Saturday assorted links
1. Lawrence Mishel is retiring.
2. John Cochrane on taxing university endowments.
3. Why did everything take so long?
4. The ten best history books of the last ten years?
5. “Margaret Thatcher’s aversion to pandas revealed by declassified papers.”
6. “The Queen owns all the swans in Britain. Or, more accurately: Any unclaimed mute swan in open waters in England and Wales is hers if she wants it.” Link here, noisy video at that link.
The piece has some excellent sentences, including: “For 700 years swan-related royal duties were handled by the Keeper of the Swans. In 1993, a major shakeup in royal swan bureaucracy split the position into two offices: Swan Marker and Swan Warden. Since then the roles have been held, respectively, by David Barber and Chris Perrins.”
And: “It’s not clear how David Barber got his job. A German reporter asks him outright; he smiles and says mysteriously, “I can’t really answer that, can I.” He owns a boat business, he says, when pressed for further details. He is not an ornithologist.”
And: “Peacocks don’t lay eggs. Peahens do,” the man says, settling smugly back into his seat. “Everybody falls into that trap.” She doesn’t push him overboard, but she should.”
And: “One of the most famous swans in Britain was Mr. Asbo, who conducted a campaign of terror against boaters on Cambridge’s River Cam from 2009 to 2012. (Asbo is British shorthand for an “anti-social behavior order,” a misdemeanor handed out for loutish behavior.) “
Tax reform sentences to ponder
Income categories are paying almost exactly the same share of federal taxes as before. Millionaires actually pay a tiny bit larger share in the new bill.
That is from John Cochrane, drawing on Greg Mankiw, with the source being the Joint Committee on Taxation. I would say that media coverage of this bill — which does have many objectionable features — has been somewhat less than ideal, most of all on the issue of redistribution. Overall, claims about redistribution — from either side — are much more likely to be wrong or misleading than claims about most other topics.
Why cut the corporate tax rate under full expensing?
Second, that there is some pure “profit,” some pure “rent,” some “unreproducible input” (i.e. something that did not come from a past unmeasured investment), something like the classic “unimproved land” that can be taxed, without distorting any decision. It goes hand in hand with the complaints of greater monopoly.
But I find it hard to find and name a concrete source of profits that, once named, does not distort the decision to undertake some useful activity to make those profits. Starting, organizing, and improving a business, figuring out the intangible organizational capital that makes it a successful competitor, creating a product and a brand name, are all crucial activities for which no investment tax credit will successfully offset a large profits tax. “Intangible capital” is about all most companies have these days.
That is John Cochrane replying to Stephen Williamson, there is much more at the link. I would add also that Williamson’s model seems to take “r” as constant.
What I’ve been reading
1. Pierre LeMaitre, Three Days and a Life. French crime fiction, conceptual, very good for those who like to read in this direction. I am glad I finished it. The first half is pretty good, the second half excellent.
2. Fred Hoyle, The Black Cloud. The legacy of Wells and Stapledon surfaces yet again, if you are looking for an early but compelling science fiction novel you haven’t read, try this. The ecological features of the story are striking too.
3. John Wyndham, Chocky. How would/should parents react if one of their children appeared to be possessed? What weights should you assign to “possession by spirits,” as opposed to “possession by aliens”? Both conceptually intriguing and well-written. Also read his The Midwich Cuckoos on similar themes.
4. Margaret Atwood, Hag-Seed: A Retelling of the Tempest. Given the author is so famous, it’s strange this book hasn’t received more attention. Perhaps that is because it requires a reasonable degree of familiarity with Shakespeare’s The Tempest, worth the reread if you must or are so inclined. This is one of Atwood’s best novels, and it focuses on an over the hill director’s attempt to stage Shakespeare at the local prison.
5. William Shakespeare, The Tempest. Given that I basically never regret a Shakespeare reread, I suppose I should do them more often. Folger edition of course.
Friday assorted links
1. “…air crews have, on average, the highest yearly dose of radiation out of all radiation-exposed workers in the US. This means they receive more radiation exposure than people who work alongside nuclear reactors.” Link here.
2. Why do the Chinese love hot water?
3. “Pet owners in Victoria are allowed to keep crocodiles up to 2.5m in length.”
4. Recreating impressions of communism as a form of therapy for those suffering from dementia.
5. Day care as a factor driving car ownership.
6. Four centuries of return predictability.
7. Ezra Klein favorite books of the year list, he also favors Pachinko.
Why has investment been weak?
Germán Gutiérrez and Thomas Philippon have a new paper on this topic:
We analyze private fixed investment in the U.S. over the past 30 years. We show that investment is weak relative to measures of profitability and valuation — particularly Tobin’s Q, and that this weakness starts in the early 2000’s. There are two broad categories of explanations: theories that predict low investment along with low Q, and theories that predict low investment despite high Q. We argue that the data does not support the first category, and we focus on the second one. We use industry-level and firm-level data to test whether under-investment relative to Q is driven by (i) financial frictions, (ii) changes in the nature and/or localization of investment (due to the rise of intangibles, globalization, etc), (iii) decreased competition (due to technology, regulation or common ownership), or (iv) tightened governance and/or increased short-termism. We do not find support for theories based on risk premia, financial constraints, safe asset scarcity, or regulation. We find some support for globalization; and strong support for the intangibles, competition and short-termism/governance hypotheses. We estimate that the rise of intangibles explains 25-35% of the drop in investment; while Concentration and Governance explain the rest. Industries with more concentration and more common ownership invest less, even after controlling for current market conditions and intangibles. Within each industryyear, the investment gap is driven by firms owned by quasi-indexers and located in industries with more concentration and more common ownership. These firms return a disproportionate amount of free cash flows to shareholders. Lastly, we show that standard growth-accounting decompositions may not be able to identify the rise in markups.
On the road I have yet to read it, but it looks like one of the most important papers of the year.
My Law and Literature reading list 2018
The New English Bible, Oxford Study Edition [not all of it]
Guantanamo Diary, by Mohamedou Ould Slahi
Petina Gappah, The Book of Memory
Glaspell’s Trifles, available on-line.
Year’s Best SF 9, edited by David G. Hartwell and Kathryn Cramer, used or Kindle edition is recommended
The Metamorphosis, In the Penal Colony, and Other Stories, by Franz Kafka, edited and translated by Joachim Neugroschel.
In the Belly of the Beast, by Jack Henry Abbott.
Sherlock Holmes, The Complete Novels and Stories, Sir Arthur Conan Doyle, volume 1, also on-line.
I, Robot, by Isaac Asimov.
Juan Gabriel Vasquez, Reputations
The Pledge, Friedrich Durrenmatt.
Ian McEwan, The Children Act
Shakespeare, The Tempest, Folger edition
Margaret Atwood, Hag-Seed
Curtis Dawkins, The Graybar Hotel
Movies: To be determined.
Assorted Thursday links
1. Why did Bitcoin take so long? And is it ugly?
2. Cashless restaurants in NYC (NYT).
3. “...infants who look like their father at birth are healthier one year later. The reason is such father–child resemblance induces a father to spend more time engaged in positive parenting.” If looks could kill…
4. Are wealthier millionaires happier?
6. Does faculty tweeting help the reputation of universities?
Why do so many intellectuals favor governmental solutions?
Building on an essay by Robert Nozick, here is Julian Sanchez:
If the best solutions to social problems are generally governmental or political, then in a democratic society, doing the work of a wordsmith intellectual is a way of making an essential contribution to addressing those problems. If the best solutions are generally private, then this is true to a far lesser extent: The most important ways of doing one’s civic duty, in this case, are more likely to encompass more direct forms of participation, like donating money, volunteering, working on technological or medical innovations that improve quality of life, and various kinds of socially conscious entrepreneurial activity.
You might, therefore, expect a natural selection effect: Those who feel strongly morally motivated to contribute to the amelioration of social ills will naturally gravitate toward careers that reflect their view about how this is best achieved. The choice of a career as a wordsmith intellectual may, in itself, be the result of a prior belief that social problems are best addressed via mechanisms that are most dependent on public advocacy, argument and persuasion—which is to say, political mechanisms.
…If the world is primarily made better through private action, then the most morally praiseworthy course available to a highly intelligent person of moderate material tastes might be to pursue a far less inherently interesting career in business or finance, live a middle-class lifestyle, and devote one’s wealth to various good causes. In this scenario, after all, the intellectual who could make millions for charity as a financier or high-powered attorney, but prefers to take his compensation in the form of leisure time and interesting work, is not obviously morally better than the actual financier or attorney who uses his monetary compensation to purchase material pleasures.
Here is the full essay, via Jeffrey Flier.
Further points on how to understand modern India (from the comments)
Good post.
There are a few other topics that can serve as useful handles to “understand” India.
1. Study the folk history of the popular Indian pilgrimage sites –
For a lot of people, Hinduism is associated with abstruse metaphysics, mysticism, Vedanta, and Yoga. And this obsession with the high falutin theoretical stuff, means that many students of Hinduism don’t pay as much attention to the pop-religion on the ground. And this religion is best understood by actually understanding the few hundred important pilgrimage sites scattered across the country. Each of these sites is ancient and has a “legend” associated with it. (the so-called Sthala Purana). The civilizational unity of India is largely accomplished because of the pan Indian reverence for these pilgrimage sites. Be it Benaras in the North, Kolhapur in the west, Srirangam in the south, or Puri in the East. A nice way to get started on this is Diana Eck’s book – “India – A Sacred Geography” where she makes a strong case for the theory that the idea of one India is one that is primarily stemming out of the pilgrimage experience of Hindus.
This study of pop religion will be messy and frustrating for people from an Abrahamic monotheistic background. But there is no better way to understand what makes Indians tick spiritually, and why every Indian is a millionaire when it comes to Religion.
2. Study of the history of Indian mathematics –
This may seem like an odd handle to understand India. But in my view it is useful, because Indian mathematical tradition that goes back to roughly 700 BCE, is one that is highly empirical, algebraic, and averse to theorizing and rigorous proofs. So it tells you a lot about the Indian mind. Which is very different from the Greek mind, in that it places a very very low premium on “neatness”, and a high premium on “improvisation”.
Unlike the Greeks, Indian mathematics is not that big on geometry. And also not that big on “visualization”. While someone like Euclid leveraged diagrams to make his point, Indian mathematicians like Brahmagupta and Bhaskara I/II, just stated results in 2-line or 4-line verses.
The Indian mathematical tradition is arguably the greatest Indian contribution to human civilization. Particularly the decimal number system, infinite series, and the algebraic orientation in general (markedly different from the Greek emphasis on geometry). The tradition includes Sulba Sutras (700BCE), Aryabhata (400CE), Varahamihira (400CE), Brahmagupta (500-600CE), Bhaskara I (600CE), Bhaskara II (1100-1200 CE), and ofcourse the famed Kerala school of mathematics (14th century). Madhava from the Kerala school approximated Pi to 13 decimal places. In more recent times, the most distinguished mathematical mind is ofcourse Srinivasa Ramanujan, very much a man in the Indian tradition, who disdained proofs and conventional rigor, and instead relied on intuition and heuristics.
3. Study of Indian poetry and music and its emphasis on meter
This is something that is again uniquely Indian – the very very high emphasis on meter. Which is a consequence of the Indian oral tradition and cultural aversion to writing. Which continues to this day. The emphasis on meter and rhyming was partly an aid to memorization and rote learning. And this emphasis begins with the Vedas (the earliest religious literature, preserved orally for some 1500 years before they were written down in the common era) And you see this in Indian poetry and even Indian film music to this day! Bollywood songs are characterized by their metrical style and perfect rhyming, which you don’t always see in western popular music. In that sense, the metrical legacy of the Vedas is still alive in popular culture.
That is from Shrikanthk.
Amateur meteorology in India
India’s amateur forecasters are not formally trained in meteorology. Still, many people rely on individual blogs or Facebook pages that have built reputations after years of forecasting. “U r a gr8 help” reads a message Srikanth received from one reader of his Chennai Rains blog, which he manages with two other people. Another reader invited the Chennai Rains team to his wedding.
Weather wonks such as Srikanth are scattered around India. In the financial hub of Mumbai, 64-year-old retired businessman Rajesh Kapadia has become a local hero for the predictions on his blog, Vagaries of the Weather. Kapadia’s passion for meteorology started when his father gave him a wall-mounted thermometer as a teenager. At first, people mocked his weather obsession. “They thought I was a madman looking at clouds,” he said.
In the northern Indian city of Rohtak, 16-year-old Navdeep Dahiya sends local farmers WhatsApp and Facebook weather alerts while studying for school exams. Dahiya describes 2014 as his “golden year” — it was the year he went on a school trip to the India Meteorological Department. “I saw how farmers are helped by the weather,” he said. “I saw how they use all these gadgets to predict weather.”
Dahiya soon set up his own weather station at home; he has thermometers, an automatic rain gauge and a digital screen. Now known as Rohtak Weatherman, Dahiya sends out weather reports in Hindi and gets phone calls from farmers in the region asking for predictions.
That is from Vidhi Doshi at WaPo. I would be very interested in knowing how the forecasts of the amateurs (probably not the right word at this point) compare to the professionals.
Wednesday assorted links
How to think about 2018 — predictions for the year to come
That is the topic of my latest Bloomberg column, here is one bit:
The onset of a new year brings plenty of predictions, and so I will hazard one: Many of the biggest events of 2018 will be bound together by a common theme, namely the collision of the virtual internet with the real “flesh and blood” world. This integration is likely to steer our daily lives, our economy, and maybe even politics to an unprecedented degree.
For instance, the coming year will see a major expansion of the “internet of things”…
And:
But whatever your prediction for the future, this integration of real and virtual worlds will either make or break bitcoin and other crypto-assets.
And:
So far the process-oriented and Twitter-oriented foreign policies have coexisted, however uneasily. I see 2018 as the year where these two foreign policies converge in some manner. Either Trump’s tweets end up driving actual foreign policy and its concrete, “boots on the ground” realization, or the real-world policy prevails and the tweets become far less relevant.
There is much more at the link, including a discussion of cyberwar, China and facial surveillance technologies, and the French attempt to ban smartphones at schools.
Critique of the blockchain contra blockchain
Here is an excellent Kai Stinchcombe essay, piling together many of the extant criticisms of blockchains, here is one excerpt:
There are four additional problems with a blockchain-driven approach. First, you’re relying on single-point encryption — your own private keys — rather than a more sophisticated system that might involve two-factor authorization, intrusion detection, volume limits, firewalls, remote IP tracking, and the ability to disconnect the system in an emergency. Second, price tradeoffs are entirely implausible — the bitcoin blockchain has consumed almost a billion dollars worth of electricity to hash an amount of data equivalent to about a sixth of what I get for my ten dollar a month dropbox subscription. Fourth, systematically choosing where and how much to replicate data is an advantage in the long run — the blockchain’s defaults on data replication just aren’t that smart. And finally, Dropbox and Box.com and Google and Microsoft and Apple and Amazon and everyone else provide a set of valuable other features that you don’t actually want to go develop on your own. Analogous to Visa, the problem isn’t storing data, it’s managing permissions, un-sharing what you shared before, getting an easy-to-view document history, syncing it on multiple devices, and so on.
Overstated, in my view, but worth a ponder nonetheless. How many years does blockchain get before we start being unimpressed? Ten? Thirty?