Could John McCain have been elected president?

If the supply of mortgage credit had not contracted from 2004 to 2008, McCain would have received half the votes needed in nine crucial swing states to reverse the outcome of the election. The effect on voting in these swing states from local contractions in mortgage credit supply was five times as important as the increase in the unemployment rate; if unemployment had not increased from 2004 to 2008, that improvement in local labor markets would only have given McCain only 9% of the votes needed to win the nine crucial swing states.

Here is more from Alexis Antoniades and Charles W. Calomiris.

The new Census study on the minimum wage

By Kevin Rins and John Voorheis, this is one of the most thorough and detailed studies to date.  Here is one excerpt:

…we find that raising the minimum wage increases earnings growth at the bottom of the distribution, and those effects persist and indeed grow in magnitude over several years. This finding is robust to a variety of specifications, including alternatives commonly used in the literature on employment effects of the minimum wage.

How does their work differ from other treatments?:

Most public datasets commonly used in the minimum wage literature have limited ability to address how earnings growth responds to minimum wage increases because they are either composed of repeated cross-sections or have panel dimensions that cover relatively limited periods of time.

My personal view still is that the next generation of firms likely will create fewer jobs, and aggregate output and employment will be lower.  I would rather look for measures that boost both efficiency and equity, and not just along the shorter time horizons.  But on the pro-minimum wage side, you should consider that those immediately affected by the wage hike do seem better off, and their higher income in the meantime may itself bring some efficiency-enhancing gains.

Sentences about dairy

But there has never been a culture more dependent on milk than the desert nomads known as the Bedouins.

And originally, ice cream was only for aristocrats.

Others [in 18th century France] called ice cream fromage.

Jefferson liked to serve ice cream on sponge cake with a lightly baked meringue on top.

The United States became the ice cream country.

Fidel Castro took a personal interest in developing Cuban ice cream, and he was determined that Cuba would make better ice cream than the United States.

Ice cream is in general more profitable than milk, but ice cream cones are one of the more profitable ways to sell ice cream.

Those are all from the newly forthcoming and entertaining Mark Kurlansky book Milk: A 10,000 Year Food Fracas.

Do earthquakes make men more risk tolerant?

We investigate whether individuals’ risk preferences change after experiencing a natural disaster, specifically, the 2011 Great East Japan Earthquake. Exploiting the panels of nationally representative surveys on risk preferences, we find that men who experienced greater intensity of the earthquake became more risk tolerant a year after the Earthquake. Interestingly, the effects on men’s risk preferences are persistent even five years after the Earthquake at almost the same magnitude as those shortly after the Earthquake. Furthermore, these men gamble more, which is consistent with the direction of changes in risk preferences. We find no such pattern for women.

That is from a newly published paper by Chie Hanaoka, Hitoshi Shigeoka, and Yasutora Watanabe.  What else will have this effect?

Those old service sector jobs (Ansichten eines Clowns)

At first they came for the clowns, and I said nothing:

Then McDonald’s terminated its regional Ronald McDonald program at the end of last year, though it’s vague about the reasons for the move…

One former Ronald, who believes their number was as high as 300 nationally, said he earned $64,000 in 2016, plus a $2,000 expense account, a car, and health and dental insurance, a fortune in clowning.

Now, that sort of income and security may be disappearing.

“Young people have not been excited by clowns,” says Richard “Junior” Snowberg, a World Clown Association founder and a retired professor [sic]. “They’re more excited by entertainment on screens.”

The World Clown Association has 2,400 members, about half its peak membership in the 1990s.

I believe roboclowns are not to blame, nor is it trade with China:

“I’ve been told that ‘you can’t come to the hospital. You’ll scare people.’ That was really heartbreaking,” says veteran Tricia “Pricilla Mooseburger” Manuel, 56, of Maple Lake, Minn. “It’s diminished my income. The damage is done in so many respects. There’s a whole generation that, when they think of a clown, they think of something scary.”

Though, Manuel adds, “people still love us in nursing homes.”

That is from Karen Heller at The Washington Post, via Michael Rosenwald and Mark Thorson.

Sunday assorted links

Owl markets in everything

A U.K. photographer said a newlywed couple has no regrets about choosing an owl to be their ring bearer, even though it flew at a member of the wedding party during their ceremony.

Mark Wood and Jeni Arrowsmith wed at Peckforton Castle in Cheshire, England, on March 17.

Unbeknownst to their guests, the couple hired an owl named Bobby to bring the rings down the aisle.

Here is the CBC story, and for the pointer I thank Michelle Dawson.

The economics of Proposition 13

In 1978 California passed Proposition 13, which lowered property tax rates and restricted future property tax increases. We find that the introduction of Proposition 13 leads to a 15 percent increase in house prices and a 3.3 percent decrease in the moving rates. The elimination of Proposition 13, however, leads to modest changes in house prices and mobility but sizable welfare gains.

Here is the paper by Ayse İmrohoroğlu, Kyle Matoba and Şelale Tüzel.  Here are ungated copies.

Blockchain vs. European privacy law (GDPR)

Under the European Union’s General Data Protection Regulation, companies will be required to completely erase the personal data of any citizen who requests that they do so. For businesses that use blockchain, specifically applications with publicly available data trails such as Bitcoin and Ethereum, truly purging that information could be impossible. “Some blockchains, as currently designed, are incompatible with the GDPR,” says Michèle Finck, a lecturer in EU law at the University of Oxford. EU regulators, she says, will need to decide whether the technology must be barred from the region or reconfigure the new rules to permit an uneasy coexistence.

Here is more from Olga Kharif at Bloomberg.

*Who We Are and How We Got Here*, by David Reich

This is a truly excellent work, readable and informative at A to A+ quality, and the subtitle is Ancient DNA and the new Science of the Human Past.  It has occasioned some public controversy for its discussion of race and genetics, but most of all this is a book about how science is done.  For instance, the page and a half discussion of how researchers try to ensure that human DNA does not contaminate Neanderthal DNA is just beautiful.

Here is one good summary passage:

The case of the Ancient North Eurasians showed that while a tree is a good analogy for the relationships among species — because species rarely interbreed and so like real tree limbs are not expected to grow back together after they branch — it is a dangerous analogy for human populations.  The genome revolution has taught us that great mixtures of highly divergent populations have occurred repeatedly.  Instead of a tree, a better metaphor may be a trellis, branching and remixing far back into the past.

Here is another excerpt of note:

Analyzing our data, he [Iosif Lazaridis] found that about ten thousand years ago there were at least four major populations in West Eurasia — the farmers of the Fertile Crescent, the farmers of Iran, the hunter-gatherers of central and western Europe, and the hunter-gatherers of eastern Europe.  All these populations differed from one another as much as Europeans differ from East Asians today.

The concept of “ghost populations” will enter your mental conceptual vocabulary.  And:

The extraordinary fact that emerges from ancient DNA is that just five thousand years ago, the people who are now the primary ancestors of all extant northern Europeans had not yet arrived.

Most of all, this is a science book, not a “race book.”  (“Having been immersed in the ancient DNA revolution for the past 10 years, I am confident that anyone who pays attention to what it is finding cannot come away feeling affirmed in racist beliefs.”)  You may know that Reich is a Professor of Genetics at Harvard Medical School.

Here is his earlier NYT essay (though I think the very first link in this post is the best place to start, do read that carefully), well done but not quite representative of the book either.  You can buy it here, this is definitely one of the books of the year and one of the best popular science books of any year.

*The Away Game: The Epic Search for Soccer’s Next Superstars*

I found this book by Sebastian Abbot very stimulating, though I wished for a more social-scientific treatment.  The focus is on Africa, here is one bit on the more conceptual side:

But focusing on a young player’s technique still tells a scout relatively little about whether the kid will reach the top level, even when the observations are paired with physical measures of speed and agility.  A study published in 2016 looked at the results from a battery of five tests conducted by the German soccer federation on over 20,000 of the top Under-12 players in the country.  The tests measured speed, agility, dribbling, passing, and shooting.  The researchers assessed the utility of the tests in determining how high the kids would progress once they reached the Under-16 to Under-19 level.  The study found that players who scored in the 99th percentile or higher in the tests still only had a 6 percent chance of making the youth national team.

So what else might you look to?:

They assessed the game intelligence of players by freezing match footage at different moments and asking players to predict what would happen next or what decision a player on the field should make.  Elite players were faster and more accurate in their ability to scan the field, pick up cues from an opponent’s position, and recognize, recall, and predict patterns of play.


Researchers have found that the key ingredient is not how much formal practice or how many official games players had as kids, but how much pickup soccer they played in informal settings like the street or schoolyard.

The implications for economics study and speed chess are obvious.  Finally:

Researchers found that athletes have a 25 percent larger attention window than nonathletes.

Is that true for successful CEOs as well?  By the way, I hope to blog  soon about why human talent is in so many endeavors the truly binding constraint.

This is an interesting Africa book, too.

Bruno Macaes on Trump on Europe

Trump the businessman has been operating in a global economy where, for the past thirty years, Europe has produced a single company that deserves to be called a world leader: the Spanish Zara. For the first time, an American President believes that Europe is a has-been. The secret of Trump’s approach to Europe is this: he will not allow the United States to be dragged down with Europe, even if that means bringing about a new schism in the transatlantic alliance…

Posed with the existential question of its own diminishing global influence, Europeans seem happy to settle for a world where their civilization and their values are protected from outside influence, even if that means renouncing the old “civilizing mission” to export them. The United States could of course reach for a similar bargain, in which case transatlantic ties would be strengthened. This seems unlikely because it would be tantamount to sacrificing its role as global leader and giving China a free hand in all those regions uncommitted to any of the two poles of the new Eurasian world. The alternative is for Washington to insert itself between Europe and Asia, drawing on the strengths of both and appealing to a global public from the position of what could become a common denominator.

…If the West ever falters, America will want to become less Western. As the fulcrum of world power moves away from the West, so does America. That—insofar as there is a doctrine—is the core of the Trump doctrine.

Interesting throughout, as you might expect, read more here.

The slow reservations restaurant culture that is Maine

Erin French’s aptly named Lost Kitchen is an exceptionally remote eatery that the Boston Globe’s food critic once declared the “best Maine restaurant you may never be able to eat at.” It was already difficult to eat there, in other words, and it may soon get more difficult because the restaurant is going full neo-Luddite with its reservations. You can’t make one by phone anymore. Or via email. Or on any app. Your sole option: snail-mailing them a letter with your name and contact info. If your letter randomly gets drawn from the pot, they’ll be in touch.

Here is more, by Clint Rainey, via Steve Rossi.