1. Listen to the science! (of hugging…”You’re probably going to want to use your arms.”) Do we actually all want longer hugs?
No, I don’t mean money/macro, such as debates over ngdp targeting or transitory inflation. I mean old-fashioned monetary theory. Try all these pieces. Obviously, many of those particular authors are now deceased or retired. But take the field in general — has it had anything interesting to say about crypto developments? I don’t expect it to have predicted crypto, or its price, any more than I expect macroeconomists to have predicted recessions (see Scott Sumner on that one). But surely monetary theory should be able to help us better understand crypto? And its price.
How much has it succeeded in that endeavor? (I have read and on MR cited a number of NBER and other academic working papers on crypto, over the years.) Or are you better off reading “amateur” pieces on Medium and other sources cited on Twitter?
What should we infer from your answer to these questions?
Surely any failings here are restricted to monetary theory alone.
That is the new Substack post from Richard Hanania, here is one excerpt:
But imagine at the start of the pandemic, someone had said to you “Everyone will face the existence of the same disease, and have access to the exact same tools to fight it. But in some EU countries or US states, people won’t be allowed to leave their house and have to cover their faces in public. In other places, government will just leave people alone. Vast differences of this sort will exist across jurisdictions that are similar on objective metrics of how bad the pandemic is at any particular moment.”
I would’ve found this to be a very unlikely outcome! You could’ve convinced me EU states would do very little on COVID-19, or that they would do lockdowns everywhere. I would not have believed that you could have two neighboring countries that have similar numbers, but one of them forces everyone to stay home, while the other doesn’t. This is the kind of extreme variation in policy we don’t see in other areas.
It’s similar when you look at American jurisdictions.
As the political reaction to COVID-19 has surprised me, I’m still trying to figure it out. But for now I can say it’s shifted my priors in a few ways.
- People are more conformist than I would have thought, being willing to put up with a lot more than I expected, at least in Europe and the blue parts of the US.
- Americans in Red States are more instinctively anti-elite than I would have thought and can be outliers on all kinds of policy issues relative to the rest of the developed world (I guess I knew that already).
- Partisanship is much stronger than I thought. When I saw polls on anti-vax sentiment early in the pandemic, I actually said it would disappear when people would have to make decisions about their own lives and everyone could see vaccines work. This largely didn’t happen. Liberals in Blue States masking their kids outdoors is the other side of this coin. Most “Red/Blue Team Go” behavior has little influence on people’s lives. For example, deciding to vote D or R, or watch MSNBC or Fox, really doesn’t matter for your personal well-being. Not getting vaccinated or never letting your children leave the house does, and I don’t recall many cases where partisanship has been such a strong predictor of behavior that has such radical effects on people’s lives.
- Government measures that once seemed extreme can become normalized very quickly.
- The kinds of issues that actually matter electorally are a lot more “sticky” than I would have expected. Issues like masks and lockdowns, though objectively much more important than the things people vote on, are not as politically salient as I would have thought. A mask mandate for children eight hours a day strikes me as a lot more important than inflation, but it seems not to be for electoral purposes. If an asteroid was about to destroy earth and Democrats and Republicans had different views on how to stop it, people would just unthinkingly believe whatever their own side told them and it would not change our politics at all.
- Democratically elected governments have a lot more freedom than I thought before, especially if elites claim that they are outsourcing decisions to “the science.” Moreover, “the science” doesn’t even have to be that convincing, and nobody will ask obvious questions like how “the science” can allow for radically different policy responses in neighboring jurisdictions without much of a difference in results. This appears true everywhere in the developed world but in Red State America, where people really hate experts, regardless of whether they’re right or wrong.
You should all be getting Richard’s Substack. Of all the “new thinkers” on the Right, he is the one who most combines extreme smarts and first-rate work ethic, with non-conformism thrown in to boot. Read him!
Here is his Wikipedia page. Among his other contributions he co-authored an excellent economics textbook (with Gwartney) and he was a “founding father” of free market environmentalism. RIP…
6. The essays of Karen Vaughn, noting she is very much an underrated figure in the GMU story.
We are short a million health care workers. Today with extreme stress on the system there are 16 million health care workers, about five hundred thousand fewer than when the pandemic began in January of 2020 and about one million fewer than would be expected based on decades of growth. A loss of this many workers is unprecedented.
Ed Yong in the Atlantic discusses Why Health-Care Workers are Quitting in Droves:
Health-care workers, under any circumstances, live in the thick of death, stress, and trauma. “You go in knowing those are the things you’ll see,” Cassandra Werry, an ICU nurse currently working in Idaho, told me. “Not everyone pulls through, but at the end of the day, the point is to get people better. You strive for those wins.” COVID-19 has upset that balance, confronting even experienced people with the worst conditions they have ever faced and turning difficult jobs into unbearable ones.
In the spring of 2020, “I’d walk past an ice truck of dead bodies, and pictures on the wall of cleaning staff and nurses who’d died, into a room with more dead bodies,” Lindsay Fox, a former emergency-medicine doctor from Newark, New Jersey, told me. At the same time, Artec Durham, an ICU nurse from Flagstaff, Arizona, was watching his hospital fill with patients from the Navajo Nation. “Nearly every one of them died, and there was nothing we could do,” he said. “We ran out of body bags.”
…Many health-care workers imagined that such traumas were behind them once the vaccines arrived. But plateauing vaccination rates, premature lifts on masking, and the ascendant Delta variant undid those hopes. This summer, many hospitals clogged up again. As patients waited to be admitted into ICUs, they filled emergency rooms, and then waiting rooms and hallways. That unrealized promise of “some sort of normalcy has made the feelings of exhaustion and frustration worse,” Bettencourt told me.
Health-care workers want to help their patients, and their inability to do so properly is hollowing them out. “Especially now, with Delta, not many people get better and go home,” Werry told me. People have asked her if she would have gone to nursing school had she known the circumstances she would encounter, and for her, “it’s a resounding no,” she said. (Werry quit her job in an Arizona hospital last December and plans on leaving medicine once she pays off her student debts.)
…Many have told me that they’re bone-weary, depressed, irritable, and (unusually for them) unable to hide any of that. Nurses excel at “feeling their feelings in a supply closet or bathroom, and then putting their game face back on and jumping into the ring,” Werry said. But she and others are now constantly on the verge of tears, or prone to snapping at colleagues and patients. Some call this burnout, but Gerard Brogan, the director of nursing practice at National Nurses United, dislikes the term because “it implies a lack of character,” he told me. He prefers moral distress—the anguish of being unable to take the course of action that you know is right.
Health-care workers aren’t quitting because they can’t handle their jobs. They’re quitting because they can’t handle being unable to do their jobs.
Hat tip: Matt Yglesias.
So I called someone smart (Tyler Cowen, an economist, author, and professor at George Mason University) to explain the dynamics to me.
“Inflation right now is still transitory in that we can choose to end it,” Cowen told me. The Federal Reserve could disinflate and raise interest rates—mortgage interest rates today remain well below 3%—though that risks starting a recession.
Cowen explained that the reason the inflation-wary are still pretty quiet is that all the anti-Obama Republicans were so wrong in 2008. After the Obama-era bailout during the Great Recession, Republicans were convinced inflation would run rampant. And they said so. A lot. But inflation stayed mostly in control. “They all got egg on their faces after that,” Cowen said. “So the crowd that would complain now, they’re whispering about it but not shouting yet.” (Larry Summers and Steve Rattner have sounded the alarm.)
“I think the inflation will last two to three years, and it will be bad,” Cowen said. But really grim hyper-inflation à la Carter-era, he thinks is unlikely. It could only happen if the Federal Reserve decides it’s too risky to trim the sails of cheap money. “I’d put it at 20% chance that the Fed will think, ‘Trump might run again, and we don’t want Biden to lose . . . history’s in our hands, so we’ll wait to tighten.’ And then it just goes on, and then it’s very bad.”
But a recession is also bad. It’s hard to sort it all out. “As the saying goes, ‘If you’re not confused, you don’t know what’s going on,’” Cowen told me.
That is from the Bari Weiss Substack, other topics are considerd (not by me) at the link.
Gunther the German shepherd spent a recent morning playing with his tennis ball, rolling in the grass, slobbering a little and napping a lot. Later, he had a “meeting” with the real estate agents selling his Miami mansion that his handlers bought from Madonna.
And of course Gunther was wearing his very best faux diamond dog collar for the meeting — his real gold collar is back at his main home in Tuscany. As crazy as it sounds even by Florida’s standards, Gunther VI inherited his vast fortune, including the eight-bedroom waterfront home once owned by the “Material Girl” singer, from his grandfather Gunther IV. At least that’s what the handlers who manage the estate say.
The Tuscan-style villa with views of Biscayne Bay went on sale Wednesday for $31.75 million — a whopping markup from the purchase two decades ago from the pop star for $7.5 million. The home also boasts a gilded framed portrait of Gunther IV over the living room fireplace.
The dog’s lineage dates back decades to when Gunther III inherited a multimillion-dollar trust from late owner German countess Karlotta Liebenstein when she died in 1992. Since then, a group of handlers have helped maintain a jet-setting lifestyle for a succession of dogs. There are trips to the Milan and the Bahamas, where the latest Gunther recently dined out at restaurants every evening — his handlers like to make sure he’s well socialized.
A chef cooks his breakfast each morning made of the finest meat, fresh vegetables and rice. Sometimes he enjoys caviar, but there’s never any kibble in sight. He travels by private jet, works on obedience skills daily with his trainer and sleeps in a lavish round, red velvet bed overlooking the bay.
“He lives in Madonna’s former master bedroom,” said real estate agent Ruthie Assouline who nabbed the listing with her husband Ethan for the 1.2-acre (0.5 hectare) property in a row of a half-dozen waterfront homes next to a public county park and on the same street where Sylvester Stallone once lived.
“He literally sleeps overlooking the most magnificent view in an Italian custom bed in the former bedroom of the greatest pop star in the world.”
Here is the full story, via Fred Smalkin.
That is the topic of my latest Bloomberg column, here is one excerpt of some super-simple (but neglected) arguments:
Education is another area where Friedman’s ideas seem newly relevant. Friedman was a strong supporter of school choice, but over time the movement stalled, as a variety of studies showed scholastic gains from school-voucher programs that were either modest, zero or negative. Advocates for school choice then moved on to the argument that vouchers allow parents to choose the kind of education they want for their children, whether or not test scores go up. That argument, too, went nowhere.
Then came the pandemic, when millions of American parents encountered a public school system that didn’t seem to care too much about educating their children. Schools stayed closed or offered inferior remote instruction, and generally followed their own bureaucratic imperatives. All of a sudden, home schooling, charter schools, private schools, micro-schools — in short, an entire host of “school choice” alternatives — rose in popularity. It remains to be seen how much those trends will stick, but Friedman may yet win this intellectual battle, at least partially.
And it’s not just the bureaucracy, it’s what’s taught in the classroom. Consider critical race theory and other instructional practices affiliated with wokeism. Whatever your views on this movement, it seems clear that it provokes strong and perhaps irresolvable differences among parents, teachers and administrators. Within a single public school district, those matters will probably never be settled to everyone’s satisfaction. Rather than pursuing a polarizing “fight to the death,” perhaps all sides can see that the case for school choice is stronger and more compelling than they had thought.
There are periodic attempts to knock Milton Friedman off his pedestal. For the most part, however, his legacy remains strong.
And who was the guy who predicted the recent problems with the FDA?
GoodFellows podcast, from Hoover, and of course I interview them back a bit too. Crypto and Ethiopia are among the topics we cover…a very good time was had by all…
The Biden administration has rebranded its Build Back Better plan as part of a strategy to fight inflation. By subsidizing essential services like child care, the argument goes, American families and the broader economy will experience relief from the rapidly rising cost of living.
Yet something doesn’t add up. Consider that the current proposal would also dramatically shift the cost structure of child care upward with regulations mandating higher salaries, greater credentials and compliance with federal “quality standards.” Having made child care more expensive, it then proposes socializing over 90 percent of the cost for a subset of middle- and lower-income households. This won’t reduce rising prices so much as mask them. And with informal child care providers, including religious organizations, at risk of being crowded-out, the true availability of low-cost child care could even contract.
This is an extreme example of what we call “Cost Disease Socialism” — addressing the increasing costs of supply-constrained goods and services by spreading the price among American taxpayers while leaving the cause of the underlying costs unaddressed.
That is from an excellent piece by Sam Hammond, Daniel Takash, and Steve Teles (NYT).
Greg Caskey is my student and a Ph.D. Candidate in his 4th year. He focuses on applied microeconomics, economic development, and political economy, particularly regarding the role of China in the developing world. His job market paper, “Chinese Development Lending & the Amplification Effect”, examines the effects of Chinese official lending and foreign aid upon the political institutions of 100+ developing nations. Using a variety of estimators on panel data over the period of 2002-2017, he finds an “amplification effect” with respect to Chinese development flows. While Chinese aid amplifies the existing institutional orientation of both autocratic and democratic recipient nations, this effect exhibits a greater magnitude in autocracies, as sampled autocratic recipients become more autocratic in their institutional orientation, relative to sampled democratic recipients becoming more democratic.
His dissertation is Three Essays on the Role of China in the Developing World, and one chapter considers Chinese policy toward the Uighurs. Greg has several publications and also revise-and-resubmits at good journals, please let me know if you would like my letter of recommendation for him! He is a great teacher too with lots of experience.
3. Questions that are rarely asked: “Does It Matter if I Eat the Stickers on Fruits and Vegetables?” (NYT) And does it matter for FDA regulatory issues?
5. David Kedrosky on the greatest paper in economic history of all time (by Peter Temin…in his opinion).
7. David Brooks on the national conservatives (Atlantic).
In front of Open AI, this was recorded circa May 2021, I quite liked the exchanges, recommended, and Sam is super-sharp, you can listen here.