Matt Levine wrote the best paragraph I read today
The 18th Brumaire of Donald Trump.
Is it really possible that today is the 18th of Brumaire in the French Republican calendar? (Apparently yes!) That’s a little on the nose. The date gives its name to Napoleon’s coup of 18 Brumaire, in which he seized power and ended the French Revolution. It also gives its name to Marx’s essay “The Eighteenth Brumaire of Louis Napoleon,” which famously opens: “Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce.” Hegel of course usually worked in threes, and if tragedy is the thesis and farce the antithesis, then surely the synthesis is Trump, who is at every point a perfect superposition of tragedy and farce. Anyway! It will all be over soon, maybe.
Will there be violence if Trump loses?
I say probably not. Leonid Bershidsky writes:
Although some of these groups have made headlines with their gun-toting antics, the militiamen I met in Florida were more afraid and disoriented than fearsome…It’s hard to imagine [those] people…taking up arms for Trump if he loses and refuses to concede defeat. One reason is that they are not die-hard Trump fans. Another is that they’re realistic about how much power they have.
I think it is far more likely there is some additional violence if Trump wins. Does “emboldening” or “disillusionment” encourage more aggression? I am more afraid of too much enthusiasm for how much “change” is possible, then leading to overreaching among some of the less salubrious followers, backed by a belief that “now everything is permitted.”
In the meantime, it’s 1968, and Eddie Brinkman is stepping up to the plate to bat…
Advertisers capture: Evidence from Hong Kong
I am impressed by how many very good job market papers are coming out of UCSD this year. This work, by Onyi Lam, I expect will be some of my favorite of the entire job market season. The underlying theme is how effectively propaganda and censorship often work through incentives and political culture, rather than outright coercion. Here is one of the papers:
Advertisers Capture: Evidence from Hong Kong
This paper provides evidence that non-coercive political pressure on the media can be substantial. It shows that advertisers in Hong Kong engage in politically-induced advertising boycott on media that adopts a political stance which is against the mainland Chinese government policy. Using daily advertising data between 2010 and 2014, I exploit the exogenous variation of the occurrence of political events and their intensity to examine to what degree political salience affects firms’ decisions to place ads in a pro-Democracy (as opposed to pro-Beijing) newspaper, particularly so among Beijing-friendly firms. I estimate that the pro-Democracy newspaper suffered from an ad revenue loss equivalent to 21.9% of its total advertising revenue in 2014 due to political reasons.
Here is a very recent Guardian story about how the Hong Kong publishing industry is shrinking under pressure from China. Hong Kong of course is heating up again, as China blocked two elected members from the legislature.
Here is another paper by Lam, this one being work in progress:
Measuring Subjectivity in History Textbooks (with Eddie Lin (University of Chicago))
History textbooks provide a lens through which students view the nation’s past. Government, especially that of authoritarian regime, has an incentive to present biased content in the history textbook to influence students’ political views. This paper considers the problem of measuring subjectivity history textbooks in China, Hong Kong and Taiwan. Using sentiment analysis, I find empirical evidence that history textbooks in mainland China exhibit stronger degree of subjectivity than history textbooks used in Hong Kong and Taiwan. Specifically, the paper measures the adjective content in the textbook, the ratio of positive to negative words in specific time periods and employs word embedding method that measures distance from entities of interest such as the Chinese Communist Party.
This entire topic is understudied by economists…
Monday assorted links
1. How did Shenzhen become China’s innovation capital?
2. Twenty people who turned piling logs into an art form.
3. More on Trump and the west coast Straussians.
4. How democracy treats education: support for spending falls sharply when people learn how much is being spent.
5. The wisdom of Malcolm Gladwell.
Election lesson: humanity needs to catch up to technology
That is the topic of my latest Bloomberg column, here is the introduction:
Each campaign season I ask myself what I have learned, and this cycle has brought more surprises than usual. Still, one theme encompasses many individual lessons, namely that the Internet as a technology has outraced our norms for using it, understanding it and controlling it, most of all in politics.
And later on:
The murkiness of these [internet and legal] issues to most voters makes it easier for the spinmeisters to turn this year’s debate into a fact-free zone. Even the participants in the election often didn’t understand what they were doing.
And:
I am also seeing friends lose control of their moods, obsessively scanning social media for the latest news or maybe hitting “refresh” 20 times a day or more on the prediction markets. We’re not even good at regulating our own use of online media.
And coming into the stretch, who had expected such a strong fear of an electoral hack by Russia, or that more than 100 pro-Trump websites are being run out of one Macedonian town?
Do read the whole thing.
Losers go to jail
That is the title of the job market paper of Mitch Downey, of UCSD, the subtitle is “Congressional Elections and Union Officer Prosecutions,” and here is the abstract:
Democratic societies rely on fair judicial systems and competitive political systems. If politicians can control criminal investigations of influential groups and use them to undermine political opponents and protect supporters, it subverts these systems. I test whether prosecutions of politically active labor unions respond to Congressional election outcomes. I use novel data on federal indictments, campaign contributions to measure support, and a regression discontinuity to recover causal effects. I find that union officers are 67% more likely to be indicted when the candidate their union supported barely loses. These indictments weaken unions’ ability to influence politics, making reelection more difficult for union-supported Representatives and easier for the union-opposed. As such, the discontinuity might reflect reduced indictments to protect election winners’ union supporters or increased indictments to target winners’ union opponents. A series of analyses suggest it includes both. The results show that US politicians manipulate the justice system to maintain power.
His other papers, at the above link, are interesting too, covering voting, labor market frictions, and also the political economy of Afghanistan.
Do voter ID laws matter for outcomes?
Not very much, and maybe not at all. There are numerous papers on this question, with a variety of results, but this one is perhaps the most thorough and best-specified:
Got ID? The Zero Effects of Voter ID Laws on County-Level Turnout, Vote Shares, and Uncounted Ballots, 1992-2014
Abstract: Abstract Do voter ID laws disenfranchise voters? Despite a ferocious, politically charged debate in the media and public opinion, the scholarly evidence on the effects of voter ID requirements is inconclusive. In this paper, I use county-level administrative data from 1992 to 2014 and a Differences-in-Differences research design to identify and estimate the impact of voter ID laws on turnout, Democratic vote share, and irregular ballots. I find no effect of ID laws on any of these outcomes. All estimates are fairly precise and robust to a number of regression specifications. Estimates of heterogeneous effects by educational attainment, poverty rate and minority presence are similarly supportive of ID laws having no impact on electoral outcomes of any type.
That is from Enrich Cantoni, who is on the job market from MIT this year. That is not his job market paper, however, that paper considers how much the distance to the poll influences turnout.
Sunday assorted links
The Chinese Keynes vs. Hayek
IT IS not quite Keynes-Hayek, but Lin-Zhang is a marvel in its own right. Perhaps the most famous debate in the history of economics was that between John Maynard Keynes and Friedrich Hayek—a clash over the benefits and perils of government intervention that exploded in the 1930s and still reverberates today. It has echoed around Chinese lecture halls in recent months. Justin Lin, a former chief economist of the World Bank, who leans to Keynesian faith in public spending, has squared off against Zhang Weiying, a self-professed Hayekian who doubts bureaucrats can ever beat the free market.
Like their predecessors, Mr Lin and Mr Zhang have been sparring over two decades. And whereas Keynes and Hayek were down the road from each other (respectively, in Cambridge and London), the Chinese professors are now only a few paces apart, both at the prestigious Peking University. Their latest debate has been one of their fiercest, becoming a talking point for the domestic press, other academics and even officials.
Here is the full story from The Economist. Now I am waiting for the Russ Roberts Chinese opera video…
Make baseball fun again
Gregory Howard of MIT is on the job market this year, and I was intrigued by one of his papers in process (not yet available):
Make Baseball Fun Again (with Vivek Bhattacharya)
Abstract: Using Pitch F/X data covering over 6 million pitches, we document that pitchers are averse to throwing fastballs. Controlling for the state space of a baseball game, including balls, strikes, outs, inning, run differential, and pitcher/batter fixed effects, we find the pitching team is more likely to win the game when throwing a fastball. This is inconsistent with a mixed-strategy equilibrium where the pitcher’s utility is winning the game. We document that fastballs are riskier, leading to more outs, but also to more extra-base hits. We outline a possible incentive problem between the team and the pitcher, who has preferences over remaining in the game, similar to career concerns (Holmstrom 1998), leading the pitcher to be risk-averse. As suggestive evidence, we show that these effects are more prevalent later in the game, and that rookie pitchers, who have less leverage over pitch choice, do not exhibit this tendency.
If you are wondering, Greg’s job market paper (also at the above link) is on how local labor migration creates an “accelerator” for labor demand by boosting the demand for housing — a locally-produced good — in that area.
Does lifetime experience influence FOMC votes?
There is a new paper by Malmandier, Nagel, and Yan (pdf) on that question, it seems the answer is yes, here is the abstract:
We show that personal lifetime experiences of inflation significantly affect the hawkish or dovish leanings of central bankers. We link experience-based inflation expectations to the desired level of nominal interest rates using a forward-looking formulation of the Taylor rule. Using data of the FOMC voting history from March 1951 to January 2014, we estimate that a one standard-deviation increase in experience-based forecasts increases the unconditional probability of a hawkish dissent by about one third, and decreases the unconditional probability of a dovish dissent also by about one third. FOMC members also use significantly a more hawkish tone in their speeches if they have experienced high inflation in their lives so far. Aggregating over all FOMC members present at a meeting, we establish a significantly positive relationship between their average inflation experience and the Fed Funds Rate target decided at the meeting. Finally, inflation experiences have a strong direct impact on FOMC members’ inflation forecasts as reported in their semiannual Monetary Policy Reports to Congress, suggesting that experiences affect beliefs. Our findings imply that even professionals are affected by their lifetime experiences of macroeconomic outcomes and shed new light on the importance of FOMC appointments.
This is from their conclusion:
This evidence adds to a growing literature on the role of ‘experience effects’, a term first coined by Malmendier and Nagel (2011) in the context of stock-market investment. What is still debated is whether such influences are weaker among more highly educated decision-makers or even experts. Our results here suggest that this is not necessarily the case.
I would expect such effects to be stronger for the better-educated and the experts. We are more a prisoner of our prisms, just as we are more likely to have strong prisms in the first place.
Saturday assorted links
1. Medical hand-washing is addictive, and persists once monitoring is removed, an important result. That is by Reshmaan Hussam, currently a job market candidate at MIT. Here is her YouTube talk on the same topic. This is probably going to be one of the best and most important job market papers of the year.
2. The audacious plan to bring back supersonic flight.
3. Can scientists publish their best work at any age? This seems counterintuitive to me, but it is always worth examining that which challenges our prior beliefs.
4. Does the “bike desk” improve cognitive performance?
6. “Rogoff predicts that future cash registers will include scanners that log purchases with plastic bills, blending elements of digital and physical currencies.” Link here, that is a Jeremy Bentham idea, basically.
What else is happening
Turkey continues a major crackdown against the Kurds.
This week at least 239 people drowned trying to cross the Mediterranean.
Huawei will begin marketing its smart phone in the United States this January.
Journalists will try to tell you that Carlsen vs. Karjakin will be close. Other journalists will try to tell you that someone other than Golden State or Cleveland will win the next NBA title. Other journalists will try to tell you…
“U.S. military hackers have penetrated Russia’s electric grid, telecommunications networks and the Kremlin’s command systems, making them vulnerable to attack by secret American cyber weapons should the U.S. deem it necessary”…link here.
TaterGrams: New Alberta company lets you mail personalized potatoes.
Just keep Mexico, South Korea, and Estonia in mind, and I’m sure you’ll do the right thing.
*Meetings with Remarkable Manuscripts*
That is the new book by Christopher de Hamel, and it is one of the very best non-fiction books this year, in fact so far it might rank #1. It is twelve chapters, each one about an individual medieval manuscript, the best-known of those being the Book of Kells. The integration of text and the visuals is of the highest order of quality. Most of all, the book brings each manuscript to life, relating its creators and creation, the surrounding historical context, its subsequent preservation and fame, and how that history has embodied varying attitudes toward copying and preservation. No less illuminating is the anthropological treatment of how each manuscript is currently guarded and displayed, the author’s travel history in getting there, and a more general “philosophical without the philosophy” introspection on what these objects are really supposed to mean to us.
This book is not in every way light reading, and it does assume some (very broad) background in medieval history, but it brings a whole topic to light, and instructs, in a way that few other works do.
Here is just one short excerpt:
My initial inquiry as to whether I might see the manuscript of the Aratea in the Universiteitsbibliotheek in Leiden was met with the reply that this would hardly be necessary, since there is a high-class published facsimile from 1989 and the complete book is in any case digitized and freely available on-line. It was a response entirely within the theme of copying. If you had applied to the palace librarians of Aachen in the early ninth century to see the late-antique Terence, they would almost certainly have assured you that you would be better off with their nice new copy by their scribe Hrodgarius.
Hamel worked for a long time in the book department at Sotheby’s and then in a library at Cambridge University. He is a bit of a fuddy-duddy (he thinks the bustle of NYC is extreme, for instance), but nonetheless has produced a lovely and complete work that virtually every author should envy. I am ordering his other books too, mostly on the history of books.
Here is a Guardian review, John Banville in the FT raves about it, and here is The Paris Review. I believe I ordered it on Amazon.uk, all five-star reviews by the way. Here is the U.S. Amazon listing, with access to used copies, I am not sure when the American edition comes out.
Friday assorted links
1. Rachael Meager has new and very high quality evidence on microcredit; it’s good but not great and sometimes possibly zero effect in the aggregate. She is a job market candidate at MIT.
2. “Neiman Marcus Is Selling Frozen Collard Greens For $66 Plus Shipping.”
3. Watch a drone hack a room of smart light bulbs from outside the window.
4. “Proponents of the gondola argue that it is far cheaper and quicker to build than a Metro station.” When it comes to transportation, there is definitely a great stagnation. ““Just think of it as a Georgetown Metro station,” Sternlieb said.” Building the system, by the way, would take considerably longer than fighting and winning WWII.
5. Do Nanodegrees (TM!) have a future?
6. I’ve been waiting for someone to call a piece “White Riot,” now it has been done. The piece has too much posturing, and pandering/moralizing, but on the factual side it has a variety of worthwhile and interesting points.