Results for “brexit” 205 found
My Conversation with Jeremy Grantham
Lots of semi-sparring, engaging throughout. Here is the audio, video, and transcript. Here is part of the episode summary:
He joined Tyler to discuss the most binding constraint on the green transition, why we need an alternative to lithium, the important message sent by Biden’s Climate and Taxes Act, the marginal cost basis of green energy, the topsoil crisis in the Midwest, why estimates of the cost of global warming vastly underestimate its effects, why he distrusts economists, the overpricing concentrated in the US stock market, the consequences of Brexit, the revolutionary tactics of Margaret Thatcher, how his grandparents shaped his worldview, why he’s optimistic about American venture capital, the secret to Boston’s success in asset management, how COVID changed his media diet, the political difficulty of passing carbon taxes, and more.
Here is one excerpt:
COWEN: Now, you mentioned major flooding in Jackson, Mississippi. That’s a problem. Right now, as we speak on September 1st, 2022, how much do you think real estate values will decline there as a result of the flooding? What would your prediction be?
GRANTHAM: The history so far on early flooding is that it has little or almost no effect. It’s a bit like going bankrupt: very, very slowly at first and then quite sudden. When you need to buy insurance one day, you will not be able to get it except from government subsidy, and on that day, the house prices will start to decline. Then quite possibly, there’ll be some sort of panic — we do panics pretty well — and the prices will drop like a stone, more than they should. And then, of course, they will rally, and so on and so forth. Business as usual.
COWEN: If I try to seek out the most serious efforts to estimate the costs of global warming, say, by 2200, I end up at the papers of Esteban Rossi-Hansberg. He comes up with figures somewhere between 5 percent and 10 percent of global GDP, which, as you know, is an enormous amount of money, especially come 2200. Now, does that strike you as a fair estimate or an underestimate?
GRANTHAM: It strikes me as utterly trivial and only producible by economists. When economists try, they can be absolutely nitwitted. The guy who got the Nobel Prize for it [William Nordhaus], for his work on climate change — actually he spelled it out. He said, “Even if there was 10 degrees centigrade, it would only cost something in the range of 10 percent of GDP.”
To which I say, “Dudes, we will be long gone as a species at 10 degrees centigrade.” It is quite obvious at 1.1 that we are already having trouble. At 2, we will be struggling and societies will fail here, there, and everywhere. At 3, in a sense, forget about it, and we may have to deal with it, but it will be grievous. At 10 degrees . . .
I also ask him why, if bubbles are so easy to spot, he isn’t richer than he already is…
People are Taking the Robots’ Jobs
In How the U.K. Became One of the Poorest Countries in Western Europe Derek Thompson offers this arresting anecdote:
“Between 2003 and 2018, the number of automatic-roller car washes (that is, robots washing your car) declined by 50 percent, while the number of hand car washes (that is, men with buckets) increased by 50 percent,” the economist commentator Duncan Weldon told me in an interview for my podcast, Plain English. “It’s more like the people are taking the robots’ jobs.”
That might sound like a quirky example, because the British economy is obviously more complex than blokes rubbing cars with soap. But it’s an illustrative case. According to the International Federation of Robotics, the U.K. manufacturing industry has less technological automation than just about any other similarly rich country. With barely 100 installed robots per 10,000 manufacturing workers in 2020, its average robot density was below that of Slovenia and Slovakia. One analysis of the U.K.’s infamous “productivity puzzle” concluded that outside of London and finance, almost every British sector has lower productivity than its Western European peers.
I also liked this pithy sentence of wisdom:
Today, Britain seems trapped between a left-wing aversion to growth and a right-wing aversion to openness.
Read the whole thing.
Tuesday assorted links
1. Lookism in TikTok. Which visual features predict video success?
2. This is slightly worrying for the diehard Brexit haters.
3. Ezra Klein and Patrick Collison podcast, self-recommending.
4. What exactly what was the new economic policy news event for the UK on Monday?
5. Potential tools of chess cheating, here and here. Good thing no one does this stuff! On top of that, the devices probably do not even exist. Nor might any similar devices exist.
The overreaction to the Truss macro policy
It has been extreme:
I know an unpopular economic policy when I see one. And the consensus among economists about the tax cuts and deregulations announced last week by UK Prime Minister Liz Truss is almost universally negative. Larry Summers noted: “I think Britain will be remembered for having pursued the worst macroeconomic policies of any major country in a long time.” Willem Buiter described it as “totally, totally nuts.” Paul Krugman is skeptical. As Jason Furman summed it up: “I’ve rarely seen an economic policy that is as uniformly panned by economic experts and financial markets.”
That is from my latest Bloomberg column. I certainly can see reasons why one might oppose the plan, but the skies are not going to fall:
I see no evidence that the markets are beginning to doubt the UK’s ability to repay its debts. The UK, and earlier Great Britain, has arguably the best debt repayment history of all time (though it did default on some of its debts to Italian lenders in the 13th century). It even repaid its extensive debts from the Napoleonic Wars, though they were more than 200% of GDP.
There are different ways you might measure the marginal cost of UK government borrowing, but I don’t see any measure where it is high and under many measures it is negative in real terms. Remember when people used to tell us this meant there was no major problem on the fiscal side?
I do criticize the Bank of England for not doing more to reign in inflation, plus the government should have coordinated better with the Bank. And don’t forget this:
The Truss plan offers many admirable deregulations, including an attempt to get the UK economy to build more residential structures, as it so badly needs. It is difficult to say now just how successful this plan will be, but it is definitely a step in the right direction, as are most of the other deregulations, including lifting the ban on onshore wind generators. By calling the Truss plan the worst thing ever, commentators make it unlikely that these ideas will get the approbation they deserve.
Recommended.
What I’ve been reading
1. Ian Morris, Geography is Destiny: Britain and the World: A 10,000 Year History. None of the book is bad, and half is quite interesting. Think of the treatment as “Deep Roots for Brexit,” though willing to noodle over earlier and more interesting topics in history. From a good FT review by Chris Allnutt: “Morris succeeds in condensing 10,000 years into a persuasive and highly readable volume, even if there are moments that risk a descent into what he seeks to avoid: “a catalogue of men with strange names killing each other”, as historian Alex Woolf put it.” Now if only he would explain why their hot and cold water taps don’t run together…
2. Michel Houellebecq, Interventions 2020. Grumpy non-fiction essays, with plenty of naive anti-consumerism. You need to read them if you are a fan, but I didn’t find so much here of interest. I was struck by his nomination of Paul McCartney (!) as the most essential musician, with Schubert next in line. Mostly it is MH being contrary. He has earned the right, but he wasn’t able to make me care more.
3. Frank O’Connor, “Guests of the Nation.” One of the best short stories I have read, Irish. Can’t say any more without spoilers! 11 pp. at the link.
4. Ursula K. Le Guin, The Word for World is Forest. Has anyone done a systematic accounting of which Vietnam era fictional works have held up and which not? Maybe this one gets a B+? Not top drawer Le Guin, but good enough to read, and better yet if you catch the cross-cultural references and all the anthropological background works.
5. Jonathan Swift, Gulliver’s Travels, some cheap paperback edition. I did a quick, non-studied reread of this, in prep for the new Cambridge University Press reissue edition due out June 30, which has excellent notes and I will study and reread in more detail. One of the very best books! Not only is the story fully engaging and deeply humorous, but it is one of the seminal tracts on progress (largely skeptical), a blistering take on political correctness, wise on the virtues and pitfalls of travel, and one of the first novels to truly engage with science and politics and their interaction. Straussian throughout. Swift is one of the very greatest thinkers and writers and his output has held up remarkably well.
Saturday assorted links
1. An obvious but still underrated point: “we find parenting attitudes strongly predict paternalistic policy attitudes—more than ideology, party identity, or any other measured demographic variables…”
2. DSM-V now makes the bestseller list (London Times). “Ralph Lewis, a psychiatrist, wrote recently in Psychology Today of a “trend toward increased self-diagnoses” that was “particularly pronounced among young people” and predated the pandemic.”
3. Roubini in the FT: “Before this week’s ECB meeting, executive board member Isabel Schnabel stated that the bank’s willingness to deal with fragmentation risk had “no limits”. This echoed former ECB president Mario Draghi’s game-changing “whatever it takes” statement of 2012. But Schnabel also hinted at the need for policy conditionality when it comes to offering support. Given the current volatility of financial markets, one can expect they will further test the ECB’s ability to protect the currency union by backstopping fragile eurozone states.”
4. ESPN: “The Warriors are 5-1 to win the 2023 NBA title at Caesars Sportsbook, followed closely by the Brooklyn Nets and Boston Celtics, who are each listed at 6-1. The Milwaukee Bucks (15-2), Phoenix Suns (8-1) and LA Clippers (8-1) round out the teams with single-digit odds entering the offseason.” Nets #2???
5. “So intense was the EU’s involvement in Northern Ireland – a part of a non-member state, remember – that it has imposed 4,000 new laws there over the past 18 months.” Link here, where are the fans of democracy on this issue? (NB: I don’t agree with everything in this piece, should go without saying but periodic reminders can be useful.)
6. Further evidence (from sex lives) on the current human capital deficit (FT).
You should be rooting for Boris Johnson
On Northern Ireland, at least. To be clear, a) I know he is proposing to break the agreement with the EU and thus break the law, and b) I know this may be unwise for matters of prudence because the EU is likely to retaliate.
Still, just about every “establishment writer” I am reading can only tsk-tsk to Boris Johnson. He may not succeed, but you should be rooting for him to succeed and we should all be willing to say this.
If Johnson succeeds, the previous “Protocol” will go away and free trade between Northern Ireland and the rest of the UK will be restored. That would be a good thing. There would be more free trade in the short run, and furthermore a backdoor to free trade between the EU and the UK, the magnitude of that change in the longer run being unclear.
The EU doesn’t have to retaliate. They shouldn’t retaliate. At current margins of support, they don’t need further punishment of those seeking to leave the EU. Furthermore such punishment would in this case be unjust, even though it is in accord with agreed-upon international law.
So go on, do all the “tsk tsk” you want, but also put the mood affiliation aside. At the end of your column add the simple sentence “But of course I am rooting for Boris to succeed!”
For those who need it, here is some background information.
U.S.A. poll fact of the day
Only one poll, yes, but here goes:
61% of Democrats say “improving border security and restricting illegal immigration” would strengthen democracy
To be clear, I don’t consider this good news. The broader point is that I genuinely do not understand Bryan Caplan’s argument that there is no backlash worry from humongous levels of immigration. I see that Angela Merkel let in one million Syrian refugees (which I favored and still favor, by the way), and that strengthened “Far Right” anti-immigrant parties throughout Europe. I see Brexit as in part motivated by a fear of loss of control of immigration. I see that Donald Trump focused on the immigration issue to win the Republican primaries and debates leading up to the 2016 election. The government in Singapore is now facing a major backlash from earlier high levels of in-migration.
How can there not be a backlash from open borders?
The actual, in practice backlash against open borders simply would be to close the borders/limit entry once again, rather than anything too dramatic. But if you continue with a “this lectern is made of ice” counterfactual where the open borders continue against what would otherwise be the political equilibrium, what exactly would be the backlash? I, for one, am afraid to find out. So we want “more open” borders, but not open borders per se.
And no, I am not persuaded by data from pre-1920 America, when borders were largely open and most parts of the world sent basically nobody, and furthermore there was not much of a welfare state. And we did in fact restrict Chinese immigration to California, because of (irrational) backlash.
UK to fast track drug trials
Drugmakers will be offered fast-tracked approvals for innovative medicines in the UK as ministers seek to build on the country’s world-leading approval of a Covid vaccine and attract life sciences companies to invest post-Brexit.
The UK’s medicines regulator will become independent of EU pharmaceutical rulemaking when Britain quits the European Medicines Agency at the end of the year, which means companies will need to apply separately to register drugs.
With ministers eager to try to refashion the UK as a post-Brexit hub for global life sciences, companies with drugs that promise to treat unmet medical needs will be offered help through the development process, including manufacturing, according to three people familiar with the situation.
Under the so-called Innovative Licensing and Access Pathway, companies are set to be offered the same rolling review of data that speeded approval of the Pfizer/BioNTech Covid-19 vaccine ahead of the rest of the world.
Here is more from Sarah Neville at the FT, via J.
Saturday assorted links
1. The power of suggestion things as they ought to be.
2. Economist William Allen has passed away.
3. The evolution of Ivor Cummins.
4. Ayn Rand on the Fairness Doctrine.
5. A critique of Tether (what would Milton Friedman have said?).
6. From July 2020: “The UK’s decision not to join an EU plan to distribute a potential coronavirus vaccine to its most vulnerable citizens has been described as “unforgivable” and condemned by health charities and opposition politicians.” Or read this one from March.
7. Profile of Annie Duflo (WSJ).
Monday assorted links
2. Vitalik year end notes from Singapore. Outside of crypto, Vitalik is perhaps the most underrated thinker, period.
3. What the Brexit trade deal does.
4. Megan McArdle on dangerous group think in the public health establishment: “…the discussion of whether to prioritize essential workers was anything but robust. The committee left only 10 minutes for it, during which not one of those 14 intelligent and dedicated health professionals suggested adopting the plan that kills the fewest people. Nor did anyone run out of time to make that point. Ten minutes was actually a little too much for what turned out to be a pro forma opportunity to get on the record endorsing the plan, and particularly its emphasis on racial and economic equity in health care.”
5. “…I assign a 90% probability to at least one of the new variants being >30% more transmissible“
Saturday assorted links
UK fact of the day, those not always so new service sector jobs
Britain’s fishing industry adds less value to the UK economy than the Harrods department store. But its importance to coastal communities almost prevented a Brexit trade deal between the UK and EU.
Here is the full FT story, via Adam Tooze.
The age of polarization ended some while ago
The coronavirus-relief bill racing through Congress contains a fair amount of economic relief as well as a wide array of unrelated measures that were thrown into the bill with little or no public debate. Included in the latter category is something shocking: a huge package of energy reforms that will result in major greenhouse-gas reductions.
How big a deal are the climate provisions? The World Resources Institute has called the bill “one of the most significant pieces of climate legislation that Congress has passed in its history.” Grant Carlisle, a senior policy adviser at the Natural Resources Defense Council, says, “This is perhaps the most significant climate legislation Congress has ever passed.”
To be sure, the “most significant climate legislation Congress has ever passed” designation is a little bit misleading. Congress hasn’t passed much climate legislation. The climate provisions in the coronavirus-relief bill might add up to more than President Obama’s 2009 stimulus bill, which included $90 billion in green-energy subsidies and helped seed the boom in wind, solar, batteries, and other tech over the past decade. They likely won’t be as significant as the 1970 Clean Air Act, which created the regulatory authority that does most of the heavy lifting in reducing carbon pollution.
But the amount of good climate policy in this bill is shocking, especially given the fact that it is about to be signed by Donald J. Trump. The major provisions include: a $35 billion investment in new zero-emission energy technology (including solar, wind, nuclear, and carbon-capture storage); an extension of tax credits for wind and solar energy, which were set to expire; and, most significantly, a plan for phasing out hydrofluorocarbons, a small but extremely potent greenhouse gas used as a coolant.
The rhetoric, however, will continue. That article is from Jonathan Chait. And here is my March 2019 Bloomberg column on polarization:
If I had to describe 2019 so far, I would characterize it as The Year Political Polarization Started to Erode. I know that sounds counterintuitive — aren’t partisans at each other’s throats on social media all the time? — but bear with me.
There is some data to support my point. A recent poll about regulating the tech industry, an issue which could prove to be one of the most important of our time, asked: “Do you agree or disagree that tech companies have too much power and should be more regulated?” Some 16 percent of Republicans said they “strongly agree,” while 13 percent of Democrats did. And combining those who “strongly agree” and “somewhat agree” gives an identical figure for both parties — 46 percent. This is the near-opposite of polarization.
More generally, both parties also seem to have converged in thinking that fiscal deficits are fine and more government spending is a good thing.
Ahem.
Friday assorted links
1. Using K-Pop to teach economics.
2. Redux of my April 4 post on tethered pairs.
4. Long blog post on DeepMind and protein folding, interesting throughout, but the most interesting section is toward the end on why DeepMind outperformed academic groups.
5. To be clear, I don’t know the answer, but why is no one even asking: “Can’t we just use the Sanofi vaccine on the young people only?” Is it that the answer is so obvious? Or is there excess confomism in this sphere? Is this simply the “this would cause the public to lose confidence in vaccines” mantra, an increasingly under-theorized and unsatisfactory substitute for an actual answer? (Would it even get a “B-” on an undergraduate, upper division psychology term paper or honors thesis?) Inquiring minds wish to know.
5b. And AstraZeneca is testing together with Russian options. Still an open question, but I’ve been saying that the Russian vaccine is underrated.
6. Good evidence for an Italian case of Covid in early December 2019.