Headlines of 2017
Burger King launches WhopperCoin crypto-cash in Russia
That is from the BBC, sprightly throughout, via Stuart Harty.
Tuesday assorted links
1. Over 44,000 Haitians have entered Chile so far this year.
2. Facebook removes posts by people smugglers.
3. My podcast with David Lizerbram, including a discussion of movies vs. TV.
More on Houston and flood insurance
But the climate is not changing fast enough to explain the dramatic spikes in disaster costs; all seven of the billion-dollar floods in American history have made landfall in the 21st century, and Harvey will be the eighth. Experts believe the main culprit is the explosive growth of low-lying riverine and coastal development, which has had the double effect of increasing floods (by replacing prairies and other natural sponges that hold water with pavement that deflects water) while moving more property into the path of those floods. An investigation last year by ProPublica and the Texas Tribune found that the Houston area’s impervious surfaces increased by 25 percent from 1996 to 2011, as thousands of new homes were built around its bayous. Houston is renowned for its anything-goes zoning rules, but the feds have also promoted those trends by providing extremely cheap insurance in high-risk areas.
Created in 1968, the national flood program was actually supposed to help prevent risky development. Its complex rules required new construction within designated 100-year floodplains to meet higher floodproofing standards, and “substantially damaged” properties that received claims worth half their value to be relocated or elevated. But most of the program’s 100-year flood maps are woefully obsolete, relocation almost never happens, and Uncle Sam has continued to cut multiple checks for repetitive losses. A recent Pew Foundation study found that the Higher Ground problems have not been solved; about 1 percent of insured properties have sustained repetitive losses, accounting for more than 25 percent of the nation’s flood claims. One $69,000 home in Mississippi flooded 34 times in 32 years, producing $663,000 in payouts. The government routinely dishes out more in claims than it takes in through premiums, and the program has gradually drifted deeper and deeper into debt.
That is from a superb Politico piece by Michael Grunwald.
How many sellers are needed for markets to become competitive?
…competitive conduct changes quickly as the number of incumbents increases. In markets with five or fewer incumbents, almost all variation in competitive conduct occurs with the entry of the second or third firm…once the market has between three and five firms, the next entrant has little effect on competitive conduct.
That is from Bresnahan and Reiss, “Entry and Competition in Concentrated Markets.”
Part of their method is to compare doctor and dentist pricing practices across towns of different size, and thus across different numbers of providers. Then they see where bigger numbers makes a difference in terms of pricing. Plumbers and tire dealers are considered too. One lesson seems to be that market concentration has to rise to very high levels to make a big difference in outcomes.
If you are wondering, the “sweet spot” for a town to have a single dentist or doctor is population between 700 and 900, at least circa the early 1990s.
Companies run by lawyers (who’s complacent?)
We looked at about 3,500 CEOs, about 9% of whom have law degrees. They were associated with nearly 2,400 publicly traded firms in the S&P 1500 from 1992 to 2012.
And:
Companies run by lawyers behaved differently in several dimensions related to risk taking than those run by non-lawyers. CEOs with legal training tended to implement more-cautious earnings management policies, especially in industries with high litigation risk, like pharmaceuticals. One measure we used was current accruals, where managers accelerate recognition of revenues and delay recognition of expenses. Lawyers were much less aggressive in accrual accounting relative to industry levels.
And:
We found that lawyer CEOs were not only associated with less litigation but, conditional on experiencing litigation, were also associated with better management of litigation.
That is all from M. Todd Henderson, more at the link.
Monday assorted links
1. Premium mediocrity: “As a result, as another buddy Rob Salkowitz put it in our Facebook discussion, premium mediocrity is creating an aura of exclusivity without actually excluding anyone.”
2. Machine learning and the new physiognomy. Interesting, and neglected.
3. Uncovering Somalia’s forgotten music from the 1970s.
4. Today the St. Louis minimum wage falls from $10 to $7.70.
5. “But in recent weeks, the monsoon rains have relentlessly pounded this part of Bangladesh. Rainwater from the Himalayas is travelling down through Nepal’s lower lying areas, through swollen rivers in north-east India and eventually through the floodplains of Bangladesh. Vast swaths of land across all three countries are under water.” Link here. In Bangladesh alone, 7.1 million people are affected.
6. The great Pessoa.
Facts about flood insurance
The National Flood Insurance Program (NFIP) owes $24.6 billion to the Treasury. Most of it covered claims from Hurricane Katrina in 2005, Superstorm Sandy in 2012, and floods in 2016, the program’s third most severe loss-year on record with losses exceeding $4 billion, according to the Federal Emergency Management Agency (FEMA), which manages it.
The NFIP was extended 17 times between 2008 and 2012 and lapsed four times in that period. A 2012 law extended the program to September.
The only source of flood insurance for most Americans, it will be in place for homeowners and businesses in Harvey’s path along the central Texas coast.
But Harvey-related claims covered under the program could push it deeper into the red and possibly toward its borrowing limit of just over $30 billion, said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan budget watchdog in Washington, D.C.
Federal law requires that homes in flood-risk areas have flood insurance before a mortgage can be completed. The program is the only flood insurance available to the vast majority of Americans, although a small market for private flood insurance is sprouting in flood-prone states such as Florida.
Here is the article. Note the Trump administration previously was pushing a plan to cut the insurance to pay for The Wall. I do see a case for doing without a federal role for this insurance, but the benefits there come ex ante, not from yanking it away ex post.
Where should you fear private internet censorship the most?
Alex already has covered this topic. I am less worried than he is, and I’ll go through a list, but first here are a few general remarks.
Most of the ban attempts seem directed at versions of alt right ideas. Whether you like it or not, those ideas have benefited from the internet perhaps more than any other. I am seeing a small amount of that gain clawed back, but in a manner consistent with principles of liberty and free association and probably Coasean efficiency as well. The claim “the tech companies are way more open than the previous mainstream gatekeepers, but they have to spend more customer and employee goodwill to be all the more open yet” has some resonance with me, but I can’t say it is in the top 300 list of demands I wish to place on the world. It might not be in the top 1000.
It remains the case that the most significant voluntary censorship issues occur every day in mainstream non-internet society, including what gets on TV, which books are promoted by major publishers, who can rent out the best physical venues, and what gets taught at Harvard or for that matter in high school. In all of these areas, universal intellectual service was never a relevant ideal to begin with, and so it seems odd to me to pick on say Facebook. It’s still not nearly as important an influence as the above-mentioned parts of non-internet society, nor is it anywhere close to being as discriminatory.
That all said, I am happy when I see people complain about voluntary censorship, even when I disagree with the complaints, or think the complainer is being too pessimistic. Complaining > complacency. That said, here is my wee dose of complacency, in the form of a list across various parts of the internet:
1. On-line dating services. No fears here. Christian, Jewish, and other dating services are already set up to include some groups and exclude others. If OK Cupid excludes neo-Nazis, or supposed neo-Nazis, this seems entirely in order.
2. Amazon. You can order Mein Kampf on Amazon, and few seem to complain about that. Does it make sense to have a world where Hitler is available but Milo is banned? Well, a lot doesn’t make sense these days, but still I don’t ever expect that to happen. There are cultural and also business reasons why universal booksellers will be among the last to embrace voluntary censorship.
Can you order a swastika, of the evil kind, on Amazon? It seems not. Presumably that has been the case for a while, it doesn’t bug me, and I wouldn’t mind if Amazon selectively stopped carrying other political symbols as well. I bet Wal-Mart doesn’t carry them either.
3. Facebook. Here my worry quotient at least potentially rises, if only because Americans spend so much time on Facebook. Let’s say Facebook bans some neo-Nazi groups and communications, and then goes too far and keeps off some groups that offer valuable intellectual contributions, even if their quality might be too “high variance.”
Yet here’s the thing: given my mixed feelings toward Facebook, I see this as OK either way. If Facebook gets better, well, how bad can “better” be? But say the Facebook censors overreact, some groups are booted off, and Facebook gets worse. I don’t mind if Facebook gets worse! People will spend more time doing other things. And the unjustly banned group still have plenty of other outlets on the web. We know from history that every medium encourages some kinds of ideas and discourages others (TV for instance seems to let people think crime rates are pretty high, because crimes get covered on the evening news). Not long ago, there was no Facebook and those unjustly banned groups couldn’t get on the evening news either. Maybe that was bad, but it was hardly the end of the world, and even with an overly aggressive Facebook censor we are still far closer to a kind of neutrality across ideas than was the case twenty years ago.
4. Google. In China I found it very easy to switch to Bing, because Bing is a second or so quicker in China (that is using Google through VPN, otherwise you can’t). Now maybe Bing bans the same web sites. And maybe the lower-tier search engines are too crummy, or people are simply not used to using them.
On this issue I have modest fears. Still, what I’ve seen so far is a Google (and Bing) that want to be as universal as possible, and the constraints as coming from the regulators, such as the EU “forgetting” policy. Google covers so much material, I think of them as not wanting to devote many resources to adjudicating content. At the very least, they still seem quite willing to take me to Amazon selling Mein Kampf.
I do expect news.google.com to become more mainstream over time, and indeed it already has. They are more careful about what pops up on the page. This too doesn’t bug me, it probably improves average quality, and furthermore it is still a more open forum than is the news on television.
Here you can read a long list of complaints against Google and affiliated services. Given how much data the company handles, and how many cases arise, I’m amazed they’ve done so well. Salil Mehta was just restored, by the way.
5. Twitter. For many people it might be an advantage to be banned from Twitter. Still, for some views Twitter is an important means of connecting with the audience, Donald Trump being the most prominent example. So I have a bit of a worry, but I don’t see Twitter as that powerful in the world of ideas. And overall I have a pretty fluid view of what is likely to matter. I do not think it is impossible or even implausible that some really important ideas, twenty years from now, are circulated using fanzines, or perhaps something like the old usenet groups. More generally, our ability as outsiders to judge the health and quality of an intellectual ecosystem just isn’t that great, so maybe we shouldn’t be so judgmental at each step along the way?
6. YouTube (owned by Google). Due to copyright law, YouTube is already in the business of making plenty of judgments about content and it has the infrastructure to do so. And unlike Google the search engine, content is posted directly on YouTube itself. YouTube is a hosting service, not just a search engine, though it is that too. YouTube search and recommendation algorithms drive a lot of views. If YouTube won’t host your videos, that is a problem.
But I am not very worried about “YouTube as we know it.” The forum seems to work quite well (no need to mention Jordan Peterson in the comments, his account was restored). I am happy that gangs can’t post videos of their killings, and the biggest problem remains government censorship of YouTube. If you google “banned from YouTube,” I do not see a long list of outrages, that said I would not have banned the Prager University videos. Whether you like it or not, it is easy to watch Milo on YouTube, even though the publishing world dropped his book like a stone. The tech companies still seem so much more open than the older media gatekeepers.
Cloudflare, and other internet choke point services: I worry about them a lot. They can in essence kick you off the entire internet through a single human decision not to offer the right services. I focus almost all of my worry on them, noting that so far all they have done is kick off one Nazi group. Still, I think we should reexamine the overall architecture of the internet with this kind of censorship power in mind as a potential problem. And note this: the main problem with those choke points probably has more to do with national security and the ease of wrecking social coordination, not censorship. Still, this whole issue should receive much more attention and I certainly would consider serious changes to the status quo.
A bit more
I hope the tech companies do not go further with voluntary censorship, but I don’t think it is obvious that they will. It seems they felt the need to do something, and now they are hoping the storm will pass. I do favor vigilance against further overreach, but let’s not overrate the importance of what are so far largely symbolic disputes.
By the way, what’s the deal with the Left favoring net neutrality but wanting all this voluntary internet censorship?
*Love, Africa*
The author is Jeffrey Gettleman, the subtitle is A Memoir of Romance, War, and Survival, and this travel romance of East Africa has taken a beating on Twitter and elsewhere, for its apparently “neo-colonial” approach. I bought the book, wondering if I might find a contrarian take to offer. I’ve only browsed it, but here was one random passage I ran across, noting the scene will culminate in the two making out (and perhaps intercourse?):
As my eye traveled across the faces, I kept coming back to the same one. It belonged to a girl with high cheekbones, wide-set eyes, heavy eyelids and dark hair; her features looked Eurasian, maybe even Eskimo. She was wearing a red dress that showed off her back; she was lithe and freckly. As she danced, the blacks of her eyes shone. There was something in them that I had seen before. She seemed deeply, freely happy, like those kids on Lake Malawi. I could tell she really dug dancing.
Now, I am not here to offer him a deserved bad writing award, nor to shame him, but still I consider this data and I am puzzling over what this data means. In a mere minute of browsing, I found several similar passages, and with a few more minutes they seemed to multiply endlessly. Nor was it easy to stumble across pages with lots of information about Africa on them. And yet he is a Pulitzer winner and a foreign correspondent for The New York Times, East Africa Bureau Chief for a decade.
But exactly which views do I need to revise? The NYT writers and journalists I have met are uniformly impressive. It is not easy to win a Pulitzer Prize.
Here is a review from Laura Seay, she is harsh but it seems to me probably fair. Is Derek Parfit right about the self after all? At the very least, my opinion of the political correctness scolds went up a bit today. And I once again ask myself whether I should spend more or less time writing negative reviews of books (mostly I don’t, though this week’s reading was pretty meh).
Please advise.
Sunday assorted links
1. Anti-abortion group to buy late-term clinic.
2. A short video on how capital deepening does not always improve productivity.
3. Will all future tennis stars be tall? (NYT)
4. “…but she balks at the idea of Jabba the Hutt getting his own film.” Here we’re talking high fixed costs, high mark-up…
5. Are aggregate wages sluggish because older, retiring workers are being replaced by the less experienced? And also from The Economist: Should more orphanages in Rwanda be closed?
The cost of running Harvard
This is from the 28 August 2017 Bloomberg Businessweek:
Salaries and wages: $1.8 billion
Services purchased (catering, security, etc.): $583 million
Benefits: $530 million, roughly equal to the revenue from graduate programs
Depreciation: $338 million
Real estate (leases, utilities, etc.): $345 million
Other (subcontractors, publishing): $323 million
Supplies and equipment run $257m, scholarships $142m, and interest on the debt $235m, with travel expenses, advertising, and postage at smaller amounts.
Total operating costs are $4.7 billion, with undergraduate tuition covering 6.4 percent of that, graduate tuition covering 11.2 percent.
That is from Kyle Stock, I cannot find it on-line. (I am a biased source, but do note that the new, gated version of Bloomberg Businessweek is consistently excellent.) One of the difficulties with scaling up, of course, is that Harvard cannot always so easily scale the quality and resources of its donors. “Harvard as we know it” may be as large as the current set of donors can support. And “Harvard as we know it” likes…”Harvard as we know it,” not some other Harvard.
The health care polity that is Texas
The Texas Legislature just enacted landmark health care reforms by opening the state to telemedicine. This success shows that states have great power to improve health care without waiting on Washington. This is especially important as the Affordable Care Act (ACA, or “Obamacare”) grows more unstable and neither party in Congress seems capable of responding.
Telemedicine can improve health and lives—especially in a sprawling state with vast, thinly populated areas. As high-quality video conferencing and remote telemetry become more sophisticated and less expensive, telemedicine offers high-quality care without the need for face-to-face contact in many (not all) situations.
Since an episode of cardiac arrhythmia, I’ve carried a $99 device (AliveCor.com) that conducts clinical-quality electrocardiograms, analyzes them, and gives one-touch, low-cost access to professional help. My then-92-year-old mother’s life was probably saved by an iPad FaceTime conversation with her grandson (an M.D.), who sensed the onset of sepsis. Low-cost digital stethoscopes, blood pressure cuffs, and other devices can plug into smartphones or tablets, transmitting information directly to teledoctors.
…Senate Bill 1107 allows patients to receive prescriptions from doctors whom they meet for the first time via electronic means.
Here is more from Robert Graboyes.
Indian caste system bleg
What should I read to better understand the Indian caste system? I thank you all in advance for your assistance.
Saturday assorted links
1. Smart people usually look smart.
2. 1991 NYT profile of Krugman, Summers, and Sachs.
3. Is Yunnan cuisine about to sweep the U.S.?
4. There is a tendency toward excessive entry in homogeneous product markets (pdf). If that link doesn’t work for you, google “free entry mankiw whinston.” And Growth Econ blog on mark-ups.
5. NBA players and start-up equity. And the network behind Twitter.
That was then, this is now — churchyard burial edition
Although all church fees were wrong, argued Francis Sadler in a much-reprinted 1738 tract, “selling” one part of the churchyard for three times the price of another “to keep Rich and Poor asunder as if there were a difference in their dust” was especially ridiculous.
Within the courtyard, “the chancel was a better address than the center aisle, which was, in turn, preferred to the side aisles.” And lead coffins cost ten times more than coffins of wood.
That is from the excellent The Work of the Dead: A Cultural History of Mortal Remains, by Thomas Laqueur. Here is a truly splendid Marina Warner review of the book.