Category: Uncategorized
Wednesday assorted links
The World Bank reappointment process
Kim had been a lame duck for some while, and few outsiders grasp how active is the role of the Board in the World Bank. So it is probably good they got him out of there sooner rather than later.
I know you’re all aghast that Trump will pick the successor, but remember the good ol’ days when everyone fell apart when Bush picked Paul Wolfowitz, considered to be one of the architects of the Iraq War? Whatever you think of Wolfowitz and his tenure at the Bank, it was not The End Times or even the beginning of the end.
It is very hard for a bad Bank president to shut down the works. The World Bank has borrowed a lot of money and to pay it back the Bank needs to make profitable loans. The mechanism for this to happen is already in place, and short of bankrupting the institution it is hard to imagine how a Bank president can totally gum up the works. That is also why good Bank presidents find it hard to reform the place.
It is trendy to call for a “meritocratic” approach to this appointment and who could be opposed to that? That said, there are plenty of plausible candidates ex ante, but it is not so easy to determine who will be effective ex post. So if you read someone calling for meritocracy here, odds are they have some other political agenda in mind (which may be fine, but evaluate that agenda on its own terms). There are plenty of Americans qualified at the highest level for this post.
I think America and yes DT should pick the next Bank president and should pick an American. How do you think it is going to go the next time the Bank calls for more capital from the US and UK? Whose certification there do you think is most important? And which country is the most nervous about the World Bank doing something geopolitically unpopular, as say the UN repeatedly has done? All this will run most smoothly if the U.S. feels, to some extent, that the Bank is its preserve. And of course the “we’ve really got to up China’s quota and get it more involved” days are long since past.
You’re all out there saying Trump should not disengage America from the world, blah blah blah etc. I agree. But let’s be honest about what the terms of that engagement were in the first place, and be willing to swallow the whole package deal once again.
Here is some FT analysis, noting that not all of its suggested candidates are good ideas.
The new committee to re-elect Donald Trump
It has some surprising members:
Rep. Alexandria Ocasio-Cortez has been promoting the idea of a 70 percent top marginal tax rate, and Paul Krugman has been defending it. Matthew Yglesias of Vox has written that 70 percent might be too low.
Here is my full Bloomberg column on the topic. You will note by the way that if you only apply the tax on say $10 million and up, it will all be converted into capital income and the tax will distort without raising much revenue. And here is a sentence toward the end of the piece, part of my advice for Democrats:
Recognize that you’ll never be that popular on the tax issue.
I see this as a kind of catnip issue, one where the Democratic Left is so, so tempted to make redistribution the central idea of the party, a disastrous urge in my view.
Tuesday assorted links
1. India fact of the day: “More than 7 million commuters a day use Mumbai’s suburban railway network…Close to 8 people die a day on the network, according to rail officials.”
2. IBM patents more than all of Germany.
3. Where the American military operates against terrorism. Is this simply equilibrium? And all of the states of emergency declared in the U.S. to date.
5. Watching movies very slowly.
6. Malcolm Gladwell considers marijuana legalization. And Alex Berenson in the NYT. Decriminalization, not legalization, is the way to go.
Predictions for the next twenty years
From New York magazine, here are mine:
American politics will return to the precedent of the 19th century. Then, there was lots of fake news; partisanship was extreme; the media was very biased; Americans reacted politically with extreme emotions and all debates seemed to be full of rancor and bitterness. So in some fundamental ways, this country has not changed. We had a break from that state of affairs in the 20th century because we had the major enemies of the Nazis and then the Soviets. But as those enemies disappeared, we’re fighting among ourselves more, and the nation will go back to an earlier version of its politics, which were highly dysfunctional. You had plenty of people becoming president who probably should not have been.
I don’t see any evidence that we’re headed toward anything like a civil war. Today is a more peaceful era. If you look at polls, you see a generalized loss of trust in many institutions, but the No. 1 clear winner by far is still the military. Police tactics have much improved over the past few decades. The riots of the 1960s are very, very far away. The fighting will stay on social media. The happy people will be those who turn off their smartphones or who don’t put Twitter on them and who just go about living their lives.
But I think the intellectual classes and people in the media will become less and less happy. They’ll be more stressed, and every day they’ll feel like they’re being put through the wringer. Social media has become a kind of opiate of the intellectual class. So, grandparents use social media to track what their grandkids are doing — that’s nice and wonderful. But people who keep on refreshing Twitter for the latest developments in the Mueller investigation — frankly, I think it’s a big waste of time. I think there has been great wrongdoing. I fully support what Mueller is up to. But, at the end of the day, following it moment-to-moment is a kind of trap.
Keep in mind that during a lot of the 19th century, America’s economy grew one and a half percent or 2 percent annually, which was okay. But it was not 4 or 5 percent growth. People felt resources were very scarce. Everything was argued over. A small amount of tariff revenue was a big deal. I think that, too, will be our immediate future. There will be a lot of scarcity. Budgets will be stretched, and, again, everything will be an emotional debate, precisely because there’s so much gridlock. We will look to symbolic politics — who deserves higher status, what kind of rhetoric is permissible. Right now, it’s the coastal elite in major cities versus many other parts of the country. But that will be in flux. Latinos — at what rate will they vote Democratic? Will Asian-Americans defect to the Republican Party?
Democrats still have a big problem: What are they going to run on? They could run on more preschool or no more paid maternity leave. They’re just not that big a deal — not major changes in how America works. I don’t think they’ll end up as the main things we’re debating. If you look at all the attention the “caravan” got — that was just a few thousand people. I think that kind of debate is our future.
The article offers numerous other distinguished and interesting entries.
Monday assorted links
1. Spider-related world records.
2. The ongoing deregulation of roadkill consumption.
3. On the causal powers of Mormonism. Highly useful.
4. AEA webcasts of various sessions.
5. 2008 me on Sarah Palin. Might any of it apply to AOC? Beats me.
Do consumer interests shape trade policy?
Alas, it seems not, or so it is reported by Timm Betz and Amy Pond:
Why are some countries more open to trade than others? Prominent explanations emphasize differences in the influence of voters as consumers. Consumers benefit from lower prices. Because governments in democracies are more responsive to voters, they should implement lower tariffs. We develop and evaluate an implication of this line of argument. If lower tariffs are a response to consumer interests, lower tariffs should be concentrated on products most relevant to consumers. Using data on consumption shares across product categories, we report evidence that consumer interests do not account for lower tariffs. Governments place higher tariffs on goods with higher consumption shares, and we find no evidence that this relationship attenuates under more democratic institutions. There may be a variety of reasons why more democratic states are engaged in higher levels of international trade. A larger concern for consumer interests, however, is likely not among them.
Does Exposure to the Refugee Crisis Make Natives More Hostile?
Although Europe has experienced unprecedented numbers of refugee arrivals in recent years, there exists almost no causal evidence regarding the impact of the refugee crisis on natives’ attitudes, policy preferences, and political engagement. We exploit a natural experiment in the Aegean Sea, where Greek islands close to the Turkish coast experienced a sudden and massive increase in refugee arrivals, while similar islands slightly farther away did not. Leveraging a targeted survey of 2,070 island residents and distance to Turkey as an instrument, we find that direct exposure to refugee arrivals induces sizable and lasting increases in natives’ hostility toward refugees, immigrants, and Muslim minorities; support for restrictive asylum and immigration policies; and political engagement to effect such exclusionary policies. Since refugees only passed through these islands, our findings challenge both standard economic and cultural explanations of anti-immigrant sentiment and show that mere exposure suffices in generating lasting increases in hostility.
That is the abstract of a new paper by Dominik Hangartner, Elias Dinas, Moritz Marbach, and Konstantinos Matakos, via the excellent Kevin Lewis.
My Conversation with Sam Altman
January 28, San Francisco, 5:30, register here.
So what should I ask Sam Altman?
Sunday assorted links
Saturday assorted links
1. Are animals getting better at acting? (NYT)
4. C’mon people, should we give the Northwest Angle back to Alex?
5. Does market concentration in homebuilding matter?
6. Our countryside is aging a lot, our cities barely so.
7. For writers, “morals clauses” are being used more and more (NYT). The days of Henry Miller are gone, it seems.
The Economic Motives for Foot-Binding
From Lingwei Wu and Xinyu Fan at AEA:
What are the origins of gender-biased social norms? As a painful custom that persisted in historical China, foot-binding targeted girls whose feet were reshaped during early childhood. This paper presents a unified theory to explain the stylized facts of foot-binding, and investigates its historical dynamics driven by a gender-asymmetric mobility system in historical China (the Civil Examination System). The exam system marked the transition from hereditary aristocracy to meritocracy, generated a more heterogeneous composition of men compared to that of women, and triggered intensive competition among women in the marriage market. As a competition package carrying both aesthetic and moral values, foot-binding was gradually adopted by women as their social ladder, first in the upper class and later by the lower class. Since foot-binding impedes non-sedentary labor, but not sedentary labor, however, its adoption in the lower class exhibited distinctive regional variation: it was highly prevalent in regions where women specialized in household handicraft, and was less popular in regions where women specialized in intensive farming, e.g. rice cultivation. Empirically, we conduct analysis using county-level Republican archives on foot-binding to test the cross-sectional predictions of our theory, and major findings that are robust and consistent with key theoretical predictions.
There are other interesting papers at the link, relating to culture and women’s issues.
Friday assorted links
1. “Examining explanations for the rise of in-and-outs [labor force participation], I find little evidence to suggest that changes in labor demand are responsible.” Other interesting papers at the same link, such as: “Overall, our findings suggest that there is no simple causal relationship between economic conditions and the abuse of opioids.” And opioids actually seem to boost labor force participation of women.
2. “…we find no evidence that mothers’ education reduces their support for FGC.”
4. Profile of Elizabeth Anderson (New Yorker).
5. Arnold Kling annotates Cowen, Andreessen, and Horowitz.
Thursday assorted links
1. “The results show that individuals with relatively low time discounting are persistently positioned higher in the wealth distribution.” Or try this link.
2. Which elderly person would you like to resemble? Is it really so embarrassing to mention sex in this context?
3. New AEA panel on blockchain and tokenomics. And more AEA papers on those topics. And yet more. And yet another.
Wednesday assorted links
1. Prediction markets vs. art markets (I mostly disagree with the portrait of each, and would even suggest that prediction markets have more to do with their own kind of social status than art markets do).
2. George Dyson favors analog over digital computing for mankind’s next revolution.
3. The aesthetics of how politicians use Instagram.
4. Ho hum. The military culture that is China.