Month: May 2022
Colombian sentences to ponder
His close colleague, fellow senator Iván Cepeda, says Petro’s ideas transcend traditional left-right boundaries. “He has been inspired by many sources . . . he has a solid Marxist foundation but has also read a lot of French post-structuralism and other political traditions. He is also a serious economist . . . who has read thinkers like Naomi Klein and is in dialogue with [French economist Thomas] Piketty”.
And this:
If Petro wins in Colombia and if, as recent polls suggest, former Brazilian president Luiz Inácio Lula da Silva pulls off what would be a momentous comeback victory in October, the seven most populous nations in Latin America — Brazil, Mexico, Colombia, Argentina, Peru, Venezuela and Chile — will all be under leftwing rule.
Here is more from the FT.
Friday assorted links
The Demand and Supply of Misinformation
Bryan Caplan reminds us that misinformation wouldn’t work well if people weren’t so irrational.
The [standard misinformation] story focuses exclusively on the flaws of speakers, without acknowledging the flaws of the listeners. Misinformation won’t work unless the listeners are themselves naive, dogmatic, emotional, or otherwise intellectually defective. In economic jargon, the problem is that the story mistakes an information problem for a rationality problem.
The motivation for this crucial omission is fairly obvious. Blaming listeners for their epistemic vices sounds bad. It makes the accuser sound elitist, if not arrogant. Blaming a few high-status liars for the world’s problems is a lot more compatible with Social Desirability Bias than blaming billions of low-status fools who fail to choose to exercise their common sense.
I agree but it’s an equilibrium process. The demand and supply of misinformation both matter. Moreover, it’s not implausible that social media has increased the supply of misinformation, essentially because it has greatly accelerated the evolution of memes. As Dawkins taught us, memes evolve like genes but in the past memes evolved like rabbits, more rapidly than human beings but not so rapid that we couldn’t keep up. Now memes evolve like viruses, mind viruses. Even worse we have made improving memes profitable so we have capitalist energy added to faster random mutation.
I am somewhat hopeful that social media hit us hard because it was novel. A generation raised on social media may have more natural immunity–assuming we survive the infection. I also encourage (as does Bryan) institutions like betting markets to raise the price of misinformation (a bet is a tax on bullshit). Betting markets and expert aggregation markets like Metacuulus can help. We should invest more in the support and prestige of tools for developing rational consensus. More generally, if we can’t raise the cost of misinformation, better tools to aid our limited rationality could reduce the demand.
Sentences to ponder model this
Consistent with beauty-blind admissions, alumni’s beauty is uncorrelated with the rank of the school they attended in China. In the US, White men who attended high-ranked schools are better looking, especially attendees of private schools. A one percentage point increase in beauty rank corresponds to a half-point increase in the school rank.
Here is more, via the excellent Kevin Lewis.
Problems with indirect convertibility
Tether a few times has been bouncing well below a dollar in value, even though it is supposed to be backed by plenty of high-quality assets.
I am reminded of some of my monetary theory writings with Kroszner in the late 1980s. He and I wrote one essay, later published in our book, on how indirect convertibility may not be entirely stabilizing. Let’s say you peg an asset at the value of one dollar, but redeem that asset in terms of gold bars rather than dollars. You offer the redeemer enough gold bars to be equal in value to a dollar.
But what if the price of gold falls below its equilibrium value, if only temporarily? To honor your peg strictly, you now have to make your dollar worth all the more gold bars. But that in effect is “pegging” the value of gold at its new, temporarily wrong and distorted market price. Your pegged price and the medium-term market value of gold will conflict. If the pegged price wins out and itself drives the market price, you have to offer excess gold to meet the peg (that equilibrium seems unlikely to me, though you might also add redemption charges and fees). In essence you are offering too much gold to a redeemer. If the true medium-term value of gold is going to win out over the temporary distortion, for some modest while your peg is not complete and fully valid. You are offering the same amount of gold you used to, but at least temporarily it is not enough for you to be promising full and complete convertibility. The market may or may not mind this, to varying degrees.
It is not transparent to me what is going on with Tether at this moment, but I wonder if some version of this logic might apply. That is, Tether could be, by all reasonable standards “adequately backed,” yet in a time of volatile and sometimes disequilibrium market prices for the backing assets, Tether won’t always be equal in value to a dollar either.
Of course gold is just an example, the backing assets could be different altogether. To the extent they are heterogeneous, perhaps this problem is amplified somewhat?
Is there a place where the crypto community discusses these issues? They gave Kroszner and me big headaches many years ago.
Let’s eliminate the Covid test entry requirement for the U.S.
That is the topic of my latest Bloomberg column, you ought to be able to guess most of my arguments. Here is the very end:
I am not arguing for passivity in the face of danger. It is distressing that US policymakers do not seem interested in spending big for pandemic preparedness. America needs a new Operation Warp Speed for pan-coronavirus vaccines and nasal spray vaccines. It should be gathering more data on Covid and improving its system of clinical trials for anti-Covid remedies, among other measures.
I am simply saying that removing the Covid test for entry to the US would bring an end to one of the more egregious instances of “hygiene theater.” And it would send a signal that America is welcoming the world once again.
Recommended. And note that the most responsible European countries do not impose such tests.
Thursday assorted links
1. Is the YIMBYest city in America in Maine?
2. Dump on Thomas Friedman all you want, he remains grossly underrated these days (NYT).
3. Patrick Collison on how to read and deal with books.
4. Monkeypox starting on Metaculus.
5. With in-house judges, the SEC wins about 90% of the time (WSJ). It’s about 70% of the time in Federal Court. “Ms. McEwen said the SEC in-house judges were expected to work on the assumption that “the burden was on the people who were accused to show that they didn’t do what the agency said they did.””
6. The ancient civilization buried under eastern Turkey.
Cryptoeconomics!
The crypto market is up! The crypto market is down! The roller coaster can be fearfully thrilling but as thoughtful academics and people interested in ideas let’s look away from the daily ups and downs and focus on the big picture. What is crypto? What is cryptoeconomics?
Tyler and I have written a new chapter for our textbook, Modern Principles. In Cryptoeconomics we explain just enough cryptography–namely cryptographic hash functions and public-private keys–to understand what new forms of communication and organization have been made possible by these breakthroughs. We then use these fundamentals to explain NFTs, blockchains, Bitcoin, smart contracts and decentralized finance–all in a crisp, compact format accessible to everyone.
Not everyone wants to teach crypteconomics, of course, or has the time (scarcity!) so this chapter will be available as an option to anyone using our book and the Achieve online course management system (in fact, it’s available now). Tyler and I have found, however, that our students, colleagues, even people at dinner parties ask us about crypto. Probably your students and friends will ask you as well. Plus our textbook is called Modern Principles so we thought we were obligated to teach these new ideas!
Cryptoeconomics is a good guide to some fundamentally new ways of trading, communicating, and cooperating.
Addendum: If you want to learn more about DeFi, my talk goes into greater depth.
My Conversation with the excellent Daniel Gross
This is Daniel Gross my co-author on Talent and the venture capitalist, to be clear. And here is the audio and transcript. Of course we focus on talent and also:
They also explore the question of why so many high achievers love Diet Coke, why you should ask candidates if they have any good conspiracy theories, how to spot effective dark horses early, the hiring strategy that set SpaceX apart, what to look for in a talent identifier, what you can learn from discussing drama, the underrated genius of game designers, why Tyler has begun to value parents more and IQ less, conscientiousness as a mixed blessing, the importance of value hierarchies, how to become more charismatic, the allure of endurance sports for highly successful people, what they disagree on most, and more.
Excerpt:
GROSS: Well, take a step back. Why are we even here? And why would I even have a shred of an interesting opinion on talent? To the extent that I do, I think it’s because in the venture business — much more so than, I think, almost any other business — you live in constant paranoia of missing out on great talent. You might say, “Well, that’s true in every company.” And it’s true at the Met when you’re looking for someone to play in the orchestra, too. But in the venture business, unlike others, great talent always looks very weird to whatever convention is.
Before Mark Zuckerberg came along, that phenotype of the hoodie sweatshirt and slightly aspie kid was not the common phenotype. Now, of course, there was a phase — 2013, 2014, 2015 — where everyone started looking for that. But then it hit you again with a very weird-looking person, where Vitalik [Buterin] is of a completely different ilk than Zuck. One very much is Julius Caesar, and I think another one — I don’t exactly know how you’d bucket Vitalik — maybe like an early pope.
COWEN: Like a Russian holy saint.
GROSS: Exactly. By the way, not just the person is weirder than whatever the conventional norm is, but the idea is weird, too.
Interesting throughout!
Russia fact of the day
A study of Russian publications in the 1990s found that some 39 percent of all nonfiction published in Russia in that decade had something to do with the occult.
That is from the really quite interesting The Russian Cosmists: The Esoteric Futurism of Nikolai Fedorov and His Followers, by George M. Young. And for more on Russian Cosmism, you might try reading this collection. It is interesting to get such a different perspective on the issues raised by Bostrom, Hanson, Balaji, Musk, and the longevity writers, among others. I don’t believe any of those thinkers would be happy with these Russian discussions, but…I suppose that’s the point!
Wednesday assorted links
1. New non-profit for geothermal energy.
2. New Allison Schrager podcast, first episode with Joel Mokyr.
3. Who owns the publicity rights to Einstein?
4. Yann LeCun on AI risks. And why (some) octopus mothers self-mutilate and kill themselves.
5. “The subscribers presumably think they’re talking directly to the woman in the videos, and it is the job of the chatter to convincingly manifest that illusion.” (NYT, those new service sector jobs)
6. Virginia Postrel has a new Substack.
7. Mihm on the Henry Ford parallel (Bloomberg).
Remote work and home prices
What explains record U.S. house price growth since late 2019? We show that the shift to remote work explains over one half of the 23.8 percent national house price increase over this period. Using variation in remote work exposure across U.S. metropolitan areas we estimate that an additional percentage point of remote work causes a 0.93 percent increase in house prices after controlling for negative spillovers from migration. This cross-sectional estimate combined with the aggregate shift to remote work implies that remote work raised aggregate U.S. house prices by 15.1 percent.
The new Covid equilibrium
Many people have stopped keeping track of where Covid is headed, if only because it is such a stressful and unpleasant topic. To be clear, under current circumstances I favor complete “Covid laissez-faire,” though with subsidies for new and better vaccines. Overall, things are not so peachy keen (NYT):
The central problem is that the coronavirus has become more adept at reinfecting people. Already, those infected with the first Omicron variant are reporting second infections with the newer versions of the variant — BA.2 or BA2.12.1 in the United States, or BA.4 and BA.5 in South Africa.
Those people may go on to have third or fourth infections, even within this year, researchers said in interviews. And some small fraction may have symptoms that persist for months or years, a condition known as long Covid.
“It seems likely to me that that’s going to sort of be a long-term pattern,” said Juliet Pulliam, an epidemiologist at Stellenbosch University in South Africa…
“If we manage it the way that we manage it now, then most people will get infected with it at least a couple of times a year,” said Kristian Andersen, a virologist at the Scripps Research Institute in San Diego. “I would be very surprised if that’s not how it’s going to play out.”
I know many of you like to say “No worse than the common cold!” Well, the thing is…the common cold imposes considerable costs on the world. Imagine a new common cold, which you catch a few times a year, with some sliver of the population getting some form of Long Covid. One 2003 estimate suggested that the common cold costs us $40 billion a year, and in a typical year I don’t get a cold even once. That 2003 estimate also does not include the sheer discomfort of having a cold.
With a pinch of Long Covid in the distribution surely the current virus is a wee bit worse than that? While many cases of Long Covid are malingerers and hypochondriacs, at this point it is clear that not all of them are. Toss in some number of immunocompromised individuals (how many?).
Even under mild conceptions of current Covid, it is entirely plausible to believe that the costs of Covid will run into the trillions over the next ten years.
Death rates are not up, but more of the unvaccinated will die off with time and the rest of us will face this steady risk and planning annoyance for — how long? Plus we’ll get lots of “colds,” some of them considerably worse than a cold. And with what risk that it might mutate again and get worse? The next generation of vaccines probably will not be directly subsidized. Which will mean much lower rates of uptake. The point of maximum Covid immunity may well be behind us. And you won’t be able to blame it all on lockdowns.
Please keep in mind that when it comes to your reactions I will read many of them as not much better than “I just don’t want to think about this, I am still in denial.”
Podcast with the excellent Patrick O’Shaughnessy
With Daniel Gross as well, here it is.
Tuesday assorted links
1. How long-term space missions change the brain.
2. Innovation in NYC subway crimes (New Yorker).
3. “Right to repair” doesn’t have to work out well.
5. The UFO hearings are on, and “For the majority of the incidents we had in last years report, the majority had multi-sensor data…”