Results for “age of em” 17236 found
The “austerity” of 2011-2012 in the United States
It turns out that much more of it was phony than many people had realized. From David Farenthold, this is from today’s Washington Post:
To sketch the bill’s biggest impacts, The Washington Post focused on the 16 largest individual cuts. Each, in theory, sliced at least $500 million from the federal budget. Together, they accounted for $26.1 billion, two-thirds of the total.
In four of those cases, the real-world impact was difficult to measure. The Department of Homeland Security officially declined to comment about a $557 million reduction. The Department of State, the Department of Agriculture and the Federal Emergency Management Agency — whose cuts totaled $1.9 billion — simply did not answer The Post’s questions despite repeated requests over the past month.
Among the other 12 cases, there were at least seven where the cuts caused only minimal real-world disruptions or none at all.
Often, this was made possible by a little act of Washington magic. Agencies got credit for killing what was, in reality, already dead.
Here is the article, and I did chuckle at the last paragraph.
*Engineers of Victory*
The author is Paul Kennedy and the subtitle is The Problem Solvers who Turned the Tide in the Second World War. This is an excellent look at the managerial and logistics side of the war. My main regret — not really a criticism — is that the central role of economists was not given more attention. Haven’t you wondered how it was possible that say the American role in the War was started and finished in less than five years’ time? These days it can take that long to design, approve, and build a freeway interchange.
Here is a good review of the book. Here is a useful NYT review.
Assorted links
1. Virgil Storr’s Understanding the Culture of Markets, and Les Miserables ROK Air Force Parody (video).
2. Buy a ten-minute phone call with Cedric Ceballos (MIE).
3. What are we learning from measuring basketball performance with data-tracking cameras?
5. 8,000 people still can speak Texas German (with audio sample).
*What to Expect When No One’s Expecting*
That is the new book by Jonathan Last, which I liked very much. Last recently wrote “In the end, demography always wins” and you will find that view writ large in the book. He also wrote “Global demographics, not domestic policy, will control who comes and who goes.”
I am one who believes that the inability of a society to reproduce itself is per se a major problem, even if you don’t accept the most pessimistic fiscal interpretation of demographic collapse. Geopolitical influence also shall not be neglected. Here is one bit:
Low-fertility societies don’t innovate because their incentives for consumption tilt overwhelmingly toward health care. They don’t invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don’t have enough workers to pay for the retirees. They cannot project power because they lack the money to pay for defense and the military-age manpower to serve in their armed forces.
That is from Last’s WSJ essay, based on his book.
Here is an article on why Germany may be failing to raise its birth rate. And here is a good response to Dean Baker’s lack of worry about the fiscal issues.
Here is a critical Ruy Teixeira review of the book. Here is Reihan on the critique. Here is Maggie Gallagher.
Dinner with Fuchsia Dunlop
I am pleased to have shared a meal at A&J Manchurian restaurant, in Rockville with the charming Fuchsia Dunlop. You may recall that Fuchsia has written what I consider to be the very best Chinese cookbooks in English and indeed some of my favorite books of all time. She was in town to speak at Georgetown University and to promote her new book Every Grain of Rice: Simple Chinese Home Cooking.
Here were a few topics of conversation and related points:
1. To what extent did excellent Chinese food, in China, go underground during the 1960s and 70s, or to what extent did those traditions need to be reconstructed?
2. Why is there good Chinese food in Panama and Tanzania (my claim not hers), but not in most of Europe, least of all Italy? Why does Latin America have so little good Chinese food?
3. Should the advanced state of Chinese food in the 18th century, relative to European food, cause economists — including Adam Smith– to revise upward their estimates of Chinese standards of living?
4. Her books are effectively written, in part, because the points are continually reduced to their simplest elements, yet those simple bits are woven together to construct and reveal multiple layers of complexity.
5. The Chinese servers seemed unsurprised by her effortless fluency in Mandarin.
6. When speaking in the United States she is often taken to some local’s idea of a good Chinese restaurant. A&J was her proposal. She was surprised that northern Virginia has restaurants which are exclusively or in significant part Peruvian-Chinese, Indo-Chinese, and Korean-Chinese.
7. To what extent do we live in an unusual temporary bubble of easy foreign access to China?
8. I consider her Hunan book to be her most significant and original achievement, but Every Grain of Rice is the most useful single all-purpose Chinese cookbook she has written. It is especially good on the vegetarian side.
9. Each of us wished to defer dictatorial ordering rights to the other.
10. At what age do people learn or discover the determination to carve out a life of (relative) freedom for themselves? To what extent is their ability to achieve such a life the result of luck or of skill?
11. The cucumber salad in hot garlic sauce was very good. No cookies.
The economics of Lego (investment markets in everything)
Here is one excerpt from a lengthy and data-intensive post, which likely offers more than you ever would wish to know:
The internet can be blamed for the size and scope of the secondary LEGO market. On the website, BrickLink, you can find almost any set that LEGO has ever produced. In addition, the site keeps records of trends in the market and value of individual pieces. This site is invaluable to a LEGO collector and has given many the ability to grow their collections. Before the advent of this site and sites like eBay, collecting LEGO required going to garage sales. There are now whole sites dedicated to buying LEGO as an investment, but that is a topic for another article.
This creation and expansion of the secondary market in conjunction with LEGO now marketing some of their products to an older audience has made the prices of some old sets increase exponentially. On the extreme range, there is the UCS Millennium Falcon that is selling new for upwards of $2,000 (and close to $1,500 USED!). It sold for $500 new in 2007. Even non-licensed sets can run a premium, such as the Cafe Corner that was one of the original modular buildings. It was $150 new and now it can sell for over $1,000.
For pointers I thank Michael Rosenwald and Kevin Won.
Assorted links
1. Markets in everything, iPad edition.
2. Krugman further explains his views on Japan.
3. Derek Thompson’s skepticism about robots. I say the correct view is not about “robots” putting people “out of work,” but rather how software and machine intelligence are restructuring relative wages, which in turn has subsequent implications for labor force participation rates.
4. How much healthier are the baby boomers?
Good shop name
That is from the web site of Nancy Hanrahan, who teaches sociology and critical theory and music at George Mason. Just recently I was talking to a Polish man whom I met standing in front of The Village Vanguard, and who claims to own 20,000 jazz LPs, and he told me that Nancy is married to Kip Hanrahan, the esteemed yet still underrated jazz musician, start with Desire Develops an Edge.
True, false, or uncertain?
Let’s start with a measurement, namely that the current rate of unemployment for individuals with a college degree is about 3.7 percent.
Therefore if we cut government spending on the jobs of those individuals, they will be reemployed reasonably rapidly. We should not assign much weight to the aggregate rate of unemployment in making this judgment. True, false, or uncertain?
Variant: If we increase government spending to hire these individuals, it will not much lower the rate of unemployment. True, false, or uncertain?
Additional exercise: What percentage of the money spent on the labor of government military contractors is spent on individuals with a college degree?
I find it remarkable how infrequently these simple considerations are mentioned, much less analyzed.
The economics of budget sequestration
Here is my latest New York Times column, on how we should deal with sequestration. One theme is that, economically speaking, we really can get away with cutting our defense budget:
In the short run, lower military spending would lower gross domestic product, because the workers and resources in those areas wouldn’t be immediately re-employed. Still, that wouldn’t mean lower living standards for ordinary Americans, because most military spending does not provide us with direct private consumption.
To be sure, lower military spending might bring future problems, like an erosion of the nation’s long-term global influence. But then we are back to standard foreign policy questions about how much to spend on the military — and the Keynesian argument is effectively off the table.
On a practical note, the military cuts would have to be defined relative to a baseline, which already specifies spending increases. So the “cuts” in the sequestration would still lead to higher nominal military spending and roughly flat inflation-adjusted spending across the next 10 years. That is hardly unilateral disarmament, given that the United States accounts for about half of global military spending. And in a time when some belt-tightening will undoubtedly be required, that seems a manageable degree of restraint.
When you hear talk of Keynesian arguments as applied to sequestration, don’t be so quick to aggregate the “G.” The Keynesian argument, as well as some supply-side arguments, does apply however to infrastructure and also to the funding of basic scientific research. The domestic half of the sequester should be redone to focus more tightly on farm subsidies and Medicare reimbursement rates:
THE Keynesian argument suggests that spending cuts do the least harm in economic sectors where demand is high relative to supply. Thus, the obvious candidate for the domestic economy is health care, and the sequestration would cut many Medicare reimbursement rates by 2 percent. We could go ahead with those cuts or even deepen them, because America has had significant health care cost inflation for decades.
We already have huge demand in our health care system, along with a corresponding shortage of doctors. And the coverage extension in the Affordable Care Act will add to the strain. In this setting, cutting Medicare reimbursement rates wouldn’t result in fewer health care services over all. Yes, doctors might be less keen to serve Medicare patients but might be more available for others, including the poor and the young. In the long run, the improved access for those groups would yield much return on investment, and would move the health care system closer to many of the European models.
Of course that is unlikely to happen. Here are some related points by Veronique de Rugy, which I found helpful for doing the piece.
I would view the sequestration as a kind of referendum on whether we are ever capable of cutting or restraining spending and I fear not. When it comes to the defense budget, “gdp fetishism” suddenly makes a comeback. Or sometimes I read or hear the argument: “let’s not do this, it is only a small nick in the budget deficit.” That attitude is exactly the problem. The point remains that the laws of opportunity cost still apply. As David Brooks has noted, I am willing to live with the price of my house going down.
Will marathon viewing become the TV norm?
On Friday, Netflix will release a drama expressly designed to be consumed in one sitting: “House of Cards,” a political thriller starring Kevin Spacey and Robin Wright. Rather than introducing one episode a week, as distributors have done since the days of black-and-white TVs, all 13 episodes will be streamed at the same time. “Our goal is to shut down a portion of America for a whole day,” the producer Beau Willimon said with a laugh.
“House of Cards,” which is the first show made specifically for Netflix, dispenses with some of the traditions that are so common on network TV, like flashbacks. There is less reason to remind viewers what happened in previous episodes, the producers say, because so many viewers will have just seen it. And if they don’t remember, Google is just a click away.
The story is here. You can buy an entire book at once, as serialization — while not dead — has ceased to be the norm for long novels. At MOMA they do not run an art exhibit by putting up one new van Gogh painting each day. Coursera, you will note, still uses a kind of serialization model for its classes rather than putting up all the lectures at once; presumably it wishes to synchronize student participation plus it often delivers the content in real time. Sushi is served sequentially, even though several cold courses presumably could be carried over at once. Still, a plate in an omakase experience typically has more than one piece of fish.
For TV I do not think upfront bingeing can become the norm. The model of “I don’t really care about this, but I have nothing much to talk to you about, so let’s sit together and drop commentary on some semi-randomly chosen TV show” seems to work less well when the natural unit of the show is thirteen episodes and you are expected to show dedication.
Ad-financed shows — still a clear majority of viewing — may prefer to have impressions from the ads spread out over weeks and months rather than concentrated in one long marathon sitting. Furthermore the show itself relies more heavily on an effective and immediate burst of concentrated marketing, with little room to build word of mouth and roll out a campaign with stages. That intense publicity can be achieved the first time this model is tried, as everyone will write about the novelty, but it will be harder to summon up interest for successive experiments in this format.
I do not myself enjoy the marathon approach to TV shows, as I prefer to ponder the episodes over weeks, months, or years. I rebel against watching even two episodes in a row, no matter how much I enjoy the program. Nonetheless I hope this model succeeds, as I have the self-control to watch only one episode a week or at some otherwise chosen regular pace.
Observations on meeting Bill Gates
I am pleased to have been invited to a small group session in New York City to meet Gates and hear him present his new letter. My observations are these:
1. Gates has a command of data and analytics in development economics better than that of most development economists, or for that matter aid professionals. He also expects everyone at the meeting to know everything about what he is talking about, or at least is willing to proceed on that basis. That said, when it comes to answering questions he sometimes assumes a stupider version of the question than what is actually being asked.
2. He is smart enough, and health-savvy enough, not to waste time with handshakes at the beginning of meetings. People as productive as Gates should not be required to shake hands, and the same can be said for people less productive than Gates.
3. He does not go on and on. His opening remarks were about two minutes long, with no notes, and all of his answers were to the point.
4. We were served water, at exactly the right cool temperature, yet without ice cubes. No cookies.
5. Unlike Gates, I am not convinced that “health” is the key breakthrough area for economic development, but there is enough low-hanging fruit out there that it doesn’t have to be. That said, when questioned on this his answers were closer to tautology than they needed to be. Much of their emphasis on measurement seemed to me to track absolute movement toward goals, rather than relative efficacies of different project investments.
6. Gates suggested that if he had been more careful tracking and organizing his AP credits, he might have been able to receive his undergraduate degree. That is one sense, in his words, in which he is barely a college drop out. In another sense, it makes him a very extreme college drop out.
7. He mentioned that he is an extremely eager consumer (and not just funder) of on-line education and The Teaching Company. And this is a man who could receive free (or paid) lectures from almost anyone he wants.
8. Empellon Tacqueria, in the West Village, has an excellent mackerel ceviche and I recommend also the quail eggs.
9. I have now run into Reihan Salam twice in the last two years, in random public places in Manhattan, without any reason for expecting to see him there. This should cause me to revise my prior on something or other, but I am not sure what. When changing/surfing the channels, which I do occasionally to “keep in touch,” I also run into him on TV a lot.
10. Gates understands the very high returns from better governance, but also sees it is not trivial to reap them.
11. In the context of U.S. education, he does not worry that teacher cheating will bias test results very much at the macro level.
12. He is more optimistic about charter schools than I am (though I favor them), and more optimistic about the results from giving teachers feedback about their performance. In my view, bad teachers don’t very much want to improve and it is not so much a matter of knowledge. Undergraduate college teachers are evaluated all the time, and it does help, but it hardly brings the rotten apples up to par and I don’t see it as the key to moving the system forward at lower levels.
Here is Jason Kottke’s account. Here is Dana Goldstein’s account.
Gates’s annual letter, which was released earlier this week, is here.
Department of Uh-Oh
Labor unions enthusiastically backed the Obama administration’s health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour.
Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26.
To offset that, the nation’s largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance.
…Contacted for this article, Obama administration officials said the issue is subject to regulations still being written…
Top officers at the International Brotherhood of Teamsters, the AFL-CIO and other large labor groups plan to keep pressing the Obama administration to expand the federal subsidies to these jointly run plans, warning that unionized employers may otherwise drop coverage. A handful of unions say they already have examined whether it makes sense to shift workers off their current plans and onto private coverage subsidized by the government. But dropping insurance altogether would undermine a central point of joining a union, labor leaders say.
…The Teamsters’ Mr. Hall said his union has no plans to eliminate workers’ insurance. Instead, he worries employers will have an incentive to drop coverage in collective bargaining if they can’t tap the subsidies.
All of a sudden, people are figuring this out. The article is here, and for the pointer I thank Craig Garthwaite.
The Browser Book of Quotations
You will find it here (pdf). There are numerous good bits, here is one of them:
To admire an artist for his own sake, although certainly a compliment, can also be a way of suggesting that he has no place in the larger scheme of things
Jed Perl
They chose a quotation from me:
Effective political ideas are those that can still do good in half-baked form
Tyler Cowen
I enjoyed every page, recommended. Here is an iPad link, here is a Kindle link.
Predatory borrowing?
From Luigi Zingales:
In fact, the authors find that more than 6% of mortgage loans misreport the borrower’s occupancy status, while 7% do not disclose second liens.
…The authors provide some interesting evidence in this context. They show, for example, that the misrepresentation is correlated with higher defaults down the line: delinquent payments on misreported loans are more than 60% higher than on loans that are otherwise similar. Thus, the errors do not seem to be random, but purposeful.
What the authors do not find is also interesting. The degree of misrepresentation seems to be unrelated to the incentives provided to the top management and to the quality of risk-management practices inside these firms. In fact, all reputable intermediaries in their sample exhibit a significant degree of misrepresentation. Thus, the problem does not seem to be limited to a few bad apples, but is pervasive.
I cannot tell whether the borrowers defrauded the lenders or the lenders defrauded the investors who bought the loans. I always presume that it is the borrower instigating the fraud. However, Zingales says that the bankers should be prosecuted. He makes it sound as if the lenders would record a loan internally as backed by an investment property and report it to investors as an owner-occupied home. That would require a much more complex conspiratorial action on the part of the lender, and until I learn otherwise, I will doubt that it happened.