Results for “writing” 1385 found
Evan Soltas is now writing for Bloomberg
Here is his excellent column on decentralized provincial health care provision in Canada. Excerpt:
By fixing the maximum federal contribution, block grants offer Canada’s provincial and territorial governments far better incentives to reduce the cost and improve the quality of the medical services they purchase. When costs rise, the provinces that run the programs are forced to pay 100 percent of the added costs at the margin, unlike in the U.S., where state governments pay an average of 43 cents at the margin for every dollar of added Medicaid expense.
Decentralized administration gives provinces the flexibility and the accountability to design their programs according to their needs and particular local challenges, rather than federal “one-size-fits-none” imposition. It also creates opportunities for innovation. By sharing notes, provinces and territories learn from one another and improve their Medicare programs.
Canada has been using block grants for 35 years. After several years of ruinously high growth in Medicare expenses during the 1970s, their federal government abandoned a 50-50 cost-sharing plan in 1977. Through the Canada Health Transfer program, which gives states some money directly and some through tax-shifting agreements, Canadian provinces and territories receive equal per capita aid, regardless of actual health care expenditure.
Hat tip goes to Miles Kimball.
Writing naked puts and how the financial sector makes so much money
In part the financial sector does the equivalent of writing "naked puts," namely taking risks which usually yield extra income but occasionally blow up and bring large losses, part of which are socialized. Lending money to homeowners under relatively loose terms is one way of taking such a position but of course trading strategies can replicate related risk positions.
H. Peyton Young just wrote me that he and Dean Foster have a piece in the latest QJE on a closely related logic; I have yet to read it closely but it strikes me as a very very important article.
The key problem underlying all of this is we don't know how to punish people in a manner consistent with the rising size of absolute rewards. As I wrote:
Another root cause of growing inequality is that the modern world, by so limiting our downside risk, makes extreme risk-taking all too comfortable and easy. More risk-taking will mean more inequality, sooner or later, because winners always emerge from risk-taking. Yet bankers who take bad risks (provided those risks are legal) simply do not end up with bad outcomes in any absolute sense. They still have millions in the bank, lots of human capital and plenty of social status. We’re not going to bring back torture, trial by ordeal or debtors’ prisons, nor should we. Yet the threat of impoverishment and disgrace no longer looms the way it once did, so we no longer can constrain excess financial risk-taking. It’s too soft and cushy a world.
That’s an underappreciated way to think about our modern, wealthy economy: Smart people have greater reach than ever before, and nothing really can go so wrong for them. As a broad-based portrait of the new world, that sounds pretty good, and usually it is. Just keep in mind that every now and then those smart people will be making—collectively—some pretty big mistakes.
Matt is correct that the argument doesn't require bailouts, although bailouts make the problem much worse, by neutering creditors as a risk-reducing force.
Most likely, shareholders favor some but not all of these "going short on volatility" risks. To some extent they are ripping off the creditors by taking such risks, to some extent they are ripping off the public sector through an expected bailout (not true for most non-financial firms, of course), and to some extent the managers are pushing the risk beyond the point shareholders would desire, if they understood what was going on. Keep in mind that shareholders and bondholders are also potential market competitors, so the firm's trading book can't be completely open to even the owners of the firm (a neglected point, in my view).
One question, raised by Robin Hanson, is why everyone doesn't write these naked puts. You can introduce the "not everyone can expect a bailout" point here and it works fine. But there are other reasons too:
1. Large-scale banking involves economies of scale (after the few biggest U.S. banks, size drops off dramatically). You don't have to think these economies are socially productive; the point remains that Goldman can take positions which my local bank will not or cannot with equal facility, for a mix of institutional and expertise reasons. The prospect of bailouts, of course, cements concentration in the sector because everyone wants to lend to "Too Big to Fail."
2. Arguably every bank does write the equivalent of naked puts to a socially non-optimal degree. It is often homeowners on the other side of the market, arguably to an irrational degree. In any case the resulting price of the put can be actuarially fair and the basic mechanism still operates. If you play this strategy, you can expect (the mode) a bunch of years of multi-million returns, followed by an eventual unceremonious firing (if that) and life in the Hamptons. If you follow an efficient markets strategy, you can expect the going rate of return on the diversified market portoflio. Which sounds better?
Soon I'll write a post on whether vigilant creditors can neuter this risk-taking, so please hold off on that question for now.
Addendum: This "going short on volatility" risk strategy is receiving a good deal of attention from commentators on my piece, but I actually think "arriving there first with a good asset purchase," as I discuss in the article, is a somewhat more important mechanism for increasing income inequality among the top one percent. A lot of the rise in income inequality has come outside the financial sector narrowly construed, though it still is related to the existence of relatively open capital markets.
Writing down the principal on mortgages
It's obvious that the economy still isn't doing well. Furthermore the rate of foreclosures won't peak until the end of 2010. On top of that, most observers agree that the Obama mortgage modification plan has been a failure.
That all said, I'm surprised that so few commentators have leapt on the "we should write off some of the principal" bandwagon. It's not currently a bandwagon at all.
I know that a) this idea is WRONG, b) it is terrible for the long run rule of law, and c) it is EVIL and UNFAIR. It's also one of the few suggested economic remedies that might have worked or maybe could still work.
How so? It limits value-destroying foreclosures. It gives homeowners the right marginal incentive to keep on making payments and maintain the value of the home and to maintain their credit capabilities. It gives the housing market a fresh start rather than this waiting/coordination game where we wait for everyone to move on down a notch in house quality, thereby freezing parts of the housing market and choking off required recalculations. (How can you have a well-functioning housing market when so many people have negative equity? I've read estimates of twenty percent of the U.S. population.) It also limits the problem of future ARM resets, once interest rates rise in the future.
It's all about long-run vs. short-run and I usually side with the long run. But the short run modification of property rights has so many defenders in other contexts, so why not here? Call it "clearing up financial logjams" if you wish.
Is it a better marginal incentive than suddenly increasing the taxes on banks?
Bernanke himself once suggested the idea.
I might add that by fostering an actual recovery, writing off the principal on mortgage loans might limit some of the other bad interventions that we will try or have ended up trying. There's more than one way to toss away the rule of law.
Writing to Peter Singer about Down syndrome
I liked this Michael Bérubé post; here is an excerpt:
…in the 1920s we were told that people with Down syndrome were incapable of learning to speak; in the 1970s, we were told that people with Down syndrome were incapable of learning how to read. OK, so now the rationale for seeing these people as somewhat less than human is their likely comprehension of Woody Allen films. Twenty years from now we’ll be hearing “sure, they get Woody Allen, but only his early comedies–they completely fail to appreciate the breakthrough of Interiors.” Surely you understand my sense that the goalposts are being moved around here in a rather arbitrary fashion…
You’re looking for things people with Down syndrome can’t do, and I’m looking for things they can. We each have our reasons, of course. But I don’t accept the premise that cognitive capacity is a useful criterion for reading some people out of the human community, any more than you would accept the premise that we should grant rights to animals on the basis of whether humans think they do or don’t taste good with barbeque sauce.
Walter Benjamin’s tips for writing
An occasional MR reader sent me these:
I.
Anyone intending to embark on a major work should be lenient with
himself and, having completed a stint, deny himself nothing that will
not prejudice the next.
II.
Talk about what you have written, by all means, but do not read from it
while the work is in progress. Every gratification procured in this way
will slacken your tempo. If this regime is followed, the growing desire
to communicate will become in the end a motor for completion.III.
In your working conditions avoid everyday mediocrity. Semi-relaxation,
to a background of insipid sounds, is degrading. On the other hand,
accompaniment by an etude or a cacophony of voices can become as
significant for work as the perceptible silence of the night. If the
latter sharpens the inner ear, the former acts as a touchstone for a
diction ample enough to bury even the most wayward sounds.IV.
Avoid haphazard writing materials. A pedantic adherence to certain
papers, pens, inks is beneficial. No luxury, but an abundance of these
utensils is indispensable.V. Let no thought pass incognito, and keep your notebook as strictly as the authorities keep their register of aliens.
VI.
Keep your pen aloof from inspiration, which it will then attract with
magnetic power. The more circumspectly you delay writing down an idea,
the more maturely developed it will be on surrendering itself. Speech
conquers thought, but writing commands it.VII.
Never stop writing because you have run out of ideas. Literary honour
requires that one break off only at an appointed moment (a mealtime, a
meeting) or at the end of the work.VIII. Fill the lacunae of inspiration by tidily copying out what is already written. Intuition will awaken in the process.
IX. Nulla dies sine linea — but there may well be weeks.
X. Consider no work perfect over which you have not once sat from evening to broad daylight.
XI. Do not write the conclusion of a work in your familiar study. You would not find the necessary courage there.
XII.
Stages of composition: idea — style — writing. The value of the fair
copy is that in producing it you confine attention to calligraphy. The
idea kills inspiration, style fetters the idea, writing pays off style.XIII. The work is the death mask of its conception.
My Slate and New York Times writings
There is now a new section of my home page, thanks to Clark Durant.
Writing tips
Christopher Paolini (teen author of the fun Eragon and the just-published Eldest, now 21 years old) notes:
I tend [sic] to get up, grab breakfast, sit in front of my computer [and not] get up until about an hour before dinner. I do this seven days a week, every week of the month, every month of the year.
That is from today’s Washington Post, Kids Section.
I have a different idea, taking effort as a scarce variable. Every day, stop writing just a short while before you really want to quit. The next day you will be very keen to get going again. For most mortals, your real enemy is the number of days when you get nothing written. Getting "not enough" done each day is a lesser problem.
Addendum: Here are my previous writing tips.
Writing a book by Wiki
Read more here, and good luck to Larry Lessig, I am cautiously bullish about this experiment. Wikis cannot always be trusted; what I like best is that the continual back-and-forth tends to keep the links fresh. They are complements to other sources, not substitutes.
Alex on blogging, writing, and teaching
The Washington Times interviews co-blogger Alex about what makes for a good blog, and how blogging can get students to write better. The article opens with Kevin Brancato, a George Mason University graduate student and the driving force behind www.truckandbarter.com. As the article points out, blogs are just starting to be used in teaching. Someday I will teach a course where each student is responsible for writing a daily blog. I will evaluate the students by grading the blogs, no other test, paper, or quiz. Usually when I make that sort of claim it means someday soon!
More Tuesday links
1. AI Camera turns your images into poetry.
2. Highly capable model locally on your phone.
3. Clara Piano reviews GOAT. “Perhaps, in his emphasis on the importance of ideas, Cowen reveals that he is ultimately a Simonian. After all, the human mind is the ultimate resource.”
4. Market liberalism, Chinese style.
5. Red flags for improper judicial conduct.
6. Data on the economics of bookselling, designed to dissuade would-be authors.
Tuesday assorted links
1. A literalist reading of Civil War.
2. Why it is so hard to get a reservation nowadays (New Yorker).
3. “There are currently 682 #AI-related bills (581 of them in the states) on the @MultiStateAssoc legislative tracker.” Link here.
4. The econometrics of social media and mental health. And more on the same. A good piece.
5. Esther Duflo calls for $500 billion in climate reparations (FT).
The politics of *Civil War* (full of spoilers, do not read)
I saw the film as having very definite politics, and yes I am aware of the pronouncements of the director — ignore them! I am writing about the movie, what was on the screen.
The seceding states — California, Texas, and Florida — all have substantial Latino population segments. The core political message is that a nation cannot hold together under those conditions. The “Democrat vs. Republican” issues become irrelevant in those scenarios, and that too is part of the political message. Ethnic considerations become primary in the final analysis. And note that the separate Florida, not part of the Western Alliance, is the one state with lots of Latinos and not so many Mexicans. It is California and Texas that share the same ethno ambitions.
The key moment is the scene when they encounter the evil blond-haired guy with the big gun, and he asks “What kind of American are you?” The naive viewer expects the Socratic dialogue to shift in the direction of red vs. blue states, but no the baddie starts talking about “Central Americans” and “South Americans.” The real question has become what kinds of Americans are we indeed.
The Hong Kong/Chinese guy is shot immediately, once he announces his nationality, again a stand-in for the broader ethnostate divisions the movie is portraying.
When the two individuals shift cars, and jump from one moving vehicle to the other, that is the true portend of pending disaster, as Hollis Robbins has pointed out. Stay in your car (country)!
Of course Hollywood cannot put such a message on the screen explicitly, nor are most critics capable of seeing it. Mostly they are left wondering what has happened to the Trump vs. anti-Trump divisions they heard about on NPR.
If you doubt whether this movie is historically detailed and aware, consider how it portrays West Virginia on this civil war “next time around.” They are less interested than are the Virginians.
You won’t see much Christianity in the film at all.
Except for the black veteran, the media class are shown as selfish, elevating the scoop above all while disclaiming moral responsibility, enjoying the witnessing of violence, and verging on the psychotic. It is not an entirely favorable portrait (and yes I do know the director’s words on this).
The U.S. citizenry gets rather caught up in fighting the war, and the most positive visions are of the two fathers who retreat to their farms, again a reactionary message.
Blacks are shown as the servant class of each side in the civil war, a portrait that, if people were more aware, would be considered offensive.
So those are the politics of the movie, but with the distractions of the violence on the screen and of current culture wars, we just don’t notice how much they are pushed into our faces. I give the director credit for his guts, noting that George Lucas ripped off Leni Riefenstahl and I still like that movie too.
To be clear, those are not my politics at all, as loyal MR readers can attest. But that is not how I judge movies and this one — while definitely flawed — was still pretty good.
My excellent Conversation with Peter Thiel
Here is the audio, video, and transcript, along with almost thirty minutes of audience questions, filmed in Miami. Here is the episode summary:
Tyler and Peter Thiel dive deep into the complexities of political theology, including why it’s a concept we still need today, why Peter’s against Calvinism (and rationalism), whether the Old Testament should lead us to be woke, why Carl Schmitt is enjoying a resurgence, whether we’re entering a new age of millenarian thought, the one existential risk Peter thinks we’re overlooking, why everyone just muddling through leads to disaster, the role of the katechon, the political vision in Shakespeare, how AI will affect the influence of wordcels, Straussian messages in the Bible, what worries Peter about Miami, and more.
Here is an excerpt:
COWEN: Let’s say you’re trying to track the probability that the Western world and its allies somehow muddle through, and just keep on muddling through. What variable or variables do you look at to try to track or estimate that? What do you watch?
THIEL: Well, I don’t think it’s a really empirical question. If you could convince me that it was empirical, and you’d say, “These are the variables we should pay attention to” — if I agreed with that frame, you’ve already won half the argument. It’d be like variables . . . Well, the sun has risen and set every day, so it’ll probably keep doing that, so we shouldn’t worry. Or the planet has always muddled through, so Greta’s wrong, and we shouldn’t really pay attention to her. I’m sympathetic to not paying attention to her, but I don’t think this is a great argument.
Of course, if we think about the globalization project of the post–Cold War period where, in some sense, globalization just happens, there’s going to be more movement of goods and people and ideas and money, and we’re going to become this more peaceful, better-integrated world. You don’t need to sweat the details. We’re just going to muddle through.
Then, in my telling, there were a lot of things around that story that went very haywire. One simple version is, the US-China thing hasn’t quite worked the way Fukuyama and all these people envisioned it back in 1989. I think one could have figured this out much earlier if we had not been told, “You’re just going to muddle through.” The alarm bells would’ve gone off much sooner.
Maybe globalization is leading towards a neoliberal paradise. Maybe it’s leading to the totalitarian state of the Antichrist. Let’s say it’s not a very empirical argument, but if someone like you didn’t ask questions about muddling through, I’d be so much — like an optimistic boomer libertarian like you stop asking questions about muddling through, I’d be so much more assured, so much more hopeful.
COWEN: Are you saying it’s ultimately a metaphysical question rather than an empirical question?
THIEL: I don’t think it’s metaphysical, but it’s somewhat analytic.
COWEN: And moral, even. You’re laying down some duty by talking about muddling through.
THIEL: Well, it does tie into all these bigger questions. I don’t think that if we had a one-world state, this would automatically be for the best. I’m not sure that if we do a classical liberal or libertarian intuition on this, it would be maybe the absolute power that a one-world state would corrupt absolutely. I don’t think the libertarians were critical enough of it the last 20 or 30 years, so there was some way they didn’t believe their own theories. They didn’t connect things enough. I don’t know if I’d say that’s a moral failure, but there was some failure of the imagination.
COWEN: This multi-pronged skepticism about muddling through — would you say that’s your actual real political theology if we got into the bottom of this now?
THIEL: Whenever people think you can just muddle through, you’re probably set up for some kind of disaster. That’s fair. It’s not as positive as an agenda, but I always think . . .
One of my chapters in the Zero to One book was, “You are not a lottery ticket.” The basic advice is, if you’re an investor and you can just think, “Okay, I’m just muddling through as an investor here. I have no idea what to invest in. There are all these people. I can’t pay attention to any of them. I’m just going to write checks to everyone, make them go away. I’m just going to set up a desk somewhere here on South Beach, and I’m going to give a check to everyone who comes up to the desk, or not everybody. It’s just some writing lottery tickets.”
That’s just a formula for losing all your money. The place where I react so violently to the muddling through — again, we’re just not thinking. It can be Calvinist. It can be rationalist. It’s anti-intellectual. It’s not thinking about things.
Interesting throughout, definitely recommended. You may recall that the very first CWT episode (2015!) was with Peter, that is here.
Wednesday assorted links
1. Lyman Stone criticizes the Pope paper on church attendance. Good criticisms, see also the points by Sure and others in the comment section. This paper doesn’t seem to hold up? I’ll gladly publish a response by the author, otherwise a withdrawal might be in order?
2. Good critique of the AGI concept. And AI regulation is unsafe, by Max T.
3. Ruxandra on the anti-cavities thing.
4. Mass shootings are down considerably.
5. First chat between humans and whales?
6. Open access version of Ran Spiegler’s The Curious Culture of Economic Theory.
7. 14 years ago, Thomas Schelling session on Iran and nuclear weapons. Let’s hope this does not very soon become more relevant.
The Ludwig von Mises comeback
That is the subject of my latest Bloomberg column. Here is one excerpt:
The Austrian economist Ludwig von Mises is having a moment, especially in Latin America. Argentine President Javier Milei admires Mises, and he has adopted some Misesian ideas, such as the notion that “the middle of the road leads to socialism.” Milei used to be an academic economist and knows the ideas of Mises well.
More colorfully, on Saturday the Brazilian UFC fighter Renato Moicano delivered an on-camera polemic (warning: audio in link NSFW) in praise of Mises and defending free speech and private property. His impromptu lecture pointed listeners to Mises and what he called the six lessons of the Austrian School of Economics, as well as his forthcoming podcast. Those lessons — as well as a G-rated version of Moicano’s economics lecture, and a Mises-inspired speech on business-cycle theory by President Nayib Bukele of El Salvador — are available on the website of the (US-based) Mises Institute.
And this:
Meanwhile, among free-market types, the vibes have shifted in a way that has boosted the influence of Mises. For a comparison, the ideas of Friedrich A. Hayek were ascendant in classical liberal circles during the 1990s, in part because Hayek had won a Nobel Prize. Hayek’s writing style was also more gentle, while Mises was uncompromising. As Hayek said about Mises’s book on socialism, published in 1922: “At first we all felt he was frightfully exaggerating and even offensive in tone.”
Milton Friedman was another great economic thinker of the 20th century, and he was renowned for always smiling and never losing his temper at his intellectual opponents. Friedman wrote a book called Capitalism and Freedom. Hayek’s was called The Constitution of Liberty. Mises, meanwhile, was producing books with titles such as Omnipotent Government and The Anti-Capitalist Mentality. He was the one of that troika who allied himself with Ayn Rand.
Today, however, many of Mises’s proclamations no longer sound as outdated as they might have a few decades ago. In his treatise Human Action, he was fond of stressing “Man Acts” as a fundamental principle of economic and social analysis. Whatever that might have meant at the time, these days I would not be surprised to find a comparable phrase in a Jordan Peterson book. Indeed, Peterson recently expressed his admiration for Moicano’s endorsement of Mises.
Finally:
As for Latin America, Mises may be just the kind of market-oriented thinker the region needs. Polemics do sometimes cut through the obfuscations of political discourse. Friedman and Hayek’s generosity toward their opponents is perhaps not the best strategy for the notoriously brutal politics of Latin America. And some of Mises’s more impolite notions — such as the idea that economic policy can simply become worse and worse over time — seem to be proving out in countries such as Brazil, which has been mostly stagnant for a long time now.
Worth a ponder.