Category: Political Science

My Conversation with Karl Ove Knausgaard

Here is the audio and transcript, this was one of my favorite Conversations. Here is the CWTeam summary:

Knausgård’s literary freedom paves the way for this conversation with Tyler, which starts with a discussion of mimesis and ends with an explanation of why we live in the world of Munch’s The Scream. Along the way there is much more, including what he learned from reading Ingmar Bergman’s workbooks, the worst thing about living in London, how having children increased his productivity, whether he sees himself in a pietistic tradition, thoughts on Bible stories, angels, Knut Hamsun, Elena Ferrante, the best short story (“Tlön, Uqbar, Orbis Tertius”), the best poet (Paul Celan), the best movie (Scenes from a Marriage), and what his punctual arrival says about his attachment to bourgeois values.

Here is one excerpt:

KNAUSGÅRD: You have this almost archetypical artist putting his art before his children, before his family, before everything. You have also Doris Lessing who did the same — abandoned her children to move to London to write.

I’ve been kind of confronted with that as a writer, and I think everyone does because writing is so time consuming and so demanding. When I got children, I had this idea that writing was a solitary thing. I could go out to small islands in the sea. I could go to lighthouses, live there, try to write in complete . . . be completely solitary and alone. When I got children, that was an obstruction for my writing, I thought.

But it wasn’t. It was the other way around. I’ve never written as much as I have after I got the children, after I started to write at home, after I kind of established writing in the middle of life. It was crawling with life everywhere. And what happened was that writing became less important. It became less precious. It became more ordinary. It became less religious or less sacred.

It became something ordinary, and that was incredibly important for me because that was eventually where I wanted to go — into the ordinary and mundane, even, and try to connect to what was going on in life. Life isn’t sacred. Life isn’t uplifted. It is ordinary and boring and all the things, we know.

And:

COWEN: So many great Norwegian writers — Ibsen, Sigrid Undset, Knut Hamsun — there’s nationalism in their work. Yet today, liberals tend to think of nationalism as an unspeakable evil of sorts. How do we square this with the evolution of Norwegian writing?

And if one thinks of your own career, arguably it’s your extreme popularity in Norway at first that drove your later fame. What’s the connection of your own work to Norwegian nationalism? Are you the first non-nationalist great Norwegian writer? Is that plausible? Or is there some deeper connection?

KNAUSGÅRD: I think so much writing is done out of a feeling of not belonging. If you read Knut Hamsun, he was a Nazi. I mean, he was a full-blooded Nazi. We have to be honest about that.

COWEN: His best book might be his Nazi book, right? He wrote it when he was what, 90?

KNAUSGÅRD: Yeah.

COWEN: On Overgrown Paths?

KNAUSGÅRD: Yeah.

COWEN: To me, it’s much more interesting than the novels, which are a kind of artifice that hasn’t aged so well.

KNAUSGÅRD: Yeah.

COWEN: But you read On Overgrown Paths, you feel like you’re there. It’s about self-deception.

KNAUSGÅRD: It’s true, it’s a wonderful book. But I think Hamsun’s theme, his subject, is rootlessness. In a very rooted society, in a rural society, in a family-orientated society like Norway has been — a small society — he was a very rootless, very urban writer.

He went to America, and he hated America, but he was America. He had that in him. He was there in the late 19th century, and he wrote a book about it, which is a terrible book, but still, he was there, and he had that modernity in him.

He never wrote about his parents. Never wrote about where he came from. All his characters just appear, and then something happens with them, but there’s no past. I found that incredibly intriguing just because he became the Nazi. He became the farmer. He became the one who sang the song about the growth. What do you call it? Markens Grøde.

COWEN: Growth of the Soil.

And:

COWEN: Arnold Weinstein has a book on Nordic culture, and he argues that the sacrifice of the child is a recurring theme. It’s in Kierkegaard’s Fear and Trembling. It’s in a number of Ibsen plays, Bergman movies. Has that influenced you? Or are you a rejection of that? Are you like Edvard Munch, but with children, and that’s the big difference between you and Munch, the painter?

I told you we ask different questions.

KNAUSGÅRD: Yeah, yeah. You just said different. You didn’t say difficult.

Knausgaard showed up for the taping carrying a package of black bread, which he forgot to take with him when leaving.  So for the rest of the day, I enjoyed his black bread…

Americans trust their government more than you are being told

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

Americans’ trust in their government is abysmally low, according to both survey data and a more subjective reading of opinions about President Donald Trump and Congress. I hold a contrarian view: Trust in the actual operations of government is pretty high, and the real growing mistrust is of each other.

Consider first that the Trump administration’s record spending and deficits don’t seem all that unpopular, even among those who detest Trump or might favor different spending priorities. No major candidate is campaigning on a platform of fiscal responsibility and restraint, and that is a sign of high trust in government.

I go through the major government programs, and show they are (mostly) pretty well trusted by the American people.  Here is another consideration:

Finally, interest rates on government debt have been remarkably low for years, probably the single best measure of trust in a government; less trusted countries such as Argentina and Turkey have to pay very high interest rates to borrow. The recent rise in U.S. rates is due more to an economic expansion than to rising fears of default.

Here is the basic model:

In reality, as people get older, they rely on government for more and more. While that is indeed a form of trust, it also increases anxiety about those in charge, and their values and priorities. The higher level of anxiety exists precisely because there is, for better or worse, greater dependence. Don’t confuse the resulting nervousness with a lack of trust.

Our leaders aside, we trust the actual operation of government on the ground, so to speak.  These days, what we do not trust is each other:

Many Democrats and Republicans do not want their children to marry into the other political party, for instance, and these preferences are growing stronger. So when one branch of the government is affiliated with one of the parties, as it inevitably is, members of the other party will voice a low level of trust. But their complaint may be about the supporters of that branch of the government as much as the government itself.

Recommended.

The politics of CEOs

We find that more than 57% of CEOs are Republicans [defined by 2/3 or more campaign contributions to Republicans], 19% are Democrats…and the rest are Neutral [do not contribute 2/3 of their campaign spending to either of the two major parties].  Therefore, Republican CEOs are more than three times as Democratic CEOs.  Furthermore, Republican CEOs lead companies with almost twice the asset value of companies led by Democratic CEOs.

That is from 2000-2017, across the S&P 1500.  And:

We show that the median CEO directs 75% of his or her total contributions to Republicans.

And:

We find that companies led by Republican CEOs are less transparent to their investors on whether how, and how much they spend on politics.

The most Republican-leaning sectors are energy (89.1%), manufacturing, and chemicals.  Business equipment and telecoms are the least-leaning R to D sectors for their CEOs, though still Republican by clear margins.  In the Northeast and West the number of Democratic CEOS has almost caught up to the Republicans.  As for female CEOs, they lean Republican 34.3% to Democratic 32.3%, a small margin but still more Republican donors.

That is all from a new paper The Politics of CEOs, by Alma Cohen, Moshe Hazan, Roberto Tallarita, and David Weiss, NBER link here.

Money lending and the origins of anti-Semitism

We study the role of economic incentives in shaping the coexistence of Jews, Catholics, and Protestants, using novel data from Germany for 1,000+ cities. The Catholic usury ban and higher literacy rates gave Jews a specific advantage in the moneylending sector. Following the Protestant Reformation (1517), the Jews lost these advantages in regions that became Protestant. We show (i) a change in the geography of anti-Semitism with persecutions of Jews and anti-Jewish publications becoming more common in Protestant areas relative to Catholic areas; (ii) a more pronounced change in cities where Jews had already established themselves as moneylenders. These findings are consistent with the interpretation that, following the Protestant Reformation, Jews living in Protestant regions were exposed to competition with the Christian majority, especially in moneylending, leading to an increase in anti-Semitism.

That is from a new AER piece by Sascha O. Becker and Luigi Pascali.

Big business isn’t big politics

That is my recent essay, adapted in Foreign Policy, from my new book Big Business: Love Letter to an American Anti-Hero.  Here is the opening:

The basic view that big business is pulling the strings in Washington is one of the major myths of our time. Most American political decisions are not in fact shaped by big business, even though business does control numerous pieces of specialist legislation. Even in 2019, big business is hardly dominating the agenda. U.S. corporate leaders often promote ideas of fiscal responsibility, free trade, robust trade agreements, predictable government, multilateral foreign policy, higher immigration, and a certain degree of political correctness in government—all ideas that are ailing rather badly right now.

To be sure, there is plenty of crony capitalism in the United States today. For instance, the Export-Import Bank subsidizes U.S. exports with guaranteed loans or low-interest loans. The biggest American beneficiary is Boeing, by far, and the biggest foreign beneficiaries are large and sometimes state-owned companies, such as Pemex, the national fossil fuel company of the Mexican government. The Small Business Administration subsidizes small business start-ups, the procurement cycle for defense caters to corporate interests, and the sugar and dairy lobbies still pull in outrageous subsidies and price protection programs, mostly at the expense of ordinary American consumers, including low-income consumers.

…overall, lobbyists are not running the show. The average big company has only 3.4 lobbyists in Washington, and for medium-size companies that number is only 1.42. For major companies, the average is 13.9, and the vast majority of companies spend less than $250,000 a year on lobbying. Furthermore, a systematic study shows that business lobbying does not increase the chance of favorable legislation being passed for that business, nor do those businesses receive more government contracts; contributions to political action committees are ineffective too.

If you are looking for a villain, it is perhaps best to focus on how corporations sometimes help poorly staffed legislators evaluate and draft legislation. But again, national policy isn’t exactly geared to making businesses, and particularly big business, entirely happy.

References and further support are available in the book,

The progressive nature of big business

That is my new opinion piece for The Washington Post, derived from my Big Business: A Love Letter to an American Anti-Hero.  Here is one excerpt:

Yet big business often has been a strong progressive force in U.S. history, not only by providing jobs but also by spreading emancipatory practices and norms.

For instance, McDonald’s, General Electric, Procter & Gamble and many of the big tech companies offered health care and other legal benefits for same-sex partners well before the Supreme Court legalized gay marriage in 2015. In addition to dramatically improving the lives of thousands of Americans, the companies’ moves put a mainstream stamp of approval on the notion of same-sex marriage itself.

And:

The larger the business, the more tolerant the institution is likely to be of employee and customer personal preferences. A local baker might refuse to make a wedding cake for a gay couple for religious reasons, but Sara Lee, which tries to build very broadly based national markets for its products, is keen on selling cakes to everyone. The bigger companies need to protect their broader reputations and recruit large numbers of talented workers, including from minority groups. They can’t survive and grow just by cultivating a few narrow networks as either their workers or customers.

There are further arguments at the link.

Sludge Audits

Consumers, employees, students, and others are often subjected to “sludge”: excessive or unjustified frictions, such as paperwork burdens, that cost time or money; that may make life difficult to navigate; that may be frustrating, stigmatizing, or humiliating; and that might end up depriving people of access to important goods, opportunities, and services. Because of behavioral biases and cognitive scarcity, sludge can have much more harmful effects than private and public institutions anticipate. To protect consumers, investors, employees, and others, firms, universities, and government agencies should regularly conduct Sludge Audits to catalogue the costs of sludge, and to decide when and how to reduce it. Much of human life is unnecessarily sludgy. Sludge often has costs far in excess of benefits, and it can have hurt the most vulnerable members of society.

That is the abstract of a new paper by Cass Sunstein.

What is China’s Belt and Road?

Another form of domestic politics?  Here is Andrew Batson on his blog:

The Belt and Road is really the expansion of a specific part of China’s domestic political economy to the rest of the world. That is the nexus between state-owned contractors and state-owned banks, which formed in the domestic infrastructure building spree construction that began after the 2008 global financial crisis (and has not yet ended).

Local governments discovered they could borrow basically without limit to fund infrastructure projects, and despite many predictions of doom, those debts have not yet collapsed. The lesson China has learned is that debt is free and that Western criticisms of excessive infrastructure investment are nonsense, so there is never any downside to borrowing to build more infrastructure. China’s infrastructure-building complex, facing diminishing returns domestically, is now applying that lesson to the whole world.

In Belt and Road projects, foreign countries simply take the place of Chinese local governments in this model (those who detect a neo-imperial vibe around the Belt and Road are, in this sense, onto something). Even the players are the same. In the 1990s, China Development Bank helped invent the local-government financing vehicle structure that underpinned the massive domestic infrastructure. Now, China Development Bank is one of the biggest lenders for overseas construction projects.

Those who defend the Belt and Road against the charge of debt-trap diplomacy are technically correct. But those same defenders also tend to portray the lack of competitive tenders and over-reliance on Chinese construction companies in Belt and Road projects as “problems” that detract from the initiative’s promise. They miss the central role of the SOE infrastructure-complex interest group in driving the Belt and Road. Structures that funnel projects funded by state banks to Chinese SOEs aren’t “problems” from China’s perspective–they are the whole point.

The fact that this model was dubbed the “Belt and Road Initiative” and turned into a national grand strategy by Xi Jinping effectively gave the SOE infrastructure complex carte blanche to pursue whatever projects they can get away with. These projects were no longer just money-makers for SOEs, but became a way to advance China’s national grand strategy–thereby immunizing them from criticism and scrutiny.

And Andrew is always worth reading on music and jazz.

Emergent Ventures, fourth cohort of award recipients

Kadeem and Savannah Noray, graduate students at Harvard, economics and HKS, general support and also to study how to identify undervalued, high potential K-12 students.

José Luis Ricón, for blogging and to develop further platforms for information dissemination. 

Arun Johnson, high school student in the Bay Area, to advance his work in physics, chemistry, nuclear fusion, and for general career development.

Thomas McCarthy, undergraduate at Dublin, Trinity College, travel grant to the Bay Area, and for his work on nuclear fusion and running start-up programs to cultivate young Irish entrepreneurs.

Natalya Naumenko, economist, incoming faculty at George Mason University, to study the long-term impact of nuclear explosions on health, and also more broadly to study the history of health in the Soviet Union and afterwards.  

Paul Novosad, with Sam Asher, assistant professor at Dartmouth, to enable the construction of a scalable platform for the integration and dissemination of socioeconomic data in India, ideally to cover every town and village, toward the end of informing actionable improvements.

Alexey Guzey, travel grant to the Bay Area, for blogging and internet writing, plus for working on systems for improving scientific patronage.

Dylan DelliSanti, to teach an economics class to prisoners, and also to explore how that activity might be done on a larger scale.

Neil Deshmukh, high school student in Pennsylvania, for general career support and also his work with apps to help Indian farmers identify crop disease and to help the blind interpret images.

Here is my previous post on the third cohort of winners, with links to the first and second cohorts.  Here is my post on the underlying philosophy behind Emergent Ventures.  You can apply here.

Caplan, Weinersmith, and Open Borders

Caplan and Weinersmith, in their splendid forthcoming graphic novel, present some rebuttals to the “cultural critique” of open borders.  For instance (and here I am presenting their views):

1. The average immigrant has political views which poll as pretty close to those of the average American.  They don’t even by huge margins favor more immigration.  (The author do admit that low-skilled immigrants do favor significantly less free speech, in any case on all of these points they do present actual numbers and visuals.)

2. Support for the welfare state remains strong in Western European nations, even as they have taken in many more migrants.

3. Open borders once before produced American political culture.

4. In “deep roots” terms, the United States already has a mediocre ancestry score, yet America has very high gdp and relatively strong political institutions.

5. There is an extended response to Garett Jones on IQ which I do not feel I can summarize well.  Toward the end, it is noted that babies adopted from poorer countries into richer countries typically do very well later in life.

6. The end of this chapter proclaims: “Open borders won’t destroy our freedom.  It’s going to bring freedom to all of mankind.”

I will again repeat my earlier point: the value and import of this new book does not very much depend on your actual opinion of open borders.  Still, if you would like to hear my views, I’ll repeat my earlier discussion:

And no I do not favor open borders even though I do favor a big increase in immigration into the United States, both high- and low-skilled.  The simplest argument against open borders is the political one.  Try to apply the idea to Cyprus, Taiwan, Israel, Switzerland, and Iceland and see how far you get.  Big countries will manage the flow better than the small ones but suddenly the burden of proof is shifted to a new question: can we find any countries big enough (or undesirable enough) where truly open immigration might actually work?

In my view the open borders advocates are doing the pro-immigration cause a disservice.  The notion of fully open borders scares people, it should scare people, and it rubs against their risk-averse tendencies the wrong way.  I am glad the United States had open borders when it did, but today there is too much global mobility and the institutions and infrastructure and social welfare policies of the United States are, unlike in 1910, already too geared toward higher per capita incomes than what truly free immigration would bring.  Plunking 500 million or a billion poor individuals in the United States most likely would destroy the goose laying the golden eggs.  (The clever will note that this problem is smaller if all wealthy countries move to free immigration at the same time, but of course that is unlikely.)

In any case, do buy the Caplan and Weinersmith book.  I have now begun to think there should be a book like this, or two, for every major political issue of import.

An Interview with the Retiring French Ambassador

An especially blunt and interesting interview with Gérard Araud, the French Ambassador, who is retiring (to America) from public life. Here’s one bit:

I don’t think that anything irreparable is happening in the U.S. I don’t know what would have happened in France if Marine Le Pen had been elected, because our institutions are much weaker.

Let’s look at the dogma of the previous period. For instance, free trade. It’s over. Trump is doing it in his own way. Brutal, a bit primitive, but in a sense he’s right. What he’s doing with China should have been done, maybe in a different way, but should have been done before. Trump has felt Americans’ fatigue, but [Barack] Obama also did. The role of the United States as a policeman of the world, it’s over. Obama started, Trump really pursued it. You saw it in Ukraine. You are seeing it every day in Syria. People here faint when you discuss NATO, but when he said, “Why should we defend Montenegro?,” it’s a genuine question. I know that people at Brookings or the Atlantic Council will faint again, but really yes, why, why should you?

These are the questions which are being put on the table in a brutal and a bit primitive way by Trump, but they are real questions.

Here’s another which reflects my own political arc watching the triumph and decline of more libertarian ideas. The tragedy is that the ideas worked as we said they would to make the world a much richer, more peaceful place but the ideas are being rejected anyway:

Bayoumy: Tell me about your memoirs.

Araud: My career had started with the election of [Ronald] Reagan, and my career is finishing with Trump. From Reagan to Trump you have, more or less, the neoliberal era—taxes were bad, borders were bad, and you have to trust the market. It’s also the period of the triumphant West … that the West was in a sense doomed to win. That sooner or later all the world will march triumphantly, to the triumph of the market. And suddenly the election of Trump and the populist wave everywhere in the Western world is for me, and I may be wrong, but for me means that this period is over.

My Conversation with Margaret Atwood

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.

[laughter]

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.

[laughter]

COWEN: In 1974, you wrote, “The Canadian sense of humor was often obsessed with the issue of being provincial versus being cosmopolitan.”

ATWOOD: Yeah.

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.

Who should Trump pick for the Fed Board of Governors?

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

First, we should not forget that the Federal Reserve system is actually a private corporation of sorts, albeit one with a unique government-backed charter. So if you are on the board of the Fed, you are not just a figurehead — you are responsible for parts of the company. You could be in charge of the Fed’s pension and benefit plans, for instance, or its payments system.

To be sure, running monetary policy for the entire nation, and to some extent the entire world, is more important than the smooth internal workings of the Fed. Still, those managerial responsibilities will impinge on a board member on a regular basis. If he or she screws them up, it will be harder to have high status within the Fed, and harder to keep one’s confidence and emotional equilibrium. Alternatively, a governor might become completely dependent on aides to perform those internal practical functions. That is not conducive toward broader autonomy on monetary policy front, either.

The bottom line is this: A good candidate for the Fed should have at least some practical managerial experience. You don’t have to be the next Bill Gates or Steve Jobs, but you should be just competent enough to forestall internal crises of bad management and to avoid losing face. For a lot of potential candidates, that is actually a pretty tall order, especially if they come from academia or have unorthodox backgrounds unrelated to finance.

And:

Of course the next board member will also be expected to have well-informed views, however you might define them, on monetary policy and regulation. But it would be a mistake to start with a set of agreeable or required views, and then use it to build a short list of advocates. It bears repeating: For a board member to be effective, political and bureaucratic skills are paramount. Without them, a board member may well end up as counterproductive, even when correct.

Recommended.