rent is a whopping 10% increase in innovation at best?

Leaving aside all of the unmeasured statistics, like how much the non-top flight innovators lose to having all their collaborators relocate, we are seeing only a 10% increase for costs whose floor is something like 20 billion per annum just in housing costs.

Including the human costs of moving away from friends and family, the discriminatory costs for families and the troubles of internal brain drain ... 10% is just pathetic. And then I ask how much of that is merely because if you move where there are more patent lawyers they encourage you to file more patents for the same amount of innovation.

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#6 Why is there so much hand-wringing about share-buybacks, but not dividends? Aren't they almost exactly the same thing?

No. dividends are cash in my pocket. Share buy backs may or may not affect the value of my stock which is just a paper value.

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3. Wild horses couldn't drag me away from useless government programs. If someone owned those horses, they would be someone's property and they would be protected. We all know government takes care of things. Right.

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#5 - number of patents is a fairly fishy metric for estimating "inventor" productivity. Some patents are way more equal than others.

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