Jeff Asher on manipulating crime data
Jeff Asher: Within a city, within a district, there are times, either by mistake or by intention, that an agency will manipulate a certain type of crime. There are times where things will get underreported. There will be mistakes. There are times where things will get over reported and there will be mistakes. But because there’s 18,000 individual agencies reporting data, usually when the data is wrong, it’s obviously wrong.
It’s like Chicago reporting, you know, six murders in a month when the city averages over 20, and in some years more than that. Way more than that. It’s when you’ve seen these sharp drops in crime all of a sudden when a data reporting system changed. But to manipulate national crime data would be virtually impossible. I think that’s the value of being able to go and get it from each individual city. You can draw your conclusions and audit agencies that look wrong and still come to the correct conclusion. And I’ll note the FBI has seven major categories of crime that they collect. And there are ten different population groups. Every one of those population groups in every category of crime reported a decline in 2024, per the FBI. So it’s not a big blue city thing. It’s a small city thing. It’s a suburb thing. It’s a rural county thing. It’s a big city thing. It’s everywhere…
But of the 30 cities that reported the most murders to the FBI in 2023, murders are down in 26 of them. We’re seeing a 20% drop in murder, a 10% drop in violent crime, a 13% drop in property crime. Whereas in 2024 murder fell a lot and auto theft fell a lot, now it’s pretty much that everything is falling a considerable amount.
Here is his full dialogue with Paul Krugman. And here is Jeff’s YouTube channel on the same topics. Yes, I know public disorderliness is up in some regards. But do not use that as an excuse to mood affiliation with an extremely negatively view of the trends!
Model this?
The gap between US companies’ borrowing costs and US Treasury yields has shrunk to its smallest since 1998, after a red-hot rally in global credit markets that investors warn is underplaying threats to the world economy.
The cost of borrowing for investment-grade companies in US and Eurozone credit markets is 0.75 and 0.76 percentage points above benchmark government bond yields, respectively, according to Ice BofA data. This took spreads in the two markets — a proxy for the risk of default — on Friday to their lowest levels since 1998 and 2018, respectively.
Here is more from the FT, macroeconomics remains an art not a science. In any case, this is yet another sign that current volatility is perhaps not as high as it might feel from reading social media?
Scott Sumner is still the greatest movie critic in the world
Here is the intro:
Over time, I’ve noticed that an unusual number of important films came out in the late 1950s and early 1960s. In this post, I’ll argue that the period from 1958 to 1963 is the artistic peak of filmmaking. So what is the evidence for this claim? I certainly won’t argue that the films discussed below are the most popular among the general public. Rather this period is especially important for serious film buffs. [I’ll conclude this post with an contrary view.]
In contrast to the general public, film buffs see a close correlation between “great films” and “films made by great directors.” And almost any list of the greatest directors of all time is going to be dominated by people who did much of their best work around 1960. For instance, in one list of the 250 greatest directors of all time, 11 of the top 13 directors were doing important work around 1960. (The other two were Coppola and Scorsese.) But why 1960? It’s not nostalgia on my part; I was too young to see these films when they came out. And note that the 1958-63 period of great films immediately preceded the golden age of pop music (roughly 1964-69.)
Go through Scott’s list in the post people, you have treasures awaiting you! I should add that I see another, arguably equally valid peak period in the early to mid-1970s, and for popular music too.
Saturday assorted links
1. Ten year old Indian girl beats grandmaster in chess.
2. Low birthrates today forecast low house price appreciation in the future.
3. Dubov on working with Magnus (subtitles in English).
4. One hypothesis about the best news in America right now.
5. TFR in Heilongjiang, Manchuria is about 0.52.
6. No, conscientiousness has not collapsed amongst the young.
Bird trivia
Potvin’s team dissected and examined the bodies of nearly 500 birds belonging to five common Australian species: the Australian magpie, laughing kookaburra, crested pigeon, rainbow lorikeet, and the scaly breasted lorikeet(…)In addition to identifying the birds’ reproductive organs, researchers also tested their DNA to reveal their genetic sex.
The team was surprised to find sex-reversed individuals in all five species, at rates of 3% to 6%. Nearly all these discordant birds were genetically female but had male reproductive organs. However, the researchers also found a few genetic males with ovaries—including a genetically male kookaburra with a distended oviduct, indicating it had recently laid an egg(…)
Here is the full article by Phie Jacobs. Via John.
A median voter theory of right-wing populism
From a recent paper:
Populists are often defined as those who claim that they fill “political representation gaps” -differences between the policymaking by established parties and the “popular will.” Research has largely neglected to what extent this claim is correct. I study descriptively whether representation gaps exist and their relationship with populism. To this end, I analyze the responses of citizens and parliamentarians from 27 European countries to identical survey policy questions, which I compile and verify to be indicative of voting in referendums. I find that policymaking represents the economic attitudes of citizens well. However, I document that the average parliamentarian is about 1SD more culturally liberal than the national mean voter. This cultural representation gap is systematic in four ways: i) it arises on nearly all cultural issues, ii) in nearly all countries, iii) nearly all established parties are more culturally liberal than the national mean voter, and iv) all major demographic groups tend to be more conservative than their parliamentarians. Moreover, I find that demographic differences between voters and parliamentarians or lack of political knowledge cannot fully account for representation gaps. Finally, I show that right-wing populists fill the cultural representation gap.
That is by Laurenz Guenther. I am myself (largely) a cultural liberal, so I am not siding with the right-wing populists here. But let us be clear what is going on. The right-wing populists are gaining ground in so many countries because the cultural liberals in various parliaments and congresses are extremely reluctant to meet the preferences of their median voters. On the immigration issue most of all. And then they wish to talk about threats to democracy!
The whole thing is really quite tragic. Whether you are willing to admit this state of affairs to yourself is one of the better measures of self-awareness in our current political environment. tekl.
“A bunch of economists”
Here is the link.
Friday assorted links
3. Using drones to study sperm whales (NYT).
4. Some pointers for whether something is AI-written.
5. MIE: New app lets people buy tickets for strangers wedding. “Generally, there could be five to 10 paid strangers at one of the ceremonies, costing an average of €100 to €150 per guest.”
6. Text as data in economic analysis.
7. Can space gas help repair damaged Old Masters?
9. New Dan Klein book, The Spirit of Smithian Laws, with free pdf download.
What should I ask David Commins?
Yes, I will be doing a Conversation with him. David recently published Saudi Arabia: A Modern History, a very good and useful book. He has numerous other books on Wahhabism, the history of the Gulf region, and also Syria. Currently he teaches at Dickinson College.
So what should I ask him?
Tabarrok on Flight Delays
Tyler already linked to Max’s excellent post on flight delays but Fortune gives you the backstory:
On one sweltering summer afternoon in June, thunderstorms rolled over Boston Logan International Airport. It was the kind of brief, predictable summer squall that East Coasters have learned to ignore, but within hours, the airport completely shut down. Every departure was grounded, and flyers waited hours before they could get on their scheduled flights.
Among those stranded were Maxwell Tabarrok’s parents, in town to help move him into Harvard Business School, where he is completing an economics PhD. Tabarrok told Fortune he was fascinated by how an entire airport could grind to a halt, not because of some catastrophic event, but due to a predictable hiccup rippling through an overstretched system.
So, he did what any good statistician would: dive into the data. After analyzing over 30 years—and 100 gigabytes—of Bureau of Transportation Statistics data, he found out his parents’ situation wasn’t bad luck: Long delays of three hours or more are now four times more common than they were 30 years ago.
Not only that, but Tabarrok found airlines are trying to hide the delays by “padding” the flight times—adding, on average, 20 extra minutes to schedules so a flight that hasn’t gotten any faster still counts as “on time.” Thus, on paper, the on-time performance metrics have improved since 1987, even as actual travel times have gotten longer.
We had a can’t miss appointment the next morning and ended up renting a car and driving through the night from Boston to the Washington. Glad Max got a great post out of it!
Dylan Matthews interviews Anne Krueger
MATTHEWS: What was the debate about import substitution like at this point, in the late 1950s/early 1960s?
KRUEGER: The whole profession believed in import substitution. Almost without question. Even Gottfried Haberler, in his lectures in 1959, said that, of course, infant industry substitution by the developing countries was acceptable. Go back and look at the Cairo lectures. It’s in there.
MATTHEWS: Would you say that was how you were thinking about import substitution at the time?
KRUEGER: It didn’t quite ring true. More than that, just seeing how import substitution was working made me skeptical. Lawyers who do trade law are more pro free trade than economists, because they know how badly protection works. A distorted economy is terrible. Not just a little bad—import substitution probably cut growth rates in half of what they could have been.
Here is the entire dialogue.
Optimal Tariffs with Geopolitical Alignment
Here is a new NBER working paper:
As geopolitical tensions intensify, great powers often turn to trade policy to influence international alignment. We examine the optimal design of tariffs in a world where large countries care not only about economic welfare but also about the political allegiance of smaller states. We consider both a unipolar setting, where a single hegemon uses preferential trade agreements to attract partners, and a bipolar world, where two great powers compete for influence. In both scenarios, we derive optimal tariffs that balance terms-of-trade considerations with strategic incentives to encourage political alignment. We find that when geopolitical concerns are active, the optimal tariff exceeds the classic Mill-Bickerdike level. In a bipolar world, optimal tariffs reflect both economic and political rivalry, and may be strategic complements or substitutes. A calibration exercise using U.N. voting patterns, an estimate of the cost of buying votes in the U.N., and military spending suggests that geopolitical motives can significantly amplify protectionist pressures and that the emergence of a second great power can contribute to a retreat from globalization.
The authors are
“In the interests of realism, we also consider models where the government a) seeks to maximize returns from corrupt side-bargains, b) seeks to maximize public treasury revenue beyond an optimal level, for Leviathan-like reasons, and c) considers behavioral postulates for policymakers who have an ungrounded attachment to protectionist ideas. The results then change as follows…”
This is after all 2025, and economics is supposed to have a descriptive component. I will make two other points:
1. The paper’s insight about how and why the rise of China may have contributed to the shinking of the pace of globalization is quite valuable, and as far as I know original.
2. This shows once again how the economics profession produces research at least supposedly defending a degree of protectionism, and how its top (non-libertarian) contributors refuse to acknowledge that. At the same time, those people do not wish to consider public choice arguments of the sort that would overturn those conclusions, because such a public choice perspective would have unwelcome implications across a broader range of issues.
Let’s go the corruption and Leviathan and ideology postulate routes with the analysis, you’ll still end up with a good case against Trump. It’s just that it will force you to reexamine some of your other priors.
Data center facts of the day
JLL estimates $170bn of assets will require construction lending or permanent financing this year. Between now and 2029, however, global spending on data centres will hit almost $3tn, according to Morgan Stanley analysts. Of that, just $1.4tn is forecast to come from capital expenditure by Big Tech groups, leaving a mammoth $1.5tn of financing required from investors and developers.
About $60bn of loans are going into roughly $440bn of data centre development projects this year, twice as much debt as in 2024, according to a recent presentation by law firm Norton Rose Fulbright. More than $25bn of loans were underwritten in the first quarter of this year alone, according to a report by Newmark.
Here is more from a very good FT article.
Chicago facts of the day
The University of Chicago has now borrowed $6.3 billion, more than 70 percent of the value of its endowment. The cost of servicing its debt is now 85 percent of the value of all undergraduate tuition. (This is not normal. No peer institution has a debt-to-asset ratio greater than 26 percent. Perhaps that is one reason why Chicago’s tuition is so high and yet it wants to spend so little on education?)
Here is the full story. Via Anecdotal.
Thursday assorted links
1. Everything Kevin Kelly knows about self-publishing.
2. Technically Economics, new podcasts by Harvard economics graduate students.
3. Notes on Aberdeen, by Gavin Leech. Notes on Glasgow. Notes on Bristol.
4. Jason Furman on BLS (NYT).
5. Are humans running out of fresh water?
6. Why did people dress better in the past? A good thread.