She requires no introduction, this conversation involved a bit of slapstick, so unlike many of the others it is better heard than read. Here is the audio and transcript. Here is the opening:
COWEN: Just to start with some basic questions about Canada, which you’ve written on for decades — what defines the Canadian sense of humor?
MARGARET ATWOOD: Wow. [laughs] What defines the Canadian sense of humor? I think it’s a bit Scottish.
COWEN: How so?
ATWOOD: Well, it’s kind of ironic. It depends on what part of Canada you’re in. I think the further west you go, the less of a sense of humor they have.
ATWOOD: But that’s just my own personal opinion. My family’s from Nova Scotia, so that’s as far east as you can get. And they go in for deadpan lying.
COWEN: In 1974, you wrote, “The Canadian sense of humor was often obsessed with the issue of being provincial versus being cosmopolitan.”
COWEN: You think that’s still true?
ATWOOD: Depends again. You know, Canada’s really big. In fact, there’s a song called “Canada’s Really Big.” You can find it on the internet. It’s by a group called the Arrogant Worms. That kind of sums up Canada right there for you.
The burden of the song is that all of these other countries have got all of these other things, but what Canada has is, it’s really big. It is, in fact, very big. Therefore, it’s very hard to say what is particularly Canadian. It’s a bit like the US. Which part of the US is the US? What is the most US thing —
COWEN: Maybe it’s Knoxville, Tennessee, right now. Right? The Southeast.
ATWOOD: You think?
COWEN: But it used to be Cleveland, Ohio.
ATWOOD: Did it?
COWEN: Center of manufacturing.
ATWOOD: When was that? [laughs] When was that?
COWEN: If you look at where the baseball teams are, you see what the US —
And from her:
ATWOOD: Yeah, so what is the most Canadian thing about Canada? The most Canadian thing about Canada is that when they ran a contest that went “Finish this sentence. As American as apple pie. As Canadian as blank,” the winning answer was “As Canadian as plausible under the circumstances.”
And a question from me:
COWEN: But you’ve spoken out in favor of the cultural exception being part of the NAFTA treaty that protects Canadian cultural industries. Is it strange to think that having more than half the [Toronto] population being foreign born is not a threat to Canadian culture, but that being able to buy a copy of the New York Times in Canada is a threat?
In addition to Canada, we talk about the Bible, Shakespeare, ghosts, her work habits, Afghanistan, academia, Peter the Great, writing for the future, H.G. Wells, her heretical feminism, and much much more.
Firefighting, the new primer on the financial crisis by the all-star team of Ben Bernanke, Timothy Geithner and Henry Paulson (BGP), is a well written, short overview of the consensus position on the U.S. financial crisis. The book has a number of good lines:
…financial institutions, unlike other businesses whose success depends primarily on the cost and quality of their goods and services, are dependent on confidence. That’s why the word “credit” comes from the Latin for “belief,” why we say we can “bank” on things we know to be true, why some financial institutions are called “trusts.”
…the most damaging problem with America’s capital rules was not that they were too weak, but that they were applied too narrowly.
Risk, like love, will find a way.
Firefighting offers a summary, consensus view of the causes of the crisis:
…the basic problems were too much risky leverage, too much runnable short-term financing, and the migration of too much risk to shadow banks where regulation was negligible and the Fed’s emergency safety net was too inaccessible. There were also too many major firms that were too big and interconnected to fail without threatening the stability of the system, and the explosion of opaque mortgage-backed derivatives had turned the health of the housing market into a potential vector for panic. Meanwhile, America’s regulatory bureaucracy was fragmented and outdated, with no one responsible for monitoring and addressing systemic risks.
Consult Adam Tooze’s magisterial Crashed for a more European and global view of the crisis, Hetzel’s The Great Recession for an explanation of the crisis based on monetary rather than financial disorder and Larry Ball’s The Fed and Lehman Brothers: Setting the Record Straight on a Financial Disaster for an exhaustive and different accounting of the politics especially around the decision not to bail out Lehman.
Given that the book takes a consensus view and given that all three authors have written previous books on the crisis, one might wonder why BGP wrote Firefighting. The answer is in two parts. Most importantly, Firefighting is a plea for discretion. At one point BGP write surprisingly directly if euphemistically:
The Fed also reinterpreted its emergency lending authority in creative ways to avert catastrophic collapses of Bear Stearns and AIG…
In other words, the Fed broke the law. That, at least, is how many in Congress saw it after the fact which is why Congress asserted its authority over banking by rewriting the rules but also removed a lot of discretionary authority from the Federal Reserve and the Treasury.
Overall, while the United States has much stronger safeguards against the occurrence of panic than it had before the crisis, it has weaker emergency authorities for responding when a panic occurs. Its crisis managers lack the power to inject capital, guarantee liabilities, or purchase assets without going to Congress…the Fed has lost its power to rescue individual firms and faces new constraints on its lending powers, while the Treasury has lost its ability to use the Exchange Stabilization Fund for guarantees.
What Congress takes it can also give but BGP are not sanguine about the effectiveness of American democracy:
…when an epic crisis does arrive, Congress would have the power to undo the preemptive limitations it has placed on crisis managers. But that is easier said than done in a nonparliamentary democracy where legislative changes require support from the president, the House of Representatives, and a filibuster proof majority in the Senate…it’s hard to look at the bitterly polarized politics of modern America and feel confident that a bipartisan consensus for unpopular but necessary actions would emerge when it mattered most.
Thus, BGP come down solidly on the side of technocracy and discretion rather than democracy and rules.
I believe the second reason that Bernanke, Geithner and Paulson wrote Firefighting is that they want their account of the crisis to be the history taught to the next generation. To that end, Firefighting is indeed a useful guide for teaching the crisis and is particularly good on timelines, major events and policy actions. About a third of Firefighting is a series of standalone charts (which aren’t even referenced within the text). Oddly, however, the book never tells you that the charts are available online, neither does the book’s homepage, but a little Google sleuthing uncovers that the charts were produced in cooperation with the Brookings Institution and can be found here. Anyone wanting to teach the crisis will find what they need in the charts supplemented of course with the discussion of financial intermediation in Modern Principles and the MRU videos on the Great Recession and the various Business Cycle Theories.
Or is it that there’s something wrong with culture, with the funding? Almost no grants go to younger scientists. When it’s scientists under age 40 that make […] of the most big discoveries, 2% of NIH grants go to scientists under age 40. That seems a little bit off. You have a peer-review process where anything heterodox can’t get funded. You have sort of a publish or perish dynamic where you have to do small, incremental things to publish lots of articles that don’t add up to anything ever…
And again, my sort of libertarian cut on what happened would be the history of was that we had a healthy, scientific world that was non-governmental. It was decentralized. It was idiosyncratic. Different people were doing different kinds of things. And in the 1930s, 1940s, it got centralized accelerated. The Manhattan Project…there was actually a way you could accelerate science temporarily by adding tons of money and centralizing…
So the centralization worked. But to use an ecological metaphor, it worked by creating a monoculture. And we’re now two generations in to where that monoculture has been just catastrophic.
That is from this taped dialogue between Peter and Bill Hurlbut, previously linked on MR.
Dueling declined as state capacity, measured by post offices, expanded:
Abstract: Scholars have long tried to understand the conditions under which actors choose to use violent versus non-violent means to settle disputes, and many argue that violence is more likely in weakly-institutionalized settings. Yet, there is little evidence showing that increases in state capacity lowers the use of violent informal institutions to resolve disputes. Utilizing a novel dataset of violence — specifically, duels — across American states in the 19th Century, we use the spread of federal post offices as an identification strategy to investigate the importance of state capacity for the incidence of violent dispute resolution. We find that post office density is a strong, consistent, and negative predictor of dueling behavior. Our evidence contributes to a burgeoning literature on the importance of state capacity for development outcomes.
Hat tip: Kevin Lewis.
Let’s assume, for purposes of argument, that basically all of the complaints about social media are correct. Then let’s also imagine, as Matt Yglesias periodically suggests on Twitter, that Facebook is shut down altogether, toss in Twitter and the others as well.
What would happen?
One possibility is that America would move toward a Chinese-style solution, with heavy censorship of the internet. Still, I think both public opinion and the First Amendment make that outcome unlikely. Furthermore, while the Chinese solution has been relatively practicable (as opposed to desirable) to date, there is no guarantee that will continue to be the case.
Alternatively, without tight censorship substitutes for Facebook and Instagram and YouTube and Twitter will arise, possibly based in other countries if regulation so dictates. They might be less ad-funded, less profitable, and less easy to use, but the basic technologies for “putting every single idea out there” are already out of the box. Furthermore, it won’t be that hard to find and circulate those ideas, including the very bad ones, through a mix of aggregation and search and focused spread and redistribution.
The first question is whether anyone actually thinks that such a world of less heavily capitalized communications entities would lead to greater responsibility. The first cut answer, drawing on basic economics, would seem to be no.
The broader point is the relative popularities of various ideas and sources still will be upended, just as the printing press and radio also had some fairly radical (and not entirely positive) effects in their times. In essence, various intellectual and ideological debates will need to be re-litigated and re-fought over the internet, just as they were redone over television and radio, or earlier through papyrus and also clay tablets, of course with somewhat different results each time.
Many people hate that reality, but a reality it is. Let’s even say you are right to hate that reality (NB: not exactly my view).
a) Go after the companies that make the clay tablets?
b) Go after the clay tablets and try to smash them?
c) Equip yourself to try to win the new intellectual and ideological battles for hearts and minds?
And what should we infer about the spiritual vigor of a society that might so heavily promote options a) and b)?
It seems so:
A voluntary army’s quality exceeds or falls below a drafted army’s average quality depending on whether selection is advantageous or adverse. Using a collection of data sets that cover the majority of the US Army soldiers during World War II, we test for adverse selection into the army. Rather, we find advantageous selection: volunteers and drafted men showed no significant difference in fatalities, but volunteers earned distinguished awards at a higher rate than drafted men, particularly after the attack on Pearl Harbor. Analyses at the level of units concur with our findings based on enlistment records.
That is from a newly published article by Javier A. Birchenall and Thomas G. Koch, via Robin Hanson.
For sale on eBay: what’s claimed to be “maybe the only” young Tyrannosaurus rex ever discovered for $2.95 million. Paleontologists decried the sale, saying that the specimen’s cost was artificially inflating the cost of other valuable fossils. “Only casts and other replicas of vertebrate fossils should be traded, not the fossils themselves,” an open letter from the Society of Vertebrate Paleontology in Bethesda, Maryland. read. “Scientifically important fossils like the juvenile tyrannosaur are clues to our collective natural heritage and deserve to be held in public trust.”
…“The asking price is just absurd,” one researcher said.
Here is the full story, via Ze’ev. Might this increase the incentive to find such fossils?
This thesis examines the implicit costs of building the Gothic churches of the Paris Basin built between 1100-1250, and attempts to estimate the percentage of the regional economy that was devoted to build them. I estimate that over this 150-year period, on average, 21.5 percent of the regional economy was devoted to the construction of these Gothic churches, 1.5 percent of which is directly related to the implicit cost of labor.
These data reveal that, in half of the Congresses over the past two decades, successful filibustering minorities usually represented more people than the majorities they defeated.
That is from Benjamin Eidelson in Yale Law Review, note that he is covering only 1991-2010.
No, I do not favor a gold standard, for reasons explained in this Bloomberg column. Still, it is sad/funny to watch the mood affiliation circus of those trying to suggest, in more or less the same breath, that Trump’s Fed picks are dangerous and terrible, and also that the gold standard is the worst idea ever. Here is one point of mine:
Historical data indicates that industrial production volatility was not higher before 1914, when the U.S. was on the gold standard, compared to after 1947, when it mostly wasn’t. And there are similar results for the volatility of unemployment. That’s not quite an argument for the gold standard, but it should cause opponents of the gold standard to think twice. Whatever the imperfections of a gold standard might be, monetary authorities make a lot of mistakes, too.
And here is the closer:
Most generally, I still think central bank governance can do a better job than a gold-based system that sometimes creates excess deflationary pressures.
Nonetheless, the contemporary world is always testing my belief in central banking. Exactly how will matters unfold when so many world leaders are not behaving as responsibly as they should? Might that irresponsibility seep into monetary policy? After all, populations are aging and debt is accumulating. Surely it is reasonable to worry that some of these governments will seek to monetize their debts and move toward excessively easy money.
Oh, but wait — I forgot one big new argument in favor of a gold standard: President Trump himself. Perhaps his management of central bank affairs is somewhat … erratic? Might it not be a good idea to have the operation of monetary policy protected by a greater reliance on rules? My personal preference is for a nominal GDP rule, but the irony is this: At the end of the day, the advocates of the gold standard, and their possible presence on the Federal Reserve Board, are themselves the best argument for … the gold standard.
This paper examines the effect of party affiliation on an individual’s political views. To do this, we exploit the party realignment that occurred in the U.S. due to abortion becoming a more prominent and highly partisan issue over time. We show that abortion was not a highly partisan issue in 1982, but a person’s abortion views in 1982 led many to switch parties over time as the two main parties diverged in their stances on this issue. We find that voting for a given political party in 1996, due to the individual’s initial views on abortion in 1982, has a substantial effect on a person’s political, social, and economic attitudes in 1997. These findings are stronger for highly partisan political issues, and are robust to controlling for a host of personal views and characteristics in 1982 and 1997. As individuals realigned their party affiliation in accordance with their initial abortion views, their other political views followed suit.
p.s. don’t call it “tribalism,” that is something else.
Not only have those who identify on the census as Indian risen from about 200,000 in 1900 to over 2 million by 2010; another 3 million identify as Native and something else. Of this ever-increasing population, in 2010 more than 70 percent lived in urban areas, continuing the trend begun in the years after World War II. Indians are young, too: 32 percent are under age eighteen, compared with 24 percent of the overall population. On reservations, the median age is twenty-six, compared with thirty-seven for the nation at large…Between 1990 and 2000, the income of Americans Indians grew by 33 percent, and the poverty rate dropped by 7 percent. There was no marked difference in income between Indians from casino-rich tribes and those from poorer tribes without casinos. Between 1990 and 1997 the number of Indian-owned businesses grew by 84 percent. And the number of Native kids enrolled in college has doubled in the last thirty years.
That is from David Treuer, The Heartbeat of Wounded Knee: Native America from 1890 to the Present.
It is undeniable that China since the late 1950s has deployed hard and soft power in its determination to exert influence over Africa. In the Mao era this translated into enormous aid budgets. By 1975, China was throwing ‘more than’ — in Zhou Enlai’s revealingly hazy formulation — 5 per cent of its national budget into foreign aid; in fact, two years earlier it had reached 6.92 per cent. Compare this proportion with the 0.7 percent of national income that the much wealthier UK annually reserves for international aid..It thus seems certain that Mao-era china spent a greater proportion of income on foreign aid — including in Africa — than did either the US (around 1.5 per cent of the federal budget in 1977) or the USSR (0.9 per cent of GNP in 1976).
That is from Julia Lovell, Maoism: A Global History, so far my favorite book of the year. One implication of course is that One Belt, One Road isn’t as new as you might think, and that contemporary China has more in common with the Mao era — and I’m not just referring to the censorship element — than many people realize.
That is the topic of my latest Bloomberg column, noting that lately Mexico has been demanding an apology from Spain for colonialism. Here is one bit:
Some features of good apologies are sincerity, overall compatibility with what the apologizer now stands for in other contexts, and a broad social willingness to accept that something indeed has been settled for the better.
OK, so how about Spain and Mexico? I am skeptical of this proposed apology, partly because it seems like a political maneuver by President Andrés Manuel López Obrador to garner political support and distract from his likely failure to successfully reform Mexico’s economy. The current Spanish government also is not a close descendant of the conquistadors, as it is a full-blown democracy and the conquest was almost 500 years ago. One can acknowledge the massive injustices of the history without thinking that current Spanish citizens necessarily should feel so guilty. And (until recently) Spain-Mexico relations have not been problematic, so it is not clear exactly what problem this apology is supposed to solve.
The current demand for an apology is a distraction from the enduring injustice of Mexico’s segregation. If Spaniards found their own reasons for wishing to apologize, that would be a good result. But on this demand, they are correct to give it a pass.
I also consider the United States, Australia, New Zealand, and Rwanda.