Month: April 2023

De-dollarization will be minimal

That is the topic of my latest Bloomberg column, here is one excerpt:

How far is the talk of de-dollarization going to proceed? Probably not very. The US has the world’s deepest and most liquid financial markets, and they remain relatively open, in spite of some restrictions on Chinese investment in industries sensitive for national security. There are strong reasons to have a dominant currency in international markets, just as there are strong reasons for having a dominant currency in domestic transactions within the US. Liquidity for a currency begets further liquidity, whether at home or globally.

With the dollar estimated at 88% of all international transactions, the euro at 31% is only a modest competitor (since a transaction may involve two currencies, the total may exceed 100%). The euro, unlike the dollar, will never be tied to a single national government, and the European Union does not come close to the military might of the US.

The yuan is estimated at only 7% of that total of international transactions, and China seems unwilling to open up its capital markets, as that could lead to rapid capital outflows and possibly a financial crisis. But without open capital markets, the yuan is not a strong contender for a global reserve currency.

Those are all very much points of intuitive, common sense.

Pittsburgh facts of the day

I’ve always had a good time in Pittsburgh, and it’s a visually striking city in a way that I think impresses visitors. Pittsburgh has also normally had a lower homicide rate than the other important city in Pennsylvania and comparable “rust belt” cities like Cleveland and Detroit.

That generates good vibes and tends to give it a kind of broadly positive reputation. But I’m always a little bit puzzled by the notion of Pittsburgh as an urban turnaround success story. Pittsburgh had 676,806 residents in the 1950 Census. That fell steadily in the second half of the 20th century to just 334,563 residents by the 2000 Census. And then in the 21st century, while the reinvention was supposedly happening, the population just kept falling at a slower pace, and in the 2021 estimate, there were only 300,453 people left. It’s true that this is a smaller population loss than Cleveland, Detroit, or St. Louis. But it’s worse than Milwaukee or Baltimore and only very slightly better than Buffalo.

I think the main lesson of Pittsburgh is just that it underscores how severe the headwinds are for central cities that have cold winters.

Those are from Matt Yglesias ($).

The effects of Native American relocation

In this paper, I estimate the historical migratory and fertility effects of the US Relocation Program. Between 1952 and 1973, the US federal government attempted to move Native Americans off reservations and into urban areas under the promises of financial assistance and job training. Using the variation in which cities were targeted by the program, I employ a difference-in-differences strategy and estimate that the Relocation Program significantly increased the Native American population in target cities. I also find evidence that second-generation Native American women living in cities have a substantially lower fertility rate than Native American women living on tribal land. Jointly, these findings indicate that this federal program substantially shifted the spatial distribution of the Native American population in the US throughout the 20th century.

That is from a recent paper by Mary Kopriva at University of Anchorage.  Are we allowed to consider whether those programs might have been good?  In other contexts, don’t we call this “Moving to Opportunity”?

LLMs and neurodiversity

I hold two hypotheses, neither of them tested:

1. LLMs will on average give a big boost to autistics.

Autistics (or autists, as the term is now evolving) are used to communicating with “beings” whose minds work very differently.  So they will do relatively well working with LLMs.  Plus LLMs, in their current forms, are text-based, also a strength of many autistics.  Or if you are like Temple Grandin, and especially strong at images, Midjourney might be of great interest.  The general point is that autistics are used to “weird,” and used to dealing with “aliens.”

One friend of mine reports an autistic relative, who otherwise was not doing well, but who finds GPT a revelation and a wonderful learning tool.  More generally, you can think of autistics as people who are used to dealing with a lot of information.  LLMs provide that, and at whatever level of information density you request.

2. LLMs will on average give a big boost to ADHD individuals.

I view many ADHD individuals as very smart and able, but doing poorly when they cannot control the pace, intensity, and direction of their learning.  (Ever see people who can’t pay attention in class, or who nod off during academic lectures and can’t sit still?  But will work for hours on their own tasks?)  LLMs let you control the topic, the pace of the exchange, and just about everything else, including mood and tone.  You are the boss, and so ADHD individuals should benefit disproportionately from this.

Sriram Subramaniam writes to me:

  1. It’s great for people with ADHD to get things done: Lesser amount of concentrated attention is needed to ship stuff. I shipped a webapp (a game for my kids) in 2 hours yesterday. I have never programmed. I hang on hacker news and knew enough to prompt. With that knowledge, I could build and ship a game in 2 hours. I could hold my attention for 2 hours and that got me to a meaningful end state. Attention is all that matters as the founding paper said 🙂

I would frame some of that differently (see above), but the general observation is well-taken.

Any other hypotheses about LLMs and neurodiversity?

Why superyachts?

I’ve been reading more polemics against superyachts lately, for instance from Paul Krugman (NYT).  I’ve never been on a superyacht, or even a non-super yacht, but I can give you my “hypothesis from a distance” about them.  A super-wealthy individual wants to convene a group of people, all of whom are talented, or friends, or famous, but not all of whom are super rich.  The point is to offer them some kind of extra special experience, namely the superyacht.  And you can’t convene everybody in normal public spaces, in part because the super rich person is famous and would attract notice, and in part because of the security risk.  Thus enter the superyacht.

I don’t know how useful these convenings are on average (do the critics?), but I don’t think they are merely or even mainly about status-seeking by the super rich.  The desire is to have a focal, locational base for drawing people together and sometimes working on projects of mutual interest.  That said, I don’t doubt the super rich person enjoys seeing others admire a beautiful yacht, but is that so crazy or craven?  It doesn’t have to be a zero-sum pleasure.  That is, I enjoy it if my friends enjoy my (rather modest) backyard deck, but I’m not so concerned about whether they like Alex’s house better, etc.  There is room for fun everywhere!  Even on superyachts.

Thursday assorted links

1. Open AI lessons for science policy.  And Steve Landsburg and GPT-4 are not in synch.

2. “Every single street lamp in New Zealand’s capital city is at risk of plunging without warning on to the footpaths below them.” And can anything stop the feral hog invasion?

3. Survey of Tyler Cowen’s “My Favorite Things.”

4. Brian Potter on how did solar power get cheap.

5. Clearinghouse for LLMs in scientific research workflows.

6. More on AutoGPTs.  And does AI reduce existential risk?

7. Ghana’s concentration camps for witches.

Eight Things to Know about LLMS

A good overview from computer scientist Samuel R. Bowman of NYU, currently at Anthropic:

1. LLMs predictably get more capable with increasing investment, even without targeted innovation.
2. Many important LLM behaviors emerge unpredictably as a byproduct of increasing investment.
3. LLMs often appear to learn and use representations of the outside world.
4. There are no reliable techniques for steering the behavior of LLMs.
5. Experts are not yet able to interpret the inner workings of LLMs.
6. Human performance on a task isn’t an upper bound on LLM performance.
7. LLMs need not express the values of their creators nor the values encoded in web text.
8. Brief interactions with LLMs are often misleading.

Bowman doesn’t put it this way but there are two ways of framing AI risk. The first perspective envisions an alien superintelligence that annihilates the world. The second perspective is that humans will use AIs before their capabilities, weaknesses and failure modes are well understood. Framed in the latter way, it seems inevitable that we are going to have problems. The crux of the dilemma is that AI capability is increasing faster than our AI understanding. Thus AIs will be widely used long before they are widely understood.  You don’t have to believe in “foom” to worry that capability and control are rapidly diverging. More generally, AIs are a tail risk technology, and historically, we have not been good at managing tail risks.

What do we need to talk to whales?

We detail a scientific roadmap for advancing the understanding of communication of whales that can be built further upon as a template to decipher other forms of animal and non-human communication. Sperm whales, with their highly developed neuroanatomical features, cognitive abilities, social structures, and discrete click-based encoding make for an excellent model for advanced tools that can be applied to other animals in the future. We outline the key elements required for the collection and processing of massive datasets, detecting basic communication units and language-like higher-level structures, and validating models through interactive playback experiments. The technological capabilities developed by such an undertaking hold potential for cross-applications in broader communities investigating non-human communication and behavioral research.

That is from a new research paper by Jacob Andreas, et.al., and the (ungated) article offers considerable detail on exactly how to do this.  They already have funding from both Dalio and Audacious.

What I’ve been reading and not reading (due to travel)

Colin Kidd, Union and Unionisms: Political Thought in Scotland, 1500-2000.  A very good and well-written look at Scottish views on the Union over the centuries.  Explained conceptually in a nice way, not just a catalog, and tied to religion as well.

Thomas Bartlett, Ireland: A History.  One of the best one-volume introductions to Irish history.

W. Paul Reeve, Let’s Talk About Race and Priesthood.  Argues that the Mormons had relatively universalistic origins, and that Brigham Young was the one who introduced the later segregationist ideas.

There is Peter Turchin, End Times: Elites, Counter-Elites, and the Path of Political Disintegration.

The impressive Jon Elster has just published America Before 1787: The Unraveling of a Colonial Regime.

Do not forget John Cochrane’s The Fiscal Theory of the Price Level, as presented on John’s blog as well.

Coming out is Robin Douglass, Mandeville’s Fable: Pride, Hypocrisy, and Sociability.

Wednesday assorted links

1. Who benefits most from name visibility bias during the journal editorial process?

2. Prendergast watercolor for 500-700k, truly a splendid piece, St. Marks in Venice.  The collection as a whole, while not my taste (“too American” in a very particular direction), shows exquisite taste.  You can learn a lot by studying their choices.  From the Wolf family.  Here is more from their collection.

3. AI Policy Guide, by Matthew Mittelsteadt at Mercatus.  And a clear explanation of the new “autonomous” AIs.

4. Current U.S. defense spending is, in historical terms, at a relative low point.

5. Miami Native, new (non-leftist) magazine on the way, presenting and explicating and enhancing the status of the culture of Miami.  They are looking for contributors.  Mainly a physical copy magazine, planning only a limited presence on-line.

6. Genetic timeline of humans? (speculative)  And I believe in hiring talented 14- to 15-year olds.

Measuring the benefits of the biomedical revolution

That is the topic of my latest Bloomberg column.  Note that for most economic gains, total gdp and per capita gdp give roughly the same answers.  But when it comes to lifesaving, that may no longer be the case.  Here is one excerpt:

Take the vaccines against Covid. Of course the most important fact about them is that they reduce the amount of death and suffering. But what is their economic impact? The vaccines have been most helpful to the most vulnerable, namely the elderly or those with preexisting medical conditions. These are not the most productive cohorts of the economy. So the effectiveness of the vaccines might have actually lowered various social averages, such as per-capita GDP or per-capita productivity.

The extra life is a pure benefit. But to capture that benefit in numbers requires looking at the totals, not just the averages. Labor productivity per hour, for example, won’t necessarily increase. But total labor supply and total population will.

And this:

And what about those subpar returns on biomedical investments? That is a sign that most of the gains from innovation are being reaped by patients, users and consumers — not capitalists. Is that not exactly what everyone has been asking for?

There is much more at the link.  The bottom line is that many of the gains will come through “n,” not per hour productivity.

My favorite things Alaska

I haven’t done  many of these in a while, mostly because I haven’t been in many new states or countries recently.  But Alaska I had never visited before (my remaining state, in fact), so here goes:

Classical music: John Luther Adams.  “The other John Adams,” his reputation continues to rise, now I would like to see one performed live.  I am fan of the sound textures and the broad expanses of his works, even if the programmatic aspects do not always delight me.  Become Ocean is his best known piece.

Popular music: There is Jewel, I guess she is OK, and I can’t think of anyone else.

This is tough!  Nor did Andre Marrou acquit himself especially well over the years.  How about “theatre builder-upper”?  Then I can cite Edward Albee.

Affiliated writer: Jack London, obviously.  Still worth reading, not archaic, has held up remarkably well.

Movies, set in: Plenty of competition here.  There is Herzog’s Grizzly Man, and Never Cry Wolf (oddly forgotten but moving, plus the protagonist is named Tyler, which was rare in the early 1980s), and of course Chaplin’s The Gold RushInto the Wild I haven’t seen.  Maybe I watched Abbott and Costello Lost in Alaska as a kid?  What am I missing?

Artist: Taking the entire cake has to be Alaskan indigenous art, but who should be the favorite?  I can’t bring myself to elevate Florence Nupok Malewotkuk to the number one position, so perhaps Nathan Jackson, who did Tlingit art?

Watercolor, affiliated with: Try this John La Farge, currently up at auction.

Throat singer: A strong area, but which ones exactly are from Alaska rather than Canada?  Janet Aglukkaq?  Don’t ask me!

Here is a good essay on Alaskan totem poles, from Eyak, Tlingit, Haida and Tsimshian cultures.

I can’t name a mask-maker, but the masks are arguably the highlight of the Alaskan indigenous tradition.

Any NBA players?  Am I supposed to like Carlos Boozer?

The bottom line: There is more than you might think at first.