Results for “age of em” 17233 found
How anti-gun is Hollywood and the entertainment industry?
Here is from today’s news:
The sweeping gun control measure signed by Gov. Andrew M. Cuomo and hailed by Democratic leaders has a surprising critic: Hollywood.
Officials in the movie and television industry say the new laws could prevent them from using the lifelike assault weapons and high-capacity magazines that they have employed in shows like “Law & Order: Special Victims Unit” and films like “The Dark Knight Rises.”
Twenty-seven pilots, television and feature projects, including programs like “Blue Bloods” and “Person of Interest,” are now in production in New York State using assault weapons and high-capacity magazines, according to the Motion Picture Association of America. Industry workers say that they need to use real weapons for verisimilitude, that it would be impractical to try to manufacture fake weapons that could fire blanks, and that the entertainment industry should not be penalized accidentally by a law intended as a response to mass shootings.
One source added:
“Weapons are part of our history as a culture as humans,” said Ryder Washburn, vice president of the Specialists, a leading supplier of firearms for productions that is based in Manhattan. “To tell stories, you need them.”
Why the housing market imploded
In a recent paper, Christopher L. Foote, Kristopher S. Gerardi, and Paul S. Willen report (pdf):
This paper presents 12 facts about the mortgage market. The authors argue that the facts refute the popular story that the crisis resulted from financial industry insiders deceiving uninformed mortgage borrowers and investors. Instead, they argue that borrowers and investors made decisions that were rational and logical given their ex post overly optimistic beliefs about house prices. The authors then show that neither institutional features of the mortgage market nor financial innovations are any more likely to explain those distorted beliefs than they are to explain the Dutch tulip bubble 400 years ago. Economists should acknowledge the limits of our understanding of asset price bubbles and design policies accordingly.
Scott Sumner summarizes the twelve points here:
Fact 1: Resets of adjustable rate mortgages did not cause the foreclosure crisis.
Fact 2: No mortgage was “designed to fail.”
Fact 3: There was little innovation in mortgage markets in the 2000s.
Fact 4: Government policy toward the mortgage market did not change much from 1990 to 2005.
Fact 5: The originate-to-distribute model was not new.
Fact 6: MBSs, CDOs, and other “complex financial products” had been widely used for decades.
Fact 7: Mortgage investors had lots of information.
Fact 8: Investors understood the risks.
Fact 9: Investors were optimistic about home prices.
Fact 10: Mortgage market insiders were the biggest losers.
Fact 11: Mortgage market outsiders were the biggest winners.
Fact 12: Top-rated bonds backed by mortgages did not turn out to be “toxic.” Top-rated bonds in collateralized debt obligations (CDOs) did.
Addendum: There was earlier Boston Globe coverage here.
The Value of a Community College
Technical degree holders from [a] state’s community colleges often earn more their first year out than those who studied the same field at a four-year university.
Take graduates in health professions from Dyersburg State Community College. They not only finish two years earlier than their counterparts at the University of Tennessee at Knoxville, but they also earn $5,300 more, on average, in their first year after graduation.
In Virginia, graduates with technical degrees from community colleges make $20,000 more in the first year after college than do graduates in several fields who get bachelor’s degrees. Yet high-school seniors are regularly told that community colleges are for students who can’t hack it on a four-year campus.
…Colleges don’t like being measured by the earnings of their graduates. Defining value in such a narrow way, they argue, obscures the broader benefits of higher education. They point out that first-year salaries often have no bearing on earnings later in life. It’s true that those with bachelor’s degrees typically earn more over a lifetime than those with a two-year degree, but that’s little consolation to those who are discouraged from going to community colleges and end up dropping out of a four-year school without a degree.
… As the researchers themselves admit, the data would be more useful if they included more than the first-year salaries of those graduates who remain in state to work. But improving these tools has been slow going, largely because the higher-education lobby has fought federal efforts to create a “unit-record” system that could work across state lines to link students’ educational and employment histories.
From Jay Selingo writing at the WSJ, he has a book coming out, College Unbound, that looks promising.
Hat tip: Daniel Lippman.
Assorted links
1. A Chinese attempt to bootstrap a fiat, state-contingent currency/insurance hybrid, I predict it will do less well than Bitcoin.
2. Peter Leeson paper on gypsies (pdf). I am myself less inclined to favor a “rational” explanation in this case.
3. 42% of Americans unsure if ObamaCare is still law.
4. Interview with Knausgaard, Canadian.
5. The wisdom of David Brooks.
6. Janos Starker passes away at 88, and comparing Bush and Degas.
Apple Diversity has Grown
Mother Jones has a fun piece on apple hunters, people who track down long-forgotten apple varieties, sometimes to a single, ancient tree which they then clone in order to resurrect its unique apples. It’s a fun, human-interest story but Mother Jones also repeats a number of errors about apple diversity. Most notably:
In the mid-1800s, there were thousands of unique varieties of apples in the United States, some of the most astounding diversity ever developed in a food crop. Then industrial agriculture crushed that world. The apple industry settled on a handful of varieties to promote worldwide, and the rest were forgotten. They became commercially extinct—but not quite biologically extinct.
Mother Jones is tame compared to The New Internationalist which really ramps up the imagery:
Lincoln was assassinated. So were Washington and Jefferson. In fact all three Lincolns were wiped out. In the end it wasn’t so much an assassination as a massacre, with 6,121 of the 7,098 American apple varieties that blossomed last century now extinct….In less than a century, market pressures for uniformity have slaughtered crop diversity.
All of this is highly misleading at best. The innovative Paul Heald and co-author Sussanah Chapman show that the diversity of the commercial apple has increased over time not decreased (pdf). It is true, that in 1905 W.H. Ragan published a catalog of apples with some 7000 varieties. Varieties of apples come and go, however, like rose varieties or fashions and Ragan’s catalog listed any apple that had ever been grown during the entire 19th century. (Moreover, most varieties are neither especially good nor especially unique). At the time Ragan wrote, Heald and Chapman estimate that the commercially available stock was not 7000 but around 420 varieties. What about today?
The Fruit, Berry and Nut Inventory for 2000 lists 1469 different varieties of apples, a massive gain in terms of what growers can easily find for sale. The Plant Genetic Resources Unit of the USDA, in Geneva, New York, maintains orchards containing an additional 980 apple varieties that are not currently being offered in commercial catalogs. Scions from these trees are typically available to anyone who wishes to propagate their variety. The USDA numbers bring the total varieties of apples available to 2450.
In fact, there are more than 500 varieties of apples from the 19th century commercially available today–thus there are more 19th century apples available today than probably at any time in the 19th century!
It is true, of course, that when you go to a typical supermarket there aren’t hundreds of varieties of apples for sale but neither were there hundreds of varieties for sale in the past. In fact, I strongly suspect that the average consumer today has more choices of apple than ever before. I stopped in at Whole Foods last night and counted seven varieties of apple for sale, that’s amazing. Over the year, Whole Foods probably sells 15 varieties. Moreover, I likely also consume other varieties in pies, juice and cider. A few more varieties are available a short drive from my home. Indeed, with all these choices it’s a wonder that Barry Schartz isn’t complaining about information overload and choice exhaustion.(Isn’t it interesting how critics of markets always find something to complain about? Either the market is overloading us with choices or tyrannizing us with too few choices.)
It is true that in a large and diverse country such as the United States there were probably more apple varieties grown in significant numbers in the 19th century but that confuses geographic diversity with what we actually care about which is consumption diversity or option availability. I explained this idea in my post, What is New Trade Theory? on Paul Krugman’s Nobel prize.
Consider the simplest model (based on Krugman 1979). In this model there are two countries. In each country (or region), consumers have a preference for variety but there is a tradeoff between variety and cost, consumers want variety but since there are economies of scale – a firm’s unit costs fall as it produces more – more variety means higher prices. Preferences for variety push in the direction of more variety, economies of scale push in the direction of less. So suppose that without trade country 1 produces varieties A,B,C and country two produces varieties X,Y,Z. In every other respect the countries are identical so there are no traditional comparative advantage reasons for trade.
Nevertheless, if trade is possible it is welfare enhancing. With trade the scale of production can increase which reduces costs and prices. Notice, however, that something interesting happens. The number of world varieties will decrease even as the number of varieties available to each consumer increases. That is, with trade production will concentrate in say A,B,X,Y so each consumer has increased choice even as world variety declines.
Increasing variety for individuals even as world variety declines is a fundamental fact of globalization. In the context of culture, Tyler explains this very well in his book, Creative Destruction; when people in Beijing can eat at McDonald’s and people in America can eat at great Chinese restaurants the world looks increasingly similar even as each world resident experiences an increase in variety.
Thus it may well be the case that more apples varieties were grown in large quantities in the 19th century but there are both more varieties commercially available today (our stock of genetic diversity is higher) and individual consumers have low-cost access to more apple varieties than ever before.
Assorted links
1. Fast foods you can’t eat in America.
2. “Find what you love and let it kill you” (not an endorsement, by the way).
3. Why is Medicare shutting down a successful pilot program?
4. The wildlife that is Fairfax (and why I don’t want to move to Brooklyn).
5. “How game theory will stop Iranian nukes,” by Ariel Rubinstein.
Observations on search theory in modern macro and in blogosphere macro
Let’s say you are 22, full of energy, don’t feel you need to marry soon, and have lots of cash in your bank account. Many people in this position feel they can “date around” a lot, without fear of the repercussions. They can enter into short-term relationships without much agonizing in advance, and simply break up if it doesn’t work out.
Alternatively, imagine you are 39, run down and vulnerable, wanting kids soon, and in a precarious financial situation. You probably won’t date casually the same way. You will treat every romantic relationship as if it is a significant investment. You will be more careful, because the cost of mistakes is higher, and the cost of serial “running around” is higher too. Search is tougher and you will apply higher standards to search.
In good times employers are like the 22-year-old and they will take chances with many different employees. In 2009-2013, they often have seemed more like the 39-year-old. They are waiting and watching, rather than trying out lots of dates.
Of course this analogy points to just one possible factor, it is hardly a comprehensive account of current unemployment, even if you ignore any possible problems in the story.
Note that the terms “involuntary unemployment” and “voluntary employment” do not make sense here, and usually it is a mistake to insist on one or the other. There are jobs and for that matter dates in North Dakota, so how high does the cost of moving have to be to distinguish one category from the other? Is theory going to supply an answer here? No. When you see arguments for either the “voluntary” or “involuntary” nature of unemployment, that is a good sign someone is trying to mix moral issues into positive issues. It is also a move away from the concept of marginal analysis.
It is better to say that the quantity and quality of employer search is suboptimal and the outcomes are suboptimal too. In this particular case, employers become choosier in their search, and raise their discount rates, without taking into account the social costs those decisions impose on the pool of available labor.
You also will note this explanation, and many others like it, differs from the traditional invocation of “sticky wages.” Sticky wages do apply to a large number of already employed workers (pdf), but the concept does not readily transfer to workers who are looking for a job. There is a great mass of evidence for sticky nominal wages for workers who already hold jobs. There is a good but not great deal of evidence for sticky and indeed possibly irrational reservation wages for the current unemployed, but this phenomenon is conceptually indistinguishable from what some people (not me) like to call “voluntary unemployment.” If you insist on stickiness for the unemployed, you will quickly end up somewhere you probably do not wish to go.
Taking established labor market results for the employed and automatically transferring those same concepts to the unemployed, without critical scrutiny, is one of the most common mistakes in blogospheric economics. You don’t see that mistake committed very much in standard academic macroeconomics and that is one of the advantages of modeling.
I sometimes hear it suggested that the sticky wage incumbent workers have “eaten up” all of the nominal gdp and there are only breadcrumbs left for the unemployed. Yet most companies seem to be sitting on enough cash and enough profits to make additional hires if they want to; it cannot be asserted that the sticky wage incumbents are “soaking up” most corporate liquidity. Plus in a full model velocity and credit will be endogenous so a cash constraint would end up doing all of the work here, not sticky wages.
I once heard Bryan Caplan mention (I am not sure how seriously) that insiders will resent outsiders hired at lower wages and thus the outsiders cannot get hired. With the decline of unions if anything I observe the opposite — insider resentment is directed at the higher-wage hires — but in any case there is simply no mass of evidence behind this claim, not enough for it to serve as a major explanation of one of our largest economic and social problems. One is led to this kind of move if one has to justify the claim that unemployment is “involuntary,” whereas a better question is why the quality of job market match is going down.
There is the macroeconomics of the academy and the macroeconomics of the blogosphere. The latter does not devote nearly enough attention to search theory, combined with other market imperfections of course.
If you’d like to read one recent macro piece on search, there is Marcus Hagedorn and Iourii Manovskii, “Job Selection and Wages over the Business Cycle,” published in the latest AER but with an ungated version here. It is not some kind of explanatory holy grail but it does illustrate the kind of questions contemporary macro is asking.
What is the implied liquidity preference of President Obama?
If not for the political issues involved with owning shares of specific companies, I might also ask about his implied equity premium:
The Obamas paid $45,046 in mortgage interest in 2012, which appears from the disclosure statement to be at a 5.625% interest rate with Northern Trust. That suggests an outstanding principal balance of about $800,000.
On the other hand, the bulk of their investments are in Treasury notes. Based on the disclosures, I estimate they hold about $3 million in Treasury notes (also held by Northern Trust), yielding 0.71% if averaging a five-year maturity.
By selling some of those Treasuries and paying off the mortgage, they would effectively be getting five more percentage points on the amount; they would also be about $40,000 better off each year before taxes, not to mention being less exposed to notes that could take a hit from possible rising rates.
The Obamas would pay more in taxes but make much more after taxes — especially since they aren’t getting the full deduction anyway, due to the AMT. That’s more money going to the U.S. Treasury and more money for them; Northern Trust would be the loser.
That is all via Greg Mankiw. In any case he does not seem to think that bonds are a bubble, but does seem interested in recapitalizing the banking sector, small steps toward a better world.
Further assorted links
2. Using Big Data to find better workers.
3. Whales seem to have culture.
4. If Paul Krugman wrote on the topics of Robin Hanson (pdf), this is what you would get. Here is Miles Kimball on same.
5. Can the market monetarists also argue “we haven’t tried enough stimulus”? Scott Sumner offers related commentary.
Assorted links
2. How the market for fake Twitter followers works, and the perils of pension advances.
3. “We propose that plagiarism is a statistical crime.” Excellent piece, via AG.
4. This is what a watermelon stroller looks like, via AF.
The politics of infrastructure in India
Tapan Kumar Chowdhury, 62, a retiree now working as an activist in the colony, said legalized status would be likely to improve sanitation and local health standards through installation of a true sewage system. But he remained skeptical about whether the election-year promises would be carried out, noting that politicians preferred to keep colonies vulnerable so that residents remained more beholden to them for even incremental improvements. “They have a vested interest in keeping us illegal and unauthorized,” he said, “so they can use us as a vote bank.”
Here is more.
Assorted links
*Oblivion*
It is one of the most visually spectacular movies I have seen. The first half is a very good movie in its own right. The second half is mostly narcissistic trash, only periodically compelling, in which Cruise also rewrites the story of his break-up with Nicole Kidman, in what seems to me an unseemly manner.
Most of all, it is a Straussian commentary on Scientology (and Kidman), you can start your research here. I am stunned but not surprised that very few reviews have picked on this angle at all (so far it seems that none have and even Quora fell down on the job). Without such knowledge, the movie makes no sense whatsoever. With such knowledge, the movie is entirely coherent but in some regards more objectionable.
There are also some nice references to other Cruise movies, such as Top Gun and Eyes Wide Shut, not to mention some of the non-Cruise classics of science fiction cinema, including Star Wars and 2001 and Solaris.
I am very glad I saw this movie, but your mileage may vary. The Wikipedia entry is here.
Judge Trims Patent Thicket
In Launching the Innovation Renaissance I wrote:
In the software, semiconductor and biotech sectors, for example, a new product can require the use of hundreds or even thousands of previous patents, giving each patent owner veto-power over innovation. Most of the owners don’t want to actually stop innovation of course, they want to use their veto-power to grab a share of the profits. So in theory patent owners could agree to a system of licenses from which everyone would benefit. In practice, however, licensing is costly, time-consuming and less likely to work the more parties are involved. It’s easy for a bargain to break down when five owners each want 25 percent of the profits. It’s almost impossible for a bargain to work when hundreds of owners each want 10 percent of the profits.
The just decided Microsoft v. Motorola decision illustrates the problem and what judges can do to help resolve the problem. The case concerned two standards-essential patents (SEPs) which must be licensed to other parties at a reasonable and non-discriminatory (RAND) rates. Motorola, however, was claiming that a reasonable fee required Microsoft to pay over $4 billion annually. The court decided, however, that a truly reasonable free was about $1.8 million a year. Quite the discount. The decision by US District Judge James Robart is admirably clear:
When the standard becomes widely used, the holder of SEPs obtain substantial leverage to demand more than the value of their specific patented technology. This is so even if there were equally good alternatives to that technology available when the original standard was adoped. After the standard is widely implemented, switching to those alternatives is either no longer viable or would be very costly….The ability of a holder of an SEP to demand more than the value of its patented technology and to attempt to capture the value of the standard itself is referred to as patent “hold-up.”…Hold-up can threaten the diffusion of valuable standards and undermine the standard-setting process.
…In the context of standards having many SEPs and products that comply with multiple standards, the risk of the use of post-adoption leverage to exact excessive royalties is compounded by the number of potential licensors and can result in cumulative royalty payments that can undermine the standards…The payment of excessive royalty to many different holders of SEPs is referred to as “royalty stacking.”…a proper methodology for determining a RAND royalty should address the risk of royalty stacking by considering the aggregate royalties that would apply if other SEP holders made royalty demands of the implementer.
Judges made patent law what it is today and they are beginning to remake it. The decision impacts not just Microsoft and Motorola but the value of future patents and the value of future patent litigation.
Will trailer parks save us all?
Or are they the new shantytowns? Or a bit of both? There is a new article on this topic:
A healthy, inexpensive, environmentally friendly solution for housing millions of retiring baby boomers is staring us in the face. We just know it by a dirty name.
…To move into Pismodise you must meet four conditions: Be 55 or older, keep your dog under 20 pounds, be present when guests stay at your home, and be comfortable with what most Americans consider a very small house. “If you need more than 800 square feet I can’t help you,” says Louise with a shrug. There seems to be some leeway on the dog’s weight. The unofficial rules are no less definite: If you are attending the late-afternoon cocktail session on the porch of Space 329, bring your own can, bottle, or box to drink. If you are fighting with other residents, you still have to greet them when you run into them. Make your peace with the word “trailer trash.”
That is all by Lisa Margonelli, in the new Pacific Standard, which so far is turning out to be an interesting periodical.
This economization of living space is what you would expect if Henry George were right about land being an artificial monopoly. On related matters, I was intrigued by this part of Bob Shiller’s column from last Sunday:
According to a 2007 study by Morris Davis of the University of Wisconsin and Jonathan Heathcote of the Federal Reserve Bank of Minneapolis, the share of nonfarm home value accounted for by land rose to 36.4 percent in 2000 from 15.3 percent in 1930. In an update, they put the percentage at 23.7 percent in the third quarter of 2012.
In fact, except in some densely populated areas, the value of a home has always been mostly in the structure, not the land. But because land’s fraction was rising until recently, people may have been deluded into thinking that investments in housing and land were one and the same.
By 2000, many people appeared to have forgotten that when home prices rise sharply, builders are likely to increase the supply, which tends to bring prices back down. We had such a supply response in the 2000s, and with a vengeance.
Here is more.