Results for “age of em” 17236 found
The death of football, installment #1437
…the NFL is seeing its ratings tumble in the same way that the Olympics, awards shows and other live events have, falling more than 10 percent for the first five weeks of the season compared with the first five weeks of last season. A continued slide, executives say, could pose an even bigger danger: If football can’t survive the new age of TV, what can?
Football’s traditional TV audience “is never going to be what it was again,” said Brian Hughes, a senior vice president at Magna Global, which tracks audience and advertising trends.
The explosion of modern entertainment options, offered on more devices and at any time, has splintered American audiences and sped TV’s decline, Hughes said. “Sports seemed to be immune from it — it was live, the last bastion of broadcast television. But [the world] has caught up to it now.”
That is from Drew Harwell, and much of the decline seems to be coming from cord-cutting, audience fragmentation, and also the presence of a somewhat controversial election season, which has drawn some viewers (not me) to cable news.
Does Diversity Reduce Freedom or Growth?
The founding father of Singapore, Lee Kuan Yew, credits ‘social discipline’ for the phenomenal economic rise of his country (Sen, 1999). Countries such as Singapore apparently demonstrate that autocratic measures are probably necessary, particularly in culturally fractionalized societies for creating the social stability necessary for economic growth (Colletta et al., 2001). Such thinking informs the so-called “Asian model” (Diamond, 2008).1 Recent studies, particularly in economics, support the logic (Alesina et al., 2006 and Easterly et al., 2006). According to these scholars, the more congruent territorial borders are with nationality, the better the chances for good economic policy to appear endogenously from within these societies because social cohesion determines good institutions and policies for development (Banerjee et al., 2005 and Easterly, 2006b). This paper addresses the question of whether or not social diversity hampers the adoption of sound economic policies, including institutions that promote property rights and the rule of law. We also examine whether democracy conditions diversity’s effect on sound economic management, defined as economic freedom, because the index of economic freedom is strongly associated with higher growth and is endorsed by proponents of the ‘diversity deficit’ argument (Easterly, 2006a).2
…Using several measures of diversity, we find that higher levels of ethno-linguistic and cultural fractionalization are conditioned positively on higher economic growth by an index of economic freedom, which is often heralded as a good measure of sound economic management. High diversity in turn is associated with higher levels of economic freedom. We do not find any evidence to suggest that high diversity hampers change towards greater economic freedom and institutions supporting liberal policies.
Paper here. The data is a panel from 116 countries covering 1980–2012 so this doesn’t rule out a negative long-run effect but it is prima facie evidence that diversity need not reduce freedom or growth.
Sunday assorted links
1. Ursula Le Guin profile. And Bob Dylan as Richard Wagner.
2. Tom Sietsema on the Michelin picks for D.C.
3. Maria Konnikova reviews Tim Harford at NYT.
4. Inaction markets in everything, age of television college football edition.
5. David Warsh on the Laureates.
6. If you could get everyone to read one book, what would it be? I find most of the listed answers strange, and overly specific, and dependent on the readers already knowing plenty of other books. Surely your selection needs to be a bestseller if indeed by “everyone” you mean everyone. I find The Bible, Krishnamurti’s Think on These Things, or even Jonathan Livingston Seagull, or perhaps a book about the enjoyment of sex, to be more plausible picks. Which book would you recommend?
I guess I was traveling when Congress took the vote on this one
The Americans are providing targeting intelligence and refueling Saudi warplanes involved in bombing rebel positions. But coalition strikes have also destroyed hospitals, markets and residential neighborhoods, killing large numbers of civilians.
Last Saturday, airstrikes by the Saudi-led coalition killed more than 100 people at a funeral in Sana, shown above. More than 10,000 people have been killed in the war, according to the United Nations, and the threat to civilians has increased since the collapse of peace talks in August.
After the Houthi rebels launched two failed missile attacks at an American warship in the Red Sea, another American vessel destroyed three radar installations in Yemen.
I do not know what is correct American policy in this conflict, but is it so wrong to have wished to have seen a Congressional vote and thereby Congressional accountability? Now that the conflict has heated up, will this be happening anytime soon? Is anything stopping the President from requesting it? Didn’t my whole Twitter feed just decide they want a President who respects the Constitution and the rule of law?
Here is the full story (NYT), short but useful and informative in any case.
Saturday assorted links
4. Is the House really on the line?
5. Wallonia blocks EU-Canada trade deal.
6. Sky Ladder is a splendid documentary, Netflix. It’s the story of Cai Guo-qiang, probably the world’s greatest active artist, and his quest to produce a truly amazing artistic display for his 100-year-old grandmother before she passes away. it is also one of the best movies about contemporary China, or for that matter art and politics.
Claims about Thailand
Another dimension of royal power is the monarchy’s vast financial holdings, estimated to be worth tens of billions of dollars. Principal among these is the Crown Property Bureau, which holds large amounts of land and has stakes in many big industries. The throne is also an important source of business patronage, including through the awards of royal warrants to companies. One past recipient was King Power, the duty-free business of Vichai Srivaddhanaprabha, owner of Leicester City, the English Premier League football champions.
That is from the Financial Times. Have any of you seen good analytical pieces on the future of Thailand, after the passing of the King? I believe their economy has more rot than is sometimes recognized.
Why announce your secret, unprecedented cyberstrike against Russia?
My Twitter feed is mocking the policy behind this news report, but of course it makes perfect sense. Here goes:
1. The United States wishes to have it be common knowledge that it can embarrass Putin. But in fact maybe it can’t! (At least not with a policy we are willing to bear the consequences of.) So why not threaten that you can? A truly secret strike probably would hurt him less than an embarrassment. So start investing in the embarrassment now.
2. If the U.S. does do something cyber against Russia, it may wish to signal in advance that it won’t be truly severe, so as to limit retaliation and lower the probability of ongoing escalation. Some public discussion can achieve this end. Truly devastating blows are in fact usually delivered in secret.
3. There is a chance that the U.S. can’t/won’t do much if anything against Russia at all. In that case third parties (Iran, China) may not know this for sure, and the announcement may have a slight deterrent value in their direction.
4. It may not be possible to understand the entire American strategy without knowing the private messages that are being sent to Putin at the same time. For instance, the overall strategy may be “announce a coming mild retaliation and privately threaten a more severe action.” Is that really so out of place? Probably not.
In other words, “announced secrets” sometimes can make perfect sense.
Arbitrary power at the CFPB
That is the Consumer Financial Protection Bureau, part of Dodd-Frank. Here is the Wall Street Journal on the recent court decision to restrict the powers of the Bureau:
The panel’s decision limited the broad discretion granted the five-year-old Consumer Financial Protection Bureau in the name of tilting the balance of power from industry to small borrowers, calling it a “gross departure” from the checks and balances normally imposed on regulatory agencies.
…If it stands, the decision from the U.S. Court of Appeals for the District of Columbia would reduce the agency’s independence, empowering the White House to supervise the agency and remove its director, in contrast to the current arrangement where the director’s five-year term is intended to outlast a president’s.
…In Tuesday’s ruling by a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, Judge Brett Kavanaugh, a George W. Bush appointee, wrote that Congress gave the CFPB director “more unilateral authority than any other officer in any of the three branches of the U.S. government, other than the president.” He said the problem of checks and balances was particularly acute because the CFPB “possesses enormous power over American business, American consumers and the overall U.S. economy.”
Megan McArdle offers comment. Here are remarks from Kevin Drum. I say the regulatory state already has too much arbitrary power, and this is a (small) move in the right direction.
Piketty, Housing, and Capital Share
Gianni La Cava has a very interesting article (based on a longer paper) on what accounts for the rising share of capital in the income accounts:
A key observation in Thomas Piketty’s Capital in the Twenty-First Century (Piketty 2014) is that the share of aggregate income accruing to capital in the US has been rising steadily in recent decades. The growing disparity between the income going to wage earners and capital owners has led to calls for government intervention. But for such interventions to be effective, it is important to ask who the capital owners are.
Recent research has shown that the long-run rise in the net capital income share is mainly due to the housing sector (e.g. Rognlie 2015, Torrini 2016 – see Figure 1). This phenomenon is not specific to the US but has been evident in almost every advanced economy. This suggests that it is not entrepreneurs and venture capitalists that are taking an increasing share of the economy, but land owners.
…The decomposition of the national accounts by type of housing indicates that the secular rise is mainly due to a rising share of imputed rent going to owner-occupiers. The owner-occupier share of aggregate income has risen from just under 2% in 1950 to close to 5% in 2014 (top panel of Figure 2). The share of income going to landlords (i.e. market rent) has also doubled in the post-war era. But, in aggregate, the effect of imputed rent is larger simply because there are nearly twice as many home owners as renters in the US economy. A similar phenomenon is observed in the personal consumption expenditure data (bottom panel of Figure 2). In other words, today’s landed gentry are predominantly home owners, not private landlords.
…The geographic decomposition reveals that the long-run rise in the housing capital income share is fully concentrated in states that face housing supply constraints. To see this, I divide the states into ‘elastic’ and ‘inelastic’ groups based on whether the state is above or below the median housing supply elasticity index (as measured by Saiz 2010). This index captures both geographical and regulatory constraints on home building across different US regions. For 50 years, the share of total housing capital income going to the supply-elastic states has been unchanged at about 3% of GDP (Figure 3). In contrast, the share going to the supply-inelastic states has risen from around 5% in the 1960s to 7% of GDP more recently. Notably, these divergent trends in housing capital income are not due to a few ‘outlier’ states where housing supply is particularly constrained, such as New York or California – instead, there is a clear negative correlation between the long-run growth in housing capital income and the extent to which housing supply is constrained across all states (Figure 4).
Thursday assorted links
1. David Beckworth podcast with Claudio Borio. And Stuart Warner interviews Peter Thiel.
2. Cass Sunstein picks five books to represent conservative thought.
3. Baby elephant topology problems (very short video).
4. What Beirut did wrong with its rebuilding.
5. Neoliberal Daniel Davies on passporting of financial services.
What I’ve been reading
1. Stephen M. Bainbridge and M. Todd Henderson. Limited Liability: A Legal and Economic Analysis. One of this year’s sleeper books, it is probably the best extant treatment of corporate limited liability and one of the best books on the corporation from a law and economics point of view. I do not understand how it ended up at $133 from Edward Elgar.
2. William F. Buckley, edited by James Rosen, A Torch Kept Lit: Great Lives of the Twentieth Century. Obituaries penned by WFB, fascinating throughout. One forgets what a lucid writer he was, and some of the more unsettling entries (MLK, John Lennon) are some of the most interesting.
3. Afghan Modern: The History of a Global Nation, by Robert D. Crews. The history of globalization in Afghanistan and of Afghanistan, highly intelligent and good material on just about every page. A model for how to take a now somewhat cliched topic and make something original out of it.
4. Morton H. Christiansen and Nick Chater, Creating Language: Integrating Evolution, Acquisition, and Processing. Have you ever wondered what is the actual professional status of Chomskyian linguistics and other claims you read in popular science books? This is the go-to work to address that question, it is written at the right level of serious rigor yet readability for a non-linguist such as myself.
Frank Ahrens, Seoul Man: A Memoir of Cars, Culture, Crisis, and Unexpected Hilarity Inside a Korean Corporate Titan. A fun take on exactly what the subtitle promises.
I can apply that same description to Joseph Turow, The Aisles Have Eyes: How Retailers Track Your Shopping, Strip Your Privacy, and Define Your Power.
Rabbi Mark Glickman, Stolen Words: The Nazi Plunder of Jewish Books. I found this moving and extremely well-presented.
From The Adam Smith Institute
So it’s official. As of today we are no longer a libertarian think tank. We’re neoliberals. And maybe you are too.
Here is the link. Here Sam Bowman, the Executive Director, explains:
And I think to most people in Britain the word libertarian connotes a sort of unflexible extremeness – a preoccupation with hard-and-fast rules over policies that actually make people’s lives better. It was this misconception that allowed the Prime Minister get away with equating the libertarian right with the socialist left, as if the two were somehow comparable…
So in embracing the term neoliberal, we’re hoping that we’re being a little clearer about what we already believe in and do. We fight for free markets, property rights, globalisation and an open society, all based on real-world evidence. Those are what have given us the rich, peaceful, prosperous world we live in, and with more of them we can help to make things even better. It’s time for us neoliberals to start going on the offensive and fight for the world we have helped to create.
I do not have sufficient background on the situation to parse this, but perhaps it is also one way of signaling that they are anti-Brexit, and the word libertarian would not do that, and might even suggest they favored Brexit as a means for arriving at a more libertarian society (which by the way is not how things are running). A neoliberal one would think favors arrangements for free trade and migration.
Addendum: Here is their home page.
Tuesday assorted links
1. Luigi Zingales on the Laureates. And the full 49-page report on the Laureates, from Sweden. And David Warsh on Holmström on debt and banking. Cardiff Garcia on Bengt on money. Kling on the prize. Boettke on the prize. A Fine Theorem on Oliver Hart, and how he changed his mind, recommended. And where Nobel Laureates come from.
3. Tim Harford on man-machine interaction, adopted from his new book Messy.
4. College chain from India expanding into the U.S.?
5. Paul Krugman on Brexit and the pound. I don’t agree with those arguments, but I think they are more consistently Krugmanian than his earlier posts on Brexit. If an economy is in demand-side secular stagnation, and then a government taxes production and trade, and takes finance down a peg, but boosts exports through a lower currency, I am not sure the model will predict significantly negative consequences. His arguments are also consistent with a more general New Old Keynesian neglect of wealth effects.
Private Prisons and Incentive Design: Critiquing Oliver Hart
One of Nobel prize-winner Oliver Hart’s most influential papers (co-authored with Andrei Shleifer and Robert Vishny) is on incentive design and private prisons (see Tyler’s post covering Hart’s work). Yesterday was not the day for a critique but Tyler and I do critique this paper in our principles textbook, Modern Principles. I believe that our textbook is the only principles textbook to have a chapter on contract design and we make this modern material accessible to undergraduates! Here is our explanation and critique:
Should the management of prisons be contracted out to the private sector? The
owners of a private firm have a strong incentive to cut costs and improve productivity because they get to keep the resulting profits. If a public prison cuts
costs, there is more money in the public treasury but no one gets to buy a yacht so the incentive to cut costs is much weaker.
In 1985, Kentucky became the first state to contract out a prison to a for profit firm. Private prisons today hold about 120,000 prisoners in the United
States, about 5 percent of all prisoners. Should efficient private prisons replace
inefficient public prisons? Three economists—Oliver Hart, Andrei Shleifer, and
Robert Vishny (HSV)—say no. HSV don’t question that the profit motive gives
private prisons stronger incentives than public prisons to cut costs—HSV say
that’s the problem! Suppose that we care about costs but we also care about
prisoner rehabilitation, civil rights, and low levels of inmate and guard violence.
What we pay for is cheap prisons, but what we want is cheap but high quality
prisons. If we can’t measure and pay for quality, then strong incentives could
encourage cost cutting at the expense of quality.
The principle is a general one, a strong incentive scheme that incentivizes
the wrong thing can be worse than a weak incentive scheme. One car dealer in
California advertises that its sales staff is not paid on commission. Why would
a store advertise that its sales staff do not have strong incentives to help you?
The answer is clear to anyone who has tried to buy a car. High-pressure dealers
who pounce on you the moment you enter the showroom and bombard you
with high-pressure sales tactics (“I can get you 15 percent off the sticker, but
you have to act NOW!”) may sell cars to first-time buyers, but the strategy is
too unpleasant to win many repeat customers. Car dealers who rely on repeat
business usually prefer a low-pressure, informative sales staff….In theory, a car dealer could have strong incentives and repeat business by
paying its sales staff based on their “nice” sales tactics, but in practice it’s too
expensive to monitor how salespeople interact with clients. Cheating by the
sales staff would be difficult to detect and thus would be common.
…What about prisons? Are HSV correct that weak-incentive public prisons
are better than strong incentive private prisons? Not necessarily. HSV assume
that cutting quality is the way to cut cost. But sometimes higher quality is also
a path to lower costs. Low levels of inmate and guard violence, for example, are
likely to reduce costs. And respect for prisoner’s civil rights? That can save on
legal bills. When quality and cost cutting go together, a private firm has a strong
incentive to increase quality.
HSV may also underestimate how well quality can be measured. Measuring
output pays off more when incentives are high. Unsurprisingly, therefore,
private prison companies and government purchasers have made extensive
efforts to measure the quality of private prisons.
Finally, don’t forget that weak incentives reduce the incentive to cut costs
but they don’t increase the incentive to produce high quality! Public prisons
might use their slack budget constraints to offer high-quality rehabilitation
programs, or they might instead offer prison guards above-market wages.
Which do you think is more likely?
Nevertheless, whether HSV are right or wrong about private prisons, their
argument is clever. The usual argument against government bureaucracy is that
without the profit incentive, public bureaucracies won’t have an incentive to
cut costs. HSV suggest this is exactly why public bureaucracies may sometimes
be better than private firms.
Addendum: We don’t go through the empirical literature in the text but overall it’s not supportive of HSV. As HSV predict, private prisons appear to be cheaper than public prisons but they are not significantly cheaper and the quality of private prisons is comparable to that of public prisons and maybe a little bit higher (faint praise). Basically the government gets what it pays for.
Monday assorted links
2. “Why, then, shouldn’t we have an official inquiry into abuses during the Bush years?” (NYT) Me, thee, etc. Personally, I don’t favor any of these suits and prosecutors and the like, not for either side, and I was one of the very first to warn about this with respect to Trump. But please don’t think Trump just pulled this idea out of some kind of personal fascist cookbook.
3. The Brexit plan for Ireland. And revisionist take that maybe Brexit made the UK wealthier. And Wolfgang M. ponders Irexit.
4. Are state-dependent cash transfers better yet?
5. Cheap Talk on Bengt Holmström. And here is a Nobel message for the blockchainers. And Paul Romer’s storified tweets on them. And Noah Smith on the prize.
6. Earth fact of the day: our planet has only the 7th greatest quantity of water in the solar system.