Category: Current Affairs

Missing markets in everything?

Or do the offer curves simply not intersect?:

Just over half of Americans between the ages of 18 and 34 — 51 percent of them — said they do not have a steady romantic partner, according to data from the General Social Survey released this week. That 2018 figure is up significantly from 33 percent in 2004 — the lowest figure since the question was first asked in 1986 — and up slightly from 45 percent in 2016.

Here is the story, via the excellent Kevin Lewis.

How bad would a hard Brexit really be?

This account has some gloomy rhetoric, but doesn’t drum up such an awful scenario, for instance:

Among the little-noticed impacts: U.K. citizens and businesses will no longer be able to register internet sites using the .eu domain, and any U.K. entities that currently have such sites will not be able to renew them.

As mentioned, no doubt British truckers would be badly hurt, but what else?  This sounds correct to me:

Custom delays could create food shortages. The U.K. is vulnerable because an extreme heat wave and summer drought caused by global warming have already reduced food output.

Tariffs would be reimposed. They are as high as 74 percent for tobacco, 22 percent for orange juice, and 10 percent for automobiles. That would hurt exporters. Some of that pain would be offset by a weaker pound.

Tariffs would increase prices of imports into the U.K. One-third of its food comes from the EU. Higher import prices would create inflation and lower the standard of living for U.K. residents.

Is this the biggest danger?:

Health Secretary Matt Hancock has warned medical drug companies to expect six months of “significantly reduced access” to the main trade routes between Britain and Continental Europe if there is a no-deal Brexit.

This one seems exaggerated:

“Bodies may remain uncollected and children might miss exams due to gridlocked roads in the event of a no-deal Brexit”, the report said.

So people, what’s the deal?  Put aside the longer and medium-term effects on gdp and the like, what are the greatest short-run dangers of a hard Brexit in the weeks to come?  Or is it a big, overstated worry, the new Y2K?

The culture that is Alexandria, VA

A proposal to open a halal butchery facility in Alexandria hit a snag Saturday after some local business owners and dog owners objected. DC Poultry Market wants to open a facility that would sell fresh, humanely killed chickens on Colvin Street in a mostly industrial area of Alexandria between Duke Street and railroad tracks. There are no residential properties in the immediate area, but pet businesses abound: Pinnacle Pet Spa & More, Frolick Dogs, Dogtopia, and the Wholistic Hound Academy.

Therein lay a problem. Though city staff and Alexandria’s planning commission recommended approving DC Poultry Market’s application, dog  lovers showed up to the Alexandria City Council’s March 16 meeting to object on olfactory grounds (“My dog can smell when there’s a cookie down the block,” one resident said) and on proximity to poultricide (“Knowing that my dogs may be walked by a business that holds chickens in a windowless room before their throats are slit while fully conscious does not make me feel that my dogs are in a safe environment,” another said).

Here is the full story, via Bruce A.  Few seem to be complaining about the chickens.

Sentences to ponder

Oregon lawmakers are considering raising their annual pay by nearly $20,000, a move the sponsors say will attract more diverse candidates to the statehouse.

“We’re a diverse state, we need a diverse legislature,” Senate Majority Leader Ginny Burdick, one of the legislators leading the effort, told Oregon Public Broadcasting. “Because of the low pay, we are automatically screening out people who really should be represented here.”

That may sound cynical, but in fact the case for doing this is not crazy, and in general the U.S. underpays many (not all!) of its public sector employees:

The move comes only a few weeks after a 28 percent legislative pay raise went into effect. Lawmakers were not behind that raise, and the increase was tied to collective bargaining agreements that affected nearly 40,000 state employees.

Legislators now make $31,200, plus an extra $149 a day when the Legislature is in session.

Here is the full story, with further detail of interest, and for the pointer I thank Mark West.

The 2019 Public Choice Outreach Conference

It’s time to get your applications in for the 2019 Public Choice Outreach conference, a crash course in public choice for students from all fields and walks of life! Professors, please encourage your students to apply!

When is the Public Choice Outreach Conference?
The 2019 Outreach Conference will be held June 14-16th at the Hyatt Centric Arlington in Rosslyn, VA.

What is the Public Choice Outreach Conference?
The Public Choice Outreach Conference is a compact lecture series designed as a “crash course” in Public Choice for students planning careers in academia, journalism, law, or public policy. Graduate students and advanced undergraduates are eligible to apply. Many past participants of the Outreach seminar have gone on to notable careers in academia, law and business.

What will I learn?
Students are introduced to the history and basic tools of public choice analysis, such as models of voting and elections, and models of government and legislative organization. Students also learn to apply public choice theory to a wide range of relevant issues. Finally, students will be introduced to “constitutional economics” and the economics of rule making.

This is a chance to hear talks from Robin Hanson, Alex Tabarrok, Shruti Rajagopolan, Tyler Cowen and more.

Who can apply?
Graduate students and advanced undergraduates are eligible to apply. Students majoring in economics, history, international studies, law, philosophy political science, psychology, public administration, religious studies, and sociology have attended past conferences. Advanced degree students with a demonstrated interest in political economy or demonstrated interest in political economy are invited to apply. Applicants unfamiliar with Public Choice and students from outside of George Mason University are especially encouraged.

What are the fees involved?
Outreach has no conference fee – it is free to attend. Room and meals are included for all participants. However, ALL travel costs are the responsibility of the participants.

Click here for the 2019 Outreach Application

*The People Next Door*

The author is T.C.A. Raghavan and the subtitle is The Curious History of India’s Relations with Pakistan.  Here is one excerpt:

The massive rigging of the March 1977 election led to a Bhutto majority the size of which stunned even his supporters and, by some accounts, even embarrassed him.  He and his party had been expected to win but the near-total decimation of the opposition made the election results lose credibility.  “Why did you do this to me?” he is widely believed to have rhetorically asked a group of senior civil servants as the results came in.  In any event, the loss of popularity and personal legitimacy was swift.

This book is must reading for these days, and it will be making my 2019 “best of the year” list.  Order from abroad here, or in the U.S. it comes out in July.

FDA Tiered Approval

have an interesting op-ed on a tiered approval regime for the FDA:

Instituting a codified approval paradigm based on four tiered levels of clinical effectiveness (biomarkers, clinical signs and symptoms, disease modification and clinical outcomes) — with evidence regarding clinical utility progressively increasing — would greatly reduce the regulatory uncertainty and subjectivity, as well as the time to approval of innovative medicines.

Moreover, the four tiers, coupled with a commitment to apply state-of-the-art technologies (Apple Watch, telemetry and other health monitoring systems) to obtain clinical evidence would allow for additional learnings from use of drugs by practicing doctors treating real world patients. This knowledge would unearth additional uses, information that can be added to the product label to allow safer and more effective use of drugs and the identification of drug combinations that lead to even greater health benefits.

See also Bartley Madden’s work on Free to Choose Medicine which would similarly create dual tracks, one the standard FDA process and a second observational track that would bring drugs to market more quickly with the tradeoff being fewer clinical trials. As clinical trials rise in expense and more treatments are targeted towards smaller patients groups (i.e. personalized medicine) and as statistical techniques improve, we will need and can benefit from reforms to the FDA process along these lines.

*Dark Shadows: Inside the Secret World of Kazakhstan*

The demographic legacy of four centuries of Slavic settlement is striking along Kazakhstan’s 6,846-kilometre frontier with Russia, the world’s second longest land border.  In 2014, when the conflict erupted in Ukraine, Russians formed 22 per cent of Kazakhstan’s population nationwide (by 2018, that figure had fallen to just below 20 per cent), but in many places in the borderlands they were in large majorities: in Ust-Kamenogorsk, 67 per cent of people were Russians, while in the town of Ridder, further north towards the frontier, the figure was 85 per cent…

By 2018, the share of Kazakhs in the population had risen from 40 per cent to 67.5 percent and the share of the other largest ethnic group, Russians, had fallen from 37 per cent to 19.8 percent.  Kazakhstan’s two main cities used to be predominantly Russians; now Kazakhs dominate.  Astana’s Kazakh population hit 78 per cent in 2018, up from 17 per cent at independence (when it was still a backwater called Akmola and not yet Kazakhstan’s capital); Almaty’s Kazakh population had risen from 22 per cent to 60 per cent.

The government is also working hard to “Kazakhify” towns along the Russian border.

That is all from the new and excellent book by Joanna Lillis.  You may also have read that Nazerbayev, who has held power in Kazakhstan since 1991, announced yesterday that he is stepping down, hoping to take on more of a Lee Kuan Yew role in the country.

Alan Krueger, RIP

You probably all know by now that Alan Krueger has passed away, nonetheless it seems appropriate to offer tribute and condolences.  Alan and I were together in the same year at Harvard in the economics Ph.D program, and although he was on track to win a Nobel Prize and I have read most of his papers and books, I always associate him more with those years in the mid-1980s.  I am very saddened by the news.

British sentences to ponder

But holding the government to account is one thing, setting the agenda another. The Brexit crisis has shown this. In January and February, when MPs tabled amendments that would truly empower backbenchers — by giving them control of what is debated in the Commons, or setting up voting systems for MPs to rank different Brexit options — the majority stepped back. “I think the most remarkable thing is how unsuccessful we’ve been in taking control,” says one shadow minister. Faced with a choice of now or never, MPs generally decided it couldn’t be now. Only this week did they become bolder, rejecting May’s deal for a second time. In response, the government agreed to facilitate a vote on different Brexit options if they rejected it a third time.

“The last two years have thrown into sharp relief the things that parliament is good at and the things it is not good at. It is generally not good at legislating,” says Lisvane. “The things that have gone really well are select committees.”

That is from a long FT piece by Henry Mance, perhaps the best article I have read this week.

Should climate change limit the number of kids you have?

No, or so says I in my latest Bloomberg column., here is the closing bit:

Let’s not give up by ceasing to have children.

Finally, leave aside the implausibility of these arguments and consider their assumptions. What you’ll find is zero-sum thinking, negative value judgments about large families, and an attempt to use guilt and shame to steer social and environmental policy. I suspect that is why these arguments are finding some traction, not because they are the result of any careful cost-benefit calculations.

So if you are both worried about climate change and considering starting a family, I say: Put aside the unhelpful mess of emotions some participants in this debate are trying to stir up. Instead, focus on how your decision might boost future innovation. As a bonus, you might find that one of the better approaches to climate change is actually pretty fun.

Super simple arguments, with credit to Paul Romer and Alex T. and Bryan and Ross Douthat as well.

The Daily Beast Hit Piece on Amazon

The Daily Beast hit piece on Amazon, ‘Colony of Hell’: 911 Calls From Inside Amazon Warehouses, insinuates (while denying that this is what they are doing) that Amazon warehouses are an unsafe space that generates mental health problems. The upshot is this:

Between October 2013 and October 2018, emergency workers were summoned to Amazon warehouses at least 189 times for suicide attempts, suicidal thoughts, and other mental-health episodes, according to 911 call logs, ambulance and police reports reviewed and analyzed by The Daily Beast.

The reports came from 46 warehouses in 17 states—roughly a quarter of the sorting and fulfillment centers that comprise the company’s U.S. network. Jurisdictions for other Amazon warehouses either did not have any suicide reports or declined requests for similar logs.

So how many employees does this cover? No answer. Note also the weasel words, jurisdictions which “did not have any suicide reports or declined requests” are not included. So that could mean that a majority of fulfillment centers reported no serious mental health problems. Basically the report is devoid of useful information.

As far as I can tell from the report, there were no actual suicides at Amazon warehouses during this time period. Nevertheless, let’s try to do some back of the envelope calculations. Amazon has about 125,000 full time workers in its fulfillment centers but in a typical year they will double that during holiday season so say 250,000 employees in a year. The US suicide rate for working age adults is 17.3 per 100,000 so over five years we would expect 216 suicides and many more “suicide attempts, suicidal thoughts, and other mental-health episodes”. Indeed, the National Institute for Mental Health reports that 0.5% of Americans aged 18 years or over attempted suicide in 2016 so we would expect 6,250 suicide attempts in a population of Amazon-sized workers (250000*.005*5=6,250). Of course, the Daily Beast’s numbers don’t cover all fulfillment centers, most suicides wouldn’t occur at work and there are a variety of other issues so cut these numbers down as you see fit. For any reasonable estimate, however, there is no reason, in this data, to think that Amazon’s numbers are in any way unusual for a large employer.

The CDC does have some limited data on suicide by occupation and the real outlier is the construction and extraction industry which has a suicide rate over 50 per hundred thousand, several times the national average.

Moreover, if you really want to find out what it’s like to work at an Amazon fulfillment center don’t look at anecdotes, look instead to the over 5 thousand reviews for this job at Indeed.com which gives Amazon 3.6 stars out of 5. Not stellar but not bad either. Costco, one of the most beloved and best ranked employers in the United States, has a rating of 4.2.

It’s obvious that there is a political impetus to go after big tech companies. Whatever one’s thoughts about that, we shouldn’t let propaganda infect our decisions.

The college bribery scandal

Of course universities have long taken money to let in unqualified applicants, what is happening here is they are going after the local rate busters.  Here is my Bloomberg column on this topic, excerpt:

My second worry is that the number of bribery cases suggests that many wealthy Americans perceive higher education to be an ethics-free, law-free zone where the only restraint on your behavior is whatever you can get away with.

I suspect that most of those charged in this case never expected they might have to answer in court for their actions. To consider a parallel situation: I wouldn’t dream of shoplifting. Yet I sometimes drive 32 mph in a 25 mph speed zone. Like most of us, I draw a distinction between laws we are expected to follow, and laws we aren’t.

To me, the number of people caught up in this scandal indicates that too many Americans do not take seriously the idea that our system of higher education is a set of institutions bound by morality and laws. They take its governing rules as optional and conditional, depending on convenience, much as we do many speed-limit signs.

In this case, those charged are mostly wealthy Americans of high social status, not gangsters. They probably thought of themselves as law-abiding Americans, with exceptions so minor as to be negligible. In other words, this case illustrates what a low opinion America has of its system of higher education. As a university professor, I would feel much better if it had been mobsters charged with these alleged crimes.

There is much more at the link.

It is easier to do this when there is no single dominant company involved

Or is it that real estate developers are somehow especially popular these days?:

New York was riveted for weeks by a debate over whether Amazon should receive $3 billion in tax breaks and other incentives in return for setting up a headquarters in Queens and creating 25,000 jobs. But with far less public attention, the city government has for more than a decade been funneling even more aid to Hudson Yards, a 28-acre complex of gleaming office buildings and luxury residential towers that is one of the nation’s biggest real estate projects in recent years.

In all, the tax breaks and other government assistance for Hudson Yards have reached nearly $6 billion, according to public records and a recent analysis by the New School.

Here is more from Matthew Haag at the NYT,