Month: May 2021
The economics of ordinary people?
Via Tyler R.
Daniel Frank on me, his introduction to Tyler Cowen
He has written a very nice appreciative post, and I regard his interpretations as accurate, here is an excerpt from it, perhaps it is an introduction to the last ten or so years of what I have been writing here:
…I wrote this post because the area Tyler influenced me the most and what I think is his greatest strength is something few discuss; his ability to deal with emotional and intellectual insecurity.
For context, when I first started reading Tyler’s writing as a teenager 15+ years ago, I was upset at how apolitical, non-partisan and unemotional he was. Sure he had all these great ideas but the world was filled with silly people who needed to be taken down a notch. Tyler never did that and eventually I realized he was right. Tyler’s equanimity and the way he tries to confront his own insecurities and flaws (that all humans have) is what, in my opinion, makes him so unique. By spending so much time reading his work, Tyler’s demeanour has rubbed off on me and made me a much better thinker.
Here are a selection of some of my favourite Tyler Cowen posts that capture his unique way of thinking:
Pushing the Button
https://marginalrevolution.com/marginalrevolution/2008/11/imagining-the-b.html
When describing a person/group/idea that you dislike, if you feel the need to attack them, it is akin to pushing a “button” that makes you temporarily dumber. You don’t want to be pushing the button yourself or in fact, spend time around/reading others who do.
The Fallacy of Mood Affiliation
https://marginalrevolution.com/marginalrevolution/2011/03/the-fallacy-of-mood-affiliation.html
When reading about an issue, people frequently identify with a mood and depending on how that mood resonates with that issue, they will artificially create a set of arguments to match and justify the mood.
Devalue and Dismiss
“a writer will come up with some critique of another argument, let us call that argument X, and then dismiss that argument altogether. Afterwards, the thought processes of the dismisser run unencumbered by any consideration of X, which after all is what dismissal means. Sometimes “X” will be a person or a source rather than an argument, of course. The “devalue” part of this chain may well be justified. But it should lead to “devalue and downgrade,” rather than “devalue and dismiss.”
Tyler Cowen’s 12 Rules for Life
https://marginalrevolution.com/marginalrevolution/2018/01/tyler-cowens-12-rules-life.html
1. Assume your temperament will always be somewhat childish and impatient, and set your rules accordingly, knowing that you cannot abide by rules for rules sake. Hope to leverage your impatience toward your longer-run advantage. 3. When the price goes up, buy less. Try to understand what the price really is, however, and good luck with that. 7. Learn how to learn from those who offend you. 9. I don’t know.
Why Do People Hate the Media So Much
https://marginalrevolution.com/marginalrevolution/2016/09/people-hate-media-much.html
“No matter what the media tells you their job is, the feature of media that actually draws viewer interest is how media stories either raise or lower particular individuals in status.” “The status ranking of individuals implied by a particular media source is never the same as yours, and often not even close.” “A good rule of thumb is that if you resent the media “lots,” you are probably making a number of other emotional mistakes in your political thought.”
This gem is also linked to in the original post expressing the idea: “So much of debate, including political and economic debate, is about which groups and individuals deserve higher or lower status”
How Public Intellectuals Can Extend Their Shelf Lives
There is in fact much more, again here is the link.
Lies vs. silence?
That is the contrast in my latest Bloomberg column. The claims about the Republicans are more widely circulated in educated circles, so here is the section on the Democrats:
Given the greater deployment of intellectual argument, smart, educated people are exposed to a more persuasive case for Democratic positions. But there is a danger in this asymmetry: when Democratic ideas are not working or are poorly designed.
Rather than constructing brazen untruths, the Democratic intelligentsia remains largely silent when it is unhappy. President Joe Biden’s recent Buy American plan is similar to protectionist ideas from Trump, but it doesn’t come in for heavy criticism on social media. If asked about it, most Democratic-leaning economists would be (correctly) critical. Yet for them this shortcoming isn’t that big a deal, given what are perceived to be the greater sins of Republicans, including their “big lie” strategy.
The continuing problems of migrant children cut off from their parents at the border receive some criticism — but the noise machine is nothing close to what it was under Trump. The new inflation data seem to indicate that Larry Summers’s criticisms of Biden’s stimulus program were largely correct, yet few if any commentators are apologizing to him on Twitter.
There is much more at the link, including about Republicans. And to be clear, when it comes to the Democrats, the “in fact this wasn’t left wing enough” is an almost obligatory form of self-criticism, serving also as a kind of repeated affirmation of relative moral superiority. Or the “I/we was even more right than I had thought” criticism is common as well. The actual self-criticism of “our value schema led us astray on this issue altogether”? — you almost never hear that one.
Saturday assorted links
1. How to write a book, circa 2021.
2. Cowen’s Second Law what the hell is this?
3. Why are non-alcoholic spirits so expensive?
4. Markets in everything: out of order watches.
5. On Todd, the church, and the cousin marriage hypothesis.
6. A new youngest grandmaster ever?
7. The education freedom program — should students have the right to take a class at any university whatsoever?
Prescription Only Apps????
Scott Alexander has a good post on prescription only Apps.
Trouble falling asleep? You could take sleeping pills, but they’ve got side effects. Guidelines recommend you try Cognitive Behavioral Therapy For Insomnia (CBT-i), a medication-free process where you train yourself to fall asleep by altering your schedule and sleep conditions.
…Late last year, Pear Therapeutics released a CBT-i app (formerly “SHUT-i”, now “Somryst”) which holds the patient’s hand through the complicated CBT-i process. Studies show it works as well as a real therapist, which is very well indeed. There’s only one catch: you need a doctor’s prescription.
The app is $899. The surprise is that it doesn’t seem that this is an FDA requirement (at least on the surface. It’s murky why no one else is offering a cheap app). Scott thinks it’s a play on the insurance companies:
My guess is that prescription-gating is necessary because it’s the last step in the process of transforming it from an app ($10 price tag) to a “digital therapeutic” ($899 price tag). The magic words for forcing insurance companies to pay for something is “a doctor said it was medically necessary”. Make sure that every use of Somryst is associated with a doctor’s prescription, and that’s a whole new level of officialness and charge-insurance-companies-lots-of-money-ability.
The good news is, Somryst has partnered with telemedicine provider UpScript. I know nothing about UpScript, but I suspect they are a rubber-stamping service. If you don’t have a doctor of your own, you can pay their fee, see a tele-doctor, and say “I would like a prescription for Somryst”. The tele-doctor asks if you have insomnia, you say yes/no/maybe/no hablo inglés, and the tele-doctor hands you a Somryst prescription and charges you $45.
On the one hand, at least this saves you from Doctor Search Hell. On the other, it involves paying $45 for the right to pay $899. So it’s kind of a wash.
In a way this is worse than an FDA requirement because at least we could mock an FDA requirement mercilessly and perhaps change it. Instead it seems that a combination of incentives and murky constraints have pushed patients, insurers and innovators into an equilibrium in which cheap things become expensive. It’s enough to keep anyone up at night.
What I’ve been reading
1. David Thomson, A Light in the Dark: A History of Movie Directors. One of the best attempts to make the auteur notion intelligible to the modern viewer, he surveys major directors such as Welles, Kubrick, Hitchcock, Godard and others. Stephen Frears is the dark horse pick, and he recommends the Netflix show Ozark. I always find Thomson worth reading.
2. Wenfei Tong, Bird Love: The Family Life of Birds. Now this is a great book, wonderful photos, superb analytics and bottom-line approach throughout. By the way, “Superb fairywrens are particularly adept at avoiding incest.”
3. William Deresiewicz, The Death of the Artist: How Creators are Struggling to Survive in the Age of Billionaires and Big Tech. Ignore the subtitle (which itself illustrates a theme of the book), this is the best book on the economics of the arts — circa 2021 — in a long time. “The good news is, you can do it yourself. The bad news is, you have to.” Every aspiring internet creator, whether “artist” or not, should read this book. If you don’t think of your career itself as a creative product — bye-bye!
I very much enjoyed Richard Thompson (with Scott Timberg), Beeswing: Losing My Way and Finding My Voice, 1967-1975, still smarter than the competition and you don’t even have to know much about Thompson.
Dorothy Sue Cobble, For the Many: American Feminists and the Global Fight for Democratic Equality is a serious and thorough yet readable account of what the title promises, with a minimum of mood affiliation.
Joanne Meyerowitz, A War on Global Poverty: The Lost Promise of Redistribution and the Rise of Microcredit. A history of antipoverty efforts, with an emphasis on the shift toward “enterprise” in the 1980s, with the microcredit treatment being mostly pre-Yunus.
Mathilde Fasting has edited After the End of History: Conversations with Frank Fukuyama.
Julian Baggini’s The Great Guide: What David Hume Can Teach Us about Being Human and Living Well is not written for me, but it is a lively and useful introduction to one of humanity’s greatest minds.
Don’t forget Deirdre Nansen McCloskey, Bettering Humanomics: A New, and Old, Approach to Economic Science.
Arrived in my pile there is William D. Nordhaus, The Spirit of Green: The Economics of Collisions and Contagions in a Crowded World, and in September Adam Tooze is publishing Shutdown: How Covid Shook the World’s Economy, and also for September there is Gregg Easterbrook’s Blue Age: How the US Navy Created Global Prosperity — And Why We’re in Danger of Losing It.
Have you noticed there are lots of books coming out now? How many were held over from the pandemic?
Friday assorted links
1. Alexey Guzey has a new non-profit — New Science — which seeks to revitalize science funding.
2. Wealth inequality is not the same as consumption inequality. Relevant for capital gains tax issues.
3. Noah: “My unified theory of COVID denial is “fear management”. People who weren’t used to being afraid of things suddenly had something to fear, and didn’t know how to deal with it, and felt ashamed, so they denied COVID in order to try to convince themselves they weren’t really afraid.”
What should I ask Alexander the Grate?
No typo there, nor has backward time travel been invented. I will be doing a Conversation with him, and here is a brief summary:
He has lived on various heating grates in Southwest D.C. for almost all of his homeless life, which is why he introduced himself as “Alexander the Grate,” when he and I first met in 1983. Several years ago, he told me this: “The bottom line is that the urban homeless in Washington, D.C., don’t create structures. We can’t because of the restrictions. Rather, we impose ourselves into the interstices of the infrastructure.”
So what should I ask him?
India Delays the 2nd Dose; Delaying 2nd Dose Improves Immune Response; Fractional Dosing
India has delayed the second dose to 12-16 weeks.
In other news, delaying the second dose of the Pfizer vaccine appears to improves the immune response (as was also found for the AstraZeneca vaccine). The latter is a news report based on a press release so some caution is warranted but frankly this was always the Bayesian bet since most vaccines have a longer time between doses as that helps the immune system. As Tyler and myself both argued, the short gap between the first and second dose was chosen to speed up the clinical trials not to maximize immunity. That was the right decision in the emergency but it was never the case that following the clinical trial regimen was “going by the science” no matter what Fauci said.
Many lives have been lost by not going to first doses first earlier, both here and in India.
Every country should move to a regimen in which the second dose comes at 12-16 weeks, even the United States, as this may improve the immune response and help other countries get a little bit ahead in their vaccine drives.
May I now also beat the drum some more on fractional dosing? Many people (not everyone) report that the second mRNA dose packs a wallop. I suspect that a half dose at 12-16 weeks would be plenty and that would free up significant capacity to vaccinate more people with first doses. We could also run some trials on half-doses for the young as a way to balance dosing and risk. Again this will matter for the rest of the world more than the United States but stretching doses in the United States will help the rest of the world and the arguments against stretching doses are now much diminished.
The Economist on Patent Waivers
A good statement from The Economist:
We believe that Mr Biden is wrong. A waiver may signal that his administration cares about the world, but it is at best an empty gesture and at worst a cynical one.
A waiver will do nothing to fill the urgent shortfall of doses in 2021. The head of the World Trade Organisation, the forum where it will be thrashed out, warns there may be no vote until December. Technology transfer would take six months or so to complete even if it started today. With the new mRNA vaccines made by Pfizer and Moderna, it may take longer. Supposing the tech transfer was faster than that, experienced vaccine-makers would be unavailable for hire and makers could not obtain inputs from suppliers whose order books are already bursting. Pfizer’s vaccine requires 280 inputs from suppliers in 19 countries. No firm can recreate that in a hurry.
In any case, vaccine-makers do not appear to be hoarding their technology—otherwise output would not be increasing so fast. They have struck 214 technology-transfer agreements, an unprecedented number. They are not price-gouging: money is not the constraint on vaccination. Poor countries are not being priced out of the market: their vaccines are coming through COVAX, a global distribution scheme funded by donors.
In the longer term, the effect of a waiver is unpredictable. Perhaps it will indeed lead to technology being transferred to poor countries; more likely, though, it will cause harm by disrupting supply chains, wasting resources and, ultimately, deterring innovation. Whatever the case, if vaccines are nearing a surplus in 2022, the cavalry will arrive too late.
Elsewhere in this issue they draw on my work with Kremer et al.
The increase in capacity seen over the past year was brought about in large part because of government interventions, most notably Operation Warp Speed in America and the activities of the Vaccine Taskforce in Britain, which guaranteed payments and drove the expansion of supply chains.
These efforts splashed around a lot of money which, if none of the vaccines had worked, would have been lost. But with the benefit of hindsight it is now hard not to wish they had been more generous still. In March Science, a journal, published estimates from a group of economists of the total global economic loss that would have been avoided if enough money to produce vaccines for the entire world had been provided up front, rather than enough for most of the rich world. They calculated that if the world had put in place a vaccine-production infrastructure capable of pumping out some 1.2bn doses per month by January 2021, it would have saved the global economy almost $5trn (see chart).
Eric Budish of the Chicago Booth School of Business, one of the model’s authors, explains the situation using a plumbing metaphor: it is faster to lay down a wider-bore pipe at the start of a project than to expand a narrow one later. The rich world succeeded in producing effective vaccines remarkably quickly in quantities broadly sufficient to its needs: an extraordinary achievement. But the capacity of the system it built in order to do so created constraints that the rest of the world must now live with. That was a choice, not destiny.
David Brooks on how wokeness will get watered down
But as the discourse gets more corporatized it’s going to get watered down. The primary ideology in America is success; that ideology has a tendency to absorb all rivals.
We saw this happen between the 1970s and the 1990s. American hippies built a genuinely bohemian counterculture. But as they got older they wanted to succeed. They brought their bohemian values into the market, but year by year those values got thinner and thinner and finally were nonexistent.
Corporations and other establishment organizations co-opt almost unconsciously. They send ambitious young people powerful signals about what level of dissent will be tolerated while embracing dissident values as a form of marketing. By taking what was dangerous and aestheticizing it, they turn it into a product or a brand. Pretty soon key concepts like “privilege” are reduced to empty catchphrases floating everywhere.
Here is the full NYT link.
The gender confidence gap in economics
From Heather Sarsons and Guo Xu, in the new AEA Papers and Proceedings:
Women are 7.3 percentage points less likely to provide extreme judgments (column 1). In terms of magnitude, this gap is economically large. Compared to the mean of the dependent vari-able (19.8 percent), this corresponds to a gap of 36 percent. The gap is somewhat smaller for the self-reported confidence level but still nontrivial (column 3). On average, women tend to report a confidence score that is 0.221 points lower than men. This corresponds to a gap of 4 percent when evaluated against the mean...
The results show that both men and women are less confident when asked questions outside of their field but that a confidence gap persists. For example, while men are 5 percentage points less likely to give an extreme answer when speaking on a topic out-side of their primary field, women are 9.2 per–centage points less likely to do so (column 1). For the measure of confidence, men are on aver–age 0.585 points less confident when speaking on a topic outside their primary field (column 2). Once again, that confidence gap is significantly larger for women. We would expect women to be less confident than men when answering questions outside of their field if women actually have a narrower range of expertise than men do. The results, however, do not change when we control for the respondents’ breadth of expertise using RePEc data and allow breadth to vary by gender. More importantly, accounting for the differential confidence when moving beyond one’s own field “explains away” the level effect of gender.
…it appears that the confidence gap emerges when women are speaking on topics on which they might be less informed.
I would be curious to see if similar results hold for bloggers (blog commenters?) and Op-Ed writers, or whether it is “the Margaret Thatcher syndrome” at work.
Cash transfers vs. in-kind health care assistance
The benefit of Medicaid coverage received by a newly insured adult is less than half what that coverage costs taxpayers, which is about $5,500 a year.
The reason is simple: The uninsured already receive a substantial amount of health care, but pay for only a very small portion of it, especially when their medical bills are high.
We have estimated that 60 percent of government spending to expand Medicaid to new recipients ends up paying for care that the nominally uninsured already receive, courtesy of taxpayer dollars and hospital resources. In other words, from the recipient’s perspective the alternatives are $5,500 in cash or only about 40 percent of that — $2,200 — in health insurance benefits, on top of the care they were already receiving.
That is from Amy Finkelstein at the NYT.
Thursday assorted links
2. Endless Frontier Act update. And further information about changes at the NSF.
3. The massive decline in China’s Northeast.
4. Diem update (WSJ).
5. Shruti Rajagopalan and Alice Evans podcast on women in India, self-recommending.
Ezra Klein on UFOs
What if they turn out to be “a thing”? Here is one excerpt, to be clear this is not the only view or possibility he is putting forward:
One immediate effect, I suspect, would be a collapse in public trust. Decades of U.F.O. reports and conspiracies would take on a different cast. Governments would be seen as having withheld a profound truth from the public, whether or not they actually did. We already live in an age of conspiracy theories. Now the guardrails would truly shatter, because if U.F.O.s were real, despite decades of dismissals, who would remain trusted to say anything else was false? Certainly not the academics who’d laughed them off as nonsense, or the governments who would now be seen as liars.
And this:
One lesson of the pandemic is that humanity’s desire for normalcy is an underrated force, and there is no single mistake as common to political analysis as the constant belief that this or that event will finally change everything. If so many can deny or downplay a disease that’s killed millions, dismissing some unusual debris would be trivial. “An awful lot of people would basically shrug and it’d be in the news for three days,” Adrian Tchaikovsky, the science fiction writer, told me. “You can’t just say, ‘still no understanding of alien thing!’ every day. An awful lot of people would be very keen on continuing with their lives and routines no matter what.”
Excellent column, do read the whole thing (NYT).