Month: July 2021
By Edward Glaeser and David Cutler, forthcoming in September (with a CWT with them on the way I might add).
2. What many people believe, and act on. How much of it is true?
3. Saudi austerity.
5. Back to normal: the West’s Cultural Revolution is over.
6. Profile of nature writer Dara McAnulty (NYT).
Preston Estep was alone in a borrowed laboratory, somewhere in Boston. No big company, no board meetings, no billion-dollar payout from Operation Warp Speed, the US government’s covid-19 vaccine funding program. No animal data. No ethics approval.
What he did have: ingredients for a vaccine. And one willing volunteer.
Estep swirled together the mixture and spritzed it up his nose.
…Estep and at least 20 other researchers, technologists, or science enthusiasts, many connected to Harvard University and MIT, have volunteered as lab rats for a do-it-yourself inoculation against the coronavirus. They say it’s their only chance to become immune without waiting a year or more for a vaccine to be formally approved.
Among those who’ve taken the DIY vaccine is George Church, the celebrity geneticist at Harvard University, who took two doses a week apart earlier this month. The doses were dropped in his mailbox, and he mixed the ingredients himself.
Church say…he believes the vaccine designed by Estep, his former graduate student at Harvard and one of his protégés, is extremely safe. “I think we are at much bigger risk from covid considering how many ways you can get it, and how highly variable the consequences are,” he says.
I’m a big fan of the RadVac vaccine and was recently asked to give a talk about the vaccine and the pluses and minuses of the open source approach. In my talk I cover patents, when it was rational to take an unapproved vaccine, the FDA, paternal medicine versus the Consumer Reports model and more. I’m especially pleased with this talk.
Addendum: Great set of posts from johnswentworth from LessWrong on making the vaccine and then testing it.
Your advice is most welcome! I thank you in advance for your wisdom and counsel. My first trip there is now about twenty-five years old, so time to go again.
1. Barnaby Phillips, Loot: Britain and the Benin Bronzes. Among its other virtues, this book is an excellent “in passing” way to learn about British imperialism and also West African economic collapse. One thing I learned from this book is that Nigeria already has one of the very best collection of these bronzes in the world. It does not seem they are being stolen or ruined, but they are not deployed very effectively either. Recommended.
2. Paul Atkinson, A Design History of the Electric Guitar. “Why is it that so many guitars produced today, not only by Gibson and Fender, but by competing companies, still hark back to the classic designs of the 1950s? Why do so many manufacturers produce designs that are very clearly derivative forms of the Les Paul, the Telecaster, the Stratocaster, the Flying V and the Explorer?” There is now a book on this question, and quite a good one.
3. Cass Sunstein, Sludge: What Stops Us from Getting Things Done and What to Do about It. More people should write books about the most important topics. Have you and your institution done a “sludge audit” lately?
4. Andras Schiff, Music Comes Out of Silence: A Memoir. A well-written and in fact gripping treatment of what makes classical music so wonderful, life as a touring concert pianist, and defecting from Hungary and later being disillusioned by a resurgent European populism. Zoltan Kocsis was at first the more brilliant pianist, but Schiff was more persistent and ended up with a more successful career.
Alex Millmow’s The Gypsy Economist: The Life and Times of Colin Clark covers the now-neglected Australian pioneer of development economics and relative historical optimist.
There is also Kathleen Stock, Material Girls: Why Reality Matters for Feminism, controversial.
Five years ago, Marginal Revolution covered a new project, Stripe Atlas, to help founders incorporate their start-ups and thus make them successful realities. There is a one-time fee of $500. Here are the results:
In 2016, we launched Stripe Atlas to help founders turn their ideas into startups, and in turn, collectively grow the GDP of the internet. Since then, over 20,000 businesses have started with Atlas and have generated over $3 billion in revenue. We surveyed over 1,000 Atlas founders to get a snapshot of this generation of entrepreneurs and their needs…
Ninety-one percent of Atlas founders are not in Silicon Valley. In fact, outside of the US, some of the places where we’re seeing the fastest growth are Nigeria (400% year-over-year), United Arab Emirates (165%), and India (66%). Twenty-eight percent of founders told us that they identify as minorities in their country, and 24% are immigrants. Just 12% of founders identified as female. (This is slightly better when compared to the portfolios of major startup accelerators or venture capital firms.) Over time we hope to help more female founders start and scale. Forty-three percent of Atlas founders are building businesses for the first time—nearly 10,000 of them started in just the past year (an indication of an upward trend in entrepreneurship after nearly three decades of decline).
That is from Edwin Wee. The core lesson, at the meta-level, is that business services for an internet age remain drastically underprovided. But on the bright side, entrepreneurs are starting to remedy this…
Because of real factors, in a nutshell:
Using the recession recovery point equal to the month when private payrolls first exceeded their previous peak level, this paper argues that it was the negative secular trend in manufacturing jobs that was the most important determinant of the length and depth of the last three recessions/recoveries. This negative secular trend changed the layoff/recall pattern of jobs in manufacturing into permanent displacements, a malady that lengthened the recovery periods and that is not the explicit target of either traditional monetary policy or traditional fiscal policy. Using the ideas gathered from an examination of the US two-digit sectoral data for the US overall, attention turns to the recession/recoveries of the 50 US states in the last three national recession periods. Regressions that explain the lengths and depths of the recessions in 50 US states reveal the importance of construction jobs, but the most important predictor was manufacturing jobs: the greater the share of manufacturing jobs prior to the recession, the worse was the recession/recovery.
That is a new NBER working paper by Ed Leamer. This of course bears on current monetary policy debates. A very firmly held view on Twitter is that our post-2012 (or so) recovery could have been quicker, had the Fed been more aggressive, and thus we cannot afford to make the same mistake again. Yet after a certain point it was real factors responsible for the recovery problems, and this new Leamer paper shows that (money still should be have been looser earlier on, in my view). See also my previous coverage of papers by Marianna Kudylak (and co-authors), and Bob Hall directs my attention to this recent paper on why employment right now is recovering as fast as it is. The evidence really is piling up very rapidly and decisively that mainly real factors are/were the problem after a certain point.
3. The distillery tour culture that is Scottish (short video).
William Carlos Williams (from Asphodel):
“It is difficult
to get the news from poems
yet men die miserably every day
of what is found there.”
For the pointer I thank Tim T.
Or maybe just taught more period? For microeconomics, I have two very definite picks:
1. Price discrimination. They do it to you more and more! Or perhaps you are striving to do it to others. This is typically covered in a first-year sequence, but how many second-year students really have mastered when it is welfare-improving or not? How it relates to product tying? When it is sustainable against entry or not?
This seems like a highly relevant real world topic covered only in passing, noting that at the Principles level Cowen and Tabarrok give it full attention.
2. Tax incidence. Covered thoroughly in public finance sequences, but usually only in passing in first-year sequences. But just about everything is a problem in tax incidence! Any change in relative prices gives rise to tax incidence issues, and aren’t relative price changes central to economics?
How can you analyze minimum wage economics, for instance, without a strong background in tax incidence theory (and empirics)? What if someone says “that minimum wage hike — the associated gains are just captured by the landlords!” Right or wrong? Under what conditions? Good luck!
Grad students these days aren’t learning enough micro theory.
And for macroeconomics? I have a definite nomination:
3. Say’s Law. Yes I have read Keynes, and furthermore John Stuart Mill understood as early as 1829 that Say’s Law doesn’t hold if there is a big increase in money hoardings. But often there isn’t a big increase in money hoardings! And then what people call “increases in aggregate demand” very often are more fundamentally “increases in aggregate supply.” Long-, medium- and short-term considerations to be tossed in as further complexities. Ngdp boosts can come through either nominal or real variables, etc.
There are still lots and lots of people — at all levels — who don’t have a firm handle on these matters. And Twitter has made this worse.
Which topics do you think should be given additional coverage?
That is the topic of my latest Bloomberg column, here is one part:
In economic terms, the private value of internet security is often less than the public value. A ransomware attack that results in only a slight decrease in profits for a business could translate into a major social inconvenience.
One consolation is that hackers will almost certainly “overfish” the pool of victims. At some point there will be so many attacks that most institutions will have no choice but to respond with significant defensive measures. The hackers themselves will accelerate this process, because each will try to maximize their profits before the game is over. Curiously, this means that a successful attempt to “slow down” the hackers could just delay the necessary adjustments that businesses need to make, leaving everyone worse off.
There is much more at the link.
2. “The implication of the birthday paper is that, at the height of the pandemic, there were not very big differences in private behavior according to party, even if public behavior was different.” Link here.
3. Wikipedia page for Zemmour. I much prefer liberalism, but he might become globally known soon. And political discrimination as civil rights struggle (an approach you will regret if you pursue it, mark my words).
Like Michael Lewis’s The Premonition which I reviewed earlier, Andy Slavitt’s Preventable is a story of heroes, only all the heroes are named Andy Slavitt. It begins, as all such stories do, with an urgent call from the White House…the President needs you now! When not reminding us (e.g. xv, 14, 105, 112, 133, 242, 249) of how he did “nearly the impossible” and saved Obamacare he tells us how grateful other people were for his wise counsel, e.g. “Jared Kushner’s name again flashed on my phone. I picked up, and he was polite and appreciative of my past help.” (p.113), “John Doer was right to challenge me to make my concerns known publicly. Hundreds of thousands of people were following my tweets…” (p. 55)
Slavitt deserves praise for his work during the pandemic so I shouldn’t be so churlish but Preventable is shallow and politicized and it rubbed me the wrong way. Instead of an “inside account” we get little more than a day-by-day account familiar to anyone who lived through the last year and half. Slavitt rarely departs from the standard narrative.
Trump, of course, comes in for plenty of criticism for his mishandling of the crisis. Perhaps the most telling episode was when an infected Trump demanded a publicity jaunt in a hermetically sealed car with Secret Service personnel. Trump didn’t care enough to protect those who protected him. No surprise he didn’t protect us.
The standard narrative, however, leads Slavitt to make blanket assertions—the kind that everyone of a certain type knows to be true–but in fact are false. He writes, for example:
In comparison to most of these other countries, the American public was impatient, untrusting, and unaccustomed to sacrificing individual rights for the public good. (p. 65)
Data from the Oxford Coronavirus Government Response Tracker (OxCGRT) show that the US “sacrifice” as measured by the stringency of the COVID policy response–school closures; workplace closures; restrictions on public gatherings; restrictions on internal movements; mask requirements; testing requirements and so forth–was well within the European and Canadian average.
The pandemic and the lockdowns split Americans from their friends and families. Birthdays, anniversaries, even funerals were relegated to Zoom. Jobs and businesses were lost in the millions. Children couldn’t see their friends or even play in the park. Churches and bars were shuttered. Music was silenced. Americans sacrificed plenty.
Some of Slavitt’s assertions are absurd.
The U.S. response to the pandemic differed from the response in other parts of the world largely in the degree to which the government was reluctant to interfere with our system of laissez-faire capitalism…
Laissez-faire capitalism??! Political hyperbole paired with lazy writing. It would be laughable except for the fact that such hyperbole biases our thinking. If you read Slavitt uncritically you’d assume–as Slavitt does–that when the pandemic hit, US workers were cast aside to fend for themselves. In fact, the US fiscal response to the pandemic was among the largest and most generous in the world. An unemployed minimum wage worker in the United States, for example, was paid a much larger share of their income during the pandemic than a similar worker in Canada, France, or Germany (and no, that wasn’t because the US replacement rate was low to begin with.)
This is not to deny that low-wage workers bore a larger brunt of the pandemic than high-wage workers, many of whom could work from home. Slavitt implies, however, that this was a “room-service pandemic” in which the high-wage workers demanded a reopening of the economy at the expense of low-wage workers. As far as the data indicate, however, the big divisions of opinion were political and tribal not by income per se. The Washington Post, for example, concluded:
There was no significant difference in the percentage of people who said social distancing measures were worth the cost between those who’d seen no economic impact and those who said the impacts were a major problem for their households. Both groups broadly support the measures.
Perhaps because Slavitt believes his own hyperbole about a laissez-faire economy he can’t quite bring himself to say that Operation Warp Speed, a big government program of early investment to accelerate vaccines, was a tremendous success. Instead he winds up complaining that “even with $1 billion worth of funding for research and development, Moderna ended up selling its vaccine at about twice the cost of an influenza vaccine.” (p. 190). Can you believe it? A life-saving, economy-boosting, pandemic ending, incredibly-cheap vaccine, cost twice as much as the flu vaccine! The horror.
Slavitt’s narrative lines up “scientific experts” against “deniers, fauxers, and herders” with the scientific experts united on the pro-lockdown side. Let’s consider. In Europe one country above all others followed the Slavitt ideal of an expert-led pandemic response. A country where the public health authority was free from interference from politicians. A country where the public had tremendous trust in the state. A country where the public were committed to collective solidarity and the public welfare. That country, of course, was Sweden. Yet in Sweden the highly regarded Public Health Agency, led by state epidemiologist Anders Tegnell, an expert in infectious diseases who had directed Sweden’s response to the swine flu epidemic, opposed lockdowns, travel restrictions, and the general use of masks.
Moreover, the Public Health Agency of Sweden and Tegnell weren’t a bizarre anomaly, anti-lockdown was probably the dominant expert position prior to COVID. In a 2006 review of pandemic policy, for example, four highly-regarded experts argued:
It is difficult to identify circumstances in the past half-century when large-scale quarantine has been effectively used in the control of any disease. The negative consequences of large-scale quarantine are so extreme (forced confinement of sick people with the well; complete restriction of movement of large populations; difficulty in getting critical supplies, medicines, and food to people inside the quarantine zone) that this mitigation measure should be eliminated from serious consideration.
Travel restrictions, such as closing airports and screening travelers at borders, have historically been ineffective.
….a policy calling for communitywide cancellation of public events seems inadvisable.
The authors included Thomas V. Inglesby, the Director of the Johns Hopkins Center for Health Security, one of the most highly respected centers for infectious diseases in the world, and D.A. Henderson, the legendary epidemiologist widely credited with eliminating smallpox from the planet.
Tegnell argued that “if other countries were led by experts rather than politicians, more nations would have policies like Sweden’s” and he may have been right. In the United States, for example, the Great Barrington declaration, which argued for a Swedish style approach and which Slavitt denounces in lurid and slanderous terms, was written by three highly-qualified, expert epidemiologists; Martin Kulldorff from Harvard, Sunetra Gupta from Oxford and Jay Bhattacharya from Stanford. One would be hard-pressed to find a more expert group.
The point is not that we should have followed the Great Barrington experts (for what it is worth, I opposed the Great Barrington declaration). Ecclesiastes tells us:
… that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favor to men of skill; but time and chance happeneth to them all.
In other words, the experts can be wrong. Indeed, the experts are often divided, so many of them must be wrong. The experts also often base their policy recommendations on factors beyond their expertise, including educational, class, and ideological biases, so the experts are to be trusted more on factual questions than on ethical answers. Nevertheless, the experts are more likely to be right than the non-experts. So how should one navigate these nuances in a democratic society? Slavitt doesn’t say.
Slavitt’s simple narrative–Trump bad, Biden good, Follow the Science, Be Kind–can’t help us as we try to improve future policy. Slavitt ignores most of the big questions. Why did the CDC fail in its primary mission? Indeed, why did the CDC often slow our response? Why did the NIH not quickly fund COVID research giving us better insight on the virus and its spread? Why were the states so moribund and listless? Why did the United States fail to adopt first doses first, even though that policy successfully saved lives by speeding up vaccinations in Great Britain and Canada?
To the extent that Slavitt does offer policy recommendations they aren’t about reforming the CDC, FDA or NIH. Instead he offers us a tired laundry list; a living wage, affordable housing, voting reform, lobbying reform, national broadband, and reduction of income inequality. Surprise! The pandemic justified everything you believed all along! But many countries with these reforms performed poorly during the pandemic and many without, such as authoritarian China, performed relatively well. All good things do not correlate.
Trump’s mishandling of the pandemic make it easy to blame him and call it a day. But the rot is deep. If we do not get to the core of our problems we will not be ready for the next emergency. If we are lucky, we might face the next emergency with better leadership but a great country does not rely on luck.
In a series of tweets (try this one), Matt Yglesias has been arguing that academic economists are far more Democratic than the U.S. population as a whole, though less left-wing than most other academics. I agree with his claims, which are backed by plenty of data, but I wish to add some further thoughts.
Very often political views follow our socioeconomic class and the peer groups we are trying to impress or join. Thus those claims from Matt are true for American policies only. If you took a leftish (but not Marxist radical) Democratic U.S. economist, and asked that person what Mexico should do to improve, I think the answers would include the following:
1. Build state capacity to win the drug war, legalize or decriminalize some drugs too.
2. Make it easier for firms in the informal sector to enter the formal, taxed sector, and thus make it easier for them to grow.
3. Invest more in education for underprivileged Mexican youth.
4. End the state monopolies in industrial products.
5. Do something about corruption (but what?).
6. Diversify the economy away from Pemex and fossil fuels.
7. Maintain NAFTA and try to maintain and indeed rebuild the health of the earlier democratization.
Now, that is pretty much the same as my list! To be sure, the rhetoric on some of these proposals, such as #2 and #3, would be different coming from this imaginary leftish Democratic economist. (Lots more talk about “inequality” on #2 and more about the benefits of regulation on #3, for instance, whereas I would stress the benefits of firm growth.) But I don’t think the substance of the proposals would be all that different.
Whether you wish to say the leftish economist has a right-wing perspective on Mexico, or vice versa, is a moot point. Or are we all centrists on Mexico? There is in any case a reasonable coincidence of policy recommendations once you remove people from their immediate socioeconomic environment. And surely that makes the Democratic economists just a little suspicious to the non-economist intellectual Democrats, as you can see from the Twitter fury directed at Matt Y. for what were purely factual claims.
There is a reason why they call it “the Washington Consensus.” I can assure you that the World Bank and IMF economists are not a bunch of Republican wanna-bees. But the Washington Consensus works, at least on average.
If you asked a non-economist Democratic voter what Mexico should do, I am not sure what answers you would get. But it is hardly obvious you would get the above list (I’d love to see this done as a study and compared to the Republican answers). Maybe the non-economist would talk about foreign aid more? Immigration more? I really don’t know. But they probably are not very aware of the dismal productivity performance of Mexican SMEs and what a problem that is, and probably not very aware of the various state monopolies. They probably would mention corruption, however, and also public safety and winning the fight against the drug gangs.
When it comes to U.S. disputes, the Democratic economist probably would be more “off the rails” than the typical Democratic voter (sorry, you’ll have to find your own links here, there are plenty), if only because that person is more aware of the socioeconomic conflicts and more aware of what one is supposed to believe. The more symbolic the dispute, the further from the median voter the Democratic economist is likely to be. But that is the education doing the work, not the economics background.
If you want to get a Democratic economist making sense, just get that person talking about some other country, follow most of the policy advice, and remove the word “inequality” and a few other catch phrases.
Interestingly, there is a subset of Republican economists who don’t talk sense no matter what the country under consideration. For instance, they might think that “income tax cuts for Mexico” would do a lot of good. In this sense they are the more consistent “cosmopolitan ideologues,” taking that phrase as a truly joint concept. Since most economists are Democrats, perhaps examining “the remnant Republicans” is selecting for excessively consistent ideology. The remnant Republicans are less likely to insist that “every country is different,” a’ la Dani Rodrik. If they were so flexible, they probably wouldn’t still be Republicans.
As a final note, I fear we are entering a world so “well-informed” about affective polarization, and with Woke concepts so globalized, that at some point the majority of the Democratic economists won’t talk sense on Mexico any more either. But we are not yet there — maybe in five to ten years? Maybe never? And where will the Republican remnant end up?
“One highlight of the night, aside from the enormous spread of pies, was chatting with former Sen. Bill Nelson, now the head of NASA, and hearing him talk about the recent UFO report — he’s convinced life is out there somewhere”