Category: Uncategorized
The need to deregulate legal advice
Offering tips on how to fight a suit would probably be illegal. Rules in New York, as in most states, forbid practicing law without a license, and giving individualized advice on how to respond to litigation is generally considered practicing law.
On Tuesday, Upsolve took a step aimed at undoing the catch: It filed a lawsuit against the state attorney general’s office in federal court in Manhattan, arguing that barring nonlawyers from giving the kind of basic advice Upsolve would teach them to offer would violate the First Amendment. Pastor Udo-Okon is a co-plaintiff.
Upsolve says a ruling in its favor would clear the way for thousands of lay professionals — social workers, clergy members, community organizers and the like — to help correct a gigantic imbalance in the legal playing field.
According to a 2020 Pew Charitable Trusts report, at least four million Americans a year are sued over consumer debt. Less than 10 percent retain lawyers, and more than 70 percent of cases end in default judgments against the defendant.
In 2018 and 2019, a total of 265,000 consumer debt suits were filed in city and district civil courts in New York State. Over 95 percent of the defendants were not represented by a lawyer, and of those, 88 percent did not respond to the suit, according to figures from the state court system.
Upsolve’s co-founder, Rohan Pavuluri, called the situation a “fundamental civil rights injustice.”
Here is the full NYT piece, and I am pleased that Emergent Ventures has been an early supporter of their work.
Wednesday assorted links
1. The political culture that is El Salvador?
2. The wisdom of Derek Thompson: “The evidence of state pre-K effectiveness has gotten worse over the last 50 years…”
3. Alice Evans on why MENA is so hierarchical.
4. Who gets Long Covid? (NYT)
5. The world of extreme ironing.
6. Markets in everything: these apps reserve the right to sell your prayers.
Where I differ from Bryan Caplan’s *Labor Econ Versus the World*
One thing I liked about reading this book is I was able to narrow down my disagreements with Bryan to a smaller number of dimensions. And to be clear, I agree with a great deal of what is in this book, but that does not make for an interesting blog post. So let’s focus on where we differ. One point of disagreement surfaces when Bryan writes:
Tenet #6: Racial and gender discrimination remains a serious problem, and without government regulation, would still be rampant.
Critique: Unless government requires discrimination, market forces make it a marginal issue at most. Large group differences persist because groups differ largely in productivity.
I would instead stress that most of the inequity occurs upstream of labor markets, through the medium of culture. It is simply much harder to be born in the ghetto! I am fine with not calling this “discrimination,” and indeed I do not myself use the word that way. Still, it is a significant inequity, and it is at least an important a lesson about labor markets as what Bryan presents to you.
But you won’t find much consideration of it in Bryan’s book. The real problems in labor markets arise when “the cultural upstream” intersects with other social institutions in problematic ways. To give a simple example, Princeton kept Jews out for a long time, and that was not because of the government. Or Princeton voted to admit women only in 1969, again not the government. What about Major League Baseball before Jackie Robinson or even for a long while after? Much of Jim Crow was governmental, but so much of it wasn’t. There are many such examples, and I don’t see that Bryan deals with them. And they have materially affected both people’s lives and their labor market histories, covering many millions of lives, arguably billions.
Or, the Indian government takes some steps to remedy caste inequalities, but fundamentally the caste system remains, for whatever reasons. Again, this kind of cultural upstream isn’t much on Bryan’s radar screen. (I have another theory that this neglect of culture is because of Bryan’s unusual theory of free will, through which moral blame has to be assigned to individual choosers, but that will have to wait for another day!)
We can go beyond the discrimination topic and still see that Bryan is not paying enough attention to what is upstream of labor markets, or to how culture shapes human decisions.
Bryan for instance advocates open borders (for all countries?). I think that would be cultural and political suicide, most of all for smaller countries, but for the United States too. You would get fascism first, if anything. I do however favor boosting (pre-Covid) immigration flows into the United States by something like 3x. So in the broader scheme of things I am very pro-immigration. I just think there are cultural limits to what a polity can absorb at what speed.
If you consider Bryan on education, he believes most of higher education is signaling. In contrast, I see higher education as giving its recipients the proper cultural background to participate in labor markets at higher productivity levels. I once wrote an extensive blog post on this. That is how higher education can be productive, while most of your classes seem like a waste of time.
On poverty, Bryan puts forward a formula of a) finish high school, b) get a full time job, and c) get married before you have children. All good advice! But I find that to be nearly tautologous as an explanation of poverty. To me, the deeper and more important is why so many cultures have evolved to make those apparent “no brainer” choices so difficult for so many individuals. Again, I think Bryan is neglecting the cultural factors upstream of labor markets and in this case also marriage markets. One simple question is why some cultures don’t produce enough men worth marrying, but that is hardly the only issue on the table here.
More generally, I believe that once you incorporate these messy “cultural upstream” issues, much of labor economics becomes more complicated than Bryan wishes to acknowledge. Much more complicated.
I should stress that Bryan’s book is nonetheless a very good way to learn economic reasoning, and a wonderful tonic against a lot of the self-righteous, thoughtless mood affiliation you will see on labor markets, even coming from professional economists.
I will remind that you can buy Bryan’s book here, and at a very favorable price point.
*Labor Econ Versus the World*
The author is Bryan Caplan and the subtitle is Essays on the World’s Greatest Market. It is a collection of his best blog posts on labor markets over the last fifteen years or so. A Bryan blog post from 2015 gives a good overview of much of the book, which you can read as pushback against a lot of doctrines held by other people, including the mainstream:
What are these “central tenets of our secular religion” and what’s wrong with them?
Tenet #1: The main reason today’s workers have a decent standard of living is that government passed a bunch of laws protecting them.
Critique: High worker productivity plus competition between employers is the real reason today’s workers have a decent standard of living. In fact, “pro-worker” laws have dire negative side effects for workers, especially unemployment.
Tenet #2: Strict regulation of immigration, especially low-skilled immigration, prevents poverty and inequality.
Critique: Immigration restrictions massively increase the poverty and inequality of the world – and make the average American poorer in the process. Specialization and trade are fountains of wealth, and immigration is just specialization and trade in labor.
Tenet #3: In the modern economy, nothing is more important than education.
Critique: After making obvious corrections for pre-existing ability, completion probability, and such, the return to education is pretty good for strong students, but mediocre or worse for weak students.
Tenet #4: The modern welfare state strikes a wise balance between compassion and efficiency.
Critique: The welfare state primarily helps the old, not the poor – and 19th-century open immigration did far more for the absolutely poor than the welfare state ever has.
Tenet #5: Increasing education levels is good for society.
Critique: Education is mostly signaling; increasing education is a recipe for credential inflation, not prosperity.
Tenet #6: Racial and gender discrimination remains a serious problem, and without government regulation, would still be rampant.
Critique: Unless government requires discrimination, market forces make it a marginal issue at most. Large group differences persist because groups differ largely in productivity.
Tenet #7: Men have treated women poorly throughout history, and it’s only thanks to feminism that anything’s improved.
Critique: While women in the pre-modern era lived hard lives, so did men. The mating market led to poor outcomes for women because men had very little to offer. Economic growth plus competition in labor and mating markets, not feminism, is the main reason women’s lives improved.
Tenet #8: Overpopulation is a terrible social problem.
Critique: The positive externalities of population – especially idea externalities – far outweigh the negative. Reducing population to help the environment is using a sword to kill a mosquito.
Yes, I’m well-aware that most labor economics classes either neglect these points, or strive for “balance.” But as far as I’m concerned, most labor economists just aren’t doing their job. Their lingering faith in our society’s secular religion clouds their judgment – and prevents them from enlightening their students and laying the groundwork for a better future.
I will say this: Labor Econ Versus the World, while not written as a book per se, still is the best free market book on labor economics I know of. And it is very reasonably priced. I agree with much of what is in this book, but by no means all of it. I’ll consider my differences with it in a separate blog post, to come tomorrow.
Does crypto add to the money supply?
That is a reader request from Jerry Kate:
Is crypto effectively adding to M2 or M3 money supply and hence inflationary (outside the control and models of central banks), or is the velocity of crypto so low that it acts (like stocks) as a store of value having no impact on inflation? Will the answer to the prior question change if the market cap of crypto doubles or if crypto is tweaked to add velocity, or incorporated into the banking system to generate multiplier effects? Should central banks be worried?
I think you could ask this question of monetary economists, and get “confirmed” answers, yet the answers would disagree with each other. My views are as follows:
1. If crypto prices are bubbles, they will encourage more spending and thus they would be inflationary, though only mildly so. And that process could not continue for very long. In the old school “Gurley and Shaw” sense, crypto is a kind of outside money and net wealth, and so spending will rise.
2. Alternatively, let’s say crypto assets have use cases that justify the current prices, but those use cases are not yet actively in use at this moment. The crypto assets are then mildly inflationary now, but an offsetting deflationary impetus will kick in once those use cases arrive and lower the prices of goods and services in the marketplace.
3. Or, let’s say crypto prices are not bubbly, and are justified by current uses. You then have a more or less offsetting boost in both aggregate demand and aggregate supply.
4. An additional question is whether the velocity of (traditional) money is higher or lower in the crypto sector. I don’t know the answer to that question. It is a possible effect, though probably not a major one. If crypto soaks up money in a kind of “segregated from the real economy” shell game, it can be mildly deflationary.
5. Jerry also asks about “incorporating crypto into the banking system.” That could mean a number of things. Under one scenario, stable coins are told to become banks and then they are regulated like banks. It would then be like having more money market funds, and that could be broadly inflationary on a modest, one-time basis, though of course you would have to compare the effects of those money market funds to the “wild west crypto effects” they were displacing.
Any other views or scenarios to consider? Overall I don’t see this as a significant effect in quantitative terms, but it is nonetheless worth thinking through the logic of the question.
Monday assorted links
1. How ugly were the ugly buildings of earlier eras? Maybe not that much. And new recordings of the Chopin Nocturnes (New Yorker).
2. Noah Smith on why Ukraine is such an economic failure.
3. Why skyscrapers are so short.
4. Claims about socialism and fascism.
The economics of exploding job market offers
I am hearing various Twitter reports that in the absence of AEA scheduling coordination, the junior economics job market is involving a lot of departments jumping the gun, interviewing early, and then making “exploding offers” with a short fuse, hoping to snap up desperate candidates. I am not personally involved in that market this year, but my sources seem credible. In any case, this is a problem worth thinking through.
As an economist, how should we think about exploding job market offers?
1. If you are a decently strong candidate who is highly risk-averse, you will end up with too low quality a job. That said, the market is satisfying your risk-averse preference just as it does when you buy insurance. And if you are so risk-averse, maybe your research record won’t be so important anyway, even if you manage to publish well. I guess I am not that worried about these people. I am happy enough to tax their risk-aversion, and in fact I suspect we should tax their risk-aversion all the more.
2. You might argue there are “thick market externalities,” and so it is efficient if most of the offers/trading occur closely bunched in time (see Niederle and Roth). After all, many asset price markets have designated trading hours, rather than full blast trading 24/7. While I find that analogy plausible, keep in mind what the efficiency here consists of, namely placing the more highly rated candidates in the more highly rated schools. Is it so terrible if a “market inefficiency” shakes up that system a bit? I thought the system was too elitist anyway. Some would say “too white male patriarchical, etc.” anyway. That is not exactly my view, but I agree that status quo ex ante methods were hardly sacrosanct.
2b. I am not one to trust a “managed intervention” into the previous job market methods more than a general disruption of trading. Of course if you are an AEA elite leader, you might differ on this.
3. Private sector offers for economists are “always there,” as for instance Amazon and Uber are not locked into the same hiring schedule as academic departments are. So at the margin these exploding offers will push more economists into the private sector. I am fine with that, as arguably economists are currently excessively subsidized into academic institutions by government support.
4. Possibly the longer-term equilibrium is that everyone is pushed into acting in November, and perhaps with fewer flyouts. I am not sure that is a bad option. Is much extra, true information revealed between November and January? If you are a good department and afraid of losing good candidates to exploding offers, can’t you just hurry up yourself? That speed-up of the entire process also gives the secondary market, for those who did not get offers on the first round, more time to operate. Surely there is room for the entire process to hurry up, yes?
4b. The more quickly the first tier of offers is cleared up, the more efficiently the queued candidates (say second or third in line for an offer) will be allocated. Isn’t that important too? For an egalitarian maybe more important? And rapid, exploding offers may take some top candidates off the market more quickly, in a good way, and stop the places that have no chance at them from chasing after them and wasting time?
5. A speedier overall job market presumably would help the job candidates who are anti-procrastinators and hurt the candidates who are procrastinators. I am fine with that! On the offering side, maybe it would help private universities, which tend to be speedier, and hurt public universities? YMMV.
6. Through the use of letters and phone calls and exclusivity norms, there has been a de facto preemptive market for the top schools for a long time. And now others are jumping in early!? Just exactly who is supposed to be fooled here?
7. What is the actual initial job market distortion we might want any change to address or improve? Might it be that job market candidates are too “Top Five” oriented and too risk-averse? I am genuinely unsure here. But if that is the problem, I don’t see why having more exploding offers should be so terrible.
8. Aren’t a lot of the most important opportunities in your life to come similar to “exploding offers”? Is it so terrible if you have to get used to this method early on?
9. If you really hate exploding offers, work on weakening the supposition that a candidate is not allowed to take one and then a month later “quit” and take another, better job. Discussed here.
10. The best argument for a coordinated market is simply that it serves the interests of the top schools, and makes sure they get the best candidates, even the risk-averse ones. Yet everyone is afraid to come out and make this explicitly elitist, anti-egalitarian, and so they resort to a lot of loose moralizing rhetoric (“ooh, it stresses people!” or “ooh, it’s unfair!”) that does not really befit how economists ought to be thinking about the problem.
Here are my earlier remarks on related issues.
The benefits system that is Irish
A dead man was brought to a post office this morning in an attempt to collect his pension in one of the most bizarre incidents that gardaí have ever seen.
The shocking incident in which the deceased male was propped up by two other men happened at the post office on Staplestown Road in Carlow town…
No money was handed over and it is understood that the deceased man is well known to the two men who moved his body.
A local woman living beside the post office told how her daughter witnessed two men carrying a man into the shop.
“She was leaving my house at the time and said the man looked unwell as his feet were dragging the ground,” she said.
The woman, who did not want to be named, said there was a queue outside of the post office at the time.
“It’s a small shop and you’re only allowed three at a time with social distancing. People were in shock as they thought he was after having a heart attack,” she said.
Here is the full story, note that the postal workers became “immediately suspicious.”
Sunday assorted links
1. The dating culture that is D.C.
2. I don’t usually trust such papers, and indeed I don’t trust this one, but this result is deserving of further investigation: “The current data suggest that both increased salience of reward/loss information and reduced discrimination between reward and loss feedback could be factors linking SES with the development of human capital and health outcomes.”
3. Biden administration opposes plan to strengthen WHO. Yet I am barely hearing a peep about this. The Biden people are also wanting to enforce Trump’s Phase I trade deal with China.
4. N.S. Lyons thinks Wokeness hasn’t peaked yet.
5. Nate Meyvis on how to talk better to think better.
6. Paul Krugman is coming very close to admitting a) “real estate bubble” was not the best formulation, and b) Kevin Erdmann was right.
7. More on Germany.
The future of football, revisited
American football, that is. Reader JB requests:
Do you still believe the death of American football is near? If not, what has changed your mind?
He is referring to this earlier 2012 Grantland essay, which by the way did not argue that “the death of American football is near.” Nonetheless I have significantly upped my probability on American football continuing more or less indefinitely. The relevant evidence is simple, namely a) the number of Americans who will not receive Covid vaccines, and b) the relative lack of high-profile litigation over Covid deaths and disabilities, while at the same time there is plenty of litigation over mandates! I also might toss in c) the greater prevalence of federalism in American life, post-Covid.
There you go.
How should you talk to think better?
Being a natural non-dualist, I have been pondering this question. For instance, I know someone who almost always gives charismatic and “thunderous” answers to questions posed. These are typically smart answers, whether or not you agree, but I suspect over time that talk style makes this person somewhat stupider and more dogmatic.
I believe if you yell your answers all the time you are also likelier to become stupider. Might the same be true for perpetual whisperers? For a steady barking yelp?
Is it better to be smiling or frowning during your discourse?
Should you always sound polite and thoughtful and well-reasoned? Even if your private conversations? Maybe those people don’t generate enough new, disagreeable ideas. And don’t many of the smartest and most successful people you know get plain, flat out excited in many of their best intellectual moments?
Keep in mind I am not discussing your optimal public image, I am focusing on how you should talk in order to think better.
What is the optimum median length of remark? Number of humorous remarks you should be inserting? Preferred volume?
If you have a really good point, does it make you smarter or stupider to lean forward while making it?
Should you ever start sentences with the exclamation “Look!…”? With giggles?
You might think there would be thirty excellent pieces on this topic, but can you think of one?
Saturday assorted links
1. The forgotten medieval habit of two sleeps.
2. Serbian government strikes back. What again is the CBA on that immigration decision?
3. Germany won’t let Estonia transfer weapons to Ukraine (WSJ). I’ve been telling you for years that Germany is not really part of the Western alliance any more. It is now all the more obvious. Addendum: And get this (FT): “Ukraine said it had summoned Germany’s ambassador to protest comments by the head of the German navy, who was filmed saying Russia only “wants respect” and Ukraine would never regain Crimea, remarks that have plunged Kyiv and Berlin into a damaging diplomatic row.”
4. Excellent Colm Tóibín piece on James Joyce’s Ulysses at 100 years (FT). One of the best pieces I’ve read so far this year. And speaking of the FT, Janan Ganesh argues that Los Angeles is the West’s most underrated walking city. Of course he is correct.
5. Dubov refuses to wear a mask and thus forfeits a chess game against Giri.
That was then, this is now, January 21 edition
For my birthday, Yana constructed/bought me a book of NYT front pages for all of the January 21sts from the year I was born to the current day. It is fun to read through these, here are a few headlines of note:
1962: Robert Kennedy Gets Invitation to Visit Moscow
[Shelby Cullom] Davis Family Gives Princeton $5 Million
1963: Turks Agree to U.S. Removal of Some Missiles
1964: Johnson Foresees Boom, But Warns of Inflation, Advisers Urge Price Cuts
Productivity Said to Cost Two Million Jobs Yearly [this one is a real howler]
1966: First front-page mention of the Vietnam War in the lot
1967: Price Rise Rate is Seen Slowing After Sharp Gain
1968 offers this disorienting number citation: $8.9 Billion Rise for U.S. Spending in 1969 Projected
1969: Soviet Tells U.S. That It Is Ready for Missile Talks
1970: Democrats React to Redistricting; Legal Moves are Hinted, but G.O.P. Lines Appear Final
Again, all of those headlines are from various January 21 dates from those years. I will continue reading! But so far my overall impressions, reading up through the early 1970s, are these: It is still recognizably the same world. There is less about both race and Vietnam than a naive observer from 2022 might expect. The “elites” from back then do not look so overwhelmingly wonderful. Every single NYT headline is at least pretending to be super-serious and of great global or national import. Presidents are indeed inaugurated on January 20, every four years.
Friday assorted links
Mexico (?) fact of the day
The exception to the weak currency rule in Latin America has been Mexico, whose leftwing populist president has pursued nationalist and interventionist policies but also free trade with the US and fiscal discipline. Reflecting this, the Mexican peso fell only 4.5 per cent against the dollar last year, by far the best performance of any major Latin American currency.
Elsewhere:
The Colombian peso lost 16 per cent of its value against the dollar, while the Peruvian sol weakened by more than 9 per cent. Brazil’s real suffered its fifth consecutive year of devaluation, losing nearly 7 per cent.
Here is the full FT story.