Simon Blackburn suffers from mood affiliation
Via Ross Douthat, here is the close of Blackburn’s review of the new Thomas Nagel book:
There is charm to reading a philosopher who confesses to finding things bewildering. But I regret the appearance of this book. It will only bring comfort to creationists and fans of “intelligent design”, who will not be too bothered about the difference between their divine architect and Nagel’s natural providence. It will give ammunition to those triumphalist scientists who pronounce that philosophy is best pensioned off. If there were a philosophical Vatican, the book would be a good candidate for going on to the Index.
The Nagel book continues to go up in my eyes.
Assorted links
1. Why don’t Japanese toilets spread to the U.S.?
2. How many states will refuse the Medicaid expansion? Possibly a whole bunch.
4. Tax hikes vs. spending cuts, and citing this old Blanchard and Perotti piece (pdf).
Economists are everywhere China fact of the day
North Korean-trained economist Zhang Dejiang is expected to head the largely rubber-stamp parliament, while Shanghai party boss Yu Zhengsheng is likely to head parliament’s advisory body, according to the order in which their names were announced.
Tianjin party chief Zhang Gaoli and Liu Yunshan, a conservative who has kept domestic media on a tight leash, make up the rest of the group.
And who said education doesn’t matter?
The story is here, via Emily Kaiser.
Sentences to ponder (who’s next?)
…by my calculation it would take songwriting royalties for roughly 312,000 plays on Pandora to earn us [Galaxie 500] the profit of one– one— LP sale. (On Spotify, one LP is equivalent to 47,680 plays.)
Oh, and there’s more:
Pandora and Spotify are not earning any income from their services, either. In the first quarter of 2012, Pandora– the same company that paid Galaxie 500 a total of $1.21 for their use of “Tugboat”– reported a net loss of more than $20 million dollars. As for Spotify, their latest annual report revealed a loss in 2011 of $56 million.
The full story is here, interesting throughout, and for the pointer I thank HL.
Coase and Wang on capitalism in China
Nick Schulz does the interview. After they discuss the topic, here is one bit toward the end:
We are now working with the University of Chicago Press to launch a new journal, Man and the Economy. We chose our title carefully to signal the mission of the new journal, which is to restore economics to a study of man as he is and of the economy as it actually exists. We hope this new journal will provide a platform to encourage scholars all over the world to study how the economy works in their countries. We believe this is the only way to make progress in economics.
For the pointer I thank David Levey.
Assorted links
What does equilibrium look like for the book business?
Adam Davidson offers some interesting remarks. My take is a little more radical. I expect two or three major publishers, with stacked names (“Penguin Random House”), and they will be owned by Google, Apple, Amazon, and possibly Facebook, or their successors, which perhaps would make it “Apple Penguin Random House.” Those companies have lots of cash, amazing marketing penetration, potential synergies with marketing content they own, and very strong desires to remain focal in the eyes of their customer base. They could buy up a major publisher without running solvency risk. For instance Amazon revenues are about twelve times those of a merged Penguin Random House and arguably that gap will grow.
There is no hurry, as the tech companies are waiting to buy the content companies, including the booksellers, on the cheap. Furthermore, the acquirers don’t see it as their mission to make the previous business models of those content companies work. They will wait.
Did I mention that the tech companies will own some on-line education too? EduTexts embedded in iPads will be a bigger deal than it is today, and other forms of on-line or App-based content will be given away for free, or cheaply, to sell texts and learning materials through electronic delivery.
Much of the book market will be a loss leader to support the focality of massively profitable web portals and EduTexts and related offerings.
There is this funny thing called antitrust law, but I think these companies are popular enough, and associated closely enough with cool products — and sometimes cheap products — to get away with this.
The wisdom of Alex Tabarrok
Alex did not reproduce this passage from his essay on on-line education, so I will did (and Reihan Salaam did):
Productivity in education has lagged productivity in other sectors of the economy because teaching is so labor intensive. Where exactly in the typical classroom is there room for investment, let alone productivity improvement? More chalk? Prior to online education, the bottleneck though which productivity improvements had to pass was the teacher, and we know that improving teacher productivity is very difficult, which is why teaching methods haven’t changed in millennia. Online education vastly increases the potential for productivity increases because it greatly increases the size of the potential market. Bigger markets increase the incentive to research and develop new products (coincidentally the very topic of my TED talk.) A tool used to improve online education–an interface, an algorithm, a new teaching method–can be applied very widely, potentially world-wide, thus greatly increasing the incentive to invest in the education sector, perhaps the most important sector of the 21st century economy.
Here are some budges forward on the accreditation of MOOCs.
Addendum: Here are interesting comments from Joshua Gans.
Undercounting very discouraged workers
Here is a guest post from Stephen Bronars. Excerpt:
I estimate that there are over four million fewer labor force participants than what would have occurred if age-adjusted participation rates maintained their pre-recession trend. In this recovery, the official BLS count of “marginally attached” workers underestimates, by 40%, the number of people who left the labor force because they stopped looking for work. Although BLS figures suggest that marginally attached workers are a minority of the 5.6 million adults who left the labor force, a more plausible estimate is that 72% of these non-participants stopped searching for work in the past few years.
If official underutilization measures included jobless workers who gave up searching for work within the past 36 months the labor force underutilization rates reported by the BLS would be higher by about 0.9%. For example, the underutilization measure that includes unemployed and marginally attached workers would have been 10.2% (rather than 9.3%) last month.
The Internet is a Series of Tubes
Turns out the internet really is a series of pipes tubes. Here is a picture from one of Google’s Data Centers.
The pipes are for running cooling water. Here is another data center:
More here.
What are the best new products that people don’t know about?
Here is a Quora discussion of that question. I like “Traffic Signal with Hour Glass Timer” and “Cooking Solved.” “No more blind spots” is the one I would pay for.
For the pointer I thank Rob.
Assorted links
1. “Andrew Solomon is a lumper.”
2. Just apply the usual stacked blog post title to this one, and more here.
3. Interview with Malcolm Gladwell.
4. Horse nationalism is defeated — for now.
5. Some of the academics behind the Obama campaign.
6. You would think the anti-virus software was enough for one lifetime.
Why Online Education Works
My essay at Cato Unbound, Why Online Education Works, goes beyond much of the recent discussion to give specific examples of how online teaching increases the productivity and quality of education. Here is one bit:
Dale Carnegie’s advice to “tell the audience what you’re going to say, say it; then tell them what you’ve said” makes sense for a live audience. If 20% of your students aren’t following the lecture, it’s natural to repeat some of the material so that you keep the whole audience involved and following your flow. But if you repeat whenever 20% of the audience doesn’t understand something, that means that 80% of the audience hear something twice that they only needed to hear once. Highly inefficient.
Carnegie’s advice is dead wrong for an online audience. Different medium, different messaging. In an online lecture it pays to be concise. Online, the student is in control and can choose when and what to repeat. The result is a big time-savings as students proceed as fast as their capabilities can take them, repeating only what they need to further their individual understanding.
More at the link including a discussion of how most of my teaching career happened in 15 minutes.
Responses from Siva Vaidhyanatha (Robertson Professor in Media Studies at the University of Virginia), Alan Ryan (former Warden of New College, Oxford) and Kevin Carey (Director of the education policy program at the New America Foundation) follow later this week.
On the “fiscal cliff”
First, I don’t like calling it the fiscal cliff; it is not a cliff and in any case, as with “austerity,” why not disaggregate the issues? James Hamilton provides some useful numbers on the components.
Today I wish to raise two questions:
1. If we don’t take “tough fiscal action” this time around, how much more will those special fiscal privileges (I’m not sure there is a single appropriate neutral term for the whole of them) become entrenched and difficult to dislodge, even when later macroeconomic conditions call for such?
2. What is the underlying rate of growth in the U.S. economy today, and how much higher (lower?) is that rate likely to rise (fall) over the next ten or so years? In other words, how much better (worse) an environment will we have for fiscal consolidation in the medium-term future? And at higher rates of growth, if we get them, how much harder is it to dislodge special fiscal privileges?
I submit that no one has very good or very certain answers to these questions, given the current states of public choice theory and the macroeconomics of growth. And if analysts do not have very good answers to these questions, dogmatic positions about the “fiscal cliff” are to be avoided.
If you read analyses which do not raise and consider these questions, fear that snake oil is being served up.
I don’t expect I’ll be doing any day-by-day tracking of this new Washington drama, but it would not hurt to remind yourself of this post every few days or so.
Paul Krugman does believe that an attack of the bond vigilantes would be expansionary
You can read him here. Keep in mind we are talking about a sudden leap upward in interest rates, a sharp rise in the risk premium, and a sudden fall in bond prices. In response, I suggest a multi-step program:
1. Read Gary Gorton on how much the decline in the value of mortgage securities — if only as collateral — damaged the global economy during 2008 by causing a credit collapse, including in but not limited to the shadow banking system.
2. Estimate size of said effect for a serious price decline for U.S. Treasury securities, a much larger and more central and otherwise more secure market. Do not leave out margin call effects or negative effects on the eurozone.
3. Compare said effect to short-run benefits from exchange rate depreciation, taking into account lags and J-curve effects and the relatively closed nature of the American economy and the slowdowns in other countries around the globe.
4. Run a Chicago Booth questionnaire study to see how much of the profession will agree with you.
5. Flee in panic.
6. Start praising the Republican Party for their macroeconomic acumen in damaging the credit reputation of the U.S. government.
7. Declare yourself an “elasticity optimist” when it comes to relative price shifts and lower tax rates. Team up with the U.S. Chamber of Commerce to write a study calling for the immediate slashing of corporate tax rates, or at least corporate tax rates as applied to exports. The theory of exchange rate incidence is the theory of tax rate incidence, and furthermore, by happy coincidence, lower tax rates do not involve all of the costs of a financial crisis.
8. Ponder technical questions such as “if I think bad news is more than offset by gains from exchange rate depreciation, do I also think that good news is more than offset by losses from exchange rate appreciation?”
9. Read Thucydides, or perhaps Broadwell, about how a crisis is not always manageable once underway.
Krugman’s is a reckless position, and simply noting that America borrows in its own currency doesn’t come close to defending it.
Addendum: Here are comments from Nick Rowe. And from Scott Sumner. And David Beckworth. And Evan Soltas. And here is my earlier post on exchange rates and the like.