Category: Uncategorized
Saturday assorted links
1. Johnny Cash and Josef Stalin.
2. Noah Smith’s current take on libertarianism.
3. New Larry Summers talk on fiscal policy.
4. The business of giving private concerts to rich people (New Yorker).
5. Amitai Etzioni, RIP (NYT).
6. Japan patent fact of the day. Yikes.
7. Kaija Saariaho, RIP (NYT).
8. Legal bank stablecoins from Japan? And a summary of the new U.S. crypto bill.
Who gains from corporate tax cuts?
Goods producers increase their capital expenditure and employment in response to a cut in marginal corporate income tax rates or an increase in investment tax credits. In contrast, companies in the service sector mostly use any tax windfall to increase dividend payouts. We base our conclusions on a novel measure of U.S. firm-specific tax shocks that combines changes in statutory tax rates faced by each firm with narrative identified legislated U.S. federal tax changes between 1950 and 2006.
That is from a new NBER working paper by James Cloyne, Ezgi Kurt, and Paolo Surico.
Friday assorted links
2. Russell Hogg and Scott Sumner podcast on Japanese movies.
3. Foundations and Frontiers, some new essays on new technologies, by Anna-Sofia Lesiv.
4. “Meet the one-person team behind Antarctica’s longest-running newspaper, the Antarctic Sun.”
5. Benjamin Wallace-Wells on libertarianism (New Yorker).
6. The excellent Dan Senor podcasts with me.
7. How to keep people chatting.
8. Pentagon now hunting for UFOs with sensors actively built for that purpose.
The international competition heats up
Chinese startup MiniMax, working on AI solutions similar to that of Microsoft-backed OpenAI’s ChatGPT, is close to completing a fundraising of more than $250 million that will value it at about $1.2 billion, people familiar with the matter said.
The deal comes amid a global AI buzz kicked off by ChatGPT that has spread to China, shoring up stocks in artificial intelligence firms and prompting a flurry of domestic companies, such as Alibaba (9988.HK), Huawei (HWT.UL), and Baidu (9888.HK), to announce rival products.
Here is the link. And here is a Chinese professor from Fudan, critical of all the money being poured into LLM research in China, comparing it to Mao’s Great Leap Forward.
You have to be very critical of all sources from China, no matter what they say. Still, in terms of expected value I know what is the correct bet here, namely that China is a current and very active competitor in this arena, even if they are behind America so far.
Then there is the open source model Falcon, which is receiving very good reviews from multiple sources, such as this:
Falcon is a new family of very high-quality (and fully open-source!) LLMs that just made it to the top of the leaderboards.
Here's the "small" 7B version running on my mac with Core ML at ~4.3 tokens per second 🤯 pic.twitter.com/B1y4tyGzXA
— Pedro Cuenca (@pcuenq) June 2, 2023
If you don’t already know, Falcon is from…the UAE. Get the picture?
My excellent Conversation with Seth Godin
Here is the audio, video, and transcript from a very good session. Here is part of the episode summary:
Seth joined Tyler to discuss why direct marketing works at all, the marketing success of Trader Joe’s vs Whole Foods, why you can’t reverse engineer Taylor Swift’s success, how Seth would fix baseball, the brilliant marketing in ChatGPT’s design, the most underrated American visual artist, the problem with online education, approaching public talks as a team process, what makes him a good cook, his updated advice for aspiring young authors, how growing up in Buffalo shaped him, what he’ll work on next, and more.
Here is one excerpt:
COWEN: If you were called in as a consultant to professional baseball, what would you tell them to do to keep the game alive?
GODIN: [laughs] I am so glad I never was a consultant.
What is baseball? In most of the world, no one wants to watch one minute of baseball. Why do we want to watch baseball? Why do the songs and the Cracker Jack and the sounds matter to some people and not to others? The answer is that professional sports in any country that are beloved, are beloved because they remind us of our parents. They remind us of a different time in our lives. They are comfortable but also challenging. They let us exchange status roles in a safe way without extraordinary division.
Baseball was that for a very long time, but then things changed. One of the things that changed is that football was built for television and baseball is not. By leaning into television, which completely terraformed American society for 40 years, football advanced in a lot of ways.
Baseball is in a jam because, on one hand, like Coke and New Coke, you need to remind people of the old days. On the other hand, people have too many choices now.
And another:
COWEN: What is the detail you have become most increasingly pessimistic about?
GODIN: I think that our ability to rationalize our lazy, convenient, selfish, immoral, bad behavior is unbounded, and people will find a reason to justify the thing that they used to do because that’s how we evolved. One would hope that in the face of a real challenge or actual useful data, people would say, “Oh, I was wrong. I just changed my mind.” It’s really hard to do that.
There was a piece in The Times just the other day about the bibs that long-distance runners wear at races. There is no reason left for them to wear bibs. It’s not a big issue. Everyone should say, “Oh, yeah, great, done.” But the bib defenders coming out of the woodwork, explaining, each in their own way, why we need bibs for people who are running in races — that’s just a microcosm of the human problem, which is, culture sticks around because it’s good at sticking around. But sometimes we need to change the culture, and we should wake up and say, “This is a good day to change the culture.”
COWEN: So, we’re all bib defenders in our own special ways.
GODIN: Correct! Well said. Bib Defenders. That’s the name of the next book. Love that.
COWEN: What is, for you, the bib?
GODIN: I think that I have probably held onto this 62-year-old’s perception of content and books and thoughtful output longer than the culture wants to embrace, the same way lots of artists have held onto the album as opposed to the single. But my goal isn’t to be more popular, and so I’m really comfortable with the repercussions of what I’ve held onto.
Recommended, interesting throughout. And here is Seth’s new book The Song of Significance: A New Manifesto for Teams.
It was just a simulation run…designed to create that problem
https://twitter.com/harris_edouard/status/1664397003986554880
Please don’t be taken in by the b.s.! The rapid and uncritical spread of this story is a good sign of the “motivated belief” operating in this arena. And if you don’t already know the context here, please don’t even bother to try to find out, you are better off not knowing. There may be more to this story yet — context is that which is scarce — but please don’t jump to any conclusions until the story is actually out and confirmed.
Funny how people accuse “the AI” of misinformation, right?
Addendum: Here is a further update, apparently confirming that the original account was in error.
Is growing conference size a problem?
In practice, they [scientists] more so blamed the human organization problems — essentially administrative issues — that they saw all around them. The growing conference sizes made it much more difficult to keep up with adjacent fields and scientific meetings. Seminars began to cater to narrower and narrower sub-branches of work rather than broad ones.
These were the places that many researchers leveraged to actually keep up to date on new work and problems in their fields as well as others. But, as money began to funnel into their field in the post-War era, there were more and more researchers and logistical decisions had to be made on how to do things like run conferences and decide who sits in what seminars.
The following Richard Feynman excerpt — taken from a 1973 oral history interview, which was one of a series of interviews between Charles Weiner and Feynman — goes into why, in the early 1970s, Feynman felt physics conferences had begun to grow far less useful than they were during the initial interviews for the series — where Feynman had told positive stories about the state of conferences as recently as 1956…
The conference size hypothesis almost surely is not the main problem, yet this is a new and interesting set of claims. The discussion of conference size comes fairly late in this piece by Eric Gilliam, plus there is a discussion of poetry toward the very end. For the pointer I thank Henry Oliver.
Wednesday assorted links
1. How does winning (or losing) a Grammy change an artist’s subsequent music?
2. Greater job churn in the red states?
3. The costs of banning targeted advertising.
4. “Vitalik Buterin holding Zuzu, the puppy rescued by people of Zuzalu.” (Interview)
5. My thirty-minute podcast with Ryan Chern of U. Washington, was lots of fun.
The value of informal mentoring
We document a largely unrecognized pathway through which schools promote human capital development – by fostering informal mentoring relationships between students and teachers, counselors, and coaches. Using longitudinal data from a nationally representative sample of adolescents, we explore the nature and consequences of natural mentoring relationships by leveraging within-student variation in the timing of mentorship formation as well as differences in exposure among pairs of twins, best friends, and romantic partners. Results across difference-in-differences and pair fixed-effect specifications show consistent and meaningful positive effects on student attainment, with a conservative estimate of a 9.4 percentage point increase in college attendance. Effects are largest for students of lower socioeconomic status and robust to controls for individual characteristics and bounding exercises for selection on unobservables. Smaller class sizes and a school culture where students have a strong sense of belonging are important school-level predictors of having a K-12 natural mentor.
That is from a new NBER working paper by Matthew A. Kraft, Alexander J. Bolves, and Noelle M. Hurd.
Are We Running Out of Exhaustible Resources?
No, or so says a new paper by Felix Pretis, Cameron Hepburn, Alex Pfeiffer, and Alexander Teytelboym:
Mineral and material commodities are essential inputs to economic production, but there have been periodical concerns about mineral scarcity. However, there has been no systematic recent study that has determined whether mineral commodities have become scarcer over the longer run. Here we provide systematic evidence that worldwide, near-term exhaustion of economically valuable commodities is unlikely. We construct and analyse a new database of 48 economically-relevant commodities from 1957–2015, including estimates of worldwide production, reserves and reserve bases, prices, and production, using publicly-available data and further data requested from the United States Geological Survey. We explore trends in prices, reserves-to-production ratios, and production itself, on a commodity-by-commodity basis, using econometric techniques allowing for structural changes, and further estimate overall trends robust to outlying observations. For almost all commodities, we cannot reject the null hypothesis of no trend in prices and exhaustion, while production has increased. Price signals appear to have guided consumption and provided incentives for innovation and substitution. Concerns about mineral depletion therefore appear to be less important than concerns about externalities, such as pollution and conflict, and ecosystem services (e.g. climate stability) where price signals are often absent.
Julian Simon lives…
Via Jason Crawford.
The changing nudity culture that is German
Some while back, sunbathers in Germany, say on the river banks of a city, would be about 2/3 fully nude. Circa 2023, they are 100% wearing bathing suits or more.
I believe the causes here are threefold: a) a Woke/prudery effect, b) an international conformity effect, and c) a fear of being posted on social media or circulating as a jpeg effect. The increased number of migrants to Germany is possibly a fourth factor, especially when people go in groups.
Tuesday assorted links
1. Digging through the Extropian archives. By Max T.
2. David French on the Right and masculinity, also relevant for understanding the MR comments section (NYT).
3. One million new galaxies discovered, ho hum.
4. The economics of augmented and virtual reality.
5. Vending machine eggs. Canadian.
What I’ve been reading
Bjorn Lomborg’s Best Things First delivers the expected dose of correct common sense.
Charles Horsnby, Kenya, A History since Independence is a very good long treatment of everything up to about 2010, conceptual too.
David Schleicher, In a Bad State: Responding to State and Local Budget Crises. An important, unfortunately timely, and very intelligent book on how the federal government has responded to state and local insolvency in the past. My main complaint is that at 171 pp. of text it is far too short.
Norman Lebrecht, Why Beethoven: A Phenomenon in One Hundred Pieces. A good introduction to Ludwig van, even if some parts do rush by too quickly. Also a good introduction for how to think about different recorded versions of the same piece.
There is Markus K. Brunnermeier and Ricardo Reis, A Crash Course on Crises: Macroeconomic Concepts for Run-ups, Collapses, and Recoveries.
And also Angus Deaton, Economics in America: An Immigrant Economist Explores the Land of Inequality.
Kelly Smith offers his account of Prenda micro-schools in his A Fire to Be Kindled: How a Generation of Empowered Learners Can Lead Meaningful Lives and Move Humanity Forward.
Patrick Mackie, Mozart in Motion: His Work and his World in Pieces is a good introduction to what the title promises.
Monday assorted links
1. Claims about semaglutide. Not to be taken as endorsement of the claims, one way or the other, but worth further investigation.
3. Claims that lab-grown meat are worse for the environment.
The strange recession that is Czechia (from my email)
From the very perceptive Kamil Kovar, these are his words I will not double indent:
“Seeing your recent brief post on recession I was wondering whether you are thinking about writing a longer post on the topic of recessions in general? I find the recent macroeconomic developments very intriguing, as they challenge my previous notions of what is a recession and what pushes us into recession, and would be very interested in hearing what you think.
To be more specific, let me use European developments, which I think are even more thought-provoking from this perspective than US developments. Take an extreme example of Czechia, which combines following facts:
- GDP has contracted for two quarters in a row, each time around 0.3% non-annualized. It is still below its pre-pandemic peak.
- Consumption has contracted for 5 quarters in a row, cumulatively 7.6%.
- Fixed investment has decreased in last quarter as well, albeit after strong recovery throughout the previous year and a half.
- The reason why GDP did not drop more is because net exports surged from their extremely low values reached during the pandemic period. In last quarter government consumption also helped a lot.
- Despite all the weakness, labor market is tight, with unemployment rate close to its pre-pandemic historical lows (in case you don’t know, it is ridiculously-sounding low at 2.1%), and employment continuing to grow.
(This as of March; more recent data continued in these trends, albeit GDP overall increased a tad bit. Also, Germany is going through something similar, albeit at much smaller scale).
It feels like this combination just does not fit in together in terms of standard macroeconomics – if you would tell me only about consumption (2) I would say the country has to be in recession, but investment (3) and labor market (5) are clearly saying no recession. If it would be just labor market, then I could accept that it is case of labor hoarding distorting the picture, but investment also remaining robust is just hard to reconcile with recession.
So I was wondering in what way, if any, did the last update your beliefs about “what is a recession and what pushes us into recession” in the light of the puzzling macroeconomic data of last year or so…
P.S.: In case you want to read more on the case of Czechia, or my take on what it all means, I had a blog post few months back:
https://kamilkovar.substack.com/p/it-or-isnt-it-recession-on-regular
My way of reconciling the data with my mental models is that got real shocks pushing us into RBC-style recession, but for whatever reason we did not get the typical demand shocks that lead to a more standard recession.”
TC again: Worth a ponder!