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Tuesday assorted links
1. Berk’s deep dive into the male/female seminar questions paper. For women there is a hostile question every twelve seminars, so might they, at least in this regard, be treated in a more friendly manner than I have been? And what is the measure of productivity or outputs here?
2. Ross Douthat on how to evaluate conspiracy theories (NYT).
4. New John Cochrane paper on g > r and fiscal sustainability.
5. Do conversations end when people want them to? And more here.
6. Toronto Star to launch on-line casino to fund its journalism.
The Gregory Clark working paper
I wanted to present this paper to you all, here is the abstract:
Economics, Sociology, and Anthropology are dominated by the belief that social outcomes depend mainly on parental investment and community socialization. Using a lineage of 402,000 English people 1750-2020 we test whether such mechanisms better predict outcomes than a simple additive genetics model. The genetics model predicts better in all cases except for the transmission of wealth. The high persistence of status over multiple generations, however, would require in a genetic mechanism strong genetic assortative in mating. This has been until recently believed impossible. There is however, also strong evidence consistent with just such sorting, all the way from 1837 to 2020. Thus the outcomes here are actually the product of an interesting genetics-culture combination.
The title is “For Whom the Bell Curve Tolls: A Lineage of 400,000 English Individuals 1750-2020 shows Genetics Determines most Social Outcomes.” For those of you who don’t know, Greg’s home page provides some context.
Monday assorted links
1. GMU Econ Society interviews me.
2. How TikTok led to a run on feta cheese (NYT).
5. Why do wealthy parents have wealthy children? Family culture really matters (Norwegian parents, adopted Korean children).
6. Mood affiliators! “Come with me if you want to live!” is a much better attitude.
Lynne Kiesling and Vernon Smith on Texas electricity
How can the resilience of ERCOT’s grid be improved without resorting to costly regulatory mandates that may or may not yield benefits? ERCOT could implement clear market rules requiring natural gas generators to have firm supply contracts in order to be certified as an eligible resource for emergency conditions. Plant owners have incentives to do so because they would have market access under high-price conditions where their performance would more than compensate them for the insurance cost of fuel security.
ERCOT can also take advantage of Texas’ deregulated retail market structure to incentivize more customers to reduce consumption in return for bill savings, creating demand flexibility. Using digital devices and automation to send prices to residential devices would allow consumers to reduce their demand during extreme stress and high prices. Similarly, the Texas market design is well-suited to increasing battery storage, which has been made increasingly economical due to innovation. Batteries enable households to choose to self-insure against outage risk, and when interconnected in their local distribution grid, they can serve as resources to provide energy or grid services to others.
Here is the full opinion piece, via Kurt B.
Sunday assorted links
1. Those new service sector jobs: “I’ve helped over 3,000 clients plan elaborate marriage proposals. The most expensive proposal so far was on a private island and cost over $100,000.” And West Palm hotel book butler.
2. The mRNA path to fighting malaria.
4. John Cochrane fiscal theory of the price level draft. And Arnold Kling responds on inflation.
Following the science? — the show so far
As the pace of recovery quickens, and most balance sheets continue to look decent, it seems increasingly obvious that $1.9 trillion is too much to spend. We are spending at least $1 trillion too much, with very little investment to show for it, and $1 trillion is a lot of money. Heaven forbid they should make part of the stimulus dependent on future macroeconomic variables, which is what science would suggest.
New CDC school opening guidelines fail to “follow the science.” School reopening is a big, big issue. Overall the blue states are not doing well on it, and the Biden administration is hurting rather than helping.
Vaccine distribution is doing better, with 2.4 million doses distributed per day by the end of this last week. I am less sure how much that is above the previous trajectory. At least originally, Biden was boasting of aspiring to doing one million doses a day, so the presidential grasp of detail is not what pushed us over the edge here.
Those are arguably the three most important issues at the moment, and the overall performance level is not great.
The AstraZeneca vaccine still is not approved, with no sign of an FDA budge in sight. Canada approved it last week, so now there are more than fifteen nations on board. The new data on its performance are quite strong, even for a single dose.
Biden will be appointing an FDA head, but I haven’t heard talk of reform in spite of major and ongoing failures, and some in process reforms in the UK. Is it even permissible to raise the topic of “the deregulations we need”?
The $15 minimum wage idea seems doomed to fail, in any case it was obviously worse than an “indexed by state” approach, even if you hold the Dube-ous view of minimum wage economics.
The emergency facility — a vestige of the Trump administration that was open for only a month in summer 2019 — is being reactivated to hold up to 700 children ages 13 to 17.
By the way, arrests of unaccompanied children at the border are up 50% this month (WSJ). So this problem isn’t going away. Is science being used to structure the incentives properly for these migrants?
That issue aside, immigration is the one policy area where there has been major sustained improvement, and where those improvements are likely to continue.
As far as I know, there is no immediate plan to eliminate or lower the Trump tariffs on Chinese goods.
The (non-scientific) belief in a new era of cooperation with Europe, including in opposition to China, already lies in tatters.
I don’t know if the American military should have bombed Syria, but I do know that it did and I suspect our government also does not know if it should have, not really know in the scientific sense.
I do get that the Biden administration “feels more scientific” to you, and it has the demeanor of a proper establishment, and it offers experts much higher status, and it does not encourage yahoos to storm the Capitol, for which I am very grateful.
But the rather obvious evidence here is that the scientific record is already quite poor.
Saturday assorted links
1. Douglas Murray on Greg Clark. By no means do I agree with Greg on everything, but he is one of the finest economic historians in the world.
2. Markus’ Academy and its influence (Bloomberg).
3. The peaceable kingdom? (photos)
4. Redux of my November take on how Covid risk might rise once we are partially vaccinated.
5. Profile of Assaf Razin at 80.
6. Christie’s will auction Beeple (NYT).
Is all that extra money trapped in high asset prices? (no)
That is the topic of my latest Bloomberg column. Here is one bit:
The hypothesis is that a lot of this new money got funneled into asset price markets, rather than being spent on goods and services. Measured rates of price inflation for consumer goods have remained stubbornly below 2%.
This view is misguided. First, dollars are not “trapped” in one sector of an economy, unable to be spent in other areas. If for instance equity prices are very high relative to food, people will sell equities and buy more food, or otherwise adjust and bring the prices back to proper levels. The experience of hyperinflation in Weimar Germany and Venezuela shows that it is not possible to keep price increases “bottled up” in particular sectors. They spread through the entire economy very quickly.
And:
…recent price-earnings ratios are only modestly above their historic values. That may be a reason to be cautious, but it is hardly a sign of suppressed inflation. Bond prices are high, but real interest rates have been falling for centuries. And the European Central Bank tends to pursue tighter monetary policy than does the Fed. Europe often has very low interest rates, including sometimes negative nominal rates.
To see why the huge increase in bank reserves did not result in inflation, consider that there has been a considerable decrease in U.S. excess bank reserves over the last five years. No one claims that this has been accompanied by a massive deflation, whether in securities markets or elsewhere. Once that point is conceded, it’s possible to see why higher levels of reserves are not necessarily inflationary.
For an alternative point of view, you can read Arnold Kling.
UK to fast track drug trials
Drugmakers will be offered fast-tracked approvals for innovative medicines in the UK as ministers seek to build on the country’s world-leading approval of a Covid vaccine and attract life sciences companies to invest post-Brexit.
The UK’s medicines regulator will become independent of EU pharmaceutical rulemaking when Britain quits the European Medicines Agency at the end of the year, which means companies will need to apply separately to register drugs.
With ministers eager to try to refashion the UK as a post-Brexit hub for global life sciences, companies with drugs that promise to treat unmet medical needs will be offered help through the development process, including manufacturing, according to three people familiar with the situation.
Under the so-called Innovative Licensing and Access Pathway, companies are set to be offered the same rolling review of data that speeded approval of the Pfizer/BioNTech Covid-19 vaccine ahead of the rest of the world.
Here is more from Sarah Neville at the FT, via J.
Vaccine markets in everything
The German national carrier Lufthansa plans to set up a first class “Corona Lounge” in a Moscow airport for rich patrons from other countries to fly into the Russian capital and get the Sputnik V vaccination without ever entering the country, bne IntelliNews can reveal.
Here is more, via Air Genius Gary Leff.
Friday assorted links
1. How much is the Tuskegee history still a factor?
2. Biggest archaeological findings of 2020? (an impressive list, recommended)
3. Should your company’s name or streaming service have a “+” on the end? (NYT)
4. Seven-volume book series of the complete works of Hilma af Klint.
5. Bloomberg profile of Janelle Jones, chief economist at the Department of Labor.
6. How Scott Ross recorded all of the 555 Scarlatti sonatas for harpsichord (NYT).
My Caribbean podcast with the excellent Rasheed Griffith
One hour, fifteen minutes, almost all of it about the history and culture and economic future of the Caribbean, here is the audio. It starts with Rasheed interviewing me, but later becomes more of a back-and-forth dialog, covering Cuba, Trinidad, Barbados, the best music from Jamaica, why Haiti has failed so badly, whether the Caribbean will be Latinized, and much more. This one is pretty much entirely fresh material and I enjoyed doing it very much.
Rasheed is from Barbados, he is a very recent Emergent Ventures winner, and more generally his podcast focuses on the role of China in the Caribbean. Newsletter and some prestigious podcast guests coming soon!
Here is Rasheed on Twitter.
What I’ve been reading
1. Kevin Donnelly, Adolphe Quetelet, Social Physics, & the Average Men of Science, 1796-1874. The Belgian Quetelet was one of the pioneers of applying statistics to the social sciences, and he had a long-running and fascinating career obsessed with astronomy, crime, opera, jokes, and short essays, among many other things. He developed the notion of an “average man” in a statistical distribution, the error curve as a distribution formula, and much more. The concept and measurement of BMI comes from him as well. Somehow he has become oddly underrated.
2. Ruth Goodman, The Domestic Revolution: How the Introduction of Coal into Victorian Homes Changed Everything. Most books of this ilk are good either on the super-micro or super-macro scale, but this volume succeeds on both levels. Under Queen Elizabeth I, London became the first place to move away from burning peat, wood, and dung in homes to burning coal. How did that supercharge the later Industrial Revolution? How did it matter for household chores and for that matter recipes? Recommended.
3. Michel Foucault, Confessions of the Flesh, The History of Sexuality, Volume 4, published posthumously just now. I only pawed through this one a bit, but it really didn’t seem so interesting. I still think of The Order of Things, Discipline and Punish, and The Birth of the Clinic as Foucault’s best and most enduring books.
4. Jason L. Riley, Maverick: A Biography of Thomas Sowell. I liked this book OK enough, and certainly read it with interest, but somehow it never brought Sowell to life for me (I have never met him), nor did it illuminate the work enough (what did Sowell claim about Say’s Law anyway? And why? Why is his book on late-talking children important for understanding his broader body of work? Why was he so hawkish on foreign policy? What might he have gotten wrong?). The most interesting parts are about Sowell writing rebuttals to Arthur Jensen.
5. Ian Leslie, Conflicted: How Productive Disagreements Lead to Better Outcomes. A good popular science book on exactly what the title promises: “In this book, we’ll learn from experts who are highly skilled at getting the most out of highly charged encounters: interrogators, cops, divorce mediators, therapists, diplomats, psychologists. These professionals know how to get something valuable – information, insight, ideas—from the toughest, most antagonistic conversations.”
Thursday assorted links
My Conversation with Patricia Fara
The last chat was with Brian Armstrong about bitcoin, this one started with Isaac Newton and bit coins (really). Here is the audio, video, and transcript. Here is the CWTeam summary:
Patricia Fara is a historian of science at Cambridge University and well-known for her writings on women in science. Her forthcoming book, Life After Gravity: Isaac Newton’s London Career, details the life of the titan of the so-called Scientific Revolution after his famous (though perhaps mythological) discovery under the apple tree. Her work emphasizes science as a long, continuous process composed of incremental contributions–in which women throughout history have taken a crucial part–rather than the sole province of a few monolithic innovators.
Patricia joined Tyler to discuss why Newton left Cambridge to run The Royal Mint, why he was so productive during the Great Plague, why the “Scientific Revolution” should instead be understand as a gradual process, what the Antikythera device tells us about science in the ancient world, the influence of Erasmus Darwin on his grandson, why more people should know Dorothy Hodgkin, how George Eliot inspired her to commit unhistoric acts, why she opposes any kind of sex-segregated schooling, her early experience in a startup, what modern students of science can learn from studying Renaissance art, the reasons she considers Madame Lavoisier to be the greatest female science illustrator, the unusual work habit brought to her attention by house guests, the book of caricatures she’d like to write next, and more
And here is one excerpt:
COWEN: Let’s start with Isaac Newton. How was it that he died rich?
FARA: He earned his money from several different ways. When he went down to London, he had far more than he ever did as a Cambridge professor because he was running the London Mint. He got a fat salary for that. He also got a premium, a reward for every single gold coin that was minted.
He invested in global trading companies like the East India Company, for example, that were sending guns and textiles out to Africa and then shipping enslaved peoples over to the Americas.
He also invested in other stock market companies. There was this famous occasion — it’s the anniversary this year of what’s called the South Sea Bubble — when he invested a small fortune in a new company, the South Sea Company, and he watched the levels rise, and he stayed in there, and he sold when the stocks had gone up. He made a small fortune, but then he made the classic beginner’s error. He invested in again at a higher price, and he watched the value crash.
So he did lose several million in today’s currency on that particular venture. But in general, when he died, he was an extremely rich man, and you can tell that — the inventory of his possessions runs to a vellum scroll that’s 17 feet long.
COWEN: What was it that he collected so obsessively to have all these possessions?
FARA: Well, a lot of it was equipment for catering. He’s got this reputation for being very antisocial, but he had hundreds of plates and sets of cutlery and things like that. He also had that ultimate Georgian luxury: he owned two silver chamber pots.
He spent money on having a good number of portraits of himself painted that he would send out to other people as bribes or as rewards for their allegiance to him. He had furniture. He had decorations. He had a carriage. He had a sedan chair tucked in the stables. He had lots of servants.
On Newton’s time at The Royal Mint
COWEN: Now, as you know, Newton spends what, over 30 years working at the Mint?
FARA: Yes.
COWEN: What’s your model of why he did this? How much was it for income? Did he think he was done with major contributions, say, to physics and optics? How do you think about that decision in his life?
FARA: I think he was very frustrated with being at Cambridge. He applied for several positions there, which he didn’t get. In theological terms, he was rather at odds with everybody else at Cambridge because he was a very, very devout believer in God, but he didn’t adhere to the traditional, to the orthodox Anglican theological belief in the Trinity, so that was difficult for him.
He’d been trying to leave Cambridge for some time, and he had a very close friend, Charles Montagu, the Earl of Halifax, who was Chancellor of the Exchequer, very influential man. He managed to find Newton this very prestigious job at the Mint that paid a good salary. The minute Newton heard about it, he downed tools at Cambridge, rushed down to London, and he moved and started a new life within a few months.
…COWEN: What do you think about Newton’s basic idea on silver recoinage — bring in all the silver coins, melt them down, reissue at a lower value? Was he right about that or not? Or do you side with John Locke?
Recommended, interesting throughout.