Month: November 2023
Milei and the history of economic thought
Argentina’s new president @JMilei explains the Cantillon Effect, or how printing money benefits the first receivers of money at the expense of everyone else. pic.twitter.com/ICzYKgKdMQ
— Liam McCollum (@MLiamMcCollum) November 24, 2023
Jimmy Carter is underrated, Thomas Schelling edition
“In the US protocol you have to rehearse the entire process every four months….The French, they never rehearse. And their logic is that if you start rehearsing with the president, people are going to start to know how he thinks and they’re going to be able to influence him.”
But, “When do you think Biden rehearses?” Cerf asks. This is another game he plays with students. “The answer is zero times — he never does it. He always says, ‘I’m going to send someone else instead. Not a good time for me…’ What about Trump? How often do you think Trump did it? And the answer is zero. We said, ‘OK, so let’s not [be] partisan. How often Obama?’ ” He didn’t either, according to Cerf. Presidents, Republican and Democrat, are always far too busy. “The last person to have done it is Carter in the Seventies,”
…The keyholes for this are set 18ft apart on either side of the room, he says. “They have to turn the keys at the same time…The whole arrangement requires two people, so that one serviceman having a bad day cannot decide to blow up the world. “The one thing that they all do at some point is they spend time figuring out how they would do it alone if they needed to,” Cerf says. “They’re not supposed to… [But] they said, ‘Every person in this shift at some point figured out that if they connect the broom to the teapot and hold it like this, they can actually turn the two keys together.’ So they all said, at some point, that they play this mental game of, ‘OK, I can actually start a nuclear war.’ ”
Here is the full Times of London article, gated but very interesting throughout. Via Jason Dunne.
May December (movie review, no real spoilers)
May December is an excellent movie, with tinges of Bergman’s Persona (just look at the poster at the link) and Girard to boot. It has some of the finest lines (“That’s what adults do”) and scenes (the make-up exchange) of any film this year or maybe even this decade. How about Natalie Portman’s “transformation monologue” toward the end? Or the segment when she explains to high school students what it is like to do a sex scene in a film? Who in this movie has real desire? Which of the two women handles celebrity better? Who envies whom and why? Interestingly, the movie is also pro-natalist. Might it be the best product to come out of Hollywood in 2023?
Friday assorted links
1. MonadGPT. Chat with the 17th century, why not?
2. Joyce Carol Oates profile (New Yorker).
3. ChatGPT > advice columnists.
4. Emmanuel Le Roy Ladurie, RIP. And his NYT obit.
5. US nuke reactor lab hit by ‘gay furry hackers’ demanding cat-human mutants.
6. Beliefs that kill birth rates.
7. A charter city for El Salvador? And struggles in Honduras.
8. Anthony Levandowski Reboots Church of Artificial Intelligence.
9. FT on possible hitches with Argentina dollarization, and here is a different perspective from La Nacion.
Canada Poaches Talent that Competes with American Workers
As I wrote earlier, Canada is poaching talent that should be American! A new working paper by Agostina Brinatti (on the job market) and Xing Guo studies this in detail. The paper first documents that Canada attracted more immigrants when America shut the door but then it traces the consequences through the growth in Canadian firms and on through international trade to American firms and workers. Computer scientists were especially affected by the US policy and the bottom line is that when the US started to deny many more H-1B visas computer scientists went to Canada, increasing the creation of Canadian businesses, jobs and exports. American computer scientists gained because they had less competition but they gained less than the direct effect because they faced more Canadian imports. Moreover, other lower-skilled Americans were harmed because they had fewer higher-skilled workers to work with.
By the end of 2018, there was a decrease of 140,000 H-1B approvals (relative to trend) and an unprecedented spike in H-1B denial rates. Denial rates increased from about 6% in 2016 to 16% in 2018….Immediately following this policy change, Canada experienced a surge in the number of skilled immigrant admissions, equivalent to 76,000 additional admissions in the period between 2018 and 2019. This inflow represents 3.5% of the stock of college-educated immigrants in Canada, or about 2% of all workers in the high-skilled service sector.
…Our event-study estimates imply that a 10 percentage point increase in H-1B denial rates increases Canadian applications by 30%. A back of-the-envelope calculation suggests that for every four forgone H-1B visas, there is an associated increase of one Canadian application.
[the inflow was especially large in computer science]….This inflow decreases the welfare of Canadian computer scientists because they are relatively close substitutes to the incoming immigrants. However, the inflow increases the welfare of workers in other occupations because Canadian sectors expand, especially high-skilled service sectors. For instance, in these sectors, the welfare of computer scientists decreases by 2.9% and that of lower-skilled workers increases by 0.9% approximately.
In the U.S., immigrant labor decreases by 1.6% and is particularly pronounced among computer scientists. As a result, we find that the drop in U.S. approval rates benefits primarily American computer scientists but tend to harm American workers employed in other occupations, especially if their sector contract. For instance, computer scientists in high-skilled service sectors experience a 0.7% welfare increase, while lower-skilled workers experience a 0.3% welfare decrease. These effects on American workers include both direct and indirect effects.
Addendum: Tyler reminds us that in the long-run, immigrants who get Canadian citizenship may immigrate to America! The basic point that Canada and the US are in a more or less free trade area is well taken and so we can thank Canada for making US immigration policy less harmful than it might otherwise be. Still, I’d rather see fewer artificial barriers distorting the allocation of talent.
The Geert Wilders victory, and more
Wilders won resoundingly in the Netherlands, and polled much stronger after October 7. Yesterday there were anti-immigrant riots in Dublin, typically a relatively open city (most likely an Algerian migrant stabbed several people). The “far right” party in Austria is very popular, AfD is doing well in Germany, and France could flip. Italy already is there, noting that actual governance has not been so different under Meloni. The Sweden Democrats are part of the ruling coalition. That is a lot of the core EU group, plus Ireland and Sweden. And maybe I have forgotten somebody.
Note to media: Since they keep winning elections, or at least placing well, you can’t call them “far right” any more! How about “deep center”?
In the New World, Milei won in Argentina, Bukele is extremely popular in El Salvador, and Trump is ahead of Biden in most polls. Even the Kiwis moved to the right, albeit in a mild-mannered way. Chile rejected a far left constitution, and Australia voted down one version of indigenous rights, not wanting to put them in the constitution. Petro is unpopular in Colombia and may not finish out his term.
A few observations:
1. If you can’t talk about/think about/write about these developments without perpetually moralizing, it is hard to be an intelligent commentator today.
2. If your main theory here is “racism,” your contribution to the discourse probably is negative. That said, I strongly feel that the events of the last ten or so years should cause us to upgrade our estimates of how much racism is in the world, and in a highly unfortunate manner. That is still a bad dominant explanation for what is going on in the [new] “deep center.”
3. For all the talk of why Biden’s position in the polls is so weak, I don’t see enough talk of “much of the world is moving in a right-wing direction, and global sweeps in ideology are difficult to counter” as a critical explanation. If true, that makes it much harder for Biden to mount a comeback.
4. For the most part, these movements are not “my kind of right-wing.”
5. These trends still carry a lot of momentum. And given that immigration is not about to turn into a political winner, you should be all the more concerned about the pending fertility crisis.
6. I was right when I argued a few years ago that “Wokeism has peaked.”
Liz Truss tax cutting ideas already are coming to fruition in the UK
Many also heard distinct echoes of Truss’ favorite mantra in the chancellor’s constant talk of the need for “growth.”
Bravo to Rishi Sunak, the Politico article outlines some of the politics behind all this. Here is NYT detail on the tax cuts themselves. People hate it when I say this, but the reign of Liz Truss remains underrated, and she also has been the victim of a rather extreme media and also social media misogyny. I would note, however, that tax cuts only make sense when followed up by further growth-enhancing policies.
Thanksgiving assorted links
1. John Cochrane on Cass Sunstein on liberalism.
2. Frau plus Auto gleich Sexismus.
3. Ben Sasse for free speech. So far he has been a very good university president.
5. Can a computer outfake a human on a personality test?
6. Five curious India-Mexico connections.
7. UK is starting up a meta-science unit.
8. Hall and Oates Bayesian update of the day.
9. More on Japanese performance.
10. That was then, this is now: Taylor Swift edition.
Q* assorted links
What am I thankful for?
Tyler Cowen, economist and blogger
I am thankful for being able to watch and to try to understand the procession of history before us. That is one of the greatest and least appreciated privileges. In a year that has had some bad events, that is one form of solace.
Here is the remainder of the Free Press symposium, with many interesting notables.
*Saints, Scholars, and Schizophrenics*
The author of this excellent book is Nancy Scheper-Hughes, and the subtitle is Mental Illness in Rural Ireland. One of the most interesting themes of this book is how life in rural Ireland became so “de-eroticized,” to use her word. Here is one bit:
Marriage in rural Ireland is, I suggest, inhibited by anomie, expressed in a lack of sexual vitality; familistic loyalties that exaggerate latent brother-sister incestuous inclinations; an emotional climate fearful of intimacy and mistrustful of love; and an excessive preoccupation with sexual purity and pollution, fostered by an ascetic Catholic tradition. That these impediments to marriage and to an uninhibited expression of sexuality also contribute to the high rates of mental illness among middle-aged bachelor farmers is implicit in the following interpretations and verified in the life history materials and psychological tests of these men.
And:
In the preceding pages I have drawn a rather grim portrait of Irish country life, one that differs markedly from previous ethnographic studies. Village social life and institutions are, I contend, in a state of disintegration, and villagers are suffering from anomie, of which the most visible sign is the spiraling schizophrenia. Traditional culture has become unadaptive, and the newly emerging cultural forms as yet lack integration. The sexes are locked into isolation and mutual hostility. Deaths and emigrations surpass marriages and births.
Recommended. This seminal book, republished and revised in 2001, but originally from the 1970s, would be much harder to write and publish today.
Vegemite ain’t enough
This survey of 3,000 Australians aged 15 to 24 found that the career most were interested in pursuing was ‘mental health therapist’ at 17% of respondents. ‘Tradie’ – which includes plumbers, electricians, and carpenters etc – was 6%.
Here is the article, with a link to the underlying report. Via Chris Wokker.
Wednesday assorted links
2. “Using unique class-level data containing chronological variables and institutional, instructor, and student characteristics, spanning Fall 2010 to Spring 2021 of 7,852 undergraduate classes, it is shown class average grade point averages (GPAs) in the College of Agriculture at Texas A&M University increased for the three semesters most impacted by COVID-19.” Link here, my hypothesis is that instructors graded by easier standards during that time.
3. Ukrainian used markets in totaled EVs. And claims about Ukraine.
4. Those new service sector jobs.
8. Douthat on Milei (NYT).
OH: “Better an AI Summers than an AI winter”
We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board of Bret Taylor (Chair), Larry Summers, and Adam D'Angelo.
We are collaborating to figure out the details. Thank you so much for your patience through this.
— OpenAI (@OpenAI) November 22, 2023
Those who graduate from college late in life
It is generally agreed upon that most individuals who acquire a college degree do so in their early 20s. Despite this consensus, we show that in the US from the 1930 birth cohort onwards a large fraction – around 20% – of college graduates obtained their degree after age 30. We explore the implications of this phenomenon. First, we show that these so-called late bloomers have significantly contributed to the narrowing of gender and racial gaps in the college share, despite the general widening of the racial gap. Second, late bloomers are responsible for more than half of the increase in the aggregate college share from 1960 onwards. Finally, we show that the returns to having a college degree vary depending on the age at graduation. Ignoring the existence of late bloomers therefore leads to a significant underestimation of the returns to college education for those finishing college in their early 20s.
That is from a new NBER paper by Zsófia L. Bárány, Moshe Buchinsky, and Pauline Corblet.