Carrying costs > liquidity premium, and not only pandas have a fertility crisis
A zoo in Finland has agreed with Chinese authorities to return two loaned giant pandas to China more than eight years ahead of schedule because they have become too expensive for the facility to maintain amid declining visitors.
The private Ähtäri Zoo in central Finland some 330 kilometers (205 miles) north of Helsinki said Wednesday on its Facebook page that the female panda Lumi, Finnish for “snow,” and the male panda Pyry, meaning “snowfall,” will return “prematurely” to China later this year.
The panda pair was China’s gift to mark the Nordic nation’s 100 years of independence in 2017, and they were supposed to be on loan until 2033.
But since then the zoo has experienced a number of challenges, including a decline in visitors due to the 2020 coronavirus pandemic and the conflict between Russia and Ukraine, as well as an increase in inflation and interest rates, the facility said in a statement.
Here is the full NPR story.
*Megalopolis* (only modest spoilers)
A fascinating movie, far more interesting than most of the slop they send your way. And it is visually stunning, with an excellent cast to boot.
One is never quite sure how to feel about what is shown on the screen, but one side of forces here are pro-growth, pro-billionaire, pro-YIMBY, and pro-science. The film itself is strongly anti-crowd and anti-populist. Contra some other recent trends, there is one trans character and that person is a villain.
It is all set in a future “alternate universe” America, where something like the Roman Senate rules and society is falling apart, both stagnant and decadent. Exactly who or what was at fault? In this parallel universe, there is no internet, few immigrants, and very little feminization. Women are sexually attractive and voracious, yet kept in their place. Some other technologies are quite advanced — physical technologies — so that a miracle city can be built. Should it be built? Can it be built? That is a central theme of the plot.
To be sure, the film has flaws galore. Some parts of the plot make no sense, and Coppola repeatedly chooses to go “over the top,” when most of the time he did not have to. Periodically the characters lapse into Latin or quote Shakespeare. The plot at some points ceases to be linear. I am uncertain how to interpret the implied politics, but I am pretty sure they are not mine.
I was never tempted to walk out, nor did it ever drag.
Matt Yglesias has a good and perceptive review.
Meta-lesson: Don’t let them tell you when to retire.
Newsom vetoes AI bill
California Gov. Gavin Newsom has vetoed a controversial artificial-intelligence safety bill that pitted some of the biggest tech companies against prominent scientists who developed the technology.
The Democrat decided to reject the measure because it applies only to the biggest and most expensive AI models and leaves others unregulated, according to a person with knowledge of his thinking. Smaller models could prove just as problematic, and Newsom would prefer a regulatory framework that encompasses them all, the person added.
Had Newsom signed the bill into law, it would have laid the groundwork for how AI is regulated across the U.S., as California is home to the top companies in the industry. Proposals to regulate AI nationally have made little progress in Washington.
The governor is hoping to work with AI researchers and other experts on new legislation next year that could tackle in a more comprehensive way the same concerns of the bill he vetoed—about AI acting in ways its designers didn’t intend and causing economic or societal damage, the person with knowledge of his thinking said.
Here is more from the WSJ.
Sunday assorted links
1. The changing federal pay scale. I guess things must run much better now with all those experienced workers.
2. Do Anglo-Saxon directors raise debt levels?
3. When I first met Matt, the first thing I said was “Matt Levine, only you can do what you do!” Here is Gwern.
4. Do dogs resemble their owners?
5. The railroads did in fact matter a great deal for U.S. productivity.
6. Does terrorism work, but for its supporters only?
7. Methods of Israeli intelligence (FT).
How tenure should be granted, circa 2024
Not just on the basis of what you publish, but on what you contribute to the major AI models. So if you go to a major archive and, in some manner, turn it into AI-readable form, that should count for a good deal. It is no worse than publishing a significant article, though of course depending on the quality of the archive. As it stands today, you basically would get no credit for that. You would instead be expected to turn the archive into articles or a book, even if that meant unearthing far less data for the AIs. Turning data into books takes a long time — is that always what humans should be doing?
Articles still count under this standard, as jstor seems to be in the literary “diet” of the major AI models. Wikipedia contributions should count for tenure, and any “hard for the AI to access data set” should count for all the more. Soon it won’t much matter whether humans read your data contribution, as long as the AIs do.
So we’re all going to do this, right? After all, “how much you really contribute to science” is obviously the standard we use, right? Right?
*Emancipation*
The author is Peter Kolchin, and the subtitle is The Abolition and Aftermath of American Slavery and Russian Serfdom. Here is one interesting excerpt of many:
Despite the surge in schools and teachers after 1880, Russian peasant children were considerably less likely to receive schooling than were African American children, especially if they were girls. As the statement about not needing literacy in order to make cabbage soup indicated, the subordination of females that characterized Russian society in general was as evident in peasant education as in any other sphere of life. Statistics on school attendance by sex indicates that, in contrast to former slaves in the Southern United States, for whom serfs in Russia rarely sent their daughters to school during the 1860s and 1870s, regarding it as a waste of time that would fill their heads with needless knowledge and make them less fit for their feminine duties. The evidence is consistent and overwhelming. Among African Americans in the Southern United States, girls were at least as likely as boys to attend school: the Freedmen’s Bureau Consolidated Monthly School Report for June 1867, for example, listed 45,855 male and 52,981 female pupils in the schools that it monitored throughout the South; in almost every state, female pupils outnumbered male pupils and there were slightly more males than females. The decennial census returns showed a similar pattern between 1870 and 1910: school enrollment rates in the United States for Black children aged five to nineteen (the great majority of whom lived in the South) were fairly evenly balanced between the sexes, with female rates slightly higher than male in four of the five census years. (The male rate was slightly higher than the female in 1880.)
You can buy the book here.
Saturday assorted links
1. Imports do not subtract from gdp.
2. A duet?
3. How to improve dynamic scoring for the budget.
4. Fresh Beeple.
5. CNN coverage of El Salvador shows the vibe shift.
6. Fresh Vitalik.
7. “A 25 year old woman’s type 2 diabetes was cured with stem cells taken from her own body.”
8. Kyla Scanlon profile (WSJ).
9. Is India the next great cheese frontier? (WSJ)
10. More and more young people are taking disability benefits (FT).
USA vs. UK fact of the day
Nixon’s ten percent import duty
That is the topic of my latest Bloomberg column, with a big assist from Doug Irwin. Here is one excerpt:
In 1971, President Richard Nixon imposed a 10% tax on foreign goods brought into the US, and kept it in place for four months. The best that can be said about this experience, well-documented by Dartmouth economist Douglas A. Irwin in a 2012 essay, is that the US economy survived it.
That is hardly good news, but it is a partial comfort. At the time, Republican officials were demanding an end to undervalued foreign currencies, better trade treatment of US exports and more spending on defense by US allies. (Sound familiar?) After this rhetoric and policy, however, came an era of trade liberalization. The costs of protection and the incentives for freer trade simply proved too strong, and subsequent presidents of both parties oversaw tariff reductions.
In 1971, Nixon’s key demand was specific: Countries had to let their currencies float upward against the US dollar. The goal was to weaken the dollar in relative terms and thus help US exports.
And these key points:
After imposing the tariff, and much negotiation, the US did receive something concrete in return: More countries allowed their currencies to float against the dollar — notably the yen, the mark and the franc. Those moves then led to a broader collapse of the Bretton Woods fixed exchange rate system, and accelerated the arrival of floating exchange rates with the Smithsonian agreement of December 1971.
Trump has no equivalent concrete demands for US trading partners. Nixon’s demand to let the exchange rates float was something that could happen immediately and was fully transparent. And it was virtually impossible to reverse. Once it happened, the US could remove the import duty. The other demands of the time — better treatment of US exports and more burden-sharing for defense — went largely unheeded, as it is much harder to negotiate over such long-term and hard-to-define changes.
Recommended.
A new schizophrenia drug
One of the most satisfying aspects of covering biotech as long as I have is the opportunity to report on the long arc of drug development, from start to finish. It’s not always pretty, and more often than not, it ends badly.
But KarXT, now Cobenfy, is one of those drug stories with a happy ending. I remember talking to Steven Paul in 2019 for a story about the phase 2 results, which were pretty remarkable. Paul was excited about what KarXT might mean for people with schizophrenia, but he was cautious because, as he warned me at the time, clinical trials for psychiatric conditions are extraordinarily difficult to replicate. Let’s wait to see what KarXT does in Ph3 trials, he said.
Now, we know.
It’s been cool to follow and report on the KarXT story all these years. From PureTech to Karuna to Bristol Myers Squibb, and now, to approval, where Cobenfy will have a meaningful impact on people living with schizophrenia.
That is from Adam Feuerstein, who also links to StatNews:
The drug, called Cobenfy, will be sold by Bristol Myers Squibb. It was developed by the biotech company Karuna Therapeutics, which Bristol acquired for $14 billion last year.
Supply is elastic, people. And we live in a (potential) golden age for biomedical advances.
Crime vs. disorder
A similar pattern emerged in my recent report on crime in Washington, D.C. There, too, there are signs that disorder has risen, relative to both the pandemic and pre-pandemic, as the police have attended to it less. Unsheltered homelessness, unsanitary conditions, shoplifting, farebeating—all seem to have become more common in D.C. And those problems have come as a smaller police force has deprioritized order enforcement—if you look at table 2 of that report, you’ll see that arrests for minor crimes were down as much as 99% in 2023 relative to 2019.
I increasingly think this is a more general phenomenon. Disorder is not measured like crime—there is no system for aggregating measures of disorder across cities. But if you look for the signs, they are there. Retail theft, though hard to measure, has grown bad enough that major retailers now lock up their wares in many cities. The unsheltered homeless population has risen sharply. People seem to be controlling their dogs less. Road deaths have risen, even as vehicle miles driven declined, suggesting people are driving more irresponsibly. Public drug use in cities from San Francisco to Philadelphia has gotten bad enough to prompt crack-downs.
These are fuzzy signals, but they jive with my personal experience (for whatever that is worth). In the half-dozen cities I’ve visited in the past year, visible disorder has been a common feature.
Here is more from Charles Fain Lehman.
Friday assorted links
1. “men do okay, but women usually win…”
2. Ed Glaeser on the Jon Hartley podcast.
3. Is bad service the sign of a better world?
4. Bari Weiss media start-up valued at $100 million.
5. Malcolm Gladwell on his new book and his development (NYT).
6. Scott Sumner on artistic styles.
7. As the worker shortage in Tokyo grows, workers are demanding ever-shorter commutes (FT). Prices are adjusting accordingly.
8. The Brian Eno AI movie (FT).
On the price of Ozempic
That is the topic of my latest Bloomberg column, here is one excerpt:
As for consumer prices for the current obesity drugs, they are not as high as is often reported, once the various ways to get a discount are taken into account. Despite reports that the drugs cost $1,000 per month, the reality is more favorable. Even putting aside insurance coverage, readily available discounts can cut that price in half. Eli Lilly & Co. recently introduced online sales of Zepbound vials for $399 a month.
Lurking in the background are “compounded” versions of these drugs, which are pharmacy-produced copies, permitted by law when there is a shortage of the core drugs. These compounds do not undergo the same inspection processes as the brand names, and their safety and efficacy has been questioned. But they are easy to get and relatively cheap. This is an example of competition, however imperfect and in need of oversight, lowering prices — and in a less clumsy manner than a government price control.
Are we right now getting anything close to optimal price discrimination, or not?
“Despair” and Death in the United States
Increases in “deaths of despair” have been hypothesized to provide an important source of the adverse mortality experiences of some groups at the beginning of the 21st century. This study examines this possibility and uncovers the following primary findings. First, mental health deteriorated between 1993 and 2019 for all population subgroups examined. Second, these declines raised death rates and contributed to the adverse mortality trends experienced by prime-age non-Hispanic Whites and, to a lesser extent, Blacks from 1999-2019. However, worsening mental health is not the predominant explanation for them. Third, to extent these relationships support the general idea of “deaths of despair”, the specific causes comprising it should be both broader and different than previously recognized: still including drug mortality and possibly alcohol deaths but replacing suicides with fatalities from heart disease, lower respiratory causes, homicides, and conceivably cancer. Fourth, heterogeneity in the consequences of a given increase of poor mental health are generally more important than the sizes of the changes in poor mental health in explaining Black-White differences in the overall effects of mental health on mortality.
Cutting welfare for immigrants
That is quite a popular policy, including with libertarian open borders types, but it does not always work out well:
This paper studies the effects of a large welfare benefit reduction on the children in the affected families. The welfare cut targeted adult refugees who received residency in Denmark, and it reduced their disposable income by 30 percent on average over the first five years. We show that children exposed to the welfare cut during preschool and school-age obtained lower GPAs, experienced reduced well-being and overall education levels, and suffered lower employment and earnings as adults. Children in their teens at exposure faced large increases in conviction probabilities for violent and property crimes.
That is from a new AEJ piece by Christian Dustmann, Rasmus Landersø, and Lars Højsgaard Andersen, and here are less gated copies of the work. A variety of different groups will not like it when I say this, but at least sometimes immigration flows and a welfare state are complements.