Donald Trump tweets my column
But they really knew who was going to win! https://t.co/WZnOx6ZHmW
— Donald J. Trump (@realDonaldTrump) March 4, 2020
Please don’t even try reading the comments on this post.
Spock’s Brain
The Santa Monica Observer noted the death of soap opera actress Marj Dusay who also appeared as the alien thief in the classic Start Trek episode “Spock’s Brain”:
…The episode is generally regarded by most fans, and those who took part in its production, as the worst episode of the series. William Shatner called this one of the series’ worst episodes, calling the episode’s plot a “tribute” to NBC executives who slashed the show’s budget and placed it in a bad time slot.
Leonard Nimoy wrote: “Frankly, during the entire shooting of that episode, I was embarrassed – a feeling that overcame me many times during the final season of Star Trek.”
…In his book What Were They Thinking? The 100 Dumbest Events in Television History, author David Hofstede ranked the episode at #71 on the list.
The rock band Phish performs a song entitled “Spock’s Brain”
So what? Well here is the part that caught my attention:
The episode was referenced in Modern Principles: Microeconomics by Tyler Cowen and Alex Tabarrok of George Mason University as an example of how it is virtually impossible to have a command economy; in that not even Spock’s brain could run an economy.
In other words, we also thought it was one of the worst episodes ever because of the bad economics. Econ instructors should use our textbook! Where else can you learn about Spock’s Brain and the command economy?
By the way, I’m pretty sure the obit was AI generated but heh the AI did a good job! I am aware of the irony.
How an economist thinks
I saw this on Twitter:
Hard Times for Adjunct Professors: 25% of part-time university faculty nationally rely on public assistance programs.
My immediate reaction was “Given the crowding in the sector, and that they presumably earn non-pecuniary returns from the enjoyment of teaching, shouldn’t we be taxing them at a higher rate?”
British colonialism in Nigeria
British colonialism in Nigeria lasted some six decades…First, the British sought to run Nigeria on the cheap. This led to a fetish for indirect rule. Much of the work of colonial governance was done in collaboration with traditional African authorities. The British expended little effort to create a centralized rule, a coherent armed force, or a professional civil service. The quality of the state that the British constructed and left behind in Nigeria was fairly poor…
The British depended on import taxes as the main source of revenue for running the colonial state. Little of these minimal revenues was spent on improving agriculture (except for the exportable cash crops), and even less on the promotion of technological or industrial development. When the British left Nigeria, the hand-hoe was still the main tool used for cultivation in the fields…
The British made do with a fairly low rate of taxation: during the interwar period tax revenue were only 2 percent to 3 percent of the GDP. As important was that nearly 60 percent of these revenues came from taxing foreign trade, a bureaucratic task that was much easier than collecting direct taxes…
Between 1900 and 1930, Nigeria’s average per capita income grew at about half a percent per annum and then essentially stagnated until the end of the war.
That is all from Atul Kohli, Imperialism and the Developing World: How Britain and the United States Shaped the Global Periphery. The book is quite good.
Overall, I have found that as I learn more about the history of British imperialism, the lower my opinion of it sinks.
The coronavirus debate is splitting into two broad camps
The “growthers” and the “base-raters” — which are you and why? Here is my latest Bloomberg column. Hard to excerpt but good.
China estimate of the day
“Only 30 percent of small and medium businesses nationwide have resumed work,” Shu Chaohui, an official at the Ministry of Industry and Information Technology, told reporters Tuesday. “It’s a pretty severe situation.”
…A nationwide survey led in February by Peking University found half the country’s small businesses will run out of cash within three months, and 14 percent might not survive past mid-March. Unlike large state conglomerates or multinational companies that could weather the storm, China’s small businesses say they simply do not have cash reserves to continue paying wages and rent.
And while manufacturing giants that mass-produce gadgets such as Apple iPhones can rely on the government to charter buses and trains to shuttle migrant workers back to their factories, nearly 40 percent of smaller businesses say they cannot get their workers back to Chinese cities because of transportation bottlenecks and quarantine restrictions, according to the Peking University study.
Here is more from Gerry Shih.
Tuesday assorted links
2. Are there negative externalities to having a lot of network-based hiring?
3. “My Guatemalan audiences took to Open Borders like fish to water.” Link here.
4. Why coronavirus testing is difficult. And here is a specific story.
The WHO Report on COVID-19
The Report of the WHO-China Joint Mission on Coronavirus Disease 2019 (COVID-19) is the best source of information on COVID-19 that I have seen.
The Joint Mission consisted of 25 national and international experts from China, Germany, Japan, Korea, Nigeria, Russia, Singapore, the United States of America and the World Health Organization (WHO). The Joint Mission was headed by Dr Bruce Aylward of WHO and Dr Wannian Liang of the People’s Republic of China.
Some of the language is more pro-China than is usual in an academic report but the report is full of credible data.
The bottom line is that there is good news and bad news. The good news is that due to extraordinary intervention the epidemic in China has been brought under control and is slowing to manageable levels.
In the face of a previously unknown virus, China has rolled out perhaps the most ambitious, agile and aggressive disease containment effort in history. The strategy that underpinned this containment effort was initially a national approach that promoted universal temperature monitoring, masking, and hand washing. However, as the outbreak evolved, and knowledge was gained, a science and risk-based approach was taken to tailor implementation. Specific containment measures were adjusted to the provincial, county and even community context, the capacity of the setting, and the nature of novel coronavirus transmission there.
…. China’s bold approach to contain the rapid spread of this new respiratory pathogen has changed the course of a rapidly escalating and deadly epidemic. A particularly compelling statistic is that on the first day of the advance team’s work there were 2478 newly confirmed cases of COVID-19 reported in China. Two weeks later, on the final day of this Mission, China reported 409 newly confirmed cases. This decline in COVID-19 cases across China is real.
… Based on a comparison of crude attack rates across provinces, the Joint Mission estimates that this truly all-of Government and all-of-society approach that has been taken in China has averted or at least delayed hundreds of thousands of COVID-19 cases in the country. By extension, the reduction that has been achieved in the force of COVID-19 infection in China has also played a significant role in protecting the global community and creating a stronger first line of defense against international spread. Containing this outbreak, however, has come at great cost and sacrifice by China and its people, in both human and material terms.
The bad news is that the WHO is worried that other countries do not have the capability or will to implement some of the same policies as China did.
Much of the global community is not yet ready, in mindset and materially, to implement the measures that have been employed to contain COVID-19 in China. These are the only measures that are currently proven to interrupt or minimize transmission chains in humans. Fundamental to these measures is extremely proactive surveillance to immediately detect cases, very rapid diagnosis and immediate case isolation, rigorous tracking and quarantine of close contacts, and an exceptionally high degree of population understanding and acceptance of these measures.
.. COVID-19 is spreading with astonishing speed; COVID-19 outbreaks in any setting have very serious consequences; and there is now strong evidence that non-pharmaceutical interventions can reduce and even interrupt transmission. Concerningly, global and national preparedness planning is often ambivalent about such interventions. However, to reduce COVID-19 illness and death, near-term readiness planning must embrace the large-scale implementation of high-quality, non-pharmaceutical public health measures. These measures must fully incorporate immediate case detection and isolation, rigorous close contact tracing and monitoring/quarantine, and direct population/community engagement.
I don’t think the WHO is the final authority on what to do, public health is their hammer. I have been dismayed, however, at the failure of the CDC, which surely prior to this crisis one would have rated as one of the best US organizations. As the NYTimes wrote:
The Centers for Disease Control and Prevention botched its first attempt to mass produce a diagnostic test kit, a discovery made only after officials had shipped hundreds of kits to state laboratories.
A promised replacement took several weeks, and still did not permit state and local laboratories to make final diagnoses. And the C.D.C. essentially ensured that Americans would be tested in very few numbers by imposing stringent and narrow criteria, critics say.
The failure of the CDC, which is a failure of the US government at the deepest levels, not just rot from the top, meant that we lost several weeks that we may have needed to avoid more stringent measures. We will know more in a week.
Read the whole thing.
Maybe they are the ones who know?
The top 1% are the only affluent group consistently more inclined than the general population to attribute variation in drive and IQ to both internal causes, particularly to innate causes (the top 1% also differ from the other affluent, at p < .01). This said, the affluent are not more dismissive than others of environmental causal explanations. Interestingly, across all income groups, “environmental” explanations for drive and IQ are more popular than the two internal explanations.
That is from a new paper (and here) by Elizabeth Suhay, Marko Klašnja, and Gonzalo Rivero.
What I’ve been reading
1. David Nutt, Drink? The New Science of Alcohol + Your Health.
A very good introduction to the growing body of evidence about the harms of alcohol, in all walks of life.
2. Samuel Zipp, The Idealist: Wendell Willkie’s Wartime Quest to Build One World.
Who cares about Wendell Willkie? I received this review copy determined not to read it, but of course I could not help but crack open the cover and sample a few pages, and then I was hooked. The first thirty pages alone had excellent discussions of early aviation (Willkie was an aviation pioneer of sorts with a cross-world flight), Midwestern family and achievement culture of the time, and the rise of the United States.
3. I was happy to write a blurb for Michael R. Strain’s The American Dream is Not Dead (But Populism Could Kill It).
4. Simon W. Bowmaker, When the President Calls: Conversations with Economic Policymakers.
The interviewed subjects include Feldstein, Boskin, Rubin, Summers, Stiglitz, Rivlin, Yellen, John Taylor, Lazear, Harvey Rosen, Goolsbee, Orszag, Brainard, Alan Krueger, Furman, Hassett, and others.
4. Cheryl Misak, Frank Ramsey: A Sheer Excess of Powers.
Thorough and useful, though not exciting to read.
5. Gabriel Said Reynolds, Allah, God in the Qur’an.
A very good treatment of what it promises, with an emphasis on the concept of mercy in Islam.
6. Sophy Roberts, The Lost Pianos of Siberia.
A wonderful book if you care about the lost pianos of Siberia and indeed I do: “Roberts reminds us in this fresh book that there are still some mysterious parts of our world.” (link here) Also of note is Varlam Shalamov, Sketches of the Criminal World: Further Kolyma Stories, the first third being remarkably moving and incisive as well.
There is also Sidney Powell and Harvey A. Silverman, Conviction Machine: Standing Up to Federal Prosecutorial Abuse is a frank and brutal documentation of why you should never trust a prosecutor or speak to the FBI.
Also new and notable is Lily Collison, Spastic Diplegia–Bilateral Cerebral Palsy: Understanding the Motor Problems, Their Impact on Walking, and Management Throughout Life: a Practical Guide for Families.
Social security and trends in inequality
Recent influential work finds large increases in inequality in the U.S., based on measures of wealth concentration that notably exclude the value of social insurance programs. This paper revisits this conclusion by incorporating Social Security retirement benefits into measures of wealth inequality. Wealth inequality has not increased in the last three decades when Social Security is accounted for. When discounted at the risk-free rate, real Social Security wealth increased substantially from $5.6 trillion in 1989 to just over $42.0 trillion in 2016. When we adjust for systematic risk coming from the covariance of Social Security returns with the market portfolio, this increase remains sizable, growing from over $4.6 trillion in 1989 to $34.0 trillion in 2016. Consequently, by 2016, Social Security wealth represented 58% of the wealth of the bottom 90% of the wealth distribution. Redistribution through programs like Social Security increases the progressivity of the economy, and it is important that our estimates of wealth concentration reflect this.
That is from a new paper by Sylvain Catherine, Max Miller, and Natasha Sarin, I look forward to reading it soon. It is at least possible that the Saez-Zucman results are coming under further question.
Just to repeat part of the abstract, I find this sentence striking: “When discounted at the risk-free rate, real Social Security wealth increased substantially from $5.6 trillion in 1989 to just over $42.0 trillion in 2016.” That’s a lot.
And this one: “Consequently, by 2016, Social Security wealth represented 58% of the wealth of the bottom 90% of the wealth distribution.” Wow.
What makes for a good CEO?
We develop a new method to measure CEO behavior in large samples via a survey that collects high-frequency, high-dimensional diary data and a machine learning algorithm that estimates behavioral types. Applying this method to 1,114 CEOs in six countries reveals two types: “leaders,” who do multifunction, high-level meetings, and “managers,” who do individual meetings with core functions. Firms that hire leaders perform better, and it takes three years for a new CEO to make a difference. Structural estimates indicate that productivity differentials are due to mismatches rather than to leaders being better for all firms.
That is from a new paper by Oriana Bandiera, Andrea Prat, Stephen Hansen, and Raffaella Sadun, forthcoming in the JPE.
Monday assorted links
1. Coronavirus protective shield markets in everything.
2. Does election forecasting itself lower turnout?
3. Ebola spread less under the local chiefs.
4. How much of world gdp has the coronavirus reduced?
5. Dreher interviews Douthat on decadence and different forms of pessimism.
6. Lots of younger Filipino crew members on Diamond Princess also infected.
Free Tool to Run the Double Oral Auction Experiment
The double oral auction was one of the first experiments that Vernon Smith ran. He was expecting to find that the supply and demand model didn’t work. Instead, the results changed his life and led to a Nobel prize:
I am still recovering from the shock of the experimental results. The outcome was unbelievably consistent with competitive price theory. … But the result can’t be believed, I thought. It must be an accident, so I will take another class and do a new experiment with different supply and demand schedules. (Smith 1991)
I’ve run similar experiments in my principles class. The exercise is fun for the students and it’s always amazing to see how quickly the equilibrium is attained even though none of the participants has any idea what the equilibrium price and quantity are. The experiment can be run with paper and pencil or a laptop in a small class but that gets cumbersome for a larger class. Fortunately, there are some free tools.
Here’s Hampton and Johnson describing Kiviq.us.
Kiviq.us provides an online version of the double oral auction that works on all student Internet-enabled devices, including smartphones and iPads, without requiring students or instructors to download any special software. Results can be projected on a screen for debriefing. Instructors can set key parameters. A version with price controls can be setup. The use of the experiment is free for instructors and students. Students do not have to give their email address to play.
The design is the classic market experiment for introducing students to demand and supply. Joseph (1970) makes a strong case for the benefits of the “market experiment” in teaching based on experience with high school and undergraduate students. The original experiment was created by Smith (1962).
….After a trading session, instructors can debrief showing dynamically the history of bids, asks, trades, individual attribution of bids/asks (by clicking the chart), individual total earnings, and the underlying demand and supply curves.
Modern Principles of Economics introduces the supply and demand model and Smith’s classic experiment and thus is an ideal accompaniment.
A coronavirus conundrum, on the percentage of asymptomatic cases
New reports suggest that the coronavirus has been spreading in Washington state for at least six weeks, infecting hundreds or maybe more. At the same time, other reports suggest a high “R0 value,” sometimes 3 or more, reflecting that the coronavirus is highly contagious and it spreads very quickly.
It is then possible to have hundreds of cases in Washington state if most cases are asymptomatic, or with only slight symptoms. Yet when we look at the experiences of the coronavirus cruise ships, it seems a reasonable number of cases have symptoms of distress. For instance, on the Diamond Princess six people died and only about half are listed as having the virus but asymptomatic (see the previous link on the rhs). So many others seem to have reported being sick or requiring treatment.
So what gives? I see a few options, none of them obviously convincing:
1. People on the cruise ship were hit especially hard.
2. Significantly different strains of the virus are circulating (all of the sequence that has been done seems to run counter to this).
3. Washington state local public health infrastructure has in fact been overwhelmed as of late, we just thought it was all a very bad flu season.
4. Many of the people on the cruise ship who showed symptoms “thought they were supposed to” but were not actually so sick.
5. Most of the detected cases on the cruise ship in fact were asymptomatic, but the media has been misreporting the extent of actual illness among the passengers.
Any other suggestions? It is quite likely the cruise ship people are older than usual, but will that make up for the entire difference? People, what do you think is going on here?
Please restrict your comments to attempting to resolve this particular issue, as you can put your more general coronavirus observations on other posts.