Category: Law

Did Ireland really have a housing bubble?

Ireland was not a story of overbuilding caused by laissez-faire policy, or an experience that defied standard economics. Ireland built very few ghost towns – housing excesses, where they occurred, were a product of government tax policy, rather than irrational markets. And supply and demand perform very well in explaining the trends.

And:

How on earth, you might ask, has Ireland ended up with almost all parts of its policy system trying to get lots more housing built – but the key cogwheel doing its utmost to hold new housing back? The answer, ironically, is Ireland’s own policymakers falling for the myths of the last bubble. It seems that the key personnel of the OPR believe the north-west of the country built too many homes in the 2000s because of state inattention and a wayward market, rather than as the result of extraordinary state effort to bring about that outcome. Without those reliefs, there is now little risk that new homes will be built where there is no long-term need.

Here is more from Ronan Lyons at Works in Progress, volume 6.  Irish housing is for the most part very expensive today. Dublin is one of the most expensive rental markets in the world.  Here is the 2019 NYT on the housing crisis in Ireland:

Homeownership has dropped, evictions and homelessness have climbed sharply, surging demand for rental units has led to a shortage, and soaring rents are fodder for daily conversation, political campaigns and street protests.

So perhaps we should speak of the Irish housing panic of the downturn rather than the bubble of the upturn?  The full history here remains to be written.  Somehow these are episodes most commentators do not wish to revisit.

We need a better tax system for crypto

From N., an MR reader:

I own crypto in 3 different centralized exchanges, two hardware wallets, one software wallet (Metamask), have four cryptos staked in multiple different pools and I also have some cryptos I gained by mining them using my GPUs. I have made 600+ transactions between the exchanges, wallets, and staking pools. I hold 75% of my portfolio and trade the rest. So most of these transactions were for trading one coin for another from which I have profited handsomely in the 2021 bull cycle run.

But I am doing my Crypto taxes right now its an unbelievably complicated nightmare. Prior to 2020 I only held a Coinbase account and I downloaded the tax forms or the transaction list as a .csv file from it and submitted them to my tax advisor. But in 2021 I have gone deeper into crypto and I have purchased hardware wallets, held crypto in soft wallets, DeFi platforms like Aave, staked crypto, mined crypto, and traded crypto between exchanges for lower transaction fees, for coins that are available only in certain centralized and decentralized exchanges, etc etc. Many of these types of crypto transactions are taxed differently and are from different institutions.

So it’s impossible for me to do my crypto taxes easily with just a single tax form from Coinbase. I have to link all my exchanges (and expose all my crypto holdings and trades) to a crypto tax website, I have decided to use Koinly.io which charges $99 to do my taxes. I do not have any other realistic choice.

After I linked all 3 centralized exchanges where I hold crypto, the capital gains estimate Koinly.io gave seemed too large. I realized it was because it was counting the crypto I sent from centralized exchanges like Coinbase to my hardware wallets as a “Sell” so it was counting them as capital gains. I have too many transactions of this nature to manually go through them one by one and mark them as “Transfer” i.e. transfer between my own wallets. So if I want the tax software to do it automatically, I have to expose the public keys of my hardware wallets so Koinly can automatically mark them as transfers. (I haven’t done this step yet because I don’t want to expose my hardware wallet public address to anyone or anywhere and I am researching alternate ways to do this.)

But if there isn’t any other way either a) I have to spend hours going through each transaction manually and marking them as “Transfers” or b) expose the public keys of my hardware wallets to Koinly.io.

Also, there is more manual work to be done for categorizing certain transactions as moved to staking pools, marking transactions from my mining pool to exchanges as income, etc.

I know that fiat currency debit and credit card purchases are absolutely not analogous to crypto but that’s the comparison many crypto maximalists make (“take down the traditional financial and banking system!”).

Imagine if TurboTax needs your complete transaction history from your banking institutions and it goes through all credit and debit card transactions to accurately do your taxes. Would anyone accept that?

How many lives were lost because of the vaccines holdup?

…economist Garett Jones recently opined that Trump’s scuttled hopes to release a COVID-19 vaccine a few weeks earlier “likely would have saved at least 100,000 American lives.”

…Pfizer did not reveal its trial’s favorable results until November 9—six days after the election. The company had originally planned to consider submitting an EUA request to the FDA with just 32 data points; instead it gathered 94, and it waited another 11 days to accrue the requested safety data, plus even more data showing how well the vaccine worked, before making its filing.

…If a compassionate use program for COVID-19 vaccines had gone forward, doctors would have been able to prescribe them to nursing-home residents, even as the vaccine makers completed their clinical trials with integrity and gathered all the safety data requested under the “EUA Plus” requirements.

According to Marks, Birx asked Anthony Fauci and FDA Commissioner Stephen Hahn to encourage Pfizer and Moderna to apply for that program…

The actual timing of the COVID-19 vaccines’ release resulted from a complicated mix of bureaucratic caution, political calculations, and the choices made by vaccine manufacturers. While the benefits of the vaccines have become very clear since then, the precise human cost of that short delay remains a mystery.

Here is the full Brendan Borrell piece in The Atlantic, excellent throughout.  And don’t forget Brendan’s new and exciting book The First Shots: The Epic Rivalries and Heroic Science Behind the Race to the Coronavirus Vaccine.

Via Rich Dewey.

My Israel-only Conversation with the excellent Russ Roberts

Here is the audio, video, and transcript, here is the CWT summary:

In this special crossover special with EconTalk, Tyler interviews Russ Roberts about his new life in Israel as president of Shalem College. They discuss why there are so few new universities, managing teams in the face of linguistic and cultural barriers, how Israeli society could adapt to the loss of universal military service, why Israeli TV is so good, what American Jews don’t understand about life in Israel, what his next leadership challenge will be, and much more.

We didn’t shy away from the tough stuff, here is one question:

COWEN: Let me ask you another super easy question. Let’s say we think that under current circumstances, a two-state solution would not lead to security either for Israel or for the resulting Palestinian state. Many people believe that. Let’s say also, as I think you believe, that a one-state solution where everyone votes would not lead to security for a current version of Israel or even a modified version of it.

Let’s say also that the current reliance of the Palestinian territories on the state of Israel for protection, security, intelligence, water — many important features of life — prevent those governing bodies from ever attaining sufficient autonomy to be a credible peace partner, guaranteer of its own security, and so on. From that point of view, what do we do? We’re not utilitarians. We’re thinking about what’s right and wrong. What’s the right thing to do?

Do read Russ’s answer!  (Too long to excerpt.)  And:

COWEN: Now, the United States has about 330 million people, yet there are more Israeli TV shows I want to watch than American TV shows. There’s Srugim, there’s Shtisel, there’s Prisoners of War, there’s In Judgment, there’s Tehran. There’s more. Why is Israeli TV so good?

ROBERTS: I’m glad you mentioned Prisoners of War, which doesn’t get enough — Prisoners of War is in my top five. If I had to list my top five, I’d pick Shtisel, Prisoners of WarThe Americans, probably The Wire, and The Crown. Do you have a top five that you could reel off?

COWEN: The Sopranos would be my number one. Srugim and Prisoners of War plausibly would be in my top five.

We then consider the Israeli topic at hand.  Interesting throughout, a very good dialogue.

Raise your hand if you think this is a good idea

…if the Food and Drug Administration decides to update Covid-19 vaccines to take better aim at Omicron or other variants, it is unlikely to go it alone.

Instead, a senior FDA official told STAT, the agency expects to take part in an internationally coordinated program aimed at deciding if, when, and how to update Covid-19 vaccines. The approach would ensure decisions are not left solely to individual vaccine manufacturers.

“We can’t have our manufacturers going willy-nilly [saying], ‘Oh well, the EMA decided they wanted this composition, but FDA wanted that composition,’” the official said, referring to the European Medicines Agency. “So we are very much of the mind that we would like to be part of a more global process in helping to come to what vaccine composition there should be now.”

Designed for flexbility and speedy response?  I guess we’ll see.  Here is the full StatNews article.  And obviously, the entire public health community is up in arms about this…

The prisoner’s dilemma for prisoners and Mafia men

We develop experimental evidence on cooperation and response to sanctions by running prisoner’s dilemma and third party punishment games on three different pools of subjects; students, ordinary criminals and Camorristi (Neapolitan ‘Mafiosi’). The latter two groups were recruited from within prisons. Camorra prisoners show a high degree of cooperativeness and a strong tendency to punish defectors, as well as a clear rejection of the imposition of external rules even at significant cost to themselves. The subsequent econometric analysis further enriches our understanding demonstrating inter alia that individuals’ locus of control and reciprocity are associated with quite different and opposing behaviours amongst different participant types; a strong sense of self-determination and reciprocity both imply a higher propensity to punish for Camorra inmates, but quite the opposite for ordinary criminals, further reinforcing the contrast between the behaviour of ordinary criminals and the strong internal mores of Camorra clans.

Here is the paper by Annamarie Nese, et.al., via Ethan Mollick and Ilya Novak.

Where are the Variant Specific Boosters?

I wasn’t shocked at the failures of the CDC and the FDA. I am shocked that our government still can’t get its act together in the third year of the pandemic. Consider how lucky, yes lucky, we have been. Here’s Eric Topol:

…the original vaccines were targeted to the Wuhan ancestral strain’s spike protein from 2019. The spike protein, no less the rest of the original SARS-CoV-2 structure, is almost unrecognizable now in the form of the Omicron strain (see antigenic drift from prior post). While there’s naturally been much focus on the extraordinary number of mutations in the receptor binding domain and the rest of the spike protein, over 50 mutations are spread out throughout Omicron, making the prior major variants of concern (Alpha, Beta, Gamma, Delta) lightweights with respect to changes in structure that are not just linear or uni-dimensional. Each mutation can interact with others (epistasis); any mutation or combination of mutations has the potential to change the 3D structure of the virus. In this sense, Omicron is an overwhelming reboot of the ancestral strain.

Omicron is very different from the Wuhan ancestral strain and it’s only a matter of luck that the vaccines continue to work and that Omicron is likely less severe than Delta. Don’t tell me that viruses evolve to be less severe over time–that isn’t correct in theory or practice. The most one might say is that a very deadly virus may be difficult to transmit but that only closes off a small part of the evolutionary design-space. There is plenty of room for transmission and lethality to both increase. So the vaccines continue to work well. We got lucky. But for how long will our luck last? Do we really have to wait for a more transmissible, more deadly, more vaccine escaping variant before we act?

Where are the variant-specific boosters? The FDA has said they would approve them quickly, without new efficacy trials so I don’t think the problem is primarily regulatory. Why not catch-up to the virus and maybe even get a jump ahead with pan-coronavirus vaccines?

More generally, in our February 2021 paper in Science my co-authors and I argued that we were still leaving trillion dollar bills on the sidewalk by not investing in more vaccine capacity. I am sorry to say that we were right. Why the failure to invest more broadly?

Mostly I blame American lethargy. After 9/11 the country was angry and united and we had troops in Afghanistan within a matter of weeks and we had taken over the country in a matter of months. For better or worse, we acted quickly and with resolve. Yet, when the virus was killing at 9/11 levels every day the public never reached the same level of anger or resolve. Even now Congress has spent trillions on unemployment insurance, business protection, money for schools and stimulus but has not passed the American Pandemic Preparedness Plan, a pretty decent, mostly science-based investment plan.

80,000 hours ranks research and investment against Global Catastrophic Biologic Risk (GCBR) as among the most pressing and yet tractable problems to work on and yet they estimate that quality-adjusted only about a billion dollars is being spent on these risks. Moreover, COVID doesn’t even count as a GCBR, i.e. 80000 hours at least recognizes that things could be much worse.

I understand that future people don’t vote but even so I expected a little bit more foresight.

Australian sentences to ponder

The world number one player was questioned for over seven hours about his paperwork and who had approved medical exemption permission for his arrival in Australia.

Here is the link.  Supposedly the star won his case.  But another source relates:

However, Australia’s immigration minister has said he is “currently considering the matter” and the process of suspending Djokovic’s visa is “ongoing”.

Resentment people, resentment.  And why are the politicians doing so much speaking, rather than say the public health authorities?  I am a fan, however, of Judge Kelly (FT):

Kelly said that Djokovic had been granted a medical exemption and had filled out the necessary paperwork to enter Australia. “The point I am somewhat agitated about is what more could this man have done?” the judge told the court. He also questioned whether Djokovic had adequate time to consult his lawyers and agent after being told he would be deported.

I might even watch some of the tourney.

Whither Australian liberty and rule of law?

According to a person close to the tournament with direct knowledge of the sequence of events, Djokovic followed every step of the country’s visa process properly. Moreover, the person said, Djokovic’s medical exemption was granted with all identifying information redacted, ruling out the possibility of favoritism for the tennis star.

But in the view of the person close to the Open, Australian authorities “did an about-face” on Djokovic’s status after his disclosure of being granted a medical exemption to covid vaccination requirements sparked outrage in Melbourne and throughout the country from citizens who have been subject to exceedingly strict protocols for nearly two years.

“He did everything correctly,” the person said. “But the goal posts have been changed — for him.”

Here is more from the very pro-vaccine Washington Post.  Has the culture there become so worn down from internal restrictions that they are so resentful?  Over ninety percent of the Australian public is vaccinated, and omicron is spreading there in any case.  Maybe there was some minor problem in the visa application, but so often there is — should the result really be such last minute political grandstanding?  It would have been easy enough to inform him in advance that maybe he would not be admitted into the country, right?  Is his case now really going to receive a fair hearing?

Arnold Kling’s proposal for regulatory reform

To improve our agencies’ performance, we need to think about restructuring the federal bureaucracy itself.

I propose we do so by creating two positions within the executive branch that operate in tension with each other. The first would be the chief operating officer, charged with managing the administrative agencies. The second would be the chief auditor, charged with leading a watchdog agency that monitors the administrative state for effectiveness and abuses of authority. Both the president and Congress would oversee the balance of power between the two positions.

Much like that of a private firm, the chief operating officer (COO) of the regulatory state would direct the operations of the entire executive branch, including independent agencies like the FDA, the Federal Trade Commission, the Federal Communications Commission, the Federal Reserve Board, and the Patent and Trademark Office. The COO’s charge would be to maximize operational effectiveness. He would have the authority to make decisions without the approval of the president.

Unlike presidents, who tend to enter the Oval Office without having supervised anything larger than a Senate staff, the COO should come into office with strong organizational-management experience — ideally based on having led a large, private-sector firm. This person should be familiar with the challenges of improving incentive systems, streamlining organizational processes, planning, budgeting, facilitating coordination among disparate units, articulating objectives, and aligning organizational efforts toward those objectives. He should have the authority to put this experience to work within the regulatory state.

To unravel the tangle of agencies that are the legacy of so many congressional bills, the COO should be empowered to re-organize, restructure, merge, or eliminate any existing agencies, refine their missions, and appoint their directors.

And:

With a COO in charge of managing government agencies, the roles of Congress and the president would adjust accordingly. Congress would act more like a board of directors with respect to the agencies, and the president would act more like a board chairman. The COO would assume the responsibility of presenting a plan and budget to Congress for approval, while the president would have the authority to hire and fire the COO at will. In a spirit of conservative incrementalism, we could first apply the COO model to one functional domain, such as domestic infrastructure, before extending it to the others.

The second new position — the chief auditor (CA) — would lead a powerful audit agency that provides independent evaluations of agency performance.

Worth a read in full.

ProPublica on the FDA and Rapid Tests

Lydia DePillis has written the best piece on the FDA that I have ever read in a mainstream news publication. It gets everything right and yes it frankly verifies everything that I have been saying about the FDA and rapid tests for the last year and a half. I wish it had been written earlier but I suppose that illustrates how difficult it is to radically change people’s mindset from the FDA as protector to the FDA as threat. The sub head is:

Irene Bosch developed a quick, inexpensive COVID-19 test in early 2020. The Harvard-trained scientist already had a factory set up. But she was stymied by an FDA process experts say made no sense.

The piece recounts how cheap, rapid tests could have been approved in March of 2020! Here’s the opening bit:

When COVID-19 started sweeping across America in the spring of 2020, Irene Bosch knew she was in a unique position to help.

The Harvard-trained scientist had just developed quick, inexpensive tests for several tropical diseases, and her method could be adapted for the novel coronavirus. So Bosch and the company she had co-founded two years earlier seemed well-suited to address an enormous testing shortage.

E25Bio — named after the massive red brick building at MIT that houses the lab where Bosch worked — already had support from the National Institutes of Health, along with a consortium of investors led by MIT.

Within a few weeks, Bosch and her colleagues had a test that would detect coronavirus in 15 minutes and produce a red line on a little chemical strip. The factory where they were planning to make tests for dengue fever could quickly retool to produce at least 100,000 COVID-19 tests per week, she said, priced at less than $10 apiece, or cheaper at a higher scale.

“We are excited about what E25Bio is capable of shipping in a short amount of time: a test that is significantly cheaper, more affordable, and available at-home,” said firm founder Vinod Khosla. (Disclosure: Khosla’s daughter Anu Khosla is on ProPublica’s board.)

On March 21 — when the U.S. had recorded only a few hundred COVID-19 deaths  Bosch submitted the test for emergency authorization, a process the Food and Drug Administration uses to expedite tests and treatments.

You know how the story ends but really READ the WHOLE THING.

Stablecoin sentences to ponder

The real reason people use stablecoins is regulations make it difficult to convert crypto assets to traditional assets. Stablecoins are a creature of regulation in the same sense that money market funds were created in the 1970s to get around government limits on interest banks could pay retail depositors while the economy was running at double-digit inflation.

That is from Aaron Brown at Bloomberg.

The Slow Rollout of Rapid Tests

I thought the Biden administration would at least make original pandemic errors. But no, its been making all the same errors. Slow on vaccines, slow on rapid testing and slow on new drugs, and far too little investment. Still after a year and half of shouting it from the rooftops we are getting some rapid tests. Josh Gans has an interesting reminder focusing on Canada that this has been an example of expert failure not just US failure. 

Rapid test advocates such as myself have suddenly moved from fringe crazies who were told they didn’t understand the science to we need them and we need them now.

Several cases in point:

  • The CDC now says that unvaccinated students exposed to Covid can “test to stay.” That is, rather than sending all the students in a class (or a school!) home when one tests positive for Covid, they test the students instead and so long as they are negative, they stay.
  • The US Government is going to order 500 million rapid tests and distribute them free to the public … by mail!

It is hard to appreciate what a sea change this is in terms of attitude. A year ago, when we tried to roll out rapid tests — that had already been purchased and were sitting in their millions in warehouses in Canada — to Canadian workplaces, we were told that those tests had to be administered by health care professionals in PPE in secure and sanitised environments with all manner of precautions taken that really took the “rapid” out of rapid testing let alone exploding the costs to businesses who wanted to keep their workers safe. This was because they required those long-swabs etc. Eventually, short swabs were permitted. Then self-swabbing supervised in the workplace. Then swabbing at home while on a virtual call with a professional for that supervision with the swabs being picked up and then taken for safe disposal. Finally, we got to self-administered, at-home screening without supervision and you could pop your negative swan in the bin. A year after we had been told that you needed a full-court medical professional press to do this, our kids in Ontario were sent home with 5 rapid tests to use over the holidays. Only a couple of weeks ago, the Ontario government’s advisory board, the Ontario Science Table, finally endorsed the use of rapid tests in this way.

Earlier data on Texas abortion restrictions

Between 2011 and 2014, Texas enacted three pieces of legislation that significantly reduced funding for family planning services and increased restrictions on abortion clinic operations. Together this legislation creates cross-county variation in access to abortion and family planning services, which we leverage to understand the impact of family planning and abortion clinic access on abortions, births, and contraceptive purchases. In response to these policies, abortions to Texas residents fell 20.5%and births rose 2.6% in counties that no longer had an abortion provider within 50 miles. Changes in the family planning market induced a 1.5% increase in births for counties that no longer had a publicly funded family planning clinic within 25 miles. Meanwhile, responses of retail purchases of condoms and emergency contraceptives to both abortion and family planning service changes were minimal.

That is an NBER paper from 2017 by Stefanie Fischer and Corey White.