Results for “age of em” 17238 found
*Wall Street II*
It was not a great movie but it was better than I had been expecting and I am glad to have seen it. Moral hazard was explained — well, and using that term – numerous times. The central role of leverage behind the crisis was stressed, as were the political economy elements. The movie was chock full of economics, to a remarkable degree, albeit in an unbalanced fashion, especially when it came to explaining "speculation." The film very well captured the feeling of sick dismay which unfolded with the events of the financial crisis. As an inside joke, they had a wonderful silent stand-in for Geithner. In this movie men don't seem to care about women very much, not even for sex. The Charlie Sheen cameo was my favorite moment, as it rewrites one's understanding of the first Wall Street movie and raises broader questions about the motivations of "good" people. The female lead was flat; I suspect this was poor execution although a Straussian reading will attribute that to a brilliant savaging of her character. I wished for a different ending. A comparison with the parent film shows that New York has become less interesting.
Is there any economic basis to homophobia?
William Alexander Johnson asks:
I always make sure to read your blog, and a while ago a Marginal-Revolution-type question popped into my mind:
Is homophobia the only form of hatred that doesn't have an economic component?
As far as I can tell, most hatreds between different peoples are caused to a great extent by economic conflicts. Whites vs. blacks in the U.S., Europeans vs. natives in former European colonies, Christianity vs. Judaism vs. Islam, locals vs. immigrants in countries across the world, animosity between different castes in India, and even killings of supposed witches in tribal societies all have very important economic dimensions.
But homophobia seems to have absolutely no economic component. I've heard that homosexuals are on average a little more economically successful than heterosexuals, but I very seriously doubt that that has the slightest bit to do with anything.
I can't think of any other form of hatred so divorced from "rational" conflict, so to speak.
…What do you think?
Bryan Caplan predicts greater tolerance in the future and Andrew Sullivan sees positive trends. I do favor both gay marriage and other advances in gay rights, but when I scan the evidence, I am a bit pessimistic. The positive short-run momentum is clear, but what about the longer run? I see the following:
1. Prejudice and bullying against gay individuals is often brutal and unreasonable and it is applied where there is no evidence of harm from gays. The prejudice is often strongest among teenagers and young males, and it weakens somewhat with age and socialization.
2. Strong prejudices against gay men and women are found in every culture I know of, past or present. And yet in many cases homosexuality "limits the competition," so to speak. This potential gain finds little appreciation.
3. There is a common and sometimes strong "disgust reaction," especially to gay men.
4. We learn from John Boswell that high levels of gay tolerance, in antiquity, were followed by a counter-reaction and higher levels of prejudice.
5. Religion, conservative morals, and sexual traditionalism make periodic comebacks.
Looking at the overall pattern, I wonder whether many individuals have a natural, innate proclivity to dislike gay men and women and to feel discomfort with the entire idea of homosexuality, bisexuality too of course. Those preferences are not universal and they can be mediated by positive social forces, but left to their own devices, they will periodically reemerge in strength.
Macroeconomic faith
Pretty much everything in AS/AD is riding on the hypothesis that labor supply is highly elastic at the nominal wage and labor demand is reasonably elastic at the real wage. There is nothing for entrepreneurs to figure out–they will employ more workers as long as you can trick those workers into taking lower real wages.
That is Arnold Kling, here is more. Many Keynesians like to poke fun at the RBC or rational expectations ideas of unemployed workers taking a "voluntary vacation" during a downturn. Yet Keynesian theory has a no less serious problem, namely that workers take a "stupid voluntary vacation" during the downturn, due to their stubbornness on nominal wage cuts. Reflation, if it comes, is doing no better for them in real terms than if they cried Uncle in the first place and simply lowered their wage demands.
The more dire a story you tell about the costs of unemployment, the more embarrassing the puzzle becomes on the side of positive economics.
Aggregate demand macroeconomics works in many cases and it almost always "works" (predicts well) when the macro forces are pointed toward destructive ends. We are not sure why it works at all, or if it always works, and yet we see a great fervor of belief in it and a demonization of those who are skeptics.
On which issues will we become less moral?
Ross Douthat considers the hoary question of which current practices we will someday condemn, linking also to Appiah, who raised it, and Will Wilkinson. Prisons, factory farming, immigration barriers, and abortion are among the nominations. I would suggest an alternate query, namely which practices currently considered to be outrageous will make a moral comeback in the court of public opinion. Torture and loss of privacy — in some of its forms at least — already seem to be on the rise, at least in terms of their acceptability in the United States.
What kind of moral status will "probabilistically causing natural disasters" have in the future? What status does it have now?
With rising health care costs and tight budgets in many countries, can we not expect euthanasia to rise in moral popularity? Will the principles for cutting off care force us to transparently embrace some ugly moral principle, or will the ugliness be our lack of transparency and arbitrariness on these matters?
Preemptive warfare feels unpopular, because Iraq and Afghanistan have gone poorly, and because there have no more major successful terrorist attacks on U.S. soil. I predict the idea will make a comeback. Robot and drone warfare may become even more commonplace, as will targeting at a distance and selective cyberwarfare. Those practices don't have to be wrong, but they could lead us to be morally cavalier about fighting a destructive war, even more than we are today. By the way, the French seem pretty happy about the recent U.S. intensification of drone warfare in Pakistan, which is directed at stopping an planned attack in Europe.
Tolerance of gay individuals and alternative lifestyles is at a historic high. I would not endorse a crude "regression toward the mean" hypothesis, but we should at least try it on for size. That tolerance is as likely to fall back as to progress.
Won't targeted genetic tests make abortion more popular and less sanctioned? Rural India is already full of ultrasound clinics. Won't the possibility of discrimination on the basis of genes (not many will refuse to do it, or make use of the information, if only implicitly) make discrimination more acceptable altogether?
On the bright side, totalitarianism and mass murder of one's civilian population have been out of style since the Nazis, the Soviets, and Mao. In that sense we still can expect the future to be morally superior to the past. But those gains were achieved some time ago. If we capitalize them, and take them for granted, at the other margins I am not convinced that we are going to see lots of moral improvement over the next fifty to one hundred years.
*Berlin at War*
That's an excellent new book by Roger Moorhouse. I found good material on virtually every page:
Heinz Knobloch was dispatched by his mother to a department store by the Hallesches Tor to buy something — anything — exempt from the rationing. He managed to return with two tins of sardines. He was lucky to have escaped with his booty intact: the new legislation against hoarding meant that some of the more punctilious shopkeepers were already insisting on opening all tins immediately upon purchase.
I also learned that many Berliners starting suspecting the Holocaust because of the rather efficient German postal system. When letters would be sent to "ghetto inhabitants" on the Eastern front, often they would be returned with notice that the intended recipient had passed away.
*Listen to This*
She [Mitsuko Uchida] tells of how she once tried to get [Radu] Lupu to visit Marlboro. "I got every excited, describing how people do nothing but play music all day long. But he said no. His explanation was very funny. "Mitsuko," he said, "I don't like music as much as you."
That's from the new book on music by Alex Ross. It's not a comprehensive tour de force like The Rest is Noise was, but it is smart and well-written on every page and if you liked the first book you should buy and read the second. The portraits cover, among others, Radiohead, Bjork, John Luther Adams, Marian Anderson, Lorraine Hunt Lieberson, and Uchida. The chapter on Bob Dylan is especially good and it eclipses Sean Wilentz's entire recent book on Dylan.
Why is the suicide rate rising for baby boomers?
Julie A. Phillips, Ashley Robin, Colleen Nugent, and Ellen Idler report (partially gated):
Our analysis of suicide rates among the middle-aged for the period 1979–2005 showed a substantial increase in suicides by men aged 50–59 years and women aged 40–59 years between 1999 and 2005, following a period of stability or decline in rates for these groups. Suicide rates also increased for younger middle-aged men between 1999 and 2005, but we found that this increase was better characterized as a continuation of previous, ongoing trends for this group. The post-1999 increase for all cohorts was found among both married and unmarried members, although the risks were higher for unmarried people. The rise was particularly dramatic for those without a college degree, while those with a college degree appeared largely protected from the trend. The timing of the increase coincided with the complete replacement of the U.S. population’s middle-age strata by the postwar baby boom cohorts, whose youngest members turned 40 years of age in 2004.
Here is a related press release and it mentions substance abuse and chronic disease (more of a rude awakening for them?). Here are some speculations about the rising rate; one possibility is that regulatory warnings have to some extent discouraged anti-depressant drugs. Here is a related paper, on measurement and considering a few possible explanations. It seems there is no comparable rise for African-Americans.
No Religion, Know Religion
From a recent Pew Survey on U.S. Religious Knowledge, atheists and agnostics know more about religion than most religionists. Atheists and agnostics score particularly well on knowing something about world religions but also do better than most on Christianity. The effect remains even after controlling for education.
Take a short version of the quiz here. Graphic from the NYTimes.
Addendum: The Atlantic has a good run down on commentary. I was especially amused by religion scholar Stephen Prothero's line "those who think religion is a con know more about it than those who think it is God's gift to humanity."
Will social networks boost good political change?
Malcolm Gladwell says not so much:
Shirky considers this [web-based] model of activism an upgrade. But it is simply a form of organizing which favors the weak-tie connections that give us access to information over the strong-tie connections that help us persevere in the face of danger. It shifts our energies from organizations that promote strategic and disciplined activity and toward those which promote resilience and adaptability. It makes it easier for activists to express themselves, and harder for that expression to have any impact. The instruments of social media are well suited to making the existing social order more efficient. They are not a natural enemy of the status quo. If you are of the opinion that all the world needs is a little buffing around the edges, this should not trouble you. But if you think that there are still lunch counters out there that need integrating it ought to give you pause.
The point is well-taken but still activism of some kinds should go up. Loose ties favor campaigns to get out the vote and sign petitions; those developments can bring about many positive changes. Most unsettled issues in American politics today would not be well-served by organizing less cooperative confrontations, even if you perceive a great injustice. I believe that "making the existing social order" more efficient, to use Gladwell's phrase, is positively correlated with many desirable reforms, as are the qualities of "resilience" and "adaptability." If we look at the recent experience in Iran, web mobilization seems to have encouraged — not discouraged — people from risking their lives for a cause. Is the web doing much to help the worst African dictators or the totalitarians in North Korea? Not so many data are in, but so far I score this one for Shirky.
How Much Has the Fed Lost?
The Federal Reserve has spent over one trillion dollars buying mortgage backed securities, so-called toxic assets. How much are these assets worth? It's a simple question but one that is exceedingly difficult to answer not the least because the Fed has resisted being audited in defense of its so-called independence. One might say the Fed's actions have been hidden behind a veil of independence.
We do know that the Fed purchased many of its mortgage securities from the GSEs, especially Fannie Mae and Freddie Mac. We also know that these GSEs have cost the taxpayers at least $148 billion so far and may end up costing $400 billion in one "worst case" scenario. How much larger would the GSE losses have been if the Fed had not taken these mortgages off their books? The Fed also bought toxic securities from the banks and one imagines that the Fed got the short end of that stick. How much larger would bank losses have been without these purchases?
The Fed has been a financial empath, it has taken on other people's financial pain and put it on its own books. But all of this shuffling of losses–perhaps not coincidentally from more to less transparent forms–has obscured the fact that when the shuffling stops it's the taxpayers who are the ultimate empaths, whether they volunteered or not. The taxpayers deserve more than a shell game, they deserve a proper financial accounting which explains where the losses came from and how much ended up on different books, including those of the Federal Reserve.
Strange prices at Johnny Rocket’s
Ben Daniels writes to me:
Seen at Johnny Rocket's near LACMA:
Pancakes. Delicious buttermilk pancakes, served with bacon or sausage & warm syrup.
Two pancakes 4.99
Three pancakes 4.99
Error aside, how might we account for this? One option is that the company wants to give the "three pancake consumers" the sense they are receiving a bargain. I suspect, by the way, that the marginal supply cost of an extra pancake is quite small. The extra pancake may also increase your demand for high-margin beverages. What else might be the explanation?
Ilya Somin and Alison Schmauch are now married
I am honored to have been the speaker at their wedding this evening. Part of my remarks discussed Charles Darwin's notes on marriage – arguments for and against – which are well worth reading (I thank A.C. for the pointer to those). He was afraid of no more balloon trips, not being able to visit America, having to visit relatives too often, and having less time and less money to spend on books. But still he did it and here is the closing bit:
Never mind my boy– Cheer up– One cannot live this solitary life, with groggy old age, friendless & cold, & childless staring one in ones face, already beginning to wrinkle.– Never mind, trust to chance–keep a sharp look out– There is many a happy slave–
The Shape of Things to Come and Not to Come
Here is a very good post from Matt Yglesias, who gets to keep his name on the Yglesias Award. I am reluctant to pull any bit out of context (do read the whole thing), but here is one excerpt:
Get 40 Senators together to filibuster everything and that’s what you get. And when you add in state and local government, that’s a pretty healthy big government agenda right there, especially when you consider that states are shouldering a health slice of the Medicaid bill. Realistically, does anyone think we’re going to increase the overall size of the government faste than that? I sure don’t.
…So the future of American politics is necessarily going to be about things like making the tax code more efficient, finding areas of government spending to cut relative to projection, and thinking of policy measures that will help people that don’t involve spending more money.
I've arrived at somewhat similar conclusions, though from a different direction. Here is an alternative version of What is Not to Come:
1. Obamacare won't be repealed or declared unconstitutional, nor will Republican candidates be running against it six years from now. Trying to repeal parts of it would likely backfire and destroy the private insurance industry, given that the process would be ruled by public choice considerations rather than rational technocracy. We still would end up with a larger public sector role in our health care institutions.
2. I don't view "$200 billion a year to redistribute what is for this purpose a largely fixed supply resource" as an especially good investment, but it won't bring this country to its knees. The policy won't do much for fiscal responsibility.
3. Social Security won't much change, keeping in mind that the number of elderly voters is growing larger every day. Given all their elderly white voters, the Republicans are already "the party of Medicare." The Democrats have become "the party of Medicaid." That locks three major programs into place, more or less. I don't hear serious talk of major cuts in defense spending.
4. Taxes won't be raised much (do the Dems seem to have great love for reversing the Bush tax cuts?), spending won't be cut enough (the recent Republican document is extremely weak), and within twenty years we will have a sovereign debt crisis in the United States, as one day a Treasury auction won't go well. I'll predict, but not favor, the emergency passage of a VAT, a' la TARP, which will restore fiscal stability but lower the long-term rate of growth. When that time comes, the VAT will indeed be necessary, though ex ante I would opt for less social protection and a higher rate of economic growth.
5. The most important changes will come from aging, how other nations in the world fare especially China and India, the rate of technological progress, and foreign policy events which are exogenous from the point of view of economic policy. Overall it will be more interesting to follow other nations than the United States. Get ready for this and pick a few countries.
6. We should try to take back many of our vanquished civil liberties. Such a fight may or may not succeed, but at least fiscal considerations won't rule out this counterblow for liberty.
7. On issues such as drug legalization and gay rights, I see a more cyclic than melioristic pattern. We will see marginal improvements but we won't enter a new age of reason, in either the public sector or the private sector. The Netherlands is backing away from its very liberal social policies, including on drugs, and the cause of gay rights could as easily fall back as progress. I believe that many people are broadly programmed to be prejudiced in this area.
8. We will tweak financial regulation, but whether this is for better or worse, the link between reforms and final outcomes will continue to be opaque, to say the least.
9. More and more laws will be frozen in place. This already seems to be the case with immigration policy. More and more expenditures will be frozen into place. Politics will become more symbolic, and in some ways more disgusting, in response to the absence of real issues to argue over.
10. Climate change will remain an important yet insoluble issue. Even major legislation (which seems unlikely) would not change this much, not for a long time at least.
11. People will write profound books and papers on how and why "status quo bias" has strengthened, and then one day some new technological development will change everything. It's an open question whether this will happen before or after the sovereign debt crisis.
12. In the meantime, the United States will experience an ongoing "late" period of cultural blossoming, driven by the proliferation and democratization of new electronic media.
That's all for now!
The Value of Political Connections
In an excellent paper titled, Revolving Door Lobbyists, Jordi Blanes i Vidal, Mirko Draca and Christian Fons-Rosen use data on the lobbying revenues of ex-Senate staffers to show:
[L]obbyists connected to US Senators suffer an average 24% drop in generated
revenue when their previous employer leaves the Senate. The decrease in revenue is out of line with
pre-existing trends, it is discontinuous around the period in which the connected Senator exits Congress
and it persists in the long-term. The sharp decrease in revenue is also present when we study separately
a small subsample of unexpected and idiosyncratic Senator exits. Measured in terms of median revenues
per ex-staffer turned lobbyist, this estimate indicates that the exit of a Senator leads to approximately
a $177,000 per year fall in revenues for each affiliated lobbyist….We also fi nd evidence that ex-sta ffers are more likely to leave the lobbying industry
after their connected Senator or Representative exits Congress.
Here is the key figure showing the drop in revenues at the time the Senator exits:
From my paper on for-profit education
Up through the 1980s, the Philippines offered a relatively level playing field for non-profit and for-profit institutions of higher education. What was the result?:
Unlike Filipino non-profits, the for-profits typically did not have entrance examinations, and accepted any student who has completed a secondary education and can pay the relevant fees (Zwaenepoel 1975, pp.163-4). From a survey of Manila institutions, the for-profit institutions had an average student to fulltime faculty ratio of 27:1, whereas the non-profit religious institutions had an average ratio of 19:1 (Miao 1971, pp.71-2). For-profit institutions tend to invest in classrooms to accommodate large enrollments, rather than investing in library facilities, book holdings, or laboratory facilities. Furthermore, Filipino for-profit institutions tend to limit their class offerings to low-cost, labor-intensive classes, such as teacher education and commerce (Zwaenepoel 1975, pp.322, 342, 348, 587). As of 1970, nonsectarian institutions (typically for-profits) spent four percent of their total budget on sites, equipment, and facilities, whereas sectarian institutions (typically non-profits) spent a much higher 12.41 percent (Isidro and Ramos 1973, p.157). As of 1971, for-profits held an average of 2.58 books per student, whereas non-profits held an average of 8.9 books per student (Zwaenepoel 1975, pp.347-8).
Filipino for-profits also produce a different kind of education. Students from for-profit institutions tend to take standardized vocational exams in much greater number, although they pass them at a lower rate. These facts reflect both the vocational emphasis of for-profits as well as the lower academic reputation of their students. Based on a sample of institutions from the Manila area (from 1963 and 1968), students from nonprofit religious institutions pass these standardized tests at an average rate of 38 percent, whereas students from for-profit institutions pass the same tests at a lower rate of 18 percent. For-profits, however, produce a much greater number of students taking the tests, and therefore pass a much greater number of students through the tests. Students at for-profits are approximately ten times more likely to take the tests. Adjusting for the lower pass rate from for-profits, the for-profits are putting about five times the number of students through the tests as the non-profits, even though for-profits educated no more than three-fifths of all Filipino students at the time (Miao 1971, p. 207).
This is broadly similar to the patterns we see in the United States. You might conclude that the for-profit status is more useful when an external test takes care of the signaling, and that a non-profit status is required when no test certifies quality. But why exactly should that be the case? Is the non-profit institution, by being so jealous of reputation, perks, and donations itself, a better producer of signals? If signaling yields so much private value, why can't a private for-profit make a sufficiently strong commitment to a credible signal?
My paper has been published in this book.