Where did the $800 billion Paycheck Protection Program money go?

The Paycheck Protection Program (PPP) provided small businesses with roughly $800 billion dollars in uncollateralized, low-interest loans during the pandemic, almost all of which will be forgiven. With 93 percent of small businesses ultimately receiving one or more loans, the PPP nearly saturated its market in just two months. We estimate that the program cumulatively preserved between 2 and 3 million job-years of employment over 14 months at a cost of $170K to $257K per job-year retained. These estimates imply that only 23 to 34 percent of PPP dollars went directly to workers who would otherwise have lost jobs; the balance flowed to business owners and shareholders, including creditors and suppliers of PPP-receiving firms. Program incidence was highly regressive, with about three-quarters of PPP funds accruing to the top quintile of households. This compares unfavorably to the other two major pandemic aid programs, enhanced UI benefits and Economic Impact Payments (i.e. stimulus checks). PPP’s breakneck scale-up, its high cost per job saved, and its regressive incidence have a common origin: PPP was essentially untargeted because the United States lacked the administrative infrastructure to do otherwise.

That is from a new NBER working paper by David Autor and many others.

Enemy of All Mankind and Indian Chemical Engineering

In 1695 the British pirate Henry Every commanding a stolen ship, one of the fastest in the world, captured the Ganj-i-Sawai an immense treasure ship carrying the granddaughter of the Mughal Emperor, Aurangzeb, from her pilgrimage to Mecca. The looting and mass rapes set off repercussions around the world.

Enemy of All Mankind is Steven Johnson’s page-turning account. I’m not fascinated by pirates per se but Johnson surrounds the narrative arc with expert historical context. Anyone can tell you that cotton was important in trade between India and Europe but you would be hard-pressed to find a more concise account of why than Johnson’s primer. What made Indian cotton unique wasn’t the cotton but Indian chemical engineering.

What made Indian cotton unique was not the threads themselves, but rather their color. Making cotton fiber receptive to vibrant dyes like madder, henna, or turmeric was less a matter of inventing mechanical contraptions as it was dreaming up chemical experiments. The waxy cellulose of the cotton fiber naturally repels vegetable dyes….The process of transforming cotton into a fabric that can by dyed with shades other than indigo is known as “animalizing” the fiber, presumably because so much of it involves excretions from ordinary farm animals. First, dyes would bleach the fiber with sour milk; then they attacked it with a range of protein-heavy substances: goat urine, camel dung, blood. Metallic salts were then combined with the dyes to create a mordant that permeated the core of the fiber.

…The result was a [soft] fabric that could both display brilliant patterns of color and retain that color after multiple washings. No fabric in human history had combined those properties into a single cloth.

Lots of other insights. Every, by the way, was never captured but in 2014 a Yemeni coin that might have come from the Ganj-i-Sawai was found in a Rhode Island orchard.

See also my previous post on Enemy of All Mankind.

Advice on finding a talented spouse

From a reader:

Re your observation that most people don’t know what their strengths are and your interest in finding and fostering talent:

I haven’t done the two things I’ve recently come to think I’d have the greatest comparative advantage in – marry and stay married to a very talented male and raise very talented kids. As a 36-yr-old female with no potential mate at present, I’ve decided I need to be more intentional about this.

What are your thoughts on the best strategies to maximize my chances of success? How to approach dating sites- multiple with different types of profiles and levels of info; deep on just 1 or 2? Focus more on new sites/established sites/niche sites? Best questions/methods for weeding out and attracting potentials online- especially deeper cultural/moral/values questions? Seek out more in-person opportunities instead? What kind? Groups, orgs I should join? What should I be most/least picky about? Other considerations I’m likely over- or under- rating? I’m in the Dallas area, finishing up my PhD in [redacted], free to move most anywhere.

You haven’t set yourself up as an expert on this, but I know you’ll answer. Also open to suggestions of who else to ask for such advice.

This one is far outside my expertise, but I have a few comments:

1. Are you sure this is what you really want?  I don’t know you at all, but surely you are smart and skilled and so far it hasn’t happened.  (What is your theory of why not?  Maybe you wanted it less before, but keep in mind part of what men want is women who have really wanted this all along.)  That said, if you don’t really want this, I don’t see the harm in trying to make a match of the sort you indicate.  Your own intuitions will save you in time, conditional on you not really wanting this.

2. Use on-line dating.  I’ve seen a graph indicating a trend line marching straight upwards for how many matches, in percentage terms, come from on-line dating (might any of you know the link?  Here it is.).  That is very often how the trend line looks for a dominant trend that is still underrated.  On-line dating simply seems better than any other method, for the same reason you are reading this blog.

2b. I have no idea which services you should use, but since network effects in this market are strong, plenty of your same-age friends should know the right answers without much hesitation.

3. If you are considering doing more “in person” things, such as joining clubs and associations, do things you would wish to do anyway.  If you are doing those activities as part of your effort to be “intentional,” they are dominated by doing more on-line dating.  So just do what you want in this regard.

Other people to ask might be clergy?  Recently married same-age friends?  All the other econ bloggers?

What to Watch

Some things I have watched, some good, some not so good.

Cobra Kai on Netflix: A reliable, feel good show, well plotted. It plays like they mapped each season in advance covering all permutations and combinations of friends turning into enemies and enemies turning into friends. Do I really need five seasons of the same thing? No. But I still watch. Popcorn material.

Maid on Netflix: I appreciated the peek into the difficulties of managing the welfare system and pulling oneself up by one’s bootstraps when your family is pulling you down. Margaret Qualley (Andie MacDowell’s daughter who plays her mother on the show) has an odd charisma. It’s been noted that she is an impossibly perfect mother. Less noted is that she is a terrible wife, a poor daughter to her father and a bad girlfriend. Everyone deserves a break is the message we get from this show, except men. Still, it was well done.

The Last Duel is one of Ridley’s best. Superb, subtle acting from Jodie Comer–deserving of Oscar. Slightly too long but there are natural breaking points for at home watching. N.B. given the times it can’t be interpreted ala Rashômon as many people suggest but rather the last word is final which reduces long term interest but I still liked it.

Alex Rider on Amazon: It’s in essence a James Bond origin story. If that sounds like something you would enjoy, you will. I am told the books are also good for YA.

14 Peaks: Nothing is Impossible: A mountain documentary following Nimsdai Purja as he and his team attempt to summit all 14 of the world’s 8,000-meter peaks in seven months. In many ways, the backstory–Purja is a Gurka and British special forces solider–is even more interesting. It does say something that most people don’t know his name.

The Eternals on Disney: Terrible. Didn’t finish it. A diverse cast with no actual diversity. Kumail Nanjiani, Dinesh from Silicon Valley, plays his super hero like Dinesh from Silicon Valley. Karun, the Indian sidekick, is the most authentic person in the whole ensemble. Aside from being boring it’s also dark, not emotionally but visually. It doesn’t matter the scene, battle scenes, outdoor scenes, kitchen table scenes–all so dark they are literally hard to see.

Wheel of Time: It’s hard to believe they spent a reported $10 million per episode on this clunker. The special effects were weak, the editing was bad, the mood-setting and world building were poor. The actors have no chemistry. Why would anyone be interested in Egwene who shows no spunk, intelligence or charisma? For better in this genre is The Witcher on Netflix.

The French Dispatch (theatres and Amazon): I loved it. Maybe the most Wes Anderson of Wes Anderson movies, so be prepared. Every scene has something interesting going on and there’s a new scene every few minutes. A send-up and a love story to the New Yorker. Lea Seydoux is indeed, shall we say, inspiring.

Anéantir, by Michel Houellebecq

As it happens, Balzac is Houellebecq’s hero. Anéantir not only demonstrates comparable ambition to Balzac; it is also proof of Houellebecq’s tireless work. In his various books he has accumulated notes on: the stages of terminal tongue cancer; the precise topography of the Ministry of Finance; the exact operation of a guillotine (with schematics); the names, composition and texture of processed sandwiches on sale in Parisian train stations; the vernacular of Paris’s best political spin doctor; the triage of dying residents in provincial care homes, and more. When, some time around the 2100s Anéantir is re-published by Penguin Classics, the notes section will take up half the space of the novel proper. The translator will battle to properly convey the Tom Wolfe-like bleak hopelessness encompassed in ‘un sandwich Daunat maxi-moelleux au blanc de poulet-emmental dans son emballage et une Tourtel’.

Like Balzac, many of Houellebecq’s characters are drawn from real life. The book is set in the year 2026. The sitting president is transparently Emmanuel Macron, who’s been re-elected in 2022. Term limits mean he can’t run again: his cunning plan is to push a popular television talk show host to win in 2027, coached by, among others, the minister of finance, thereby keeping the seat warm for a return of ‘Macron’ himself at the 2032 election — a kind of Putin-Medvedev switcheroo.

The book just came out in France, here is more information.  Is Houllebecq best at 736 pp.?  I guess we’ll find out.  In French, on Kindle.  And in German.  When in English?  I have ordered it in German, though I am not sure when I will get to start much less finish it.

The prisoner’s dilemma for prisoners and Mafia men

We develop experimental evidence on cooperation and response to sanctions by running prisoner’s dilemma and third party punishment games on three different pools of subjects; students, ordinary criminals and Camorristi (Neapolitan ‘Mafiosi’). The latter two groups were recruited from within prisons. Camorra prisoners show a high degree of cooperativeness and a strong tendency to punish defectors, as well as a clear rejection of the imposition of external rules even at significant cost to themselves. The subsequent econometric analysis further enriches our understanding demonstrating inter alia that individuals’ locus of control and reciprocity are associated with quite different and opposing behaviours amongst different participant types; a strong sense of self-determination and reciprocity both imply a higher propensity to punish for Camorra inmates, but quite the opposite for ordinary criminals, further reinforcing the contrast between the behaviour of ordinary criminals and the strong internal mores of Camorra clans.

Here is the paper by Annamarie Nese, et.al., via Ethan Mollick and Ilya Novak.

What should I ask R.F. (Roy) Foster?

I will be doing a Conversation with him.  He is Ireland’s greatest historian, here is part of his Wikipedia entry:

He has written early biographies of Charles Stewart Parnell and Lord Randolph Churchill, edited The Oxford History of Ireland (1989), and written Modern Ireland: 1600–1972 (1988) and several books of essays. He collaborated with Fintan Cullen on a National Portrait Gallery exhibition, Conquering England: the Irish in Victorian London.[1] Foster produced a much-acclaimed two-part biography of W. B. Yeats,[2][3] which was awarded the James Tait Black Memorial Prize. Seamus Deane wrote a review of the biography in which he quoted the last line of Yeats’ poem The Municipal Gallery Revisited: “My glory was that I had such friends”, and stated that Yeats was also lucky to have Foster as his biographer.

Modern Ireland 1600-1972 would be the place to start, and it is a book you can read more than once.  Here is an excellent Guardian profile of Foster, worth reading in its own right.  So what should I ask him?

Buy Things Not Experiences!

A nice, well-reasoned piece from Harold Lee pushing back on the idea that we should buy experiences not goods:

While I appreciate the Stoic-style appraisal of what really brings happiness, economically, this analysis seems precisely backward. It amounts to saying that in an age of industrialization and globalism, when material goods are cheaper than ever, we should avoid partaking of this abundance. Instead, we should consume services afflicted by Baumol’s cost disease, taking long vacations and getting expensive haircuts which are just as hard to produce as ever.

Put that way, the focus on minimalism sounds like a new form of conspicuous consumption. Now that even the poor can afford material goods, let’s denigrate goods while highlighting the remaining luxuries that only the affluent can enjoy and show off to their friends.

[The distinction is too tightly drawn]…tools and possessions enable new experiences. A well-appointed kitchen allows you to cook healthy meals for yourself rather than ordering delivery night after night. A toolbox lets you fix things around the house and in the process learn to appreciate how our modern world was made. A spacious living room makes it easy for your friends to come over and catch up on one another’s lives. A hunting rifle can produce not only meat, but also camaraderie and a sense of connection with the natural world of our forefathers. In truth, there is no real boundary between things and experiences. There are experience-like things; like a basement carpentry workshop or a fine collection of loose-leaf tea. And there are thing-like experiences, like an Instagrammable vacation that collects a bunch of likes but soon fades from memory.

Indeed, much of what is wrong with our modern lifestyles is, in a sense, a matter of overconsuming experiences. The sectors of the economy that are becoming more expensive every year – which are preventing people from building durable wealth – include real estate and education, both items that are sold by the promise of irreplaceable “experiences.” Healthcare, too, is a modern experience that is best avoided. As a percent of GDP, these are the growing expenditures that are eating up people’s wallets, not durable goods. If we really want to live a minimalist life, then forget about throwing away boxes of stuff, and focus on downsizing education, real estate, and healthcare.

Hat tip: The Browser.

Photo Credit: MaxPixel.

What is actually a heretical view?

I was two days ago at Hereticon, and wondering which views actually should be considered heretical.  It seems there are some distinct categories, for instance here are a few categories of the “partially heretical”:

1. Used to be heretical, or on the verge of switching.

Favoring gay marriage, or more on the border thinking that UFOs are of alien origin.  The latter view is now presented with a straight face by former presidents and CIA heads, so it is not heretical any more.  In polls, it is not even so unusual amongst the American public, though some elites will mock it and it remains outside of the mainstream.

2. It’s heretical to say but the actual idea is not heretical.

Presenting “eugenics” ideas is heretical, but talking about “dating” and “matchmaking” is not.  Embryo selection is on the verge of not being heretical, if it ever was.  Or talking about “the feminization of society” is modestly heretical, but believing women have a much greater cultural influence is not heretical at all.  You just have to talk about it the right way.

3. The idea is not heretical globally.

But it might be heretical domestically, such as saying “the CCP is great.”  Or “women should have their kids really young.”  Those are a special category of heretical ideas, extremely common around the world, for better or worse, but still a no-no in some locales.

4. Popular views, but heretical with many elites.

Try “Darwin is wrong,” or “Facebook is fine.”  How about “autocracy is good”?  NB: In all of these discussions, I am not considering whether the belief is right or wrong.

Which would be a truly heretical belief that does not fall into these “partially heretical” categories?  But it can’t be absurd either, for instance it is not “heretical” for me to believe I can jump one hundred feet in the air, rather it is simply stupid.  I am also not looking for beliefs that offend or insult groups per se, as that is too easy.  “Group X is crummy” is not interesting for my purposes.

Maybe here are a few outright heretical views, again noting that I am not endorsing them:

5. ESP works.

6. Whales are smarter than people and deeper thinkers too.

7. In fact you can trust Congress to do the right thing.

8. Ten percent inflation a year is just fine.

9. Fortunately America has so many guns that we couldn’t do very strict lockdowns for Covid.

10. It would be better if humans never had existed, as they have destroyed more welfare than they created.  Most of all because of their effects on non-human animals.

11. Non-human animals suffer more than they enjoy, and it would be better if they did not exist.

12. American TV was much better in the 1960s and 1970s.

What else?

Duke 2022 Summer Institute on the History of Economic Thought

The Center for the History of Political Economy at Duke University will be hosting another Summer Institute on the History of Economics this summer from June 20-29, 2022. The program is designed for students in graduate programs in economics, though students in graduate school in other fields as well as newly minted PhDs will also be considered.

Students will be competitively selected and successful applicants will receive free (double occupancy) housing, a booklet of readings, and stipends for travel and food. The deadline for applying is March 1.

We are very excited about this year’s program, which will focus on giving participants the tools to set up and teach their own undergraduate course in the history of economic thought. There will also be sessions devoted to showing how concepts and ideas from the history of economics might be introduced into other classes. The sessions will be run by Duke faculty members Bruce Caldwell, Steve Medema, and Jason Brent. More information on the Summer Institute is available at our website, http://hope.econ.duke.edu/


TikTok returns

TikTok stars are dancing their way to the bank. Some are making more than America’s top chief executives.

Charli D’Amelio, who started posting videos of herself dancing on TikTok in 2019, brought in $17.5 million last year, according to Forbes, which recently ranked the highest-earning TikTok stars of 2021. With 133 million followers on TikTok, she makes her money from a clothing line and promoting products in TikTok videos and other ads.

By comparison, median pay for chief executives of S&P 500 companies was $13.4 million in 2020, according to a Wall Street Journal analysis of data from MyLogIQ. CEO compensation figures include stock and option awards, which typically make up most of executive pay, as well as annual salary and bonus, perks and some kinds of retirement-benefit gains. Only some 2021 CEO compensation figures have been released so far.

Here is the full WSJ article, via the excellent Kevin Lewis.

Friday assorted links

1. David Brooks on America falling apart (NYT).

2. Jonah Goldberg is right.  And Megan McArdle is right.

3. Shawn Bradley’s life is tough.

4. “Likewise, authors from the same PhD program or who previously worked with the reviewer are significantly more likely to receive a positive evaluation. We also find that sharing “signals” of ability, such as publishing in “top five”, attending a high ranked PhD program, or being employed by a similarly ranked economics department significantly influences editor decisions and/or reviewer recommendations.”  Link here.

5. So a virus triggers multiple sclerosis? And more here (NYT).  And, not unrelated, the nature of Long Covid.

6. Links from Chris Blattman, who is blogging again.

7. Good Bridgewater/Dalio piece (FT).

Who has been loneliest during the pandemic?

That question is the topic of my latest Bloomberg column.  The wealthy can fly to the sun, meet outdoors, test regularly, and find many other workarounds.  Poorer individuals tend to be working together in public-facing service jobs.  That has a Covid downside, but it does make them less lonely.  So who are the biggest loneliness losers?

…it’s pointless to debate which group is loneliest. Still, I might argue for some sympathy for Northerners in midlevel jobs who work alone or remotely. Think of academics, accountants, middle managers.