South Dakota is trying to hold on
Map of the TFRs by US state for 2023, based on recently released birth data from January-September 2023. The TFR declined to around 1.62 kids per woman last year, but there are important regional differences. Values range from 1.99 in South Dakota to 1.19 in Washington DC. pic.twitter.com/xXXzKm1kT6
— Birth Gauge (@BirthGauge) January 22, 2024
Bihar is holding on:
When will the world have its first trillionaire?
Not anytime soon, as I argue in my Bloomberg column, here is one of the arguments:
The desire to diversify is another limiting force. Once you have a considerable sum of money, it makes sense to spread your assets widely. Gates, for example, sold a good deal of Microsoft stock early on, presumably with diversification as a motive. At the time it seemed like an obviously good idea. Yet today Gates would be much richer if he had held onto his Microsoft shares. By one estimate he would in fact be a trillionaire, but even that hypothetical required a very dramatic recent run-up in Microsoft shares.
No one gets to be a billionaire by fully diversifying, anyway. Rather, billionaires pour their hearts and souls into a small number of very particular enterprises, which then (might) earn very high rates of return. But throughout the course of one’s life, it doesn’t make sense to keep on holding so much risk. It is better to cash in and enjoy some safety, in turn limiting your chance to become a trillionaire.
As I do note in the piece, it is the Federal Reserve that will get us there eventually.
Rent Controls
Ryan Bourne has a good rundown on rent controls in Argentina. In 2020 Argentina introduced a relatively mild form of rent control; rent increases during tenancy were capped at a weighted average of inflation and wage growth, tenancy was a minimum of 3 years and it became very difficult to end a tenancy. In ordinary times, this might have had only mild negative effects but in a high inflation rate scenario everything was accelerated (and the controls got worse over time, most notably in 2023 rent increases were capped at the minimum of inflation and wage growth).
….The results of all this were predictable. Around the policy’s introduction, it’s estimated that 45% of landlords stopped renting to instead sell their properties, not least because most home sales were made in dollars [it was illegal to rent in dollars, AT]. A lot of landlords shifted to short-term rentals on AirBnB too. In 2019, Buenos Aires had 10,000 properties listed on AirBnB; now it’s over 29,500. There have thus been no end of stories about a rental housing crisis, with tenants unable to find rental accommodation, despite the Financial Times reporting late last year that energy use implies ‘one in seven homes’ in Buenos Aires, the capital, laid empty.
This supply crunch led to soaring rents. Bloomberg reported that rents jumped sharply after tenancy rent controls were announced, as landlords opted out of the market or front-loaded rent increases to protect against inflation. Having been falling in real terms through 2018 and 2019, and tracking inflation for most of the previous decade, rents in Buenos Aires grew at 1.7 times the pace of inflation in 2020, broadly tracked inflation in 2021 and 2022, and then accelerated much faster than inflation again in 2023 as the rate which rents could be increased within tenancies was tightened further to the lower of wage growth or inflation.
As a result, the average rent for a two bedroom apartment in Buenos Aires has surged from 18,000 pesos per month at the end of 2019 to 334,000 pesos today, far above the 210,000 pesos if prices had merely tracked broader inflation, as used to happen. This relative price hike obviously hurts the poor most, because they cannot easily afford deposits to buy homes, or more expensive shorter-term dollar rentals.
Controls on rents within tenancies also soured landlord-tenant relations, incentivising landlords to forgo expensive maintenance (thus allowing the value of the property to fall towards its regulated price or to encourage tenants to leave). Misallocation of properties was rife. Reports in Buenos Aires described friends having to share apartments further out of the city centre, meaning cramped conditions and longer commutes. Under such controls, people enjoying sub-market rents are incentivized to stay in properties ill-suited for them, while others must leave properties they can afford prematurely when rents adjust sharply before their wages rise.
Milei’s Decree 70/2023, translated as ‘Foundations for the Reconstruction of the Argentine Economy,’ eliminated rent controls, including allowing contracting in dollars. Even though it has been only a matter of months, early signs are very positive:
Already the reduced risks to landlords is leading a rebound in the rental supply. Broker Soledad Balayan has shown a 50% rise in notices for traditional rentals since the decree. A host of other sources, including the Argentine Real Estate Chamber, have confirmed large supply jumps. Perhaps unsurprisingly, reports show new rental prices falling, by between 20 and 30% so far.
Quick tour of Argentina’s fiscal deficit (from my email, anonymous author)
I won’t double indent, but this is not by me, though I agree with it:
“I agree with your read re Argentina’s history of fiscal stability. From this paper (unclear if the data is accurate), here is Argentina’s deficit from 1960 to 2016 or so:
[See Figure 3 here]
Notice 2003-2009 is the only time with a noticeable superavit (exports > imports, taxes > spending), which coincides with Kirchner. It happily coincided with booming soy prices and it was immediately followed by more public spending. Remember soy exports have their own special tax rate (retenciones + FX tax, ~double other exports). Here are soy prices (source):
[See Figure here]
Here is Carlos Pagni in 2009 covering the law that let the state spend as much as it pleased once again. This was only a few years after 2004, when the IMF had forced Argentina to pass Ley 25.917 constraining government spending and debt under GDP.
Also notice that the deficit continued after the hyperinflation of 1989-1990! Between the privatizations, Plan Bonex, and reduced social spending, Menem reduced inflation (and caused a recession for which he is resented to this day). Then Cavallo comes in with convertibilidad. This gets world bankers excited and the dollars start flowing back into Argentina but the fiscal deficit immediately resumes. That same Menem ran an ad campaign in 1999 partially based on infrastructure investments after his decade of deficit.
In other words, the Peronistas simply do not believe that too much spending leads to a crisis. They will always spend if allowed to. Argentina still lacks the institutions to prevent this.
Looking at the recent history of fiscal deficit, Milei can make two contributions:
Short-term: Cut spending before things explode. The Peronistas would’ve continued to print + spend, deepening the problems. Milei is already succeeding at this and will likely succeed while he remains in power. For example, he has cut some of the funding to the provinces, which will be forced to cut their spending. Some of them are already considering printing their own currency (paper bonds like the LECOP or Patacones from 2001).
Long-term: Prevent future spending. This is what the Libertarians promise: remove the people that spend us to the ground for good. We should measure “historical success” by this measure. This is why dollarization is attractive: it prevents the state from printing money to fund its deficit.
I have my hopes up but I don’t understand Argentinian institutions or history well enough to know if he can make progress on this. As a comparison, the Bank of England was founded in 1694 and became formally independent a few centuries later in 1997 (including an IMF intervention into fiscal spending as recent as 1976).”
*The End of Race Politics: Arguments for a Colorblind America*

By Coleman Hughes, coming soon!
Monday assorted links
1. Noah Smith on the California Forever Project.
2. Corporations defending DEI.
3. More on ice deposits on Mars? (speculative)
4. Larry speaks the truth about Harvard.
5. “A rich literature explores gender differences between men and women, but an increasing share of the population identifies their gender in some other way. Analyzing data on roughly 10,000 students and 1,500 adults, we find that such gender minorities are less confident and provide less favorable self-evaluations than equally performing men on a math and science test.” Link here.
6. These two cicada broods will emerge at the same time (NYT).
7. “Dana-Farber Cancer Institute is reviewing more than 50 papers, including work of the hospital’s CEO.” (WSJ) That is at Harvard.
Dose Optimization Trials Enable Fractional Dosing of Scarce Drugs
During the pandemic, when vaccines doses were scarce, I argued for fractional dosing to speed vaccination and maximize social benefits. But what dose? In my latest paper, just published in PNAS, with Phillip Boonstra and Garth Strohbehn, I look at optimal trial design when you want to quickly discover a fractional dose with good properties while not endangering patients in the trial.
[D]ose fractionation, rations the amount of a divisible scarce resource that is allocated to each individual recipient [3–6]. Fractionation is a utilitarian attempt to produce “the greatest good for the greatest number” by increasing the number of recipients who can gain access to a scarce resource by reducing the amount that each person receives, acknowledging that individuals who receive lower doses may be worse off than they would be had they received the “full” dose. If, for example, an effective intervention is so scarce that the vast majority of the population lacks access, then halving the dose in order to double the number of treated individuals can be socially valuable, provided the effectiveness of the treatment falls by less than half. For variable motivations, vaccine dose fractionation has previously been explored in diverse contexts, including Yellow Fever, tuberculosis, influenza, and, most recently, monkeypox [7–12]. Modeling studies strongly suggest that vaccine dose fractionation strategies, had they been implemented, would have meaningfully reduced COVID-19 infections and deaths [13], and perhaps limited the emergence of downstream SARS-CoV-2 variants [6].
…Confident employment of fractionation requires knowledge of a drug’s dose-response relationship [6, 13], but direct observation of both that relationship and MDSE, rather than pharmacokinetic modeling, appears necessary for regulatory and public health authorities to adopt fractionation [15, 16]. Oftentimes, however, early-phase trials of a drug develop only coarse and limited dose-response information, either intentionally or unintentionally. A speed-focused approach to drug development, which is common for at least two reasons, tends to preclude dose-response studies. The first reason is a strong financial incentive to be “first to market.” The majority of marketed cancer drugs, for example, have never been subjected to randomized, dose-ranging studies [17, 18]. The absence of dose optimization may raise patients’ risk. Further, in an industry sponsored study, there is a clear incentive to test the maximum tolerated dose (MTD) in order to observe a treatment effect, if one exists. The second reason, observed during the COVID-19 pandemic, is a focus on speed for public health. Due to ethical and logistical challenges, previously developed methods to estimate dose-response and MDSE have not routinely been pursued during COVID-19 [19]. The primary motivation of COVID-19 clinical trial infrastructure has been to identify any drug with any efficacy rather than maximize the benefits that can be generated from each individual drug [3, 18, 20, 21]. Conditional upon a therapy already having demonstrated efficacy, there is limited desire on the part of firms, funders, or participants to possibly be exposed to suboptimal dosages of an efficacious drug, even if the lower dose meaningfully reduced risk or extended benefits [16]. Taken together, then, post-marketing dose optimization is a commonly encountered, high-stakes problem–the best approach for which is unknown.
…With that motivation, we present in this manuscript the development an efficient trial design and treatment arm allocation strategy that quickly de-escalates the dose of a drug that is known to be efficacious to a dose that more efficiently expands societal benefits.
The basic idea is to begin near the known efficacious dose level and then deescalate dose levels but what is the best de-escalation strategy given that we want to quickly find an optimal dosage level but also don’t want to go so low that we endanger patients? Based on Bayesian trials under a variety of plausible conditions we conclude that the best strategy is Targeted Randomization (TR). At each stage, TR identifies the dose-level most likely to be optimal but randomizes the next subject(s) to either it or one of the two dose-levels immediately below it. The probability of randomization across three dose-levels explored in TR is proportional to the posterior probability that each is optimal. This strategy balances speed of optimization while reducing danger to patients.
Read the whole thing.
No, Covid spending wasn’t the only factor, but…
Barro, CPI rate correlation with covid spending in 37 countries pic.twitter.com/AD47gPTbYb
— 161phi (@161phi) January 21, 2024
A year or so ago I recall telling Bari Weiss in a podcast that the inflation was perhaps half real shocks, half an aggregate demand problem. Don’t let the revisionists talk you into the hardcore RBC view!
Social improvements that don’t create countervailing negative forces
Let us say you favor policy X, and take steps to see that policy X comes about.
Under many conditions, people who favor non-X will take additional countervailing steps to oppose X. And in that case your actions in favor of X, on average, will lead to nothing. In the meantime, you and also your opponents will have wasted material resources fighting over X.
This argument is hardly new, but most people do not like to consider it much. They instead prefer to mood affiliate in favor of X, or perhaps against X. They prefer to be “fighting for the right things.”
Perhaps visible political organizing is most likely to set this dynamic in motion. Everyone can see what you are doing, and perhaps they can use their actions to fundraise for their own side.
That is one reason why I am not so thrilled with much of that organizing, even if I agree with it. Of course there are other scenarios here. Your involvement on behalf of X might just be flat-out decisive. Or perhaps the group against X is too resource-constrained to respond to your greater advocacy. That said, those descriptors (and others) might apply as well to either side of the dispute, your side included. Scaling up the fight over X might cause you to be the one who simply flat out loses the struggle.
It is worth thinking which kinds of “small steps toward a much better world” do not produce such countervailing effects.
How about “being positive and constructive”? Does it generate an equal and offsetting amount of negativity?
How about “trying to get people to be more reasonable, yet without offering a substantive political commitment bundled with that”? Does that in turn motivate the crazies to work harder at making everyone go insane? I am not sure.
What else might be effective, once these strategies are considered?
Does “refuting people” fit into this category? Yes or no?
Which activities should you be abandoning altogether? Or perhaps trying to do in secret, rather than publicly?
2024 is already an incredible year for cinema
There is:
Poor Things
The Delinquents [Los Delincuentes], from Argentina, tragicomedy.
The Teacher’s Lounge
All of Us Strangers
Anselm 3-D
The Zone of Interest
Of course many of those came out in their respective foreign markets before 2024, but that is not the point. Rather it seems cinema has turned a corner and is vital and original again (though not culturally central?). The best films of 2023 list was very good as well.
The David Network
I am pleased to have spoken at their yearly conference yesterday. If I understand them correctly (here is their web site), it is for elite college students — grad and undergrad — at Harvard, MIT, Stanford and the rest of the Ivies. No other schools. The group is explicitly religious (across religions and denominations) and also right-leaning and explicitly elitist. [Correction: Unlike as previously stated, Robert George of Princeton does not have a leadership role in the group, though he has a speaker role. The Network is run by volunteers.]
Here is the thing — there were about five hundred people at the event. That shocked me. Overall the energy and talent levels in the rooms seemed high.
The group is four years old, and I had never heard of them before, so I am passing this information along. As I’ve said in the past, the most important thinkers of the future will be religious thinkers (and I’m not one of them). Today I am upping my “p” on that prediction.
Addendum: My comments were on higher education, and they were more optimistic than what the other panel members expressed. There is a good chance they will put it on-line.
Will Milei succeed in Argentina?
I give him a 30-40% chance, which is perhaps generous because I am rooting for him. Bryan Caplan, who is more optimistic, offers some analysis and estimates that Milei needs to close a fiscal gap of about five percent of gdp.
I have two major worries. First, if Milei approaches fiscal success, the opposing parties will think long and hard about whether they wish to enable further success. Or will they instead prefer to see the Milei reforms crash and burn for fiscal reasons? I don’t think they know themselves, but the history of politics in Argentina does not give special reason to be super-optimistic here. You don’t have to believe the opposition will deliberately flush their country down the toilet, they just not might be convinced that further fiscal consolidation is needed, even if it is (surely they gotten this wrong a lot in the past).
Second, Argentina has not succeeded in obtaining fiscal stability in the past, not for a long time. I disagree with this passage of Bryan’s:
The monetary and fiscal stabilization is very likely to work. Argentina has faced far worse crises before: The hyperinflations of the 70s to the 90s multiplied prices 100 billion times. That’s like turning a billion dollars into a penny. Yet Argentinians ultimately overcame all these problems and more using the orthodox medicines of monetary restraint and fiscal responsibility. Since even politicians who ideologically opposed these treatments ultimately endured their short-run costs, it is a safe bet that a libertarian economics professor will do the same.
That is a misread of the history. One common tactic, for instance, is to do enough stabilization so that Argentina is “fiscally sound enough” at the peak of a commodity super-cycle. Most recently, that super-cycle has been China buying lots from Argentina (no such positive wave from China will be coming again, not anytime soon at least). When the positive real shocks subside, Argentina goes back into the fiscal hole.
In reality, past reforms never put the country on a sound fiscal footing, even if inflation rates were low for a while.
One scenario for now is that Argentina does enough so that it appears fiscally stable, and the recent discoveries of oil and gas — which will translate into government revenue — kick in to support a temporary status quo. But within ten years the whole thing falls apart again. Even if Milei wants to do more on the fiscal front to get past that point, it is not obvious that either voters or the legislature would support such further moves.
Those are two “pretty likely” scenarios in which Milei fails, and in neither case is it the fault of Milei. As I mentioned above, the chances of success remain below fifty percent.
Boosting fertility by subsidizing child-bearing for *young* women
From Vidya Mahambare:
Several countries have grappled with a longstanding dilemma – how to reverse the trend of falling fertility rates. In 2019, eighty-one countries had fertility rates below the population replacement threshold. The replacement fertility rate, estimated at 2.1 births per woman, represents the level required to sustain a stable population over the long run, assuming mortality and migration remain constant.
Is it now time, at least in some countries, to implement policies targeted at lowering the age at which women have their first child?
Perhaps, yes. Here is why.
While most countries in Europe, Northern America, Japan, Australia, New Zealand, and China have had low fertility rate for years, India, the most populous country, joined them in 2021. Countries such as Greece, Italy, Japan, and Spain have had very low fertility levels below 1.5 births per woman for decades. South Korea has the lowest fertility rate, with 0.8 births per woman.
Countries have tried several policies to raise the fertility rates, with only sporadic and local success. A commonly adopted measure is maternity leave, paid or unpaid, with job security. Other policies include subsidised childcare, child or family allowances, paid or unpaid paternity leave, flexible or part-time work hours for parents, and tax credits for dependent children.
These measures are appropriate, but miss one point.
The age at which a mother gives birth to her first child can impact her likelihood of having a second child. In several developed countries, the mean age of mothers at the birth of their first child has surpassed or is close to 30 years. Since 2000, many countries have seen the mean age at first birth increase by at least two years. Even in China, reports indicate that the age at which new mothers give birth to their first child now exceeds 30 years in Shanghai.
Until 2010, the largest number of new births in developed countries occurred among mothers aged 25 to 29. Presently, the highest number of first-time mothers falls within the 30-34 age group. Women can and do have successful deliveries in their late thirties and early forties. For many, it is a deliberate decision to start a family late.
The point however, is this – even if a woman desires to reconsider her choice of having a single child, there is less time and inclination to reverse the course if the first childbirth occurs after the mother reaches the age of 30.
Studies often report decreased happiness and life satisfaction during the early stages of parenthood, and younger parents may be unhappier. This is not the same as saying children don’t make parents happy. Parenthood by itself can have a substantial positive effect on life satisfaction but time and monetary cost offsets it. That is why the negative association between fertility and happiness is weaker in countries with higher public support for families.
As parents gain experience and adjust to the demands of parenthood, they may become more adept at managing stress and finding joy in parenthood. They may begin to recognise that loosening the intensive parenting norm relieves stress and raises happiness. Also, recently a study shows that the reported results about the trade-off between happiness and children require strong assumptions about how individuals report happiness and their beliefs about its distribution in society.
Rising female education and employment, women’s delayed entry into the labour market, high monetary and time cost of raising kids, and rising real estate prices have all played a role in declining fertility. In societies where marriage is culturally deemed essential for starting a family, the rising age at marriage and a declining marriage rate also contribute to a postponement in having the first child. For example, In South Korea, a country where only 2% of childbirth is outside marriage, the marriage rate has slid to a record low.
Countries need to contemplate whether they should promote more women having their first child in their twenties. Historically, several countries have had official policies to raise women’s age at marriage and the age at their first child. Is it time to shift gears?
Should countries that aim to boost fertility consider offering increased financial incentives or tax concessions for specific age brackets? Is it time for countries, including Canada and the United States of America, which currently have below-replacement level fertility and lack official policies to influence fertility levels, to initiate strategies aimed at reducing the average age of women with their first child?
Further, several countries facing fertility crises continue to subsidise family planning services directly through public programs or indirectly through non-governmental organisations. Indeed, the option for family planning should be accessible to all adults, but is there a necessity to offer public support for it in countries facing below-replacement-level fertility rates?
A word of caution. The above suggestions do not apply to all countries with fertility rates below the replacement level. An example is India, where the mother’s mean age at first birth is still less than 22 years, with the median age at first marriage less than 20 years in 2019-21 for women in 25-29 age cohort.
What may go wrong with a policy that aims to lower women’s age at first child? Could it be that women would still prefer to have only one child but at a younger age? Yes, that is possible, but that’s no different from today and, hence, not a worse outcome. Would women end up compromising their education and employment? Not really, if we are targeting the whole age group of twenties. Can couples afford to have children 2-3 years earlier than now? That’s tough to answer, but it may be feasible with childcare subsidies and workplace support.
To be clear, child support should be available for women of all ages. Exploring increased incremental support tailored to specific age groups might be worthwhile in a race to raise fertility rates.
Settembrini and the continuing relevance of classical liberalism
Adrian Wooldridge has an excellent Bloomberg column on this topic, promoting the relevance of Thomas Mann, and here is one excerpt:
In the book [Magic Mountain], Castorp falls in with two intellectuals who live in the village of Davos below his sanitorium: an Italian humanist called Lodovico Settembrini and a Jewish-born cosmopolitan called Leo Naphta who is drawn to the Communist revolution and traditional Catholicism. The two men carry on a bitter argument about the relative merits of liberalism and illiberalism that touches on every question that mattered in prewar Europe: nationalism, individualism, fairness, tradition, war, peace, terrorism and so on.
Settembrini mechanically repeats the central tenets of liberalism but doesn’t seem to realize that the world is a very different place from what it was in 1850…Settembrini is like the bulk of today’s liberals — well-meaning but incapable of recognizing that the world of their youth has changed beyond recognition.
My reading of the world, however, is slightly different. I think the Settembrini example, from 1924, shows classical liberalism is still relevant. In 1924, classical liberalism seemed out of touch because the rest of the world was too fascistic, too communist, and too negative, among other problems. Yet at the time the classical liberals were essentially correct, even though Settembrini sounds out of touch.
Because classical liberals continued to carry the torch, we later had another highly successful classical liberal period, something like 1980-2000, though of course you can argue the exact dates.
Perhaps the underlying model is this: classical liberals often seem out of touch, because the world is too negative to respond to their concerns. Most of the time classical liberals are shouting into the well, so to speak. But they need to keep at it. Every now and then a window for liberal change opens, and then the classical liberals have to be ready, which in turn entails many years in the intellectual and ideological wilderness.
When the chaos surrounds, the liberals are no less relevant. The Settembrini character, from 1924, illustrates exactly that. Because he did eventually have his day, though many years later.
Saturday assorted links
1. Did proxenia grants help ancient Greece grow?
2. Bob Lawson tribute to Jim Gwartney.
3. Puffin walking on the cliff in Iceland, other good photos too.
4. “Alphafold found thousands of possible psychedelics.”
5. Daniel Gross on AGI trades?
6. Girardian Papuans, circa 1963 (short video).
7. Nabeel on how to use Twitter. And on Substack.