Month: October 2020
Contrary to conventional intellectual wisdom there are not many good ones, but this packs some real force:
Starting from probabilistic simulations of likely presidential election outcomes that are similar to the output from election forecasting models, we calculate the likelihood of disputable, narrow outcomes under the Electoral College. The probability that the Electoral College is decided by 20,000 ballots or fewer in a single, pivotal state is greater than 1-in-10. Although it is possible in principle for either system to generate more risk of a disputable election outcome, in practice the Electoral College today is about 40 times as likely as a National Popular Vote to generate scenarios in which a small number of ballots in a pivotal voting unit determines the Presidency.
And note this, which explains a good deal of the debate and rationalizations — on both sides:
This disputed-election risk is asymmetric across political parties. It is about twice as likely that a Democrat’s (rather than Republican’s) Electoral College victory in a close election could be overturned by a judicial decision affecting less than 1,000, 5,000, or 10,000 ballots in a single, pivotal state.
That is from a new NBER working paper by Michael Geruso and Dean Spears.
Tyler and I interview each other on COVID for EconED and then we take questions on business cycles, the new edition of our textbook and teaching online. Just prior to the interview we premiered our MRU video on The Economics of COVID, which we refer to at the beginning if you haven’t already seen it.
I am very pleased with this interview.
Un-convinceable people are frustrating to talk to.
But being around only convinceable people, you just end up at the average belief.
Having a diverse variety of unconvinceable people to sample from (and move away from when it gets to be too much), and a group of convinceable people with whom to hash out the ideas and find the best versions, seems like the ideal.
I think I gravitate too much to the convinceable, finding the nonconvinceable too annoying except in very small doses.
This paper argues that after a quarter century of sharp and sustained increase, Chinese inequality is now plateauing and, according to some measures, even declining. A number of papers have been harbingers of this conclusion, but this paper consolidates the literature indicating a turnaround, and provides empirical foundations for it. The argument is made using a range of data sources and a range of measures and perspectives on inequality. The evolution of inequality is further examined through decomposition by income source and population subgroup. Some preliminary explanations are provided for these trends in terms of shifts in policy and the structural transformation of the Chinese economy. We relate the turnaround to two classic phenomena in the development economics literature—the Lewis turning point and the Kuznets turning point. The plateauing is not yet a full blown decline, and there are short term variations. But the narrative on Chinese inequality now needs to accommodate the possibility of a turnaround in inequality, and to focus on the reasons for this turnaround.
Via the excellent Kevin Lewis.
1. Something about a billionaire, the Coase theorem, and Gilligan’s Island. Or better yet with photos. I believe Paul Samuelson mentioned this case in one of his articles.
3. These “oddest book titles” don’t seem that odd to me. C’mon people, you can do better than that.
6. “The University of California, Berkeley, on Monday both revealed and renounced its long-standing Genealogical Eugenic Institute Fund, according to the Los Angeles Times. ..There is no evidence that Berkeley used the money for eugenic research, he said, but rather for a genetic counseling training program, among other uses.” Link here.
David is repeatedly writing critiques of my writings on Covid-19. (Google to them if you wish, they are so off base and misrepresentative I don’t think they deserve a link, and furthermore I find it almost impossible to track down EconLog archives under their new system.) Virtually all of his points revolve around simple or it seems even willful misunderstandings. For instance, David wrote:
But he’s willing to sacrifice the well-being of 50 million school-age children. Remember his casual “It just doesn’t seem worth it” remark about allowing kids to go back to school. He handles the tradeoff by not mentioning it.
Here is what I wrote:
…the value of reopening schools. It is an inarguable point, and Sweden seems to have made it work. But schools cannot and should not be reopened unconditionally. Amid high levels of Covid-19, a successful reopening very often will require social distancing, masks and a good system for testing and tracing. It would be better to focus on what needs to be done to make school reopenings work. Reopened schools in Israel, for instance, seem to have contributed to a significant second wave of Covid-19.
And my remark about “It just doesn’t seem worth it”, cited by David as me dismissing school reopenings? Here is what I actually wrote:
Indoor restaurant dining and drinking, for example, is probably not a good idea in most parts of the U.S. right now.
Yes, many of the Covid cases spread by such activity would be among the lower-risk young, rather than the higher-risk elderly. Still, practically speaking, given America’s current response capabilities, those cases will further paralyze schools and workplaces and entertainment venues. It just doesn’t seem worth it.
I am worried about reopening indoor bars and restaurants because I want to keep schools (and other venues) open. At my own school, GMU, I very much argued for keeping it open, which indeed we have done with success but also with great effort. My whole point is one about trade-offs.
I’ve also linked regularly to evidence that school reopenings are often possible and desirable, but still there is a right and wrong way to do it and they are not in every case a good idea. It is not just up to the policy analyst, you also have to keep the teachers and various other parties on board, whether you like that reality or not.
One issue here is that likely more students would end up in functioning schools under a Tyler Cowen regime than under a David Henderson regime. David’s sum of recommendations would, in practice, if we were to trace through their full consequences, lead to more schools being shut and more teachers refusing to show up. And more deaths and panic and overflowing medical facilities. Now that’s a trade-off.
I could point to numerous misunderstandings in David’s recent posts, pretty much in every paragraph. (I also think he is quite wrong on substance, allying himself with a few eccentric thinkers that hardly anyone agrees with, and who have not acquitted themselves well in debate, or made good predictions as of late, but that is another matter for a different time. He should pay greater heed to say Scott Gottlieb, who knows what he is talking about.)
In the meantime, David is failing the ideological Turing test badly and repeatedly.
Addendum: David’s Russian vaccine post does not misunderstand me, but I don’t think it shows a very full grasp of the issue. I very much favor regulatory reciprocity for pharmaceuticals, vaccines, and more, but I strongly believe adding Russia to the reciprocal list would “poison the well” and doom the whole idea. In the meantime, they are not nearly as far along for a major vaccine rollout as they claim, so probably we are not missing out on very much, even if the quality were fine. The slightest problem with the vaccine would be blown out of proportion, most of all with DT as president and Russian conspiracy theories circulating. If your goal is to nudge and push the FDA to move more quickly across the board, starting them off with the approval of a Russian vaccine is bad tactics and is risking the entire apple cart. Maybe try for Mother England first? So I think David here is quite wrong, and applying market liberalization ideas in a knee-jerk rather than a sophisticated fashion. He called the post “Tyler Cowen’s shocking post on the Russian vaccine,” but I wonder who he thinks is really supposed to be shocked by that one. If you read David’s comment on his own post you will see he is genuinely unable to imagine that such an argument as I present above might exist.
Based on a simple and intuitive point, the title of the paper is: “How Should Tax Progressivity Respond to Rising Income Inequality?”, and the answer is something you hardly ever hear acknowledged:
When facing shifts in the income distribution like those observed in the US, a utilitarian planner chooses higher progressivity in response to larger residual inequality but lower progressivity in response to widening skill price dispersion reflecting technical change. Overall, optimal progressivity is approximately unchanged between 1980 and 2016. We document that the progressivity of the actual US tax and transfer system has similarly changed little since 1980, in line with the model prescription.
That is from a new NBER working paper by Jonathan Heathcote, Kjetil Storesletten, and Giovanni L. Violante.
The current portfolio is multinational, including investments in Pfizer, Sanofi, AstraZeneca and Johnson & Johnson. Ideally, there should be at least one Chinese vaccine included, but there is not.
Obviously, given the rhetoric of the current administration, using a Chinese vaccine would be politically difficult. You can’t call it “the Chinese virus” and then tell Americans they ought to take a Chinese vaccine. So the Trump administration has made no serious effort to make a vaccine-sharing deal with China.
The matter is hardly settled, but at the very least the Chinese vaccines are not dropping out of contention.
Note that a year’s worth of partial protection still could go a long way. Recommended.
There are many ways to conduct clinical trials while releasing a vaccine—indeed, we can make the clinical trials better by randomizing a phased release. Suppose we decide health care and transit workers should be vaccinated first. No problem–offer the workers the vaccine, put the SSNs of those who wants the vaccine into a hat like draft numbers, vaccine a randomly chosen sub-sample, monitor everyone.This is the well known lottery technique for measuring causal effects often used in the school choice literature. If we use this technique we can greatly increase sample sizes and as we study each wave we will gather more confidence in the data. We won’t have enough vaccine in November to vaccinate everyone or probably even all health care and transit workers so a lottery is an ethically fair as well as statistically useful way to distributed the vaccine. We can also randomize across cities and regions.
That is from a recent post by Alex Tabarrok, on the blog Marginal Revolution, and there is more at the link. Of course I don’t have to tell you what Alex’s brother thinks of all this.
Addendum: Anup Malani notes:
BTW, those worried about ethics here should note that most product markets, even many dangerous ones (including non-FDA regulated medical care) use the population testing approach. Drugs are the exception. Elsewhere handle risk via exclusively via ex post tort liability.
So please don’t offer some kind of passive, under-argued Twitter comment on how unacceptably unethical it is — do some analysis and empirics on the trade-offs! And read up on surgical procedures while you are at it.
1. Data on the oldest companies in the world. Often small, and related to food and/or hospitality. Often Japanese.
2. “The Trans-Universal Zombie Church of the Blissful Ringing is a religion that emerged in the context of a period of political uprising in Slovenia in 2012–13 and later consolidated into a church that now claims 12,000 members.”
3. “We find that COVID-19 has likely become the leading cause of death (surpassing unintentional overdoses) among young adults aged 25-44 in some areas of the United States during substantial COVID-19 outbreaks.”
Murder hornets are in the news. Japanese honey bees have an amazing defense:
Wikipedia: Beekeepers in Japan attempted to introduce western honey bees (Apis mellifera) for the sake of their high productivity. Western honey bees have no innate defense against the hornets, which can rapidly destroy their colonies. Although a handful of Asian giant hornets can easily defeat the uncoordinated defenses of a western honey bee colony, the Japanese honey bee (Apis cerana japonica) has an effective strategy. When a hornet scout locates and approaches a Japanese honey bee hive, she emits specific pheromonal hunting signals. When the Japanese honey bees detect these pheromones, 100 or so gather near the entrance of the nest and set up a trap, keeping the entrance open. This permits the hornet to enter the hive. As the hornet enters, a mob of hundreds of bees surrounds it in a ball, completely covering it and preventing it from reacting effectively. The bees violently vibrate their flight muscles in much the same way as they do to heat the hive in cold conditions. This raises the temperature in the ball to the critical temperature of 46 °C (115 °F). In addition, the exertions of the honey bees raise the level of carbon dioxide (CO2) in the ball. At that concentration of CO2, they can tolerate up to 50 °C (122 °F), but the hornet cannot survive the combination of high temperature and high carbon dioxide level. Some honey bees do die along with the intruder, much as happens when they attack other intruders with their stings, but by killing the hornet scout, they prevent it from summoning reinforcements that would wipe out the entire colony.
Detailed research suggests this account of the behavior of the honey bees and a few species of hornets is incomplete and that the honey bees and the predators are developing strategies to avoid expensive and mutually unprofitable conflict. Instead, when honey bees detect scouting hornets, they transmit an “I see you” signal that commonly warns off the predator.
By Takahashi – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=348351
Depressive symptoms increased from before to during COVID-19 and life satisfaction decreased. Individuals with higher education experienced a greater increase in depressive symptoms and a greater decrease in life satisfaction from before to during COVID-19 in comparison to those with lower education. Supplemental analysis illustrates that income had a curvilinear relationship with changes in well-being, such that individuals at the highest levels of income experienced a greater decrease in life satisfaction from before to during COVID-19 than individuals with lower levels of income.
My colleague Bryan Caplan has some comments on the topic, here is also Robin Hanson here and here. I think both are trying to fit the Covid battle too much into a framework of equating marginal benefit and marginal cost. While that MB = MC condition is true tautologically for my views as well, I see it as a less useful framing given the non-linearities involved. It is only a modest oversimplification to assert that either we are beating back Covid or it is beating back us, and we can’t just choose a point along a smooth curve. You end up on one side of the distribution or another, if you are losing you are not really in control.
Here is a manipulative partisan tweet, but it still gets at a true point:
New COVID-19 cases reported yesterday:
* New Zealand: 1
* The U.S. Vice President's office: 5
— Mark D. Levine (@MarkLevineNYC) October 25, 2020
Since America is not a small, isolated island we don’t have the Kiwi option, but you can nonetheless see the two “winning” and “losing” options embedded in that comparison.
I think back to when I was 12 or 13, and asked to play the Avalon Hill board game Blitzkrieg. Now, as the name might indicate, you win Blitzkrieg by being very aggressive. My first real game was with a guy named Tim Rice, at the Westwood Chess Club, and he just crushed me, literally blitzing me off the board. I had made the mistake of approaching Blitzkrieg like chess, setting up my forces for various future careful maneuvers. I was back on my heels before I knew what had happened.
Due to its potential for exponential growth, Covid-19 is more like Blitzkrieg than it is like chess. You are either winning or losing (badly), and you would prefer to be winning. A good response is about trying to leap over into that winning space, and then staying there. If you find that current prevention is failing a cost-benefit test, that doesn’t mean the answer is less prevention, which might fail a cost-benefit test all the more, due to the power of the non-local virus multiplication properties to shut down your economy and also take lives and instill fear.
You still need to come up with a way of beating Covid back.
5. Strikingly good piece on Palantir (NYT), with cameos from Hegel, Talcott Parsons, Thiel, and Tolkien. And Palantir.