Results for “mood affiliation”
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Where I differ from Bryan Caplan’s *Labor Econ Versus the World*

One thing I liked about reading this book is I was able to narrow down my disagreements with Bryan to a smaller number of dimensions.  And to be clear, I agree with a great deal of what is in this book, but that does not make for an interesting blog post.  So let’s focus on where we differ.  One point of disagreement surfaces when Bryan writes:

Tenet #6: Racial and gender discrimination remains a serious problem, and without government regulation, would still be rampant.

Critique: Unless government requires discrimination, market forces make it a marginal issue at most.  Large group differences persist because groups differ largely in productivity.

I would instead stress that most of the inequity occurs upstream of labor markets, through the medium of culture.  It is simply much harder to be born in the ghetto!  I am fine with not calling this “discrimination,” and indeed I do not myself use the word that way.  Still, it is a significant inequity, and it is at least an important a lesson about labor markets as what Bryan presents to you.

But you won’t find much consideration of it in Bryan’s book.  The real problems in labor markets arise when “the cultural upstream” intersects with other social institutions in problematic ways.  To give a simple example, Princeton kept Jews out for a long time, and that was not because of the government.  Or Princeton voted to admit women only in 1969, again not the government.  What about Major League Baseball before Jackie Robinson or even for a long while after?  Much of Jim Crow was governmental, but so much of it wasn’t.  There are many such examples, and I don’t see that Bryan deals with them.  And they have materially affected both people’s lives and their labor market histories, covering many millions of lives, arguably billions.

Or, the Indian government takes some steps to remedy caste inequalities, but fundamentally the caste system remains, for whatever reasons.  Again, this kind of cultural upstream isn’t much on Bryan’s radar screen.  (I have another theory that this neglect of culture is because of Bryan’s unusual theory of free will, through which moral blame has to be assigned to individual choosers, but that will have to wait for another day!)

We can go beyond the discrimination topic and still see that Bryan is not paying enough attention to what is upstream of labor markets, or to how culture shapes human decisions.

Bryan for instance advocates open borders (for all countries?).  I think that would be cultural and political suicide, most of all for smaller countries, but for the United States too.  You would get fascism first, if anything.  I do however favor boosting (pre-Covid) immigration flows into the United States by something like 3x.  So in the broader scheme of things I am very pro-immigration.  I just think there are cultural limits to what a polity can absorb at what speed.

If you consider Bryan on education, he believes most of higher education is signaling.  In contrast, I see higher education as giving its recipients the proper cultural background to participate in labor markets at higher productivity levels.  I once wrote an extensive blog post on this.  That is how higher education can be productive, while most of your classes seem like a waste of time.

On poverty, Bryan puts forward a formula of a) finish high school, b) get a full time job, and c) get married before you have children.  All good advice!  But I find that to be nearly tautologous as an explanation of poverty.  To me, the deeper and more important is why so many cultures have evolved to make those apparent “no brainer” choices so difficult for so many individuals.  Again, I think Bryan is neglecting the cultural factors upstream of labor markets and in this case also marriage markets.  One simple question is why some cultures don’t produce enough men worth marrying, but that is hardly the only issue on the table here.

More generally, I believe that once you incorporate these messy “cultural upstream” issues, much of labor economics becomes more complicated than Bryan wishes to acknowledge.  Much more complicated.

I should stress that Bryan’s book is nonetheless a very good way to learn economic reasoning, and a wonderful tonic against a lot of the self-righteous, thoughtless mood affiliation you will see on labor markets, even coming from professional economists.

I will remind that you can buy Bryan’s book here, and at a very favorable price point.

Why the New Pollution Literature is Credible

My recent post, Air Pollution Reduces Health and Wealth drew some pushback in the comments, some justified, some not, on whether the results of these studies are not subject to p-hacking, forking gardens and the replication crisis. Sure, of course, some of them are. Andrew Gelman, for example, has some justified doubt about the air filters and classroom study. Nevertheless, I don’t think that skepticism about the general thrust of the results is justified. Why not?

First, go back to my post Why Most Published Research Findings are False and note the list of credibility checks. For example, my rule is trust literatures not papers and the new pollution literature is showing consistent and significant negative effects of pollution on health and wealth. Some might respond that the entire literature is biased for reasons of political correctness or some such and sure, maybe. But then what evidence would be convincing? Is skepticism then justified or merely mood affiliation? And when it comes to action should we regard someone’s prior convictions (how were those formed?) as more accurate then a large, well-published scientific literature?

It’s not just that the literature is large, however, it’s that the literature is consistent in a way that many studies in say social psychology were not. In social psychology, for example, there were many tests of entirely different hypotheses–power posing, priming, stereotype threat–and most of these failed to replicate. But in the pollution literature we have many tests of the same hypotheses. We have, for example, studies showing that pollution reduces the quality of chess moves in high-stakes matches, that it reduces worker productivity in Chinese call-centers, and that it reduces test scores in American and in British schools. Note that these studies are from different researchers studying different times and places using different methods but they are all testing the same hypothesis, namely that pollution reduces cognitive ability. Thus, each of these studies is a kind of replication–like showing price controls led to shortages in many different times and places.

Another feature in favor of the air pollution literature is that the hypothesis that pollution can have negative effects on health and cognition wasn’t invented yesterday along with the test (we came up with a new theory and tested it and guess what, it works!). The Romans, for example, noted the negative effect of air pollution on health. There’s a reason why people with lung disease move to the countryside and always have.

I also noted in Why Most Published Research Findings are False that multiple sources and types of evidence are desirable. The pollution literature satisfies this desideratum. Aside from multiple empirical studies, the pollution hypothesis is also consistent with plausible mechanisms and it is consistent with the empirical and experimental literature on pollution and plants and pollution and animals. See also OpenPhilanthropy’s careful summary.

Moreover, there is a clear dose-response effect–so much so that when it comes to “extreme” pollution few people doubt the hypothesis. Does anyone doubt, for example, that an infant born in Delhi, India–one of the most polluted cities in the world–is more likely to die young than if the same infant grew up (all else equal) in Wellington, New Zealand–one of the least polluted cities in the world?  People accept that “extreme” pollution creates debilitating effects but they take extreme to mean ‘more than what I am used to’. That’s not scientific. In the future, people will think that the levels of pollution we experience today are extreme, just as we wonder how people could put up with London Fog.

What is new about the new pollution literature is more credible methods and bigger data and what the literature shows is that the effects of pollution are larger than we thought at lower levels than we thought. But we should expect to find smaller effects with better methods and bigger data.  (Note that this isn’t guaranteed, there could be positive effects of pollution at lower levels, but it isn’t surprising that what we are seeing so far is negative effects at levels previously considered acceptable.)

Thus, while I have no doubt that some of the papers in the new pollution literature are in error, I also think that the large number of high quality papers from different times and places which are broadly consistent with one another and also consistent with what we know about human physiology and particulate matter and also consistent with the literature on the effects of pollution on animals and plants and also consistent with a dose-response relationship suggest that we take this literature and its conclusion that air pollution has significant negative effects on health and wealth very seriously.

Monday assorted links

1. Alberto Vilar, RIP.

2. Murky, but important, here is an excellent thread from Avichal Garg on Loot.  And from Tandavas.eth.  Pay attention people.  I know it makes your brain hurt, but…”suck it up kid!”

3. Tom Holland podcast with @pmarca on the history of Silicon Valley.

4. Claims about obesity (speculative).

5. Autor’s mistakes in labor economics.

6. Is there adverse selection for taking equity shares in human capital?

7. New Yorker profile of Kathryn Paige Harden too much mood affiliation in our world.

A simple illustration of the benefits of feminization

Fox’s Tucker Carlson, the most important nationalist voice in America, seemed to sympathize with the gender politics of Taliban-supporting Afghans. “They don’t hate their own masculinity,” he said shortly after the fall of Kabul. “They don’t think it’s toxic. They like the patriarchy. Some of their women like it too. So now they’re getting it all back. So maybe it’s possible that we failed in Afghanistan because the entire neoliberal program is grotesque.” (By “neoliberalism” he seems to mean social liberalism, not austerity economics.)

From Michelle Goldberg (NYT), that in a nutshell is the case for the feminization of society, which I see as bringing strongly positive net benefits for both men and women, in most but by no means all cases.

Do note that if you ever see me describing this feminization in not entirely glowing terms, that is part of my desire to give you the entire unvarnished picture, as I would with most other topics.  (The most common reading mistake you can make in these parts is to over-infer an entire mood affiliation from a single post.)

When it comes to feminization, I also think sometimes of my grade and junior high school gym teacher, Mr. O (I will omit his full name, but in fact we also called him “Mr. O”).  He acted like a tough guy, but in fact was just a…grade school gym teacher.  Nonetheless he acted as if he was auditioning for the role of Patton in a Hollywood movie.

He smoked his cigarillos (?) in that kind of plastic thing-y, like the Penguin did on the original Batman show.

If a smaller or less athletic kid took a tough spill, or was picked on by the others, he would say “Suck it up, kid!”, with little sympathy.  (If you are wondering, the worst he ever said to me was “That was a stupid foul, kid,” in a fifth-grade basketball contest.  So I didn’t bear a personal grudge against him.)

He seemed to love the game of Bombardment, as in fact I did too.  (I still remember being one of the last two men standing, but losing to Jimmy Gravelis, who caught my too-weak toss.)

He was a Roman Catholic and a veteran of the Korean War.  He seemed to stare too long at the boys entering and leaving the shower, after the exercise period of gym.  But no one really questioned this.

Even as a kid, I thought he was a bit…sick and also over the top.  In some ways though he was a good teacher and he definitely maintained discipline.  Kids were afraid of him.  And he toughened them up for the world to come.

Still, at the end of the day I am not wishing to return to the cultural ascent of Mr. O.

I would rather live in a more feminized world, even if I still miss Bombardment.  But if you are not a fan of this new arrangement…hey, “Suck it up kid!”

Addendum: You might argue that I had the best of both worlds, namely to grow up in the “tougher” society, but live most of my life in the more feminized society — maybe so!

The labor market ran hot, real wages fell

You may remember that I’ve been predicting that repeatedly, while much of “Twitter economics” was suggesting that “running the labor market hot” would boost real wages, I was claiming it was far more likely that rising employment would be correlated with falling real wages.  (Try here.)  This did not represent any great insight on my part, rather I was simply refusing to make the mood affiliation move of denying the tradeoff, and I had read Keynes’s General Theory.  Here is the latest:

Companies big and small are raising wages to attract workers and hold onto employees as the economy revs back into gear.

But those fatter paychecks aren’t going as far, thanks to rising inflation.

In fact, compensation is now lower than it was in December 2019, when adjusted for inflation, according to an analysis by Jason Furman, an economics professor at Harvard University.

The Employment Cost Index — which measures wages and salaries, along with health, retirement and other benefits — fell in the last quarter and is 2% below its pre-pandemic trend, when taking inflation into account. (Wages and salaries are growing at a faster pace than benefits.)

Score one for Keynesian economics > Twitter economics.

Or maybe they didn’t run the labor market hot enough.


Don’t judge Covid conditions by the current rate of Covid growth

These days when I go to Twitter I see so many claims that current caseload or hospitalization numbers (in some not all regions) are approaching their peaks from the third wave last winter.

But don’t be misled by that rhetoric — speed of growth is not at this stage of the pandemic a good metric for evaluation.  Obviously, speedy Covid growth is bad news compared to having no Covid at all, but relative to actual constraints inference here is difficult.  Even the growth of hospitalizations, much less the growth in cases, is a misleading signal for how well we are doing.

First, there is a diehard core of individuals who just won’t get vaccinated.  That is highly unfortunate, but possibly it is better if those individuals get Covid sooner rather than later, at least provided they are not so numerous as to overwhelm the hospital system all at once.  The Covid case is in essence their preferred form of vaccination.  Stupid, yes, but later is not necessarily better.

A second possibility is that we will see waves of Delta Covid, rising rapidly and then declining rapidly.  That seemed to happen in the most badly afflicted parts of India, and maybe has been happening in England and the Netherlands, noting that the English numbers have begun a recent (minor?) uptick again, so we cannot be sure of the dynamics.  The general point stands that it is better to get a given amount of Covid over with more quickly rather than less quickly, again subject to the constraint that you do not overwhelm your hospital system.  Circa August 2021, we are no longer in the older position of “waiting for the vaccines to arrive.”

A third possibility is that Delta really is extremely contagious and that non-pharmaceutical interventions just aren’t going to succeed in checking it.  (Oddly, few elites are willing to mention this possibility.  Though they are willing to tell us how terrible it is, which it is!)  Yes, boosters may help out, but most of the “cavalry” — vaccines in this case — already has arrived, at least for those willing to take them.  OK, so if most people are going to be hit by this thing, and vaccinations do make that event much safer than before, again you want to get that process over with more quickly rather than less quickly.  And to the extent vaccine protection decays (an unknown variable but a real worry), speed really is of the essence here.  Again, all subject to the “don’t overwhelm your hospital system” caveat.

Clearly there are scenarios where the rapid case growth is a bad thing, even taking relevant constraints into account.  For instance, vaccinating younger individuals might be a relevant “cavalry” still to arrive, and maybe it can arrive before most of our young people are exposed to Covid.  Or maybe most of the unvaccinated are pretty “elastic” in their status, and a high but not too high case and hospitalization growth will scare them enough to bring them over to the vaccinated side of the ledger.  Those really are possibilities.

But rapid growth per se — even on the hospitalization side of the ledger — has to be used with care as an indicator of where we stand.  Generating a lot of Covid cases and hospitalizations in a short period of time is a very tricky signal, again relative to the constraints we face.  You need to define your counterfactual very carefully, and recognize that the mood affiliations you were promoting earlier in the pandemic may or may not make sense now.

Daniel Frank on me, his introduction to Tyler Cowen

He has written a very nice appreciative post, and I regard his interpretations as accurate, here is an excerpt from it, perhaps it is an introduction to the last ten or so years of what I have been writing here:

…I wrote this post because the area Tyler influenced me the most and what I think is his greatest strength is something few discuss; his ability to deal with emotional and intellectual insecurity.

For context, when I first started reading Tyler’s writing as a teenager 15+ years ago, I was upset at how apolitical, non-partisan and unemotional he was. Sure he had all these great ideas but the world was filled with silly people who needed to be taken down a notch. Tyler never did that and eventually I realized he was right. Tyler’s equanimity and the way he tries to confront his own insecurities and flaws (that all humans have) is what, in my opinion, makes him so unique. By spending so much time reading his work, Tyler’s demeanour has rubbed off on me and made me a much better thinker.

Here are a selection of some of my favourite Tyler Cowen posts that capture his unique way of thinking:

Pushing the Button

When describing a person/group/idea that you dislike, if you feel the need to attack them, it is akin to pushing a “button” that makes you temporarily dumber. You don’t want to be pushing the button yourself or in fact, spend time around/reading others who do.

The Fallacy of Mood Affiliation

When reading about an issue, people frequently identify with a mood and depending on how that mood resonates with that issue, they will artificially create a set of arguments to match and justify the mood.

Devalue and Dismiss

“a writer will come up with some critique of another argument, let us call that argument X, and then dismiss that argument altogether. Afterwards, the thought processes of the dismisser run unencumbered by any consideration of X, which after all is what dismissal means. Sometimes “X” will be a person or a source rather than an argument, of course. The “devalue” part of this chain may well be justified. But it should lead to “devalue and downgrade,” rather than “devalue and dismiss.”

Tyler Cowen’s 12 Rules for Life

1. Assume your temperament will always be somewhat childish and impatient, and set your rules accordingly, knowing that you cannot abide by rules for rules sake. Hope to leverage your impatience toward your longer-run advantage. 3. When the price goes up, buy less. Try to understand what the price really is, however, and good luck with that. 7. Learn how to learn from those who offend you. 9. I don’t know.

Why Do People Hate the Media So Much

“No matter what the media tells you their job is, the feature of media that actually draws viewer interest is how media stories either raise or lower particular individuals in status.” “The status ranking of individuals implied by a particular media source is never the same as yours, and often not even close.” “A good rule of thumb is that if you resent the media “lots,” you are probably making a number of other emotional mistakes in your political thought.”

This gem is also linked to in the original post expressing the idea: “So much of debate, including political and economic debate, is about which groups and individuals deserve higher or lower status”

How Public Intellectuals Can Extend Their Shelf Lives

There is in fact much more, again here is the link.

What I’ve been reading

1. David Thomson, A Light in the Dark: A History of Movie Directors.  One of the best attempts to make the auteur notion intelligible to the modern viewer, he surveys major directors such as Welles, Kubrick, Hitchcock, Godard and others.  Stephen Frears is the dark horse pick, and he recommends the Netflix show Ozark.  I always find Thomson worth reading.

2. Wenfei Tong, Bird Love: The Family Life of Birds.  Now this is a great book, wonderful photos, superb analytics and bottom-line approach throughout.  By the way, “Superb fairywrens are particularly adept at avoiding incest.”

3. William Deresiewicz, The Death of the Artist: How Creators are Struggling to Survive in the Age of Billionaires and Big Tech.  Ignore the subtitle (which itself illustrates a theme of the book), this is the best book on the economics of the arts — circa 2021 — in a long time.  “The good news is, you can do it yourself.  The bad news is, you have to.”  Every aspiring internet creator, whether “artist” or not, should read this book.  If you don’t think of your career itself as a creative product — bye-bye!

I very much enjoyed Richard Thompson (with Scott Timberg), Beeswing: Losing My Way and Finding My Voice, 1967-1975, still smarter than the competition and you don’t even have to know much about Thompson.

Dorothy Sue Cobble, For the Many: American Feminists and the Global Fight for Democratic Equality is a serious and thorough yet readable account of what the title promises, with a minimum of mood affiliation.

Joanne Meyerowitz, A War on Global Poverty: The Lost Promise of Redistribution and the Rise of Microcredit. A history of antipoverty efforts, with an emphasis on the shift toward “enterprise” in the 1980s, with the microcredit treatment being mostly pre-Yunus.

Mathilde Fasting has edited After the End of History: Conversations with Frank Fukuyama.

Julian Baggini’s The Great Guide: What David Hume Can Teach Us about Being Human and Living Well is not written for me, but it is a lively and useful introduction to one of humanity’s greatest minds.

Don’t forget Deirdre Nansen McCloskey, Bettering Humanomics: A New, and Old, Approach to Economic Science.

Arrived in my pile there is William D. Nordhaus, The Spirit of Green: The Economics of Collisions and Contagions in a Crowded World, and in September Adam Tooze is publishing Shutdown: How Covid Shook the World’s Economy, and also for September there is Gregg Easterbrook’s Blue Age: How the US Navy Created Global Prosperity — And Why We’re in Danger of Losing It.

Have you noticed there are lots of books coming out now?  How many were held over from the pandemic?

The first date book walk out meme

Michele W. (citing @ogbrenna) asked on Twitter:

You’re on a first date with someone, and they tell you the name of their favorite book. You immediately leave. What’s the book?

This caused Atlas Shrugged to trend, and The Bible was another popular response.  It is striking to me how, with a simple change of setting, and a shift in the mood affiliation of the example, how discrimination on the basis of religion suddenly is glorified and celebrated.  Funny how few cited The Quran, or for that matter “The Hebrew Bible,” albeit for two very different reasons.

(By the way, I’ve been going around to many San Francisco book stores, and none of them carry the new Sarah Ruden translation of The Gospels, which is likely a significant work.  I could feel people looking down on me as I asked for it.  Part of me wanted to say “But this is Sarah Ruden,” but that would be making the problem only worse.  Since I did not feel tempted to say “But this is God,” perhaps I am part of the problem.)

Why not email a bit with a potential date beforehand, if such matters are so important?  Or is this meme a simple, never-to-be-enacted revenge fantasy for those who don’t quite have the options they might ideally prefer?

One thing the contemporary world definitely has not come to terms with is how much a highly feminized culture will be (rather strongly) enforcing new forms of discrimination, albeit cloaked under different and rhetorically emancipatory principles.

Addendum: Here is a statistics variant.

Misdemeanor Prosecution

Misdemeanor Prosecution (NBER) (ungated) is a new, blockbuster paper by Agan, Doleac and Harvey (ADH). Misdemeanor crimes are lesser crimes than felonies and typically carry a potential jail term of less than one year. Examples of  misdemeanors include petty theft/shoplifting, prostitution, public intoxication, simple assault, disorderly conduct, trespass, vandalism, reckless driving, indecent exposure, and various drug crimes such as possession. Eighty percent of all criminal justice cases, some 13 million cases a year, are misdemeanors. ADH look at what happens to subsequent criminal behavior when misdemeanor cases are prosecuted versus non-prosecuted. Of course, the prosecuted differ from the non-prosecuted so we need to find situations where for random reasons comparable people are prosecuted and non-prosecuted. Not surprisingly some Assistant District Attorneys (ADAs) are more lenient than others when it comes to prosecuting misdemeanors. ADH use the random assignment of ADAs to a case to tease out the impact of prosecution–essentially finding two similar individuals one of whom got lucky and was assigned a lenient ADA and the other of whom got unlucky and was assigned a less lenient ADA.

We leverage the as-if random assignment of nonviolent misdemeanor cases to Assistant District Attorneys (ADAs) who decide whether a case should move forward with prosecution in the Suffolk County District Attorney’s Office in Massachusetts.These ADAs vary in the average leniency of their prosecution decisions. We find that,for the marginal defendant, nonprosecution of a nonviolent misdemeanor offense leads to large reductions in the likelihood of a new criminal complaint over the next two years.These local average treatment effects are largest for first-time defendants, suggesting that averting initial entry into the criminal justice system has the greatest benefits.

We find that the marginal nonprosecuted misdemeanor defendant is 33 percentage points less likely to be issued a new criminal complaint within two years post-arraignment (58% less than the mean for complier” defendants who are prosecuted; p < 0.01). We find that nonprosecution reduces the likelihood of a new misdemeanor complaint by 24 percentage points (60%; p < 0.01), and reduces the likelihood of a new felony complaint by 8 percentage points (47%; not significant). Nonprosecution reduces the number of subsequent criminal complaints by 2.1 complaints (69%; p < .01); the number of subsequent misdemeanor complaints by 1.2 complaints (67%; p < .01), and the number of subsequent felony complaints by 0.7 complaints (75%; p < .05). We see significant reductions in subsequent criminal complaints for violent, disorderly conduct/theft, and motor vehicle offenses.

Did you get that? On a wide variety of margins, prosecution leads to more subsequent criminal behavior. How can this be?

We consider possible causal mechanisms that could be generating our findings. Cases that are not prosecuted by definition are closed on the day of arraignment. By contrast, the average time to disposition for prosecuted nonviolent misdemeanor cases in our sample is 185 days. This time spent in the criminal justice system may disrupt defendants’ work and family lives. Cases that are not prosecuted also by definition do not result in convictions, but 26% of prosecuted nonviolent misdemeanor cases in our sample result in a conviction. Criminal records of misdemeanor convictions may decrease defendants’ labor market prospects and increase their likelihoods of future prosecution and criminal record acquisition, conditional on future arrest. Finally, cases that are not prosecuted are at much lower risk of resulting in a criminal record of the complaint in the statewide criminal records system. We find that nonprosecution reduces the probability that a defendant will receive a criminal record of that nonviolent misdemeanor complaint by 55 percentage points (56%, p < .01). Criminal records of misdemeanor arrests may also damage defendants’ labor market prospects and increase their likelihoods of future prosecution and criminal record acquisition, conditional on future arrest. All three of these mechanisms may be contributing to the large reductions in subsequent criminal justice involvement following nonprosecution.

So should we stop prosecuting misdemeanors? Not necessarily. Even if prosecution increases crime by the prosecuted it can still lower crime overall through deterrence. In fact, since there are more people who are potentially deterred than who are prosecuted, general deterrence can swamp specific deterrence (albeit there are 13 million misdemeanors so that’s quite big). The authors, however, have gone some way towards addressing this objection because they combine their “micro” analysis with a “macro” analysis of a policy experiment.

During her 2018 election campaign, District Attorney Rollins pledged to establish a presumption of nonprosecution for 15 nonviolent misdemeanor offenses…After the inauguration of District Attorney Rollins, nonprosecution rates rose not only for cases involving the nonviolent misdemeanor offenses on the Rollins list, but also for those involving nonviolent misdemeanor offenses not on the Rollins list (and for all nonviolent misdemeanor cases)…. the increases in nonprosecution after the Rollins inauguration led to a 41 percentage point decrease in new criminal complaints for nonviolent misdemeanor cases on the Rollins list (not significant), a 47 percentage point decrease in new criminal complaints for nonviolent misdemeanor cases not on the Rollins list (p < .05), and a 56 percentage point decrease in new criminal complaints for all nonviolent misdemeanor cases (p .05). 

It’s unusual and impressive to see multiple sources of evidence in a single paper. (By the way, this paper is also a great model for learning all the new specification tests and techniques in the “leave-out” literature, exogeneity, relevance, exclusion restriction, monotonicity etc. all very clearly described.)

The policy study is a short-term study so we don’t know what happens if the rule is changed permanently but nevertheless this is good evidence that punishment can be criminogenic. I am uncomfortable, however, with thinking about non-prosecution as the choice variable, even on the margin. Crime should be punished. Becker wasn’t wrong about that. We need to ask more deeply, what is it about prosecution that increases subsequent criminal behavior? Could we do better by speeding up trials (a constitutional right that is often ignored!)–i.e. short, sharp punishment such as community service on the weekend? Is it time to to think about punishments that don’t require time off work? What about more diversion to programs that do not result in a criminal record? More generally, people accused and convicted of crimes ought to find help and acceptance in re-assimilating to civilized society. It’s crazy–not just wrong but counter-productive–that we make it difficult for people with a criminal record to get a job and access various medical and housing benefits.

The authors are too sophisticated to advocate for non-prosecution as a policy but it fits with the “defund the police,” and “end cash bail” movements. I worry, however, that after the tremendous gains of the 1990s we will let the pendulum swing back too far. A lot of what counts as cutting-edge crime policy today is simply the mood affiliation of a group of people who have no recollection of crime in the 1970s and 1980s. The great forgetting. It’s welcome news that we might be on the wrong side of the punishment Laffer curve and so can reduce punishment and crime at the same time. But it’s a huge mistake to think that the low levels of crime in the last two decades are a permanent features of the American landscape. We could lose it all in a mistaken fit of moralistic naivete.

The Covid-19 relief bill

Is that what they should call it?  In any case, for all the bickering over inflation, the real news to me is that the Republicans just didn’t try very hard to fight it.  Partly they are left with few good arguments after their own fiscal profligacy.  Partly they are consumed with their own internal squabbles.  And partly their own pollsters/advisors told them the thing is going to be pretty popular, at least initially and perhaps always.

In my view, this is the watershed event for entering a new era of politics.  Polarization in the old sense peaked in 2011 or so.  I call the new regime “Democrats can get a lot done if they soft pedal it, veer away from the mood affiliation, pretend they do not control the presidency, and stick to ideas that are popular.”

We’ll see how long that lasts, but I think for at least another year.

Medical ethics? (model this)

Steven Joffe, MD, MPH, a medical ethicist at the University of Pennsylvania, said he doesn’t believe clinicians “should be lowering our standards of evidence because we’re in a pandemic.”

Link here.  That sentence is a good litmus test for whether you think clearly about trade-offs, statistical and speed trade-offs included, procedures vs. final ends of value (e.g., human lives), and how obsessed you are with mood affiliation (can you see through his question-begging invocation of “lowering our standards”?).  It is stunning to me that a top researcher at an Ivy League school literally cannot think properly about his subject area at all, and furthermore has no compunction admitting this publicly.  As Alex wrote just earlier today: “Waiting for more data isn’t “science,” it’s sometimes an excuse for an unscientific status-quo bias.”

To be clear, we should run more and better RCT trials of Ivermectin, the topic at hand for Joffe (and in fact Fast Grants is helping to fund exactly that).  But of course the “let’s go ahead and actually do this” decision should be different in a pandemic, just as the “just how much of a hurry are we in here anyway?” calculus should differ as well.  I do not know enough to judge whether Ivermectin should be in hospital treatment protocols, as it is in many countries, but I do not condemn this simply on the grounds of it representing a “lower standard.”  It might instead reflect a “higher standard” of concern for human lives, and you will note the drug is not considered harmful as it is being administered.

If you apply the standards of Joffe’s earlier work, we should not be proceeding with these RCTs, including presumably vaccine RCTs, until we have assured that all of the participants truly understand the difference between “research” and “treatment” as part of the informed consent protocols.  No “therapeutic misconception” should be allowed.  Really?

If the pandemic has changed my mind about anything, it is the nature of expertise.

Why was trading restricted?

Let’s bring in the CEO of Webull, Anthony Denier. And Anthony, your platform also among those that’s restricted trade for the likes of AMC, as well as GameStop. We were talking about Alexandria Ocasio-Cortez now jumping in on the debate, saying that she would be for a hearing in this if it’s necessary. Why restrict the trade, and what led to that action?

ANTHONY DENIER: Well, it wasn’t our choice. Our clearing firm gave us a call and said we’re going to have to stop allowing new opening positions in the three names, AMC, GME, and KOSS. Highly volatile, and what happens is this is not a political decision. And unfortunately, it got political. I think, you know, I think it was once said that don’t let any good crisis go to waste. And that’s clearly what’s happening here.

And we’re seeing politicians jump on the bandwagon so they can get– so they can start trending on Twitter. But in reality, what’s going on is that there is a two-day settlement between if you buy the stock today, those brokerage firms that you bought that stock on have to fund that trade with the clearing central house called DTC for two whole days. And because of the volatility of stocks, DTC has made the cost of the collateral of the two-day holding period extremely expensive.

And we just can’t afford– well, we’re not a clearing firm, but our clearing firm simply cannot afford the cost to settle those trades. We cannot use customer funds to front that cost due to regulation. So the brokerages or the clearing firms have to go into their own pockets to do it. And they simply can’t afford the cost of that trade clearance. That is the reason why these stocks are coming off. It has nothing to do with the decision or some sort of closed room cigar– smoke-filled cigar room of Wall Street firms getting together to the dismay of the retail trader. This has to do with settlement mechanics of the market.


ANTHONY DENIER: …There is no way that a customer would not be able to sell a position they hold. We are simply stopping opening of new positions. Liquidations can happen at any time. This is general market mechanics. We have customer protections in place. We would never stop a customer from being able to get out of a position. But currently, we are stopping customers from getting into a new position. And that has to do with it possibly.

There is more of interest here.  And here is some common sense from the FT — shame on you all for your mood affiliation!

What should I ask Brian Armstrong?

I will be doing a Conversation with him, in case you do not know Brian is co-founder and CEO at Coinbase.

So what should I ask him?  And to be clear, this is the conversation I want to have with him, namely one that maximizes my selfish learning, not your mood affiliation.  Here is the Wikipedia page for Coinbase, here is Brian on Twitter, why does a major CEO and person with 410k Twitter followers have no Wikipedia page of his own?

Is concentration eroding labor’s share of national income?

Here is a new piece from Joe Kennedy, here are his summary points:

Despite the persistent claims that increased market power has hurt workers, the scholarly evidence is weak, while the macroeconomic data is strong and clear in showing that this is not the principal cause.

Labor’s share of income has declined slightly over the past two decades, but not principally because capital’s share of income has increased.

Most of the decline is offset by an increase in rental income—what renters pay and what the imputed rent homeowners pay for their house. This increase is due to restricted housing markets, not growing employer power in product or labor markets.

Antitrust policy is not causing the drop in labor share, so changing it is not the solution. For issues such as employer collusion over wages or excessive use of noncompete agreements, antitrust authorities already have power to act.

Stringent antitrust policy would do little to raise the labor share of income, but it could very well reduce investment and productivity growth. The better way to help workers is with pro-growth, pro-innovation policies that boost productivity.

This probable untruth received a big boost about three years ago, in part through mood affiliation.  Perhaps other data will yet rescue it, but for now I am watching to see how long it will take to die away.  Ten years perhaps?