Say that you live in a metropolitan area and that everyone works downtown. If you leave early, then you get to work WAY early. If you leave late, then you get to work WAY late. What’s up with that? Let’s say that the closer people live to downtown, the proportionally deeper you work in downtown.
Odds are that you live somewhere in between super far away and somewhere super close. That means that when you arrive at work, there are people closer to and further from the city center also arriving at their jobs. They are your competition. Their mere existence adds congestion to the roads and slows your velocity. As you all make your way closer to the downtown area, the congestion increases and the velocity falls still further such that your slowest speed occurs as you approach work.
The overall demographic of Econ Twitter people appears to be youngish professionals, mostly male, surprisingly social and normal-looking (surprising to me because I retain the ’90s-era stereotype that people who write a lot online are nerds who don’t want to talk to anyone IRL).
Adam opened with a history of EconTwitter, which to him is not just about Twitter, but is anywhere where communities of people write about economics online. This starts with the comment sections of the earliest blogs, like Brad DeLong’s, in the early 2000’s. Then in the late 2000’s many commenters start their own blogs, like Karl Smith at Modeled Behavior. In the 2010’s Econ Twitter comes into its own. It may persist or a new forum might take over, but either way the discussion and community will live on.
While it was cool to see a live recording of Odd Lots, and a panel on innovation with MacArthur Genius Heidi Williams, my favorite panel was the one on immigration, because it saw the most serious disagreement. Garett Jones and Daniel Di Martino argued for reforms to the immigration system that would move it away from a focus on family reunification and toward a focus on skills and other indications (like country of origin) that immigrants would benefit the US economy. In contrast, Leah Boustan argued that the current system has worked well, including for assimilation and economic growth, and we should be wary of making big changes to it. Moderator Cardiff Garcia pointed out the oddity of the economists from George Mason and the Manhattan Institute arguing for a “socialist” system where the government determines what the economy needs when it comes to immigration, while the Princeton economist argues against. Garett Jones noted that the rest of his department at Mason disagree with him, but he’s glad to have the freedom to disagree.
While the panel saw intense disagreement about what the ideal system looks like, all panelists shared a frustration with parts of the current system that seem to pointlessly slow or prevent high-skill immigration. Some of this is bureaucracy slowing the process for immigrants who are legally allowed already. Some is politicians refusing to make the smallest, simplest, most common-sense fixes unless they are part of a comprehensive immigration reform that hits their big priority. The big priorities differ by party, but the commitment to holding simple fixes hostage is bipartisan.
Hopefully discussions like this can start to change things. That might sound naive or idealistic, but on an earlier panel Matt Yglesias noted that we should be both impressed and slightly scared of how aware Capitol Hill staffers are about the opinions of Econ Twitter.
The magic of all this is that you never know what can come from a post. You might make a friend, make an enemy, get a job, lose a job, influence public policy, get a job in the White House… even make (or lose) a million dollars. So we keep poasting, and once in a while see the results IRL.
The scars of Hurricane Katrina were still obvious eight years afterward when I moved to New Orleans in 2013. Where I lived in Mid-City, it seemed like every block had an abandoned house or an empty lot, and the poorer neighborhoods had more than one per block. Even many larger buildings were left abandoned, including high-rises.
Since then, recovery has continued at a steady pace. The rebuilding was especially noticeable when I spent a few days there recently for the first time since moving away in 2017. The airport has been redone, with shining new connected terminals and new shops. The abandoned high-rise at the prime location where Canal St meets the Mississippi has been renovated into a Four Seasons. Tulane Ave is now home to a nearly mile-long medical complex, stretching from the old Tulane hospital to the new VA and University Medical Center complex. There are several new mid-sized health care facilities, but most striking is that Tulane claims to finally be renovating the huge abandoned Charity Hospital:
The new VA hospital opened in 2016 as mostly new construction, but they’ve now managed to fully incorporate the remnants of the abandoned Dixie Beer brewery:
Dixie beer itself opened a new beer garden in New Orleans East, and just renamed itself Faubourg Brewery. Some streets named for Confederates have also been renamed, though you can still see plenty of signs of the past, like the “Jeff Davis Properties” building on the street renamed from Jefferson Davis Parkway to Norman C Francis Parkway.
Of course, even with all the improvements, many problems remain, both in terms of things that still haven’t recovered from the hurricane, and the kind of problems that were there even before Katrina. The one remaining abandoned high-rise, Plaza Tower, was actually abandoned even before Katrina.
My overall impression is that large institutions (university medical centers, the VA, the airport, museums, major hotels) have been driving this phase of the recovery. The neighborhoods are also recovering, but more slowly, particularly small business. Population is still well below 2005 levels. I generally think inequality has been overrated in national discussions of the last 15 years relative to concerns about poverty and overall prosperity, but even to me New Orleans is a strikingly unequal city; there’s so much wealth alongside so many people seeming to get very little benefit from it.
The most persistent problems are the ones that remain from before Katrina: the roads, the schools, and the crime; taken together, the dysfunctional public sector. Everywhere I’ve lived people complain about the roads, but I’ve lived a lot of places and New Orleans roads were objectively the worst, even in the nice parts of town, and it isn’t close. The New Orleans Police Department is still subject to a federal consent decree, as it has been since 2012. The murder rate in 2022 was the highest in the nation. Building an effective public sector seems to be much harder than rebuilding from a hurricane.
As much as things have changed since 2013, my overall assessment of the city remains the same: its unlike anywhere else in America. It is unparalleled in both its strengths and its weaknesses. If you care about food, drink, music, and having a good time, its the place to be. If you’re more focused more on career, health, or safety, it isn’t. People who fled Katrina and stayed in other cities like Houston or Atlanta wound up richer and healthier. But not necessarily happier.
Today the largest annual gathering of economists begins, in-person for the first time in 3 years. It won’t be as big as the pre-Covid conferences, but I’m excited to spend a few days in New Orleans for the first time since I moved away in 2017. I lived there for 4 years; in the eventful 5 years since my knowledge likely became somewhat out of date, but I hope I can still provide some guidance for those new to the city.
For most people the main destination is the French Quarter. People are right about this; it is great to walk through to see the old colonial buildings, hear the street music, and eat the food. Some of the ASSA hotels are in the Quarter, but for those staying downtown or in the Warehouse district its definitely worth the walk. The Quarter is a big, diverse place, not only for tourists. Bourbon Street is the tourist trap. It is probably worth seeing once, but be prepared for crowds, loud music, and touts trying to get you into bars and strip clubs. The standard advice now is to skip Bourbon St and hang out on Frenchman street instead- which is in the Marigny, just east of the Quarter. There are two blocks entirely packed with bars / jazz clubs. Any evening you will have at least 5 shows to choose from, usually jazz, usually with no cover. Café du Monde is the other Quarter attraction that everyone does, and with good reason. They have decent coffee, and great beignets (a donut / fried dough sort of thing drowned in powdered sugar). There is often a long line to get a table or to get to-go, but usually not for both at once. There is a river walk just south of Café Du Monde, and the Jackson Brewery building is just east- there is a good place to sit and look at the river beside their food court.
In a short trip it would be entirely reasonable to just stay in the Quarter. But if you’d like to get out, the main attraction of New Orleans to me is the parks. Audobon Park is west of the Quarter in Uptown. It stretches from the Mississippi river to the Tulane and Loyola campuses. City Park is north of the Quarter in Mid-City, and is home to the Art Museum and Sculpture Garden. Both can be reached by trolley, and both are full of lovely ponds and interesting waterfowl. At the big lake in city park you can rent kayaks, or get a ride in a gondola.
People associate New Orleans with Cajun food, but most of the Cajuns settled to the west. The traditional New Orleans cuisine is Creole- a blend of the Italian, French, and other settlers. When I think about what makes restaurants attractive, I think about three things- food, prices, and everything else (service, wait times, ambience). In New Orleans it is very easy to find places with great food at good prices, but rare to find good places that also have short wait times and good service (Commander’s Palace, the best restaurant in the city, is already booked solid). My restaurant recommendations are the thing most likely to be out of date, so I’ll keep it short:
Central Grocery- original home of the Mufalleta, a creole sandwich. In the French quarter.
Dat Dog- fancy hot dogs (mostly sausages) with more toppings than you could ever want to choose from (including crawfish etouffee). One location is on Frenchman St- you can often hear live jazz from the bars by while sitting on their balcony. Cheap.
Hotel Monteleone- classy bar, often with live jazz, home to the rotating Carousel bar. One of many good places to try old New Orleans cocktails like the Sazerac. I’ll be staying here trying to get a spot on the Carousel.
New Orleans is unlike anywhere else in the US, almost like a Caribbean island (it practically is an island, surrounded by lakes, rivers, and swamps). The highs (food, music, knowing how to have a good time) are higher than just about anywhere else here, though the lows are also lower. One of the most special things about it is Mardi Gras. Mardi Gras day isn’t until February 21st this year, but Mardi Gras is really a whole season in New Orleans- and the first parade, Krewe of Joan of Arc, starts right in the Quarter on Friday January 6th (Twelfth Night).
Enjoy the city, and let me know if you’d like to meet up.
Winter holiday travel is notoriously frustrating. This year was especially bad if you were flying on Southwest. But that frustration about delayed and cancelled flights seems to have caused a big increase in pundits criticizing the airline industry generally. Here’s one claim I’ve seen a few times lately, that airline prices have “soared” as airlines consolidated.
Reich’s claim that there are 4 airlines today is strange — yes, there are the “Big Four” (AA, United, Delta, and Southwest), but today there are 14 mainline carriers in the US. There have been many mergers, but there has also been growth in the industry (Allegiant, Frontier, JetBlue, and Spirit are all large, low-cost airlines founded since 1980).
But is he right that prices have increased since 1980? Using data from the Department of Transportation (older data archived here), we can look at average fare data going back to 1979 (the data includes any baggage or change fees). In the chart below, I compare that average fare data (for round-trip, domestic flights) to median wages. The chart shows the number of hours you would have to work at the median wage to purchase the average ticket.
The dip at the end is due to weird pandemic effects in 2020 and 2021, so we can ignore that for the moment (early analysis of the same data for 2022 indicates prices are roughly back to pre-pandemic levels, consistent with the CPI data for airfare).
The main thing we see in the chart is that between 1980 and 2019, the wage-adjusted cost of airfare was cut in half. Almost all of that effect happened between 1980 and 2000, after which it’s become flat. That might be a reason to worry, but it’s certainly not “soaring.”
Of course, my chart doesn’t show the counterfactual. Perhaps without several major mergers in the past 20 years, price would be evenlower. Perhaps. But research which tries to establish a counterfactual isn’t promising for that theory. Here’s a paper on the Delta/Northwest merger, suggesting prices rose perhaps 2% on connecting routes (and not at all on non-stop routes). Here’s another paper on the USAir/Piedmont merger, which shows prices being 5-6% higher.
There are probably other papers on other mergers that I’m not aware of. And maybe all of these small effects from particular mergers add up to a large effect in the aggregate. But, as my chart indicates, even if the consolidation has led to some price increases, they weren’t enough to overcome the trend of wages rising faster than airline prices.
One last note: the average flight today is longer than in 1979. I couldn’t find perfectly comparable data for the entire time period, but between 1979 and 2013, the average length of a domestic flight increased by 20%. So, if I measured the cost per mile flown, the decline would be even more dramatic.
On Twitter, folks have been supporting and piling on to a guy whose bottom line was that we are able to afford much less now than we could in 1990 (I won’t link to it because he’s not a public figure). The piling on has been by economist-like people and the support has been from… others?
Regardless, the claim can be analyzed in a variety of ways. I’m more intimate with the macro statistics, so here’s one of many valid stabs at addressing the claim. I’ll be using aggregates and averages from the BEA consumer spending accounts.
I have previously wrote about living standards in Ireland, and how GDP per capita overstates typical incomes because of a lot of foreign investment.
This is not to say that foreign investment is bad — to the contrary! But standard income statistics, such as GDP, aren’t particularly useful for a country like Ireland.
Norway has a similar challenge with national income statistics, but a different reason: Oil. Norway has a very large supply of oil revenues relative to the size of the rest of its economy, and oil revenues are counted in GDP. But those oil revenues don’t necessarily translate into higher household income or consumption.
Using World Bank data, Norway appears to be very rich: GDP per capita in nominal terms was about $90,000 in 2021. Compare that with $70,000 in the US, which is a very rich country itself. Sounds extremely wealthy!
Of course, by that same statistic, average income in Ireland is $100,000. But after making all the proper adjustments, as we saw in my prior post, Ireland is right around the EU average in terms of what individuals and households actually consume.
I was in DC last weekend for the Effective Altruism Global conference. I met a lot of smart people who are going to have a huge impact on the world, and some who already are. I’ll share a few of my favorite highlights here, with the disclaimer that most quotes won’t be exact:
The mistake every do-gooder makes is coming to a country and thinking ‘I’m just here to help people, I’m not a political actor.’ Guess what? You are. What you do changes the balance of power, often toward the center
You should all be political independents, both parties are terrible. You should be voluntary social conservatives, behave like Mormons…. we need a marginal revolution toward the better parts of the Mormon / social conservative package
Tyler later specified that the main things he meant by this were to marry young and not drink, though I don’t think he realized how common the latter already is:
As he often does, Tyler recommend that people travel more:
If I meet someone who’s been to 40 countries I tell them they should travel more, and to weirder places
But when someone asked “How much travel is too much”, he came up with this limiting principle:
How much travel is too much travel? 10% after your significant other gets mad at you
I asked Matt Yglesias how much of his policy influence comes just from writing things online, and how much from personal connections and being in DC. He said something like:
Personal connections matter a lot given how real people change their minds, but there’s also less of a dichotomy than you’d think. For instance, a WaPo column of mine was getting passed around the White House, but I wrote it because someone in the WH suggested the topic. Politicians often communicate with each other via the media, though I wish they wouldn’t. Just talk to each other, you work in the same building!
My tweets are more influential than my columns & substack, because they are read so much more & I’m followed by many journalists. Overall though now is a great time for specialists, obsessives and weirdos. Construction Physics is a great blog now but if he’d written it in 2003 people would just be like, WTF. On the other hand my [generalist] college blog did well in 2003 but if a college student wrote the same kind of things today people would say, who cares?
Journalists are suspicious haters, that’s our function in society
Tyler and Matt were both telling people that you can accomplish your goals more effectively by being more “normie” in some ways. This can be a bit of a sacrifice, but:
If you can give a kidney, you can learn to tie a tie, give a firm handshake, and look people in the eye
I’m some combination of smart enough and arrogant enough that its normally rare for me to meet someone and think “oh, you’re smarter than I am”. But at EAG it was common; not just because of the ridiculous numbers of top-university degrees and real-world accomplishments, but the breadth and depth of the conversations, everything from mental math to number theory, AI to finance, to a surprisingly convincing pitch for the relevance of metaphysics for political theory.
It wasn’t a step up for everyone though; I talked to someone at a top hedge fund who said the people he worked with were “are the smartest, most dedicated people I’ve been around…. smarter than EAs, more able to execute than mathematicians at [top PhD program he was at]”. They work 12 hour days, actually working the whole time (no long lunch break, small talk with colleagues, reading social media on their computers)… but all in a ruthless, selfish, impressively successful quest to outsmart the market and make more money.
Overall it was a great time and helped me narrow down my plans for what to do with my time and brainpower post-tenure. If you’re interested there are more conferences ahead.
For many decades the Allied Social Science Association (ASSA) meetings, anchored by the American Economic Association, have been by far the world’s largest gathering of economists each year, typically attracting well over ten thousand. But the meetings went virtual-only for the past two years, and when they finally return in-person in 2023 they will likely be substantially diminished.
Some of this is due to potentially one-off factors; some people don’t want to travel to Louisiana because of its state laws, some still want to avoid large conferences because of Covid, others want to avoid the ASSA’s response to Covid:
All registrants will be required to be vaccinated against COVID-19 and to have received at least one booster to attend the meeting…. High-quality masks (i.e., KN-95 or better) will be required in all indoor conference spaces.
But the AEA made one big, apparently permanent change that means it could be a long time before we see a meeting as big as January 2020’s in San Diego- they gave up the job market. Prior to Covid the vast majority of first-round interviews to be a full-time US economics professor took place at ASSA. Naturally interviews moved online during Covid, but surprisingly the AEA has asked that they stay online, and in fact has specifically asked schools NOT to schedule interviews during ASSAs. This removes a huge source of demand for the meetings- the ~1200 new PhDs looking for their first jobs, the thousands of people there to recruit them (each hiring school typically sends 2-4 interviewers), and everyone trying to switch jobs. This was THE big thing that made AEAs special, that other conferences didn’t really have.
I’ll let everyone else debate whether this makes the job market better or worse; I’m agnostic there, but I’m sure it will shrink the conference. One silver lining to a smaller conference is that it is much easier to find a hotel room. Like usual I was waiting on the AEA website this Tuesday to book a hotel room on the first minute the AEA’s deeply discounted hotel blocks opened, because the good hotels tend to fill up near-instantly. But it appears this was unnecessary this year- two days later and even the headquarters hotel is still wide open:
I got the room I wanted at the Hotel Monteleone; I’ll be looking to grab a spot on the Carousel Bar, maybe see some of you there. I’ll present a poster at AEA, but mostly I’m just looking forward to spending real time in New Orleans for the first time since I moved away in 2017.
So I’m still looking forward even to a diminished AEA, but it does make me wonder- which other conferences will benefit most from AEA’s decline? I don’t know that anyone has put together the numbers for all the conferences enough to know what the 2nd-largest is, but my bet both for the 2nd-largest and most likely to benefit is the Southern Economic Association; I’ll be there too, in Ft. Lauderdale this November.