Saturday assorted links

Fama on Pornography and the Fed

Excellent interview with Eugene Fama. The usual stuff on efficient markets but also

It’s not just the Fed, around the globe central banks are flooding the system with liquidity like never before. Is this a reason for concern?

Frankly, I think this is just posturing. Actually, the central banks don’t do anything real. They are issuing one form of debt to buy another form of debt. If you are an old Modigliani–Miller person the way I am, you think that’s a neutral activity: You’re issuing short-term debt to buy long-term debt or vice-versa. That’s not something that should have any real effects.

Then again, the financial markets sure seem to love it. At least it looks like that the S&P 500 is moving upwards in tandem with the expansion of the Fed’s balance sheet.

Every day we hear a story about the movement of stock prices. But the story is different each day. So basically, these stories are made up after the fact. But when we look at it systematically, we don’t see a big effect of Fed actions on real activity or on stock prices or on anything else. That’s why I use to say that the business of central banks is like pornography: In essence, it’s just entertainment and it doesn’t have any real effects.

I agree that people think the Fed is much more powerful than it is.

Keynes on what is required to make a great economist

The study of economics does not seem to require any specialized gifts of an unusually high order. Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy and pure science? Yet good, or even competent, economists are the rarest of birds. An easy subject, at which very few excel! The paradox finds its explanation, perhaps, in that the master-economist must possess a rare combination of gifts. He must reach a high standard in several different directions and must combine talents not often found together.  He must be mathematician, historian, statesman, philosopher – in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature of his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.

That is from Keynes’s 1924 essay on Marshall, reprinted in Essays in Biography. Most of all, it is Keynes describing himself!

Could we detect it if we are living in a simulation?

“If quantum computing actually materializes, in the sense that it’s a large scale, reliable computing option for us, then we’re going to enter a completely different era of simulation,” Davoudi says. “I am starting to think about how to perform my simulations of strong interaction physics and atomic nuclei if I had a quantum computer that was viable.”

All of these factors have led Davoudi to speculate about the simulation hypothesis. If our reality is a simulation, then the simulator is likely also discretizing spacetime to save on computing resources (assuming, of course, that it is using the same mechanisms as our physicists for that simulation). Signatures of such discrete spacetime could potentially be seen in the directions high-energy cosmic rays arrive from: they would have a preferred direction in the sky because of the breaking of so-called rotational symmetry.

Telescopes “haven’t observed any deviation from that rotational invariance yet,” Davoudi says. And even if such an effect were to be seen, it would not constitute unequivocal evidence that we live in a simulation. Base reality itself could have similar properties.

Here is further discussion from Anil Anathaswamy.  Via Robert Nelsen.  As you may already know, my view is that there is no proper external perspective, and the concept of “living in a simulation” is not obviously distinct from living in a universe that follows some kind of laws, whether natural or even theological.  The universe is simultaneously the simulation and the simulator itself!  Anything “outside the universe doing the simulating” is then itself “the (mega-)universe that is simultaneously the simulation and the simulator itself.” etc.

New results on the Chinese vaccine

Importantly, this was the first study of an inactivated SARS-CoV-2 vaccine to include participants older than 60 years—the most vulnerable age group for this infection. In the phase 1 dose-escalating trial, the vaccine was given at a two-dose schedule at three different concentrations (2 μg, 4 μg, and 8 μg per dose) and was well tolerated in both age groups (18–59 years and ≥60 years). The older age group had lower rates of solicited adverse events than the younger adults: the overall rates of adverse events within 28 days after vaccination were 34 (47%) of 72 participants in the group aged 18–59 years, compared with 14 (19%) of 72 participants in the group aged 60 years and older. At the same time, in both age groups the vaccine was similarly immunogenic: the geometric mean anti-SARS-CoV-2 neutralising antibody titres measured by a 50% virus neutralisation assay 14 days after the booster dose were 88, 211, and 229 in the group aged 18–59 years and 81, 132, and 171 in the group aged 60 years and older for 2 μg, 4 μg, and 8 μg vaccine doses, respectively. Moreover, the authors tested cross-reactivity of the neutralising antibodies against several drifted SARS-CoV-2 isolates and showed the potential of their vaccine to protect against evolutionary diverged viruses, should they appear in circulation.


The current study is the second to report the interim results of safety and immunogenicity of inactivated SARS-CoV-2 vaccine, with the first being the another β-propiolactone inactivated aluminium-adjuvanted whole-virion SARS-CoV-2 vaccine developed by Wuhan Institute of Biological Products.

Both studies showed very similar levels of adverse events and neutralising antibody titres post vaccination, which indicates the reproducibility of clinical results of similar vaccine modes produced by different manufacturers.

All good news of course, and this vaccine exists right now.  Just not for you!  Here is the piece from The Lancet, and here is associated commentary, also seeming to confirm the positive results.  A phase III trial is underway in the UAE to measure efficacy.  I cannot speak to data reliability issues, but presumably the referees at The Lancet find this credible enough to recommend publication.

Via Alan Goldhammer.

Friday assorted links

1. Shruti Ideas of India podcast with Viral Acharya.

2. Is stupidity expanding, or just becoming more visible?

3. “The world’s largest chess play website has closed more than 85,000 accounts for cheating since March.

4. Teachers’ unions aren’t about education: the war against microschools and Prenda in particular (WSJ).

5. Flat results for remdesivir and interferon from a new study.  Interferon is the big news here, noting that timing may well be the issue (more likely that it works when administered early, which is not what this study measured — another reason testing matters!).  And note this:

The silver lining may be that the trial itself, unprecedented in several ways, succeeded. Set up in a short time in March as the pandemic engulfed the world, it used a simple protocol that allowed doctors in overstretched hospitals anywhere to randomize their patients to whatever study drug was available or to standard care.

And this:

The biggest hurdle was the long time it took to get regulatory approval for the study in some countries, says WHO’s Marie-Pierre Preziosi. “Regulators, as well as the ethics committees for that matter, need to rethink their approaches in pandemics and need to be much more ready to cope with this because sometimes the duration for authorization is really not appropriate.”

Doing things “by the book” is not really appropriate in the current moment.  We need a better book!

6. Various pandemic updates from Karl Friston.  And a good albeit imperfect thread on GBD.

What is your useless superpower?

Trey Miller emails me about my polymaths post, and my observation that: “One of my views in talent search is that extremely talented people are almost always extraordinarily good at one or more entirely trivial tasks.”

Tyler…I’ve referred to this as a “Useless Super-Power.”

I’m not a polymath, but one of my Useless Super-Powers is the ability to pour nearly identical amounts of liquid without thought or effort. In practice, for example: if I’m pouring wine for four people, there is almost always no visible difference between the contents of the glasses. I am not, and never have been, a professional waiter or held a related job.

I would love to see a list of other people’s examples…

I am pretty good at knowing how long a particular journey will take, or at waking up at exactly the time of my choosing (neither is entirely useless I might add).  How about you?

Why I reject the Great Barrington Declaration

Here is my 2x normal length Bloomberg column on that topic, as had been requested by Daniel Klein.  The argument has numerous twists and turns, do read the whole thing but here is one bit (I will indent only their words):

“Here are the key words of the Great Barrington Declaration on herd immunity:

The most compassionate approach that balances the risks and benefits of reaching herd immunity, is to allow those who are at minimal risk of death to live their lives normally to build up immunity to the virus through natural infection, while better protecting those who are at highest risk. We call this Focused Protection.

What exactly does the word “allow” mean in this context? Again the passivity is evident, as if humans should just line up in the proper order of virus exposure and submit to nature’s will. How about instead we channel our inner Ayn Rand and stress the role of human agency? Something like: “Herd immunity will come from a combination of exposure to the virus through natural infection and the widespread use of vaccines. Here are some ways to maximize the role of vaccines in that process.”

And the close:

“In most parts of the Western world, normal openings for restaurants, sporting events and workplaces are likely to lead to spiraling caseloads and overloaded hospitals, as is already a risk in some of the harder-hit parts of Europe. Reopenings, to the extent they work, rely on a government that so scares people that attendance remains low even with reopening.

In that sense, as things stand, there is no “normal” to be found. An attempt to pursue it would most likely lead to panic over the numbers of cases and hospitalizations, and would almost certainly make a second lockdown more likely. There is no ideal of liberty at the end of the tunnel here.

Don’t get me wrong: The Great Barrington strategy is a tempting one. Coming out of a libertarian think tank, it tries to procure maximum liberty for commerce and daily life. It is a seductive idea. Yet consistency of message is not an unalloyed good, even when the subject is liberty…

My worldview is both more hopeful and more tragic. There is no normal here, but we can do better — with vigorous actions to combat Covid-19, including government actions. The conception of human nature evident in the Great Barrington Declaration is so passive, it raises the question of whether it even qualifies as a defense of natural liberty.”

MR Tyler again: You will note I do not make the emotional, question-begging argument that herd immunity strategies will kill millions (though I do think more people die under that scenario).  If you argue, as many herd immunity critics do, that the elderly cannot be isolated, it seems you also should not be entirely confident that the currently non-infected can be isolated.  The brutal truth is simply that a Great Barrington strategy put into practice would lead to rapidly spiraling cases and a rather quick and oppressive second lockdown, worse than what the status quo or some improved version of it is likely to bring.  Total deaths are likely higher, along with more social trauma, due to the more extreme whipsaw effects, but no not by millions.

Let’s accelerate those biomedicals, people!

From the comments, on AstraZeneca vaccine trial resumption

America is really, really messed up.

The only place with such intensely wasteful discussions about a disease is the U.S. And it is getting increasingly easy to ignore the U.S. as the world continues to respond to this pandemic.

And it is not just the British based trial. This is from Reuters on Sept. 14 – “Clinical trials for the coronavirus vaccine being developed by AstraZeneca PLC and Oxford University resumed in Brazil on Monday after the country’s health regulator got confirmation over the weekend that its British equivalent MHRA had approved the restart, a company representative said.

The Federal University of Sao Paulo, which is running the trials, said in a statement that 4,600 of the planned 5,000 volunteers have been vaccinated in Brazil without any of them reporting any serious health issues.”

This from the Times of India on Sept 20th -“The phase-III human clinical trial of the COVID-19 vaccine developed by Oxford University and being manufactured by the Serum Institute of India (SII) will begin at the Sassoon General Hospital in Pune next week. Dean of the state-run Sassoon General Hospital Dr Muralidhar Tambe told this to on Saturday.

“The phase-III trial of ‘Covishield’ vaccine will begin at Sassoon hospital from next week. It is likely to start on Monday. Some volunteers have already come forward for the trial. Around 150 to 200 volunteers will be administered the vaccine candidate dose,” he said.

Regulators in Japan and South Africa also have no problem with the trial continuing.

That is from Easy-Peasy.  And I did google to ensure that those claims about foreign trial resumption are correct, for instance Japan resumed no later than October 2.  This is one reason — not the only! — why I am puzzled when Derek Lowe claims on Twitter that American perhaps cannot go any faster with its vaccine.  If you think Japan and the Brits are irresponsible, by all means let us know.  Otherwise…it is time to speak up in favor of maximizing expected value.

*American Purpose*

…a new magazine, media project, and intellectual community called American Purpose is launching at, and can also be found on Twitter at @americanpurpose.

American Purpose, through digital publishing, conversation and convening, and podcasts, will offer a spirited examination of politics and culture. Our aim is to support the revitalization of liberal democracy at home, while addressing the authoritarian challenges to liberal democracy abroad. And we will offer lively and engrossing discussion of history and biography, arts and culture, science and technology.

“American Purpose is committed to building an intellectual community and a space for much-needed dialogue about the United States’ role as the vanguard of classically liberal ideas and institutions around the world,” said Francis Fukuyama, chairman of the American Purpose editorial board.

Thoughts on Peter Burke’s new book *The Polymath*

1. No one is really a polymath.

2. No one is really a unimath, for that matter.

3. Many supposed polymaths apply a relatively small number of learning techniques to many fields.  They remain specialized, although their modes of specialization happen not to line up with how the academic disciplines are divided.  Say you apply non-parametric statistics to five different fields — do you have one specialization or five?

4. What to make of the economist who can run experiments, use computational methods, build models, run regressions, find new data sources, has mastered machine learning, can speak fluently about macroeconomics, and popularize for a lay audience.  Is there any such person?  (No.)  Would he or she count as a polymath?

5. The medieval polymaths Albert the Great and Ramon Llull seem especially impressive to me, because they had to learn before printing presses or easy travel were available.

6. One of my views in talent search is that extremely talented people are almost always extraordinarily good at one or more entirely trivial tasks.  “I can tell exactly how much people weigh just by looking at them.”  That sort of thing.  What is your claim in this regard?  Polymaths also must encompass the trivial!

7. How many “polymaths” are great at say only seven very trivial tasks, and fail to excel at anything important.  Should the polymath concept be held hostage to Jeremy Bentham?

8. Is Leibniz — amazing philosopher, an inventor of the calculus, mastery of languages, theologian, diplomacy, legal reform, inventor, political theorist, and supposed expert on China — the most amazing polymath of all time?

9. Leonardo seems a little thin in actual achievement (though not imagination) once you get past the visual arts.  And there are fewer than fifteen paintings to his name.

10. I think of the 17th century as a peak time for polymaths.  Enough chances to learn and create things, and read lots, but not so much knowledge that you could stand on only one frontier.

11. John Stuart Mill is the most impressive polymath economist.

12. Alan Turing contributed to virtually every field, but in some sense he did only one thing.  Von Neumann did more than one thing, did he do two?  He too contributed to virtually every field.

13. I am very much a fan of Susan Sontag, but I think of her as having done, in essence, “only one thing.”

14. Here is a good piece Beware the Casual Polymath.

I am very happy to recommend this book, especially to MR readers, the full title is The Polymath: A Cultural History from Leonardo da Vinci to Susan Sontag, by Peter Burke.

What kinds of fiscal stimulus are justified right now?

Here is my Bloomberg column on that topic, excerpt:

The greatest potential problem facing the U.S. economy right now is a loss of organizational capital, most of all in small businesses. As they fold, jobs will be lost and the knowledge and efficiencies embedded in those businesses will disappear. In many cases it will be difficult to reconstitute that knowledge quickly, and so the markets for both labor and goods will be operating at less than full capacity…

If you are very optimistic about vaccines and anti-Covid therapeutics, as I am, this strengthens the case for short-term aid. If you believe that more or less normal times for many small businesses will arrive by April or May, that argues for tiding them over in the meantime.

If you are more pessimistic, however, and expect a high level of Covid-19 cases for the next few years, then the argument for aid is weaker. Those endangered small businesses cannot be kept on “life support” for that long; better for them to know that aid is not forthcoming. The economy would then continue to adjust into fewer restaurant jobs and more food-delivery jobs.

I consider further arguments and options at the link.

Wednesday assorted links

Studying Economics Increases Wages a Lot

Students who majored in economics earned median wages at the age of forty of $90,000 in 2018. Students who majored in other social sciences earned only $65,000. Why the big difference? Selection or a causal effect of earnings? Zachary Bleemer and Aashish Mehta compare students at UCSC who just missed the grade cutoff to be able to major in economics with those who just made the grade. Making the grade causes a big increase in students choosing to major in economics and a big increase in their salaries by their mid-20s of about $22,000. Thus most or all of the observed differences in salaries by major appear to be causal. The increase in salary appears to be driven by a change in preferences that leads students with economics majors to specialize in high-wage industries.

Abstract: We investigate the wage return to studying economics by leveraging a policy that prevented students with low introductory grades from declaring the major. Students who barely met the GPA threshold to major in economics earned $22,000 (46%) higher annual early-career wages than they would have with their second-choice majors. Access to the economics major shifts students’ preferences toward business/finance careers, and about half of the wage return is explained by economics majors working in higher-paying industries. The causal return to majoring in economics is very similar to observational earnings differences in nationally representative data.

As I have written, College Majors Matter and by about as much as going to college!

Hat tip: John Holbein.