Category: Current Affairs

Is the trade war with China over?

That is the topic of my latest Bloomberg column, here is one excerpt:

The basic problem with any U.S.-China trade conflict is that there is not very much the Chinese are interested in offering, and their intransigence is more than just a bargaining stance. They are willing to buy more American soybeans and manufactured goods (and probably wish to anyway), and they might give U.S. financial institutions freer rein within China. But they won’t dismantle their system of state-owned enterprises, as those companies are among China’s most powerful special interest groups. Nor will China give the major U.S. tech companies free rein in China, if only for reasons of national security and China’s desire to build a surveillance state based on data controlled by China.

Overall, the grievances on the U.S. side are significant, and the possible concessions on the Chinese side are minor. So the most likely outcome is only modest progress in difficult negotiations. It’s also likely that the power and focus of the Trump administration will wane as it deals with investigations from the new Democratic-controlled House of Representatives. It might be said that the trade war you now see is the trade war you are going to get. Foreign relations gridlock will set in.

Nonetheless, it’s not quite fair to describe the trade war with China as a problem that Trump started and then pretended to solve. The reality is that hostility toward Chinese trade practices has been building for some time. Anti-China measures have long commanded bipartisan support not only in Washington but also among corporate leaders, who see themselves as victims of unfair Chinese trade practices and espionage. This is an issue that predates Trump, and he deserves some credit for doing something to help solve it.

Do read the whole thing, which contains other points of interest.

What should I ask Larissa MacFarquhar?

I will be doing a Conversations with Tyler with her, no associated public event.  Here is her New Yorker bio:

Larissa MacFarquhar has been a staff writer at The New Yorker since 1998. Her Profile subjects have included John Ashbery, Barack Obama, Noam Chomsky, Hilary Mantel, Derek Parfit, David Chang, and Aaron Swartz, among many others. She is the author of “Strangers Drowning: Impossible Idealism, Drastic Choices, and the Urge to Help” (Penguin Press, 2015). Before joining the magazine, she was a senior editor at Lingua Franca and an advisory editor at The Paris Review, and wrote for ArtforumThe NationThe New Republic, the New York Times Book ReviewSlate, and other publications. She has received two Front Page Awards from the Newswomen’s Club of New York and the Academy Johnson & Johnson Excellence in Media Award. Her writing has appeared in “The Best American Political Writing” (2007 and 2009) and “The Best Food Writing” (2008). She is an Emerson Fellow at New America.

She also wrote famous profiles of Richard Posner and Paul Krugman.

So what should I ask her?

Why historians worry more about Trump than economists do

That is the topic of my latest Bloomberg column.  Here is one excerpt:

…historians stress the importance of contingency, that things really could have gone another way. The decisions of a solitary assassin or the outcome of a single battle can shift the course of history. Particular leadership decisions might have avoided or limited World War I. Or what if the Germans had not, in 1917, put Lenin on a train back into Russia? The Bolshevik Revolution might have been avoided and probably the entire course of history would have been different. A shrewder President Paul von Hindenburg might have prevented the rise of Adolf Hitler.

If you think about these questions enough, you can end up very nervous indeed. Historians have seen too many modest mistakes spiral out of control and turn into disasters.

Economists, in contrast, work more with general models than with concrete historical situations, and those models emphasize underlying structural forces. Economies have fairly set populations, birth rates, natural resources, capital stocks, savings rates, trading partners, and so on. So to an economist, the final outcomes are closer to necessary than contingent…

And when it comes to politics, economists of the “public choice” variety tend to see outcomes as controlled by a fairly tight structure of voter preferences and interest groups, variables which a president can change only at the margin and with great effort.

So which perspective is correct — the historian’s or the economist’s?

There is much more at the link, including a discussion of how Paul Krugman’s strong anti-Trump stance fits into this picture.

Is the internet good for African politics?

That is the topic of my latest Bloomberg column, here is one excerpt:

A second dynamic is harder to measure or prove, but is also likely positive: greater national unity…

One source of gain is simply that the colonial era is receding ever further into the past. In the meantime, a wide array of media outlets have helped to further African notions of national unity and cultural coherence. Soccer and other athletic teams compete on the world stage, and African players competing in Europe are portrayed as representatives of their nations, not particular ethnic groups. Commercial brands and celebrities help define national identities. Exposure to international media, most of all through smart phones and the internet, cements the notion that these regions are indeed perceived as nations by the outside world and that such designations are likely to stick. Mobile phones have knit together different African regions, and ethnic groups, in closer economic ties.

The notion of a nation as an “imagined community,” to use a term from political scientist Benedict Anderson, is under accelerating construction in many parts of Africa. Cultures and cultural expectations are adapting to current borders, even given earlier injustices, thereby contributing to falling rates of violence and conflict.

Unfortunately, Africa is exposed to a lot of “fake news,” perhaps more than Americans are. The good news, if you would call it that, is that Africans seem to be relatively skeptical of social media as a news source, and they put a relatively high degree of trust in international media.

Better yet is that most Africans say that the internet has improved their politics and economics. For instance, 64 percent of Nigerians reported in 2017 that the increasing reach of the internet was good for Nigerian politics. That number compares to just 43 percent in 2014, and positive impressions of a similar nature are common throughout Africa. For all the talk about social media creating divisions (such as in Myanmar), the net effect of modern technology seems to be greater unity, including with respect to national borders.

Do read the whole thing.

Tyler Cowen predicts our coming 19th century future

Here is my podcast with New York magazine, with a short excerpt of it offered in print.

And they offer this summary: “On the latest episode of 2038, Cowen predicts that over the next 20 years, “this nation will go back to an earlier version of its politics, which were highly dysfunctional. You had plenty of people becoming president who probably should not have been. And yet at the same time we muddled through that era and emerged as modern America.””

China possible fact of the day

A Chinese researcher claims that he helped make the world’s first genetically edited babies — twin girls born this month whose DNA he said he altered with a powerful new tool capable of rewriting the very blueprint of life.

If true, it would be a profound leap of science and ethics.

A U.S. scientist said he took part in the work in China, but this kind of gene editing is banned in the United States because the DNA changes can pass to future generations and it risks harming other genes.

Here is the full story.  Here is further background.

Microsoft is now the world’s most valuable company

Microsoft’s current market cap has overtaken Apple’s, after living for nearly a decade in the shadow of the Cupertino company.

At the time of writing Microsoft’s intra-day Market Cap is now 751.88B, higher than competing company Apple Inc. which is now 749.75B, by more than 2 billion dollars.

Amazon (currently 741.90B) and Apple were dubbed the world’s most valuable tech companies by Market Cap earlier this year as they crossed the $1 trillion mark. With Microsoft now overshadowing all three, including Alphabet Inc, the firm now looks to be the most valuable tech company…

Investors are concerned about slowing revenue growth at the so-called FANG companies (Facebook, Apple, Netflix and Google), a club of high flyers Microsoft has traditionally been excluded from.

Now they are betting company spending on cloud services and software will remain strong as companies strive to increase efficiency and productivity, while Facebook and Google are increasingly coming under scrutiny for their consumer data practices.

Microsoft’s cloud segment, in particular, is expected to do well, with Office 365 the lead programs in the market for cloud-based productivity tools, while Azure services for storing data and running apps in the cloud is in a solid second position to Amazon’s AWS. Microsoft is also increasingly relying on a steady subscription business which is less subject to volatility.

Here is the full story.

My Conversation with John Nye

John is one of the smartest people I know, and one of my favorite people to talk to, here is the transcript and audio.  Here is the opening summary:

Raised in the Philippines and taught to be a well-rounded Catholic gentleman, John Nye learned the importance of a rigorous education from a young age. Indeed, according to Tyler he may very well be the best educated among his colleagues, having studying physics and literature as an undergraduate before earning a master’s and PhD in economics. And his education continues, as he’s now hard at work mastering his fourth language.

On this episode of Conversations with Tyler, Nye explains why it took longer for the French to urbanize than the British, the origins of the myth of free-trade Britain, why Vertigo is one of the greatest movies of all time, why John Stuart Mill is overrated, raising kids in a bilingual household, and much more.

Here is one bit:

NYE: In fact, one of the things I do know about the 19th century is that there’s no evidence that either unilateral free trade or multilateral did very much.

Almost all the free trade in Europe in the 19th century was a product of, initially, the bilateral trade agreement between Britain and France, sometimes known as the Anglo-French Treaty of Commerce of 1860, in which they each agreed to much more liberalized trade on a most-favored-nation basis. Once they accepted this, then what happened is, anyone who signed on to either Britain or France on the most-favored-nation basis then bought into, in some sense, this system.

Here is another:

COWEN: Particular mistakes aside, what were the systemic mistakes the Western world was making in, say, 1910, 1912?

NYE: I think the systemic mistake really boils down to how do you deal with the problem of power? How do you deal with the problem of different groups, different cultures wanting their place at the table? It’s clear that, if you look, a lot of the fight of imperialism was great-power competition.

If you look in the Far East, for example, some people may know that the United States took the Philippines from Spain at the end of the period of Spanish control of the Philippines in 1898, and partly this was due to Perry’s decision to sail into Manila Bay.

One of the things that’s not discussed — most people are unaware of — is that the German and British fleets were waiting in Hong Kong. They were waiting to see what the Americans did. And it’s quite likely that, had the Americans not steamed into Manila Bay, that the Germans or British would have intervened in the Philippines once the Spanish collapsed.

And:

COWEN: And if there’s an underlying political subtext or import of Hitchcock, what do you think that would be? Not what he necessarily intended as his politics, but what’s in the movies in terms of human nature and political man?

NYE: Well, I think there’s this question of suspicion and the tendency to not appreciate how much is going on under the surface. I think people tend to see these things narrowly in terms of Cold War paranoia. But Hitchcock was a political conservative, and he was much more of the very old British conservative view that one should be wary in times of —

COWEN: Suspicion is metaphysical, right?

Definitely recommended, I am very honored to have had the chance to do this with John.

Coleman Hughes reviews *Stubborn Attachments*

Excellent review, in Quillette, here is part of the closing sequence:

Ultimately, absorbing the thesis of Stubborn Attachments would entail a radical loss of purpose for the politically-minded among us. The small, short-term policy fights that energize us most are precisely the ones from which, on Cowen’s account, we should abstain entirely. Even the smartest among us don’t know what net effect small policies will have; plus very little well-being turns on such policies to begin with. Growth maximization, on Cowen’s view, becomes a moral black hole from which no partisan skirmish, no matter how seemingly important, can escape.

In a cultural landscape where partisan skirmishes regularly induce something approaching bloodlust on both sides of the political aisle, it’s safe to say that most Americans are roundly rejecting Cowen’s thesis at the moment. But perhaps that means the message of Stubborn Attachments is needed now more than ever.

Recommended, here is the link.

Those new service sector jobs

The DAWN Café is an upcoming trial project that will test an inclusive working environment. The café will seemingly be staffed with robots that will wait on you by bringing you your coffee and asking if you need anything. But if you think this is another example of robots coming for our jobs, you would be mistaken. Embedded within the robots are real intelligence: they’re operated remotely by people with severe disabilities who often can’t leave their bed.

Here is the story, via Dustin Palmer.

Everyone is upset at Amazon, but…

When we reported last month on the approximately $4.5 billion that city taxpayers are spending on the “dynamic neighborhood” of Hudson Yards on Manhattan’s West Side, eagle-eyed readers may have noticed that our breakdown of the costs featured a tilde (~) before the $750 million figure for tax breaks for commercial developers — indicating that “this figure is our best guess.”

Now, a draft paper by two New School researchers has conducted an even more comprehensive trawl for Hudson Yards public costs, and while it generally confirms our analysis, it finds a couple of items we missed: A total of $1.1 billion worth of items, in fact, bringing the public price tag to a staggering $5.6 billion, with hundreds of millions of dollars still to flow from city coffers.

Ho hum!  It’s not a tech company, so who cares?  Here is the article, via Alex X.  As for FoxConn and Wisconsin: “Remember: Wisconsin is giving Foxconn more $$$ and incentives than New York, Virginia and Tennessee combined gave Amazon. And the real kicker? Foxconn will create far fewer jobs (13,000) than Amazon (55,000)”

Do we need a Journal of Controversial Ideas?

That is the topic of my latest column for Bloomberg, here is one excerpt:

Now enter a newly announced project, called the Journal of Controversial Ideas. It will publish one issue per year, devoted to ideas that otherwise may not receive a fair hearing, and it will allow for anonymous or pseudonymous publication. Princeton philosopher Peter Singer is one of the names associated with the journal, which does not yet have an agreement with a publisher.

I am skeptical though not hostile toward this enterprise. It is sad that such a journal is seen as necessary. But I would suggest instead putting forth your ideas on a blog, on Twitter or on YouTube. Many politically incorrect figures have done just that. A Jordan Peterson YouTube lecture might range from the Bible to Jung to a critique of contemporary feminism, none of it refereed, but he has attracted millions of viewers. At the end of it all you get the Jordan Peterson worldview, which I suspect has more resonance than any particular empirical claim Peterson might make along the way.

In an internet-centered intellectual world, what persuades people is reading or hearing a charismatic personality, year in year out, promoting a particular view of the world. A lot of controversial ideas will have to ride that roller coaster, for better or worse.

The Journal of Controversial Ideas is intended to be open access, though without a publishing contract we can’t know if it will have an open online comments section. It would be odd if not (would we have to create a companion Journal of Controversial Comments?), but with open comments you have to wonder whether a prestige publisher will take on the associated libel and reputational risks, and how high status the journal actually will be. It would not be practical to referee the comments, but that may mean the truly open internet, with its free-for-all atmosphere, will remain the dominant source for controversial ideas. “Controversial for me but not for thee” hardly seems like a winning slogan for such a revisionist enterprise.

Overall, I think controversial ideas will do best on the non-refereed internet, but I am not opposed to giving this venture a try.  Refereeing is supposed to boost status, but will anyone put a publication here on their tenure vita?  And:

To make a controversial idea stick through the academic process, maybe you do have conquer the biases and beat the odds against you, as Harvey MansfieldRobert P. George and Oded Galor have done (to name just three). You also might pursue a “Straussian” approach, embedding subversive messages in your paper and covering them up with flowery rhetoric, hoping that some but not too many people notice what you are really saying.

Do read the whole thing.

Ho hum, or hidden externalities?

The ratings agency Fitch shrugged on Tuesday at what it considered the “muted impact” on the economies and credit ratings of New York and Washington.

According to Fitch, 25,000 jobs are the equivalent of about a quarter of a percentage point of all the jobs in metro New York. In metro Washington, they’d represent about three-quarters of a percentage point of the labor force. The Washington region is already growing by about 50,000 jobs, or an Amazon HQ2, each year, according to the D.C. Policy Center. New York over the past year gained about 70,000 jobs.

Here is more from Emily Badger at the NYT.

The sex recession

From Kate Julian at The Atlantic:

Gen Xers and Baby Boomers may also be having less sex today than previous generations did at the same age. From the late 1990s to 2014, Twenge found, drawing on data from the General Social Survey, the average adult went from having sex 62 times a year to 54 times. A given person might not notice this decrease, but nationally, it adds up to a lot of missing sex. Twenge recently took a look at the latest General Social Survey data, from 2016, and told me that in the two years following her study, sexual frequency fell even further.

Some social scientists take issue with aspects of Twenge’s analysis; others say that her data source, although highly regarded, is not ideally suited to sex research. And yet none of the many experts I interviewed for this piece seriously challenged the idea that the average young adult circa 2018 is having less sex than his or her counterparts of decades past. Nor did anyone doubt that this reality is out of step with public perception—most of us still think that other people are having a lot more sex than they actually are.

I enjoyed this sentence:

In a famous 2007 study, people supplied researchers with 237 distinct reasons for having sex, ranging from mystical (“I wanted to feel closer to God”) to lame (“I wanted to change the topic of conversation”). The number of reasons not to have sex must be at least as high.

This is interesting too:

“Millennials don’t like to get naked—if you go to the gym now, everyone under 30 will put their underwear on under the towel, which is a massive cultural shift,” Jonah Disend, the founder of the branding consultancy Redscout, told Bloomberg last year. He said that designs for master-bedroom suites were evolving for much the same reason: “They want their own changing rooms and bathrooms, even in a couple.” The article concluded that however “digitally nonchalant” Millennials might seem—an allusion, maybe, to sexting—“they’re prudish in person.”

The sex recession remains a puzzle.  Here is my much earlier blog post on why people don’t have more sex.