Thursday assorted links
1. Words from the Chinese translator of Sally Rooney, a good piece.
2. Updating your syllabus for the GPTs. I’ll be doing this myself for the spring.
4. Are toy prices falling? (short video)
5. Chrome browser add-on logs your ChatGPT history.
6. From a reader: “Project Relate is a Google app that allows users with speech impediments to create a customized voice model so they can interact with Google’s voice assistant. After the user trains the model it can pretty effectively parse what they are saying even when other humans can’t.” Link here.
I Still Hate Flexible Spending Accounts
According to a new report in Money workers lost billions in so-called flexible savings accounts:
…44% of workers with FSAs in 2019 forfeited money. On average, the amount lost totals $339 per person.
…With reliable data on how often workers forfeit, how much they forfeit and how many FSAs workers hold, we can now reasonably estimate that workers forfeited approximately $3 billion in 2019 and $4.2 billion in 2020.
As I said in my post from 2017 (no indent), I hate “flexible” spending accounts, i.e. those accounts where you put say $1000 in tax-free but you then must submit a bunch of health or education receipts to claim the money–and the “benefits manager” tells you half of the receipts you submitted are no good so you have to trawl through your files to find more–or lose the money. The whole process is demeaning. My hatred of this process, however, pales in comparison to that of Scott Sumner who gives a correct analogy:
Imagine a government that took 10% of each person’s income, and put in in a wooden box. The box was placed at the end of a 10-mile gravel road. Each citizen was given a knife, and told they could crawl on their hands and knees down the road, and then use the knife to cut a hole in the box, and retrieve their money.
Scott’s point is twofold. First, there is a lot of waste in crawling down the road. Second, taken in isolation, it looks like the plan at least offers people an option and so, in isolation, flex accounts and their ilk appear to benefit taxpayers. In the big picture, however, the total amount taken in taxes is somewhat fixed by politics and economics so if we got rid of the spending accounts, taxes would probably fall in other ways that are difficult to predict but nonetheless real.
Some want to crawl down the gravel road, fearing that if they abolish the program the government will not reduce their tax rates, instead the money in the box will be diverted to welfare for the poor, or higher salaries for teachers. I can’t deny that this might occur, but if we don’t even TRY to build a good country, how can we possibly succeed? Isn’t it better to try and fail, rather than not even try?
I agree with Scott. If I am going to be forced to pay taxes I’d like to hand over my cash standing like a man and not be given the option of crawling to recoup some bills the tax collector magnanimously throws on the floor.
Canine Coaseanism
We are for a while caretakers for a dog, and so I have started thinking what kind of trades I might make with the beast. Of course for Darwinian reasons dogs have co-evolved with humans to be fairly cooperative, at least for some breeds (and this is a very smart, easily trained breed, namely an Australian shepherd). So the dog’s behavior (my behavior?) already mirrors some built-in trades, such as affection for food. But what kinds of additional trades might one seek at the margin?
One thought comes to mind. I would like to signal to the canine that, when I get up from the sofa, he does not need to follow me because there is no chance I will offer him a food treat. It would be better if he would just stay sleeping. And yet this equilibrium is impossible to achieve. Nor does rising from the sofa quietly succeed in fooling him, he follows me nonetheless.
Overall, though, I conclude that the current (spayed) version of the dog is already fairly Coasean in his basic programming.
One look at our future
The following comes from a deleted tweet, so I have paraphrased in some places and also removed references to a few specific individuals. If the author wishes to reclaim ownership of these ideas, I will write a separate blog post crediting him:
1. AGI and Fusion are what matter. Fusion accelerates AGI, since AGI is just exaflops spent on training.
2. GPT 3.5 (ChatGPT) is civilization-altering. GPT-4, which is 10x better, will be launched in the second quarter of next year.
3. Google is worried, but Microsoft is all-in, and is building many more data centers to lead the charge. Bing search is getting GPT integration next year.
4. Model configuration and training parameters don’t matter. Intelligence is just GPU exaflops spent on training.
5. If #4 is true, civilization becomes a decentralized crypto network, where computers are contributed for training and earning tokens. Querying the model costs tokens.
6. One last centralizing force — gradient descent is synchronous. Needs high GPU coordination and fast network bandwidth. Current trend is civilization centralizing with Microsoft laying 10x bigger Open AI data centers.
7. Gradient descent is the process of error correction, where an N-layer model predicts an output. When that’s far away from the target, we correct all the layer weights slightly to re-aim.
8. Some other batch of stuff I didn’t understand and cannot paraphrase.
9. A lot of the configurations work equally fine. If you throw the same GPU exaflops at the model — they perform more or less the same. Probably that is why it is evolutionarily easy to invent the brain. Open AI is at 10 exaflops right now vs. 1000 for the human brain. Probably going to equalize in five years.
10. Models are so good already that only expert training matters anymore. Co-pilot for X is in play. Anyone building a Co-pilot for my browser? Browsers are largely text-based, which GPT fully understands.
There you go! Speculative, of course.
Wednesday assorted links
Ohio teen fact of the day
The number of 11th and 12th grade males experiencing gambling problems, such as lying about how much they lost, or being unable to control their gambling, rose to 8.3% in 2022 from 4.2% in 2018, according to one survey of 7,500 7th through 12th graders in Wood County, Ohio.
People who research and treat problem gambling say the line between gambling and videogaming is blurring. Videogames, which are often played on smartphones as well as computers and game consoles, include features that mimic gambling activities like roulette and slot machines.
The FDA’s Lab-Test Power Grab
The FDA is trying to gain authority over laboratory developed tests (LDTs). It’s a bad idea. Writing in the WSJ, Brian Harrison, who served as chief of staff at the U.S. Department of Health and Human Services, 2019-2021 and Bob Charrow, who served as HHS general counsel, 2018-2021, write:
We both were involved in preparing the federal Covid-19 public-health emergency declaration. When it was signed on Jan. 31, 2020, the intent was to cut red tape and maximize regulatory flexibility to allow a nimble response to an emerging pandemic.
Unknown to us, the next day the FDA went in the opposite direction: It issued a new requirement that labs stop testing for Covid-19 and first apply for FDA authorization. At that time, LDTs were the only Covid tests the U.S. had, and many were available and ready to be used in labs around the country. But since the process for emergency-use authorization was extremely burdensome and slow—and because, as we and others in department leadership learned, it couldn’t process applications quickly—many labs stopped trying to win authorization, and some pleaded for regulatory relief so they could test.
Through this new requirement the FDA effectively outlawed all Covid-19 testing for the first month of the pandemic when detection was most critical. One test got through—the one developed by the Centers for Disease Control and Prevention—but it proved to be one of the highest-profile testing failures in history because the entire nation was relying on the test to work as designed, and it didn’t.
When we became aware of the FDA’s action, one of us (Mr. Harrison) demanded an immediate review of the agency’s legal authority to regulate these tests, and the other (Mr. Charrow) conducted the review. Based on the assessment, a determination was made by department leadership that the FDA shouldn’t be regulating LDTs.
Congress has never expressly given the FDA authority to regulate the tests. Further, in 1992 the secretary of health and human services issued a regulation stating that these tests fell under the jurisdiction of the Centers for Medicare and Medicaid Services, not the FDA. Bureaucrats at the FDA have tried to ignore this rule even though the Supreme Court in Berkovitz v. U.S. (1988) specifically admonished the agency for ignoring federal regulations.
Loyal readers will recall that I covered this issue earlier in Clement and Tribe Predicted the FDA Catastrophe. Clement, the former US Solicitor General under George W. Bush and Tribe, a leading liberal constitutional lawyer, rejected the FDA claims of regulatory authority over laboratory developed tests on historical, statutory, and legal grounds but they also argued that letting the FDA regulate laboratory tests was a dangerous idea. In a remarkably prescient passage, Clement and Tribe (2015, p. 18) warned:
The FDA approval process is protracted and not designed for the rapid clearance of tests. Many clinical laboratories track world trends regarding infectious diseases ranging from SARS to H1N1 and Avian Influenza. In these fast-moving, life-or-death situations, awaiting the development of manufactured test kits and the completion of FDA’s clearance procedures could entail potentially catastrophic delays, with disastrous consequences for patient care.
Clement and Tribe nailed it. Catastrophic delays, with disastrous consequences for patient care is exactly what happened. Thus, Harrison and Charrow are correct, giving the FDA power over laboratory derived tests has had and will have significant costs.
Best movies of 2022
The Lost Daughter, TV but still good, a movie of sorts, based on Ferrante.
Belle, spectacular Japanese anime.
Licorice Pizza, a good normal movie, captured California well.
Compartment Number Six, with a new meaning after the war of course.
Petit Maman, French, short, plays mind games with you, profound.
The Quiet Girl (Irish)
Vesper, Lithuanian, dreamy, Tarkovsky influence but faster-paced, an underrated movie this year.
Tár, really quite good and interesting.
Decision to Leave, Korean crime drama with Hitchcockian twists and inspirations.
The Fabelmans, Ignore the cloying preview.
Saint Omer, French-Senegalese courtroom drama.
Clytaemnestra, Korean movie, one hour long.
EO, Polish movie about a donkey, better than you think.
Overall an abysmal year for Hollywood, a pretty good year for the movies. I haven’t yet seen Oppenheimer or Bardo, so their absence on the list should not be taken as a negative signal.
Why are Americans spending less on holiday gifts?
That is the question behind my latest Bloomberg column:
The research is clear: Americans are becoming less generous over the holidays. Not to sound too much like a Scrooge, but this is not necessarily a bad thing.
In 1999, Americans said they planned to spend $1,300 (converting to 2020 dollars) on holiday gift giving. In 2020, that amount was about $800. These numbers are based on Gallup data, but retail sales figures show a broadly similar pattern. From 1935 through 2000, gift-giving tended to rise with disposable income. Since 2000, gift-giving has fallen as national disposable income has risen.
…One hypothesis is that Americans are simply getting less generous. Yet charitable giving is robust, so that’s probably not right.
An alternative possibility is that Americans are too rich for gifts to make sense. It’s not only that billionaires are hard to buy for; the rest of us are, too. You might think your friends already have most of the important things they need, so how can you buy them something meaningful at the margin? This logic doesn’t hold for all Americans, but perhaps the higher earners account for a big enough share of the gift-giving total that it exerts a downward pull on the numbers.
The cheeriest scenario — again, speaking strictly as an economist — is that Americans are realizing that gift-giving often doesn’t make much sense. If you give me a gift and I give you a gift, neither of us is quite sure what the other wants. We might both be better off if we each spent the money on ourselves. Under this hypothesis, Americans are not becoming less generous, they are becoming more rational.
Another rationale for gift-giving is that it tightens familial and social bonds. Perhaps it does, but it is not the only means for doing so. More and better communication — which has also become cheaper and easier over the last two decades, with email, texts and cheaper phone calls — may make gift-giving seem less essential.
There is also the possibility that we, as a society, have lost that “Christmas spirit,” whatever that might mean. After all, secularization is rising and churchgoing is declining. Christianity is less central to American life. Whether this social development is all good or bad will of course depend on your point of view.
What do you all think are the likely causes here?
*Paved Paradise: How Parking Explains the World*
Henry Grabar has written an excellent book on how badly America has screwed up its parking policies, and in turn ruined many of its cities, or at least parts of them.
Here is just one little tidbit:
Parking on the curb was not such a great option in those days: in 1990, 147,000 cars were stolen in New York City — one theft for every fifty residents. My parents joined the club shortly before Christmas, 1993. Their next car went into a garage, a prewar building with a cable-hauled elevator serving three floors of parking…
The revival of Manhattan around the millennium, which often took the form of apartments replacing parking, and the concurrent decline of car thefts, which fell by an astounding 96 percent between 1990 and 2013, put a lot of pressure on the curb.
I wish such books would spend more time discussing whether dense urban areas are simply a fertility trap. Nonetheless excellent work, and everyone interested in urban economics (or parking) should pick this one up. Due out in May, you can pre-order here.
Tuesday assorted links
1. Have Irish IQs not seen such a radical Flynn effect in the last few decades?
2. Phyllis Wheatley.
3. The metaphysics of LLM, and yes Wittgenstein has been underrated.
4. Context is that which is becoming increasingly scarce?
5. Dwarkesh Patel podcast with Aella (note the language and some of the content is not safe for work).
Health Care Spending Growth Has Slowed: Will the Bend in the Curve Continue?
In large part yes:
Over 2009-2019 the seemingly inexorable rise in health care’s share of GDP markedly slowed, both in the US and elsewhere. To address whether this slowdown represents a reduced steadystate growth rate or just a temporary pause we specify and estimate a decomposition of health care spending growth. The post-2009 slowdown was importantly influenced by four factors. Population aging increased health care’s share of GDP, but three other factors more than offset the effect of aging: a temporary income effect stemming from the Great Recession; slowing relative medical price inflation; and a possibly longer lasting slowdown in the nature of technological change to increase the rate of cost-saving innovation. Looking forward, the
post-2009 moderation in the role of technological change as a driver of growth, if sustained, implies a reduction of 0.8 percentage points in health care spending growth; a sizeable decline in the context of the 2.0 percentage point differential in growth between health care spending and GDP in the 1970 to 2019 period.
That is from a new NBER working paper by Sheila D. Smith, Joseph P. Newhouse, and Gigi A. Cuckler.
What I’ve been reading
Ahmet T. Kuru, Islam, Authoritarianism, and Underdevelopment: A Global and Historical Comparison is one of the best books on why Islam fell behind Western Europe. I don’t think it solves the puzzle, but has plenty of good arguments in the “rent-seeking” direction.
Newly published is Daniel B. Klein, Smithian Morals, Amazon link here, some of the essays are with co-authors. Free, open access version is here.
Nicolai J. Foss and Peter G. Klein, Why Managers Matter: The Perils of the Bossless Company, is an interesting defense of corporate hierarchy, based on economic reasoning and also a dash of Hayek.
Jamieson Webster, Disorganisation & Sex. Lacanian, yet readable. Recommend to those who think they might care, but it will not convince the unconverted.
There is the interesting Plato Goes to China: The Greek Classics and Chinese Nationalism, by Shadi Bartsch. Here is my very good CWT with her, in which we discuss the topics of the book a bit.
Pretty good is Jon K. Lauck, The Good Country: A History of the American Midwest, 1800-1900.
There is Owen Ullmann, Empathy Economics: Janet Yellen’s Remarkable Rise to Power and Her Drive to Spread Prosperity to All.
And a new libertarian memoir, Murray Sabrin, From Immigrant to Public Intellectual: An American Story.
Dalibor Rohac, Governing the EU in an Age of Division is a classical liberal take on its topic.
Monday assorted links
Addendum to best books of 2022
First, there are two books I haven’t read yet — new translations — but they are almost certainly excellent and deserving of mention. They are:
Ovid, Metamorphoses, translated by Stephanie McCarter.
Alessandro Manzoni, The Betrothed, translated by Michael F. Moore.
From fiction I would add to my earlier list:
R.F. Kuang, Babel: An Arcane History,
and Olivier Guez, The Disappearance of Josef Mengele, excellent and easy to read in one sitting.
In non-fiction I would give especially high ratings to the following additions:
Andrew Mellor, The Northern Silence: Journeys in Nordic Music & Culture. I will read this one again. It assumes some knowledge of the Nordic countries and also some knowledge of classical music, but it is exactly the kind of book I hope people will write. It explains at a conceptual level how those countries built up such effective networks of musical production and consumption.
Keiron Pim, Endless Flight: The Life of Joseph Roth. Gripping throughout.
Rodric Braithwaite, Russia: Myths and Realities. Perhaps a little simple for some readers, but probably the best place to start on the topic of Russian history.
Allan Kozinn and Adrian Sinclair. The McCartney Legacy: Volume 1: 1969-1973. Having now finished the work, I can’t think of any biography that better integrates the tale of the life and the tale of the creative work. And it changed my views on Paul a good deal, for instance he wrote many of his best solo songs earlier than I had thought.
Here is my earlier non-fiction list for 2022.