Saturday assorted links

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7. “To prevent unionization, nonunion firms over-hire high-skill workers—who vote against the union—and under-hire low-skill workers— who vote in its favor.”
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Under the assumption that unions perform well, they find that without unions their assumption is wrong. Sounds like this came from UC Berkeley.

In fact there is wide support for public sector unions under this assumption because the tech firms congregate in public sector union states. Many later regret it, but they still do it.

What’s your beef with UC Berkeley; you’ve bashed us a couple times already even though we’re one of top ten universities in the world.

Because it's "a haven for communist sympathizers, protesters, and sex deviants." (RWR)

And your problem is...?

You've confused it with Reed College.

They are flat earthers haven;t learned a thing. They trot out Laura Tyson for each recession and all she says is that public sector is good.
Robert Reich has not contributed on thing to economic theory, nor had Brad Delong. Zilch, yet they keep hiring these useless ex government employees. They have not, in the twenty year peiod of watching them, ever once explained the boom bust cycle of the California economy. They preach 50 little Hoovers, one of the most atrociously bad theories of our time. They fail, for some reason, to understand the federal government cannot bailout the public sector, yet keep asking.
I could go on, their economic department is worthless, simply a legal mouth piece for public sector unions and nothing more.

It took California five years to recover from near bankruptcy in the last recession, and all during that time they offered no explanation except more federal debt. Now California is bankrupt and they have no explanation. They are worthless, a huge waste of money.

+1 If you went to UC Berkeley Matt Young they would have taught you to read the abstract. The whole point of the paper is that even the mere threat of unions makes firms more inefficient because to prevent a union majority (an even worse outcome) firms choose to over-index on high-skilled labor (sub-optimal). If you had gone to UC Berkeley you might just have been able to figure this out.

Which employees are high-skill and which are low-skill? Maybe they mean that white-collar workers that spend all day peering at a monitor are high-skill and blue-collar workers that are tearing equipment apart and re-assembling it are low-skill. Since the low-skill people are regarded as the scum of the earth by their white-collar overlords they're likely to feel that union representation may work in their favor.

Horse manure.
The subject is dominated by silicon valley firms almost all of them write software. Who exactly are these lower level staff who are supposed to unionize?

This paper was clearly priors in and priors out, and does not qualify for reproduction.

In a three week period, right here on this blog, we discussed the new method of modeling covid infections over a large population. Doing so economists discovered a 250 year blunder of handling the Lucas criteria. A stunning achievement by about three different economists in the span of three weeks.

Compare that to the endless dribble of the '50 little Hoovers crowd' who spent their entire lifetimes trying to convince us of the flat earth fraud. Berkeley economics needs to be shut, it is useless and destructive.

Your argument to dismiss and/or dismantle UC Berkeley is not convincing. I’m, at least, relieved for the institution that you’ve focused your aggressions on the economics department. Do you not recognize wage equality as a benefit of unionization in the public sector that would reduce the likelihood of any federal bail-out? Or are you disparaging Silicon Valley for their lack of union potential? Can there be a consideration of solidarity under unionization, which, per se, always threatens monopoly? When you point out prediction models, do you understand that they’re predictions and never guarantees? While I may agree with some of your points, the harshness and extremism with which you paint your perspective is deterring to your argument. And if Berkeley finds out, they might protest you!

Have economists ever taken DeLong, Tyson or Reich seriously? These are bloggers/NPR circuit economists of the 90s.

Google Scholar is your friend. Delong and Reich were fairly accomplished academics in the 1990s when they were appointed by the Clinton Administration.

DeLong has been a serious economic historian mostly known for his blog and being the nephew of Larry Summers. Reich is a political scientist who discusses economic policy and promoted industrial policy. Tyson's rise in the early 90s was for her support of industrial policy which fortunately Clinton moved away from.

Public sector unions work well because often the employees they represent have limited work mobility. If you're a teacher in the local school district and don't like your "company" it is much harder to find another job at another district with moving, losing your pension, or both.

It's much easier to leave in the private sector, so generally there's much less need for unions in the corporate world.

How is it that public sector unions "work well"? In a sane world public sector employees would be required to annually bid for their jobs, low bidder winning the position, and would be forbidden to vote in local, state or national elections.

They also protect against the hiring of more qualified candidates new to the area.

We ought to apply antitrust law to labor monopolies just as much as product monopolies. Competition law might be too aggressive or not quite aggressive enough under all sorts of different circumstances (and political leaders), but it's not useless, and exempting labor seems stupid.

I would be a better world if there were three UAWs that were prohibited from working together.

1) Position in a hierarchy as measured is post-treatment from the other factors, i.e. title in a firm is a function of all the other factors examined. All this is really finding is that the higher your rank in a firm org chart the more you're paid. Not at all surprising and hard to say much about society from this.

Yep, that was going to be my comment.

First he looks at the effect on Y of, one at a time, variables X1, X2, X3, etc. Each of them have weak or somewhat weak effects.

Then he uses a variable that under any reasonable social theory is based on the combined effects of X1, X2, X3, etc. and wants us to be impressed that it has a larger effect size than the individual variables do.

It gets worse: among his sources of information on hierarchical rank is this one: "The data labeled ‘US model’ is a model-based inference, based jointly on data from firm case studies and the pay of US CEOs".

Yeah, if you create a variable called "hierarchical rank" that is based, among other things, on people's pay, the resulting variable is going to have a good correlation with people's income. Using Y as an ingredient in your model to predict Y will lead to large effect sizes -- and a useless model.

This is not to say that hierarchies are unimportant in pretty much all societies. Of course they're important. But almost by definition they're going to be highly correlated with income. But that doesn't mean he's uncovered the master secret to income; he's simply correlating two highly endogenous variables, income and hierarchical rank.

This is as bad as that 0.984 correlation that those viral-sewage-and-infection researchers were touting.

An analogy: suppose we want to determine what's important in predicting who's going to win a basketball game. Is it the teams' shooting ability, their defense, rebounding, ballhandling?

We could do a correlation (or measure the effect sizes) of say field goal percent, rebounding percentages, assists, steals, blocked shots, etc. with winning percentages and see which ones have the largest effect size.

And then someone comes up with a brilliant idea, the equivalent of the hierarchical rank measure: let's measure how many points the team scored relative to its opponent!

That variable will have a very high correlation and effect size. And will tell us nothing useful about basketball.

I suspect the author totally conflates prestige hierarchy with dominance hierarchy, and suspects any progress in institutions (companies) to be purely the latter

#1 Interesting read, but the author irritates me with his Bold Stand Against Received Wisdom schtick. IQ accounts for little? Really?

Sounds like someone who has never held a job in the private sector.

#1 is hocus pocus. So income is correlated with being an owner and/or manager of organizations. And the bigger the organization, the more they tend to make. That's common knowledge. But the author makes it sound sinister by calling it "hierarchy", and saying that the higher up in the hierarchy, the more income. Wow, a bank CEO makes more money than a bank teller, even if the bank teller went to school longer and had a higher IQ? We should overthrow the unjust power hierarchy!
Classical economics is refuted!
Thanks also to the author for the condescending primer in basic stats, as if his ability to describe simple statistics proves he has discovered some revolutionary truth.
A more interesting paper that statistics probably cannot answer as well is how some people create successful businesses or rise to positions of importance.

#3, straight after your previous blog post? Well played sir.

Poor Sully can't catch a break.

4. Long a Brooks fan, but enjoyed that especially.

By the way, as I've said, when Brooks talks about changing perspectives on artificial intelligence, I think that can be generalized to changing perspectives on intelligence itself.

This is not a unique thought. Cross-read with:

https://en.m.wikipedia.org/wiki/Descartes'_Error

and

https://www.simonandschuster.com/books/Cheating-Monkeys-and-Citizen-Bees/Lee-Dugatkin/9781439136515

It is not widely known, but Dugatkin predicted the existence of something like the naked mole rat before the naked mole rat was discovered. In that book, iirc. He was speculating on what it would be like for a mammalian species to live like ants. And take "cooperation" to an extreme.

No 1. A guy discovers that people in charge of a lot of other people tend to make more money than the average, and he thinks he is a new Galileo?

Who is the economist that disagrees with that? Where is the church, here?

Whereas Galileo found evidence one thing went around another thing instead of vice versa and thought he was the same old Galileo.

Wondering what the profound point of (1) is? Bosses make more than subordinates? If so, it's a profoundly shocking discovery. And what's up with the "neoclassical" bashing, other than to sound "edgy"...

/sarc

#8: Tyler's column is okay, but covers a very limited range of activities: protest. Vote. Become informed about policing. And he may've mentioned writing letters to the editor (and implicitly blog posts, social media, op-eds, etc.).

Some other obvious alternatives to protesting, while still trying to affect society's course: in addition to voting, donate to the candidate or party (or PAC) of your choice. And volunteer for them (or maybe even better, work for them professionally, obviously only certain careers are suitable here).

Well duh. I thought he would discus the traits that allow one to rise through the hierarchy.
I think a very important one is desire to make a lot of money. I have an uncle who was the only child on single mother teacher in Italy who wanted to make a lot of money and he sure enough did. I also wanted to make money and did but not as much as he made. He was far crazier than me.
I sometimes look back at my brothers who did not want make a lot of money who got secure Gov jobs and think I should have done that. Being a business owner is a pain in the but. My sons want no part of it.

#1: Of course neo-classical economics is wrong! For one thing, budget constraints don't exist.

#3- Andrew Sullivan can't write on his own blog? If so that's his own fault for agreeing to it in the first place.

He could go back to writing a blog:

He started a political blog, The Daily Dish, in 2000, and eventually moved his blog to various publishing platforms, including Time, The Atlantic, The Daily Beast, and finally an independent subscription-based format. He announced his retirement from blogging in 2015.[1] Sullivan has been a writer-at-large at New York since 2016.[2]

https://en.wikipedia.org/wiki/Andrew_Sullivan

This would, in may opinion, be good as he is a better blogger than columnist. You are correct that it is (at least partially) his fault and he can and should unwind it.

Ye$, $ullivan $hould recon$ider hi$ job as a colomni$t for the $ake of free $peech.

True, at least Sullivan can take comfort in the fact that he isn't like one of those hourly workers at Shake Shack or, until recently, Amazon's warehouses, who are locked into a non-compete clause.

He otherwise faces a situation that is unremarkable for workers in the real world: your employer can not only tell you what to do but can also prohibit you from taking on freelancing gigs.

From no. 1: “Income, I believe, is determined not by productivity, but instead largely by rank within a hierarchy.”

That would be an interesting result, but it seems the author only shows a strong correlation between rank in the org chart and income. They don’t have any measure of productivity. It would be interesting if they were able to come up with a measure of productivity for managers and non-supervisory workers that made them commensurable. Certainly at the upper ends of management, there is research showing that better managers are incredibly valuable, so you can argue that they are incredibly productive.

"Certainly at the upper ends of management, there is research showing that better managers are incredibly valuable, so you can argue that they are incredibly productive"

Great hand waving!

https://www.vox.com/policy-and-politics/2020/6/6/21282611/black-workers-left-behind-unemployment

The unemployment rate improved in May, but left black workers behind
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This is what the riots are about. Each generation these blacks discover they are at the end of the queue for goodies, and they rebel.

This goes to the central fundamental rule of economics, folks do not like to wait in liner. Inf fact, this is what drives the new covid infection models, it is what drives the electron motion, it is what makes antibodies do what they do, it is why we have skin, it described black holes, it was discovered by Karl Marx and elucidated by Andrey Markov.

And Bekely has no clue even though thousands of economists world wide are now looking more closely. This simple fact has eluded f;at earther economists who cannot get out of the box and connect dots, on both the right and left.

If nothing else, the covid crisis as driven a few economists to think and will likely reduce the disasters of flat earthers by a considerable margin.

8. This was good.

And FWIW, I never thought it could descend to this parody/tragedy. Just drivin' along pepper spraying out the window.

https://twitter.com/chadloder/status/1268955152750264320?s=19

It's amazing that PDs aren't even thinking PR.

7. They aren't labor unions. They are labor cartels. Wise up academics.

Hi, I am Batbayar Borjigin, a Mongolian-American lawyer. I think it is time to end Trump's reign of terror. He has mismanaged the coronavirus crisis, has made the protests worse than they would have been otherwise, alienated good allies such as Brazil and Korea and refused to fix the infrastructure. I think Congress must overthrow him. He must go.

Well, Congress tried. And Republican Senators torpedoed it. Because they could.

And so here we are.

Thiago, hun, we know who you are.

8. TC fully supports the protests/riots. I was waiting to see TC's reaction. He supports the recent events. I knew TC leaned left, but I'm somewhat surprised.

It is actually a pretty mainstream position:

"In a Monmouth University poll released this week, 76 percent of Americans — including 71 percent of white people — called racism and discrimination “a big problem” in the United States. That’s a 26-percentage-point spike since 2015. In the poll, 57 percent of Americans said demonstrators’ anger was fully justified, and another 21 percent called it somewhat justified."

Especially when you add that fully justified to somewhat justified. 57+21=78%

(as reported at the NYT)

I am confused and surprised too...
I specifically scrolled through comments, hoping that somebody will explain that the article was some kind of irony. It appears that TC really support BLM and "peaceful" protests.

#1) So, basically, author finds that race, sex, and parental income have very little effect on income contra all of Social Justice theory. He also finds that workers make more than property owners. But, his big takedown of "neoclassical economics" is that CEOs make more than line workers. I must have missed the class where we were taught that "neoclassical economics" predicted the opposite.

8. These protests fill you with ... hope? Like, you hope you can find the keys to your dacha?

3. If I recall, the NYT published both an article by a extremist British outfit that supported a monarchy instituted in America, and it published an article by Erdogan's deputy forcefully justifying widespread torture regimes set up within Turkey.

Of course readers complained but they stood by publishing those articles in the interest of free speech. Furthermore, the NYT publishes Ross Douthat continuously, even when he is spouting rather extreme positions (I tend to agree with him on most issues, but sometimes it is a bit much.)

They publically supported the Supreme court case supporting Westboro Baptist churches protest of the funeral of a soldier and subsequent mockery of that soldier, not because such actions are good, but in the interest of tree speech.

Blocking editorials over subjects relatively trivial in comparison is kinda ridiculous.

1) This is pretty amateurish work. There’s some obvious confirmation bias type statements (“women earn less when in the same job as men”). But the most significant issue is the author’s lack of creative thinking, perhaps driven by his fixation on hierarchy.

Take for instance his analysis of the impact of education. If you consider all education to have an equal impact on earnings and wealth you’re an idiot and probably a communications major. STEM (less biology and psychology) and professional degrees have a far more significant impact than hierarchy.

Are you sure?

They way he laid out hierarchy, as in 5 layers of people working under you, would probably map pretty well to income.

If some Yoga guru had 3 direct reports, they each had 2-5 direct reports who also had 2-5 people working for them who each had teams of 5 . . . on average he'd be making more than your average STEM graduate.

Power does map to income more so than productivity.

#3) Tyler's prediction that the pandemic would kill Social Justice politics does not appear to be holding. The idea was that, when dealing with a pandemic, people wouldn't have patience to deal with trivialities like pronouns and prom dresses. Of course, Tyler couldn't have known then that the virus was far less severe than originally feared, so much so that even (especially?) epidemiologists would eventually prioritize wokeness over slowing viral spread. It appears that the NYT (and Twitter and Facebook employees other than Zuckerberg) have re-opened for wokeness.

Yes, it seems like that MR prediction (alongside the "Trump rioters") was completely backwards in the actual event.

As a quick guess, coronavirus has actually accelerated the urgency with which that Woke feel they need to seize power; and the only path they really understand for how to get there is by louder, more radical, more forceful displays of Wokeness (which have always worked for them on social media and at university), so... when this conflicts with pandemic public health ideas, the Unstoppable Force defeats the essentially Moveable Object.

One of the particularly odd things, to add, to this is that corona, and crippling economic effects of both involuntary lockdowns and unavoidable voluntary behaviour change, are peaking in poorer countries right now.

These are exactly the people the internationalist Woke claim to care the most about!

But they've been almost completely forgotten by the Woke in favour of a small number of African-Americans, who are mostly prosperous by world standards, and to some degree even fairly well off in income by OECD standards, and whose problems in lack of wealth accumulation, high crime rates, high obesity and other such things tend to be somewhat cultural and have little to do with the police...

E.g. twitter - "Lockdown failed" hashtag on India (https://twitter.com/search?q=%23LockdownFailed&src=trend_click) where Modi + BJP lockdown seems to have been way too early or otherwise not suppressed anything.

I would expect the usual voices on social media to at least care about this a bit, even if only to proclaim that the Indian lockdown was "not a lockdown" in the rather flexible way they've tried to claim Sweden's lack of lockdown was a "soft lockdown". But almost nothing outside of India.

Let’s face it. The daily dish, Andrew Sullivan’s blog, one of the great web achievements of my lifetime and a prototype for MR, was largely a creation Patrick Appel and Chris Bodenner. I read about 1 IN 4 of Andrew’s columns now. Mostly boring.

#1. So it’s not what ya know but who ya blow! Duh!?!

3. Sullivan continues to write on Twitter, where he expresses his Tory views. I enjoy reading Sullivan, but he has blinders when it comes to discrimination other than discrimination against gays. At Twitter, there's lots of hostility toward what's referred to as the "woke mob". Oddly, the most recent dust-up in the "woke mob" community (i.e., the community that uses "woke mob" in a condescending way) is about trans, even J.K. Rowling offering her views. It seems the gay community and the trans community don't agree, and the gay community takes offense that the trans community takes offense and the trans community takes offense that the gay community takes offense. One needs a program to keep track of who is offending whom (or is it who - I wouldn't want to offend the grammar community).

Re 1:
while an interesting line of questioning there's 2 issues with this article:
the first is that companies promote their most able workers(ideally), so being in a high hierarchy position could just mean your a great worker who should get paid a lot. (you worked for less than you should while an underling and when your quality was recognized with a promotion they paid you appropriately).

Secondly, the statistical method of comparing within- to out- group means is that it falls prey to Simpson's paradox; if the people high up in the hierarchy are full time, well educated, city living, white males then you dont know if the hierarchy variable is adding any information or just segments the people who would and wouldn't earn a lot anyway.

The second issue could be solved with a regression, if you had the underlying data and not just estimates of effect size; but I don't know how you'd distinguish between the CEO being the best worker, for whatever position, and being paid the most becuase of it.
Even comparing the pay of people who got promoted to those that didnt when they were on the same level has this issue.

It's ironic that you'd censor my post about censoring Sullivan's post.

But as I said in the censored post: that's your privilege as the owner of a private commercial media.

No. 1 No 1 #1.) 1)
I don't get the crash course, why does variation within a group matter when you're comparing between groups? Because of this measurement all the things I most associate with income (sex, education, race, etc.) are deemed to have little correlation.
He says because "the income difference between races is relatively small compared to the income variation within each race", race has a "weak effect", but why care what the variation within a race is?
Maybe I misinterpreted something and the correlation is substantial but small relative to other factors?

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