Results for “backlash” 107 found
Monday assorted links
1. Short video, Beijing residents on Biden and Trump. They are better thinkers than the lot of you.
2. Worthwhile Canadian moose car-licking warnings. And new Jordan Peterson book coming in March.
3. Other coronavirus variants found in frozen bats outside of China.
5. Rolf is wrong again. And yet another dispute. And French students who talk about their teachers (NYT). They send the police, that is what they do.
Secularization and the Tribulations of the American Working-Class
That is a work in progress by Brian Wheaton, job market candidate from Harvard University. Here is the abstract:
Over the past several decades, working-class America has been plagued by multiple adverse trends: a sharp increase in social isolation, an even sharper increase in single parenthood, a decline in male labor force participation rates, and a decline in generational economic mobility – amongst other things. Material economic factors have been unable to fully explain these phenomena, often yielding mixed results or – in some cases, such as that of single parenthood – lacking explanatory power altogether. I study the decline in religiosity and, using a shift-share instrument leveraging the fact that different religious denominations are declining at different rates, I find that religious decline has a strong adverse effect on the aforementioned variables. The effects are not weakened by including other potential explanatory factors (such as China trade shocks and variation in public assistance). I present evidence that, to the extent reverse causality exists, it creates bias in the opposite direction of my estimates. These findings are also robust to several alternative instruments, including the repeal of the state blue laws banning retail activity on Sundays and the Catholic church scandals of the 2000s. Two instruments – the blue laws and the state anti-evolution laws mandating teaching of creationism in school – allow me to ascertain whether the effect proceeds through religious attendance or beliefs. I find that, for most outcomes, the bulk of the effect is driven by religious attendance.
To be clear, that is not Brian’s job market paper, which covers “Laws, Beliefs, and Backlash.” Or you might wish to try these results on corporal punishment in schools (with Maria Petrova and Gautam Rao):
We find that the presence of corporal punishment in schools increases educational attainment, increases later-life social trust and trust in institutions, and leads to less authoritarian attitudes toward child-rearing, and greater tolerance of free speech. Additionally, exposure to corporal punishment in school decreases later-life crime. We find no effects on mental or physical health.
Here is his paper about flat tax reform in Eastern Europe:
Using static and dynamic difference-in-differences approaches, I find that the flat tax reforms increase annual GDP growth by 1.36 percentage points for a transitionary period of approximately one decade.
I praise the scholarship and courage of Brian N. Wheaton.
What happened to the mandate, the third leg of the stool?
But Congress did ultimately chop off a leg when it repealed the mandate penalties in 2017 — and, despite these predictions, the Affordable Care Act still stands. New federal data and economic research show the law hasn’t collapsed or entered the “death spiral” that economists and health insurers projected.
Many experts now view the individual mandate as a policy that did little to increase health coverage — but did a lot to invite political backlash and legal challenges.
The newest evidence comes from census data released Tuesday, which shows health coverage in the United States held relatively steady in 2019, even though Congress’s repeal of the mandate penalties took effect that year.
“The stool might be a bit rocky, but you can get away with two legs,” said Evan Saltzman, a health economist at Emory University who studies the topic. “It’s like the table at the restaurant that is a little wobbly. You can still sit at it, even if it’s not quite as pleasant.”
That is from Sarah Kliff at the NYT, the whole piece is excellent and full of substance. And:
Mr. Saltzman went on to earn a doctorate in economics after his job at RAND, and focused his research on the mandate. He has found that the mandate isn’t a very effective tool for increasing enrollment. One recent paper of his estimated that eliminating the mandate penalties would reduce marketplace enrollment by 2 percent and increase premiums by 0.7 percent.
“My viewpoint on the mandate has changed,” he said. “Back in 2012, my sense was it was essential. The evidence indicates that the marketplaces are doing about the same as they were before the mandate was set to zero.”
Separately, in The New England Journal of Medicine last year, researchers concluded that “the individual mandate’s exemptions and penalties had little impact on coverage rates.”
To be clear, this surprises me too. Was it Ross Douthat who once said on Twitter that it was the Trump administration and the Republican courts that saved Obamacare? The Krugman line, pushed without qualification for over a decade (and with incessant moralizing), that all of the legs of the stool are necessary, seems…wrong. I would say be careful with this one, as sometimes elasticities don’t kick in for a long time (as maybe with the corporate income tax cuts as well?…let’s be consistent here…). Still, it seems that an update of priors is in order. As you will see in the piece, even Jonathan Gruber thinks so.
And here are useful comments from John Graves.
How is Defunding the Police Going in Minneapolis?
Not well.
MPR News: The meeting was slated as a Minneapolis City Council study session on police reform.
But for much of the two-hour meeting, council members told police Chief Medaria Arradondo that their constituents are seeing and hearing street racing which sometimes results in crashes, brazen daylight carjackings, robberies, assaults and shootings. And they asked Arradondo what the department is doing about it.
…Just months after leading an effort that would have defunded the police department, City Council members at Tuesday’s work session pushed chief Medaria Arradondo to tell them how the department is responding to the violence…More people have been killed in the city in the first nine months of 2020 than were slain in all of last year. Property crimes, like burglaries and auto thefts, are also up. Incidents of arson have increased 55 percent over the total at this point in 2019.
Bear in mind this is coming after just a few months of reduced policing, due in part to extra demands and difficulty and probably in part due to police pulling back either out of fear or reluctance (blue flu) as also happened in Baltimore after the Freddie Gray killing and consequent protests and riots.
A few true believers still remain:
Cunningham also criticized some of his colleagues for seeming to waver on the promises they made earlier this year to transform the city’s public safety system.
“What I am sort of flabbergasted by right now is colleagues, who a very short time ago were calling for abolition, are now suggesting we should be putting more resources and funding into MPD,” Cunningham said.
I’m a supporter of unbundling the police and improving policing but the idea that we can defund the police and crime will just melt away is a fantasy. As with bail reform the defunders risk a backlash. Let’s start by decriminalizing more victimless crimes, as we have done in many states with marijuana laws. Let’s work on creating bureaus of road safety. But one of the reasons we do these things is so that we can increase the number of police on the street. The United States is underpoliced and the consequences of underpolicing, as well as overpolicing, fall on minority communities. As I have argued before, we need better policing so that we can all be comfortable with more policing. Getting there, however, will take time.
Shoring Up the Vaccine Supply Chain
Supply chains were hit hard early in the pandemic. Disinfectant couldn’t be produced because of a lack of bottles, tests couldn’t be processed because nasal swabs or PPE wasn’t available, the decline of passenger air traffic hit commercial delivery and so forth. I worry about forthcoming stresses on the vaccine supply chain. Billions of doses of vaccine will be demanded in the next year and a lot will depend on complicated supply lines including cold storage, air traffic, styrofoam, vials, bags, needles and many other inputs. Companies and the awesome team at CEPI (give them all a Nobel prize) are planning for vials and needles and other inputs but there are many non-obvious inputs higher up in the supply chain that also need shoring up.
Writing in Bloomberg, Scott Duke Kominers and I look at some of the odder inputs to vaccines like horseshoe crab blood, shark livers and the vaccinia capping enyzme, VCE. We are actually not too worried about horseshoe crab blood and shark livers as these are used in other industries. Shark livers, for example, are used to produce a lot of cosmetics so we should be able to divert supply as needed. VCE, however, is rarer.
DNA and mRNA vaccine technologies have shown promising results, and two of the leading vaccine contenders, from Pfizer Inc. and Moderna Inc., use mRNA technology. But mRNA has never been used to produce a commercial vaccine for humans, let alone at scale. And scaling these technologies may not be easy. In particular, mRNA degrades rapidly. To prevent this, it must be “capped” by a very rare substance called vaccinia capping enzyme.
Just over 10 pounds of this VCE is enough to produce a hundred million doses of an mRNA vaccine — but the current manufacturing processes for VCE require so much bioreactor capacity that making 10 pounds would cost about $1.4 billion. More important, global bioreactor capacity cannot support production at that level while also producing other vaccines and cancer-fighting drugs.
If we work hard now, we may be able to find more efficient means of producing VCE. Expanding bioreactor production and repurposing bioreactors from existing large-scale industrial applications will also help to lessen the pressure on the supply chains for multiple types of vaccines.
In addition to supply chains per se we also face the problem that companies are not raising prices enough. Ironically, this means that we need more public investment.
Of course, we might think that private companies would have incentives to coordinate supply chains themselves — and to some extent, they are doing so. But many have pledged to keep their vaccine prices close to costs, both out of altruism and because they may fear public backlash (or legal action) if they’re perceived as “price gouging” in the middle of a pandemic. And if companies don’t stand to profit much from Covid-19 vaccines, then they don’t have much incentive to invest in increasing capacity. In short: If prices can’t rise, then the only way to encourage companies to invest more in production is to reduce their costs — and that means we need public investment.
More generally, it’s not too late to be building more vaccine capacity and to repurpose bioreactor capacity from non-GMP sources, perhaps including veterinary and food sources. There are lots of vaccines in development. The science is promising. We need to take action now so that we can deliver on that promise.
Read the whole thing.
The Bari Weiss letter
Here is one part of it:
But the truth is that intellectual curiosity—let alone risk-taking—is now a liability at The Times. Why edit something challenging to our readers, or write something bold only to go through the numbing process of making it ideologically kosher, when we can assure ourselves of job security (and clicks) by publishing our 4000th op-ed arguing that Donald Trump is a unique danger to the country and the world? And so self-censorship has become the norm.
What rules that remain at The Times are applied with extreme selectivity. If a person’s ideology is in keeping with the new orthodoxy, they and their work remain unscrutinized. Everyone else lives in fear of the digital thunderdome. Online venom is excused so long as it is directed at the proper targets.
Op-eds that would have easily been published just two years ago would now get an editor or a writer in serious trouble, if not fired. If a piece is perceived as likely to inspire backlash internally or on social media, the editor or writer avoids pitching it. If she feels strongly enough to suggest it, she is quickly steered to safer ground. And if, every now and then, she succeeds in getting a piece published that does not explicitly promote progressive causes, it happens only after every line is carefully massaged, negotiated and caveated.
Do read the whole thing. And Andrew Sullivan is stepping down at New York magazine.
Let the Markets Work
Many people are calling for the President to use the Defense Productions Act (DPA) but the reality is that the DPA is neither especially useful nor necessary. The markets are already redirecting resources in a rapid and sophisticated manner. For the most part, the shortages were due to temporary increases in demand. The shelves are now filling. Food is plentiful. Hand sanitizer and soap is on the way or available. We are not going to run out of toilet paper. Now that the CDC and the FDA have gotten out of the way, we are producing more tests.
Honeywell and 3M are already ramping up production of N95 masks. We should arrange with China to buy more. The Federal Government is playing a useful role by buying surgical masks from companies like Hanes. Ironically, we will be importing them from Latin America.
Winston-Salem Journal: The company went from negotiating a contract with the federal government to beginning production in less than a week, according to the spokesman.
Using U.S.-grown cotton, the masks are being produced in Hanesbrands’ sewing factories in El Salvador, Honduras and the Dominican Republic.
These factories would normally be producing T-shirts, underwear, socks, sweatpants and sweatshirts.
(Note the stupid requirement to use American Cotton.)
A price is a signal wrapped up in an incentive, as Tyler and I write in Modern Principles. Compare the price system with command and control. We need ventilators. The federal government could order ventilator firms to make more but they are already doing so. The government could order other firms to get into the ventilator business but does the Federal government have a good idea which firms have the right technology or which firms have the right technology that could be repurposed to ventilator production at low cost, that is without causing shortages and disruption in other fields? Can they do better than a decentralized process in which millions of entrepreneurs respond to price signals. No.
A word here on “price gouging.” There are two kinds. The first, which has gotten some attention, is when the manufacturer/retailer holds the price constant despite increased demand and an enterprising fellow buys up stock to sell at the true market price–the ticket scalping model. “Ticket scalping” has some good features and I would not make it illegal but it has one big problem–the benefits of the increased price are not going to the producers. It would be better if the manufacturer and retailer raised their prices, the scalpers would then be eliminated and the benefits of the higher price would flow to producers giving them an incentive and resources to expand production. We shouldn’t worry too much about ticket scalping, however, because its temporary. Typically what happens is that the manufactures and retailers hold the price low for a short period of time to avoid consumer backlash, output ramps up, and then the price rises but given the increased supply by not as much as it would have in the short run. This also works fine. The bottom line is that it’s very important that manufacturer prices be allowed to rise to reflect true scarcities and to get resources flowing in the right direction. So far, we are doing that and the system is working well.
If all the trucks are fleeing from the front, we want the army to be able to requisition vehicles to move in the opposite direction. Private and social incentives do not always align and when time and certainty are of the essence command and control may be superior (as Tyler and I discuss in Modern Principles in the chapter on externalities). For the most part, however, that is not the situation we are in now. Private incentives are all pushing in the right direction of greater production. Let the market respond. The federal government is not good at command and control but it does have a role to play in redistribution for need.
America’s great strength is decentralization and markets, and right now we need our strength.
The Google checking account?
Google will soon offer checking accounts to consumers, becoming the latest Silicon Valley heavyweight to push into finance.
The project, code-named Cache, is expected to launch next year with accounts run by Citigroup Inc. C -0.70% and a credit union at Stanford University, a tiny lender in Google’s backyard.
Big tech companies see financial services as a way to get closer to users and glean valuable data. Apple Inc. introduced a credit card this summer. Amazon.com Inc. has talked to banks about offering checking accounts. Facebook Inc. is working on a digital currency it hopes will upend global payments…
Google’s approach seems designed to make allies, rather than enemies, in both camps. The financial institutions’ brands, not Google’s, will be front-and-center on the accounts, an executive told The Wall Street Journal. And Google will leave the financial plumbing and compliance to the banks—activities it couldn’t do without a license anyway.
Here is more from Peter Rudegeair and Liz Hoffman at the WSJ.
The economics of California power blackouts
Once again there is a risk of fire so they are turning off the power in many parts of dry and windy northern California, for 2.7 million people. From The New York Times:
“When you turn the lights out on 3 million people because you have to keep the power lines safe then there’s no reason you should be allowed to continue,” Mr. Court said.
Michael Lewis, PG&E’s senior vice president of electric operations, said the issue was safety.
“We would only take this decision for one reason — to help reduce catastrophic wildfire risk to our customers and communities,” Mr. Lewis said in a statement.
PG&E filed for bankruptcy in January after amassing tens of billions of dollars in liability related to two dozen wildfires in recent years. As speculation grew that its equipment might be the cause of the Kincade Fire, its stock price plummeted about 30 percent on Friday to $5.08, a small fraction of its 52-week high of $49.42.
I would think the market expectation is that if PG&E is allowed to continue, as is likely to be the case, that it slowly will claw its way back to profitability, given that this is a highly regulated sector with barriers to entry. So the company is afraid of losing its expected remaining profit from further liability, and thus it plays it safe with power, too safe because they don’t suffer so much from the power blackouts. Sadly, the retail customers do not have many other options.
One solution would be to remove the liability the company faces from the fires, or alternatively you could add a liability option of set of fines from power cuts (call them “breach of contract”). Both changes would introduce greater symmetry into the liability equation, but of course the former would eliminate the incentives for fire safety and fire reduction and the latter might bankrupt the company or create unenforceable or undefinable legal obligations. Still, it hardly seems the current arrangement can be first best.
How about raising rates? And then spending more on capital improvements? (do read the tweets behind that link):
And in those proceedings, there is an independent division of the CPUC (the ‘Office of Ratepayer Advocates’) that has typically argued against maintenance and safety expenditures, so that rates can be kept low
How about raising rates a lot? But maybe it is too late for that.
Another option, which I do not feel I have enough information to assess, is to have the state government buy out the power company. That is not usually a good idea but in this case there is at least a chance it could lead to superior incentives. The resulting company would then be geared toward pleasing voters, hardly an ideal arrangement but possibly better than the current incentives toward excess safety and massive power cuts with no real chance of consumer backlash. With government ownership, how would the state internalize the liability risk? How much would state borrowing rates rise?
Have you seen good proposals for improving the incentives in this rather disastrous matter?
Tuesday assorted links
Friday assorted links
1. “The evening’s entertainment harshly criticizes capitalism, and at $2,000 a seat…” (NYT)
2. “Pledges to Notre Dame by rich stir resentment…” (NYT) More information here.
3. Has TikTok learned how to censor the internet?
4. Me on The Gist, Slate podcast with Mike Pesca. And Ryan Bourne reviews *BIg Business* in the Daily Telegraph.
5. Have we finally figured out how general anesthesia works?
6. Emily Oster on evidence-based parenting and breast-feeding (NYT).
Words of wisdom
Amazon will pay property tax on its new Long Island City offices. It will pay corporate tax — not just on its profits, but on its capital base. Its employees, especially highly paid ones, will pay the city’s personal income tax. Those taxes, of course, will be somewhat offset by the incentives that the city has promised the company — up to $2 billion, depending on how many people the company hires and how many facilities it builds. Those incentives were a wasteful way to attract corporate investment. But in the long run, the tax revenue New York City gets from HQ2 will probably far exceed the cost.
That is from Noah Smith at Bloomberg. The “will” needs to be changed, otherwise right on target…
Eric Kaufmann’s *Whiteshift*
The subtitle is Populism, Immigration, and the Future of White Majorities, and might this be the must-read book of the year? It is “to the right” of my views on immigration policy, but still I found it informative, fascinating, and relevant on just about every page. Here is the author’s opening framing:
First, why are right-wing populists doing better than left-wing ones? Second, why did the migration crisis boost populist-right numbers sharply while the economic crisis had no overall effect? If we stick to data, the answer is crystal clear. Demography and culture, not economic and political developments, hold the key to understanding the populist moment.
Kaufmann, by the way, is Professor of Politics at Birkbeck in London, but hails from Canada. As for the basics, there is this in addition:
Much of this book is concerned with the clash between a rising white tribalism and an ideology I term ‘left-modernism.’
If you wish to understand “all the stuff that is going on today,” maybe Whiteshift is the best place to start? Kaufmann, by the way, is not a mega-pessimist and he seems to think that “broadening the category of white” will lead to a “good enough” solution for many of the Western democracies. Still, much of this book is disturbing, especially for readers who might consider themselves to be on the left. Most of all, he sees “whiteness” as a legitimate cultural interest, and one which, if we deny, will lead to more overt racism rather than less.
Here is Kaufmann on Brexit, brutal but I think largely correct:
…many analysts bring a political lens to their analysis which inclines them to want to tell a story about wealth and power. Over half the country voted Leave and we can’t condemn such a large group. So we pretend populist voters are motivated by the same things we are: economic stagnation (for fiscal conservatives) or, for left-liberals, inequality and resentment of the establishment.
Kaufmann also has strong evidence for the “immigration backlash” hypothesis, for instance:
…a higher immigrant share is a consistent predictor of higher opposition to immigration over time…in Western Europe there is a .63 correlation between projected 2030 Muslim share and the highest poll or vote share a populist-right party has achieved.
On top of all of its other virtues, Whiteshift provides the best intellectual history of the immigration debates I have seen. It also has the best discussion of why Canada seems to be different when it comes to immigration, and I may cover that in another blog post.
Kaufmann does very much argue that the left-wing values of diversity and solidarity stand very much in conflict. How is this for an “ouch” sentence?:
Casual observation would suggest that being black in diverse San Francisco is not necessarily better than being black in white-majority Fargo [North Dakota].
By no means am I convinced by everything in this book. I don’t think European politics can handle systematized refugee camps in Europe itself (rather than Turkey and Lebanon), and most of all I am not sure that recognizing whiteness as a legitimate cultural concern will diminish rather than boost racism. I wish he had said much more about gender, and how immigration and gender issues interact.
Nonetheless this book has more points of interest yet, including an original and persuasive take on residential clustering, a good analysis of racial intermarriage, and a sustained argument that avoiding the “no dominant ethnic group” approach of Guyana and Mauritius is imperative.
Strongly recommended, it is out next week, you can pre-order here.
Wednesday assorted links
1. “The type of puffer jacket someone chooses to wear is important.”
2. More Scott Sumner on China. In a few places he is responding to points slightly different than the ones I made. More generally, libertarians and classical liberals stress how the protection of private property rights is an essential function of government, and I agree. Actions from the Chinese side have led to what is arguably, in the aggregate, the greatest peacetime theft of property in all of history. So what should be done about that? And why do classical liberals and libertarians not like to bring up this issue?
3. France is yet another example of unpopular climate change taxes.
4. The Minerva curriculum is doing well.
5. Ross Douthat defends the WASP elites (NYT).
Why the U.S.-Saudi relationship has proven so enduring
That is the topic of my latest Bloomberg column, note I am continuing to see a larger backlash on the Saudi issue than one might have expected. The bigger underlying question is this: given all that has happened, so why is the United States still such an ally of the Saudis? It’s longstanding and thus not just about Trump’s possible business dealings. It’s also not just about the oil, here is one excerpt:
One feature of the geography of Saudi Arabia is that its major oil fields stand apart and can be taken over without controlling the major Saudi cities. That is one reason why the Saudis were so wary of Saddam Hussein.
That risk means the Saudis are especially dependent on American military protection. In turn, the U.S. knows it has a lot of leverage over the Saudis, and therefore making deals with the Saudis involves easier enforcement and lower transaction costs. The same cannot be said of deals with Iran. So in the Saudi-Iran rivalry, the U.S. ends up siding with the Saudis.
Historically, Iran has been a very difficult country to capture or control, and the population has fought fiercely to defend Iranian territorial integrity. Iran doesn’t need American protection to the same degree as do the Saudis, and so Iran is more willing to be prickly or openly hostile to the U.S.
Iran shared a border with the former Soviet Union (though not Russia) and shares Caspian Sea rights with Russia, and the two countries often have had close and cordial relations. Iran also is easier than Saudi Arabia for China to reach with its One Belt, One Road initiative, which aims to build close ties with the countries to its west. In sum, Iran is going to diversify its geopolitical bets, which pulls it away from the U.S., even if the issues surrounding nuclear weapons and support for terrorism somehow were resolved.
And this:
Of course, the Saudis have abused their position. They are dependent on the U.S., but they also know America has few other potential regional partners for cooperation on such a large scale. And so the Saudis have engaged in human-rights abuses over the decades, figuring it may harm but will not irrevocably damage relations with America.
There is more at the link, analytical throughout.