Something that stood out to me about the two sources above are that the entertainment aspect made more people push through to the end and learn as a result. Right now, after my kids are asleep, I’m splitting my time between reading The Property Species and watching The Good Place on Netflix. The Property Species is really good, but it’s not catnip for my brain like The Good Place.
My son was home for most of the past week, so one of the things I forced him to do was read out loud. He needs to learn to read, and I know reading simple books out loud is good for him. It was clear that he would have chosen a painful burn over learning in this way.
Alexander the Grate is homeless, but I learned that he prefers the term No Fixed Address (NFA). He and Tyler discuss what it is like to live in DC as a homeless person. Policy is mixed in with interesting stories.
Matt Y’s guest on Slow Boring, Jeff Maurer, delivers information on Chad. As he points out, 16 million people live in Chad, so we should educate ourselves about the political situation and how our own policies would affect the fate of the citizens. He, the self-proclaimed Lady Gaga of Chad, is irreverent for a cause.
This week the Biden Council of Economic Advisers blogged about “Historical Parallels to Today’s Inflationary Episode”.
Consumer demand in 2021 is roaring back after pandemic shutdowns. Demand for airline travel is exceeding expectations. Car dealer lots are empty.
The authors argue that, of all the periods of rapid inflation in American history, the boom after WWII has the most parallels to today.
During WWII, Americans were obviously in war mode. Price controls and supply shortages led to deprivation on the Homefront. Families had trouble buying cars, just like today.
Instead of focusing on consumer or industrial durable goods, manufacturing capabilities were concentrated on military production. Today’s shortage of durable goods is similar—a national crisis necessitated disrupting normal production processes. Instead of redirecting resources to support a war effort, however, manufacturing capabilities were temporarily shut down or reduced to avoid COVID contagion.
Remember when oil had a negative price in 2020? While people in the US were staying home, many were building up personal savings. As soon as the “war” ends, consumers compete as buyers and drive up the prices of the limited available goods.
They present the post-war inflationary episode as dramatic but temporary, because it only lasted for two years. It’s short compared to inflation of the late ‘70’s. They are standing behind the Powell “transitory” story, in their conclusion.
On the other hand, they say that the most comparable moment in history to today involved the price level spiking 20% and taking two years to come down. I’m pondering a very expensive repair on our car, just make sure I don’t have to buy a new one soon.
Paul Fain writes a newsletter called The Job. The newsletter typically presents a few paragraphs one topic and then provides summaries and links to relevant news and current research. I subscribe because I write on and teach labor economics. The title of the letter this week is “Skills and Employability”.
As federal and state governments mull big spending on skills training, some experts say more resources should go toward boosting the literacy and numeracy of Americans without college degrees.
And despite the widespread belief that a quality liberal education in a college degree program is the best way to develop the sort of highly sought skills that pay off in the job market, many college degree holders also lack proficiency in literacy and numeracy.
Fain’s cites a recent essay by Irwin Kirsch calling for more opportunities for illiterate adults to achieve literacy, so that they can take advantage of continuing professional education. Kirsch is calling for more education so that the adults can do yet more education. I’m an educator and find myself sympathetic to Kirsch’s plan.
This is my day in the sun. A decade ago, I started ecoNomNomNomics.com. Back then, I knew that my dream job was “economics professor”, but I was years away and also thousands of miles away from where I am now. I have barely updated the site since 2011, but every now and then new people find it. My hope has always been that it would be both helpful and happy.
A French publisher reached out to me and asked for permission to use one of my cartoons in their workbooks that will reach actual French students. I was delighted to say yes.
Allons-y! With their permission, I reproduce the page that has my picture:
Recall how this all started, as per the Econtalk podcast record in March 2020:
Tyler Cowen: I have been hunkered down at home every day, with some quick trips outside, typically to use the printer at work or maybe to refresh some grocery supplies as quickly as I can. But, , I wake up; I get onto my sofa; I get into information-absorption mode, and just let it rip until it’s time to go to bed at night. And, I’ve been blogging and writing about this the whole time, and really not doing very much else. Although I am spending more time cooking.
So, what I see as the data come in is we ought to have greater concern as to the possible risks here, for this being a very large scale negative event.
… And in fact, I don’t think I’ve ever been busier in my entire life. Reading materials, writing, passing along advice, just processing information. Every day feels like an enormous rush of things I have to do, even though in the sense of my physical surroundings it’s quite static.
No one had all the right answers in the Spring of 2002. How many people devoted themselves to figuring it out? Who was reading dense medical research papers instead of watching extra Netflix, after being forced into semi-quarantine? There have been many heroes of the pandemic (see data heroes). The Marginal Revolution blogging team is certainly among them.
I have a virtual heap of notes on pieces I would like to write. I made notes a few years ago for an essay with the working title “Tyler Cowen as pro life economist” (which has nothing to do with abortion, by the way). I was going to construct an original argument and pull together disparate facts. Someday, maybe I will write it, but now I’ll be leading with the example of the pandemic response. It’s so obviously “a matter of life and death”. If they caused the vaccine to arrive a month sooner, then we can count the lives saved.
I didn’t plan to phrase it this way, in my original essay, but everything is life and death to economists. Occupational licensing is life and death. Deflation is life and death, because if economic output is lost due to deflation that will be someone’s prescription payment and someone else’s ability to live a full life. Economic growth is life and death. Tyler is one of the few people pointing out that it’s not only today’s low-income people but also future generations that will have longer fuller lives if economic growth is higher.
I became aware of SlateStarCodex during the online kerfuffle over the popular blogger, Scott, getting his real name and professional identity exposed by the NYT. He’s written a new post about the whole event. He is a victim of sorts, but he doesn’t ask for more sympathy than he deserves. His story is an interesting case study concerning free speech and the internet.
See here the consequences of becoming a known figure in 2020. Quotes from Scott:
The New York Times thought so. Some people kept me abreast of their private discussions (in Soviet America, newspaper’s discussions get leaked to you!) and their reporters had spirited internal debates about whether I really needed anonymity. Sure, I’d gotten some death threats, but everyone gets death threats on the Internet, and I’d provided no proof mine were credible. Sure, I might get SWATted, but realistically that’s a really scary fifteen seconds before the cops apologize and go away. Sure, my job was at risk, but I was a well-off person and could probably get another.
So, you know, death or abuse and unemployment is all. Scott recognizes that some people have it worse. He used his situation to discuss the whole issue of anonymity. Why do people want anonymity to discuss their ideas? Scott brings us some data:
And: a recent poll found that 62% of people feel afraid to express their political beliefs. This isn’t just conservatives – it’s also moderates (64%), liberals (52%) and even many strong liberals (42%). … And the kicker is that these numbers are up almost ten percentage points from the last poll three years ago.
Leopold said when he started his new blog that he would be thinking long-term. He has managed to stop staring at footage of the capital raid last week and produced a forward-looking blog. He is not the first person to speculate that the US has a vulnerability in its reliance on the country we buy the most stuff from.
Free trade is awesome. Something that is going to link together all EWED writers is a common respect for the power of trade to make lives better. Consumers who have access to world market can have much more great stuff. Enjoying your chair, or your phone, or you lightbulbs right now? It’s great to have access to more stuff and be able tot get it cheaper.
However, there are those who worry that if country A abandons domestic production of widget B, then in the unfortunate/unexpected event of a war, country A will be in trouble. For example, it would be concerning for a military power if they are not able to make any steel themselves.
Should country A use tariffs to stimulate domestic production? Tariffs really bother economists. Tariffs bite into the wonderful benefits of free trade. Since I talk to economists, I have heard a lot of arguments against tariffs. Leopold makes a novel argument against using tariffs to advance national security interests.
The problem with tariffs, however, is that they are royally ineffective at reducing the security vulnerability we are concerned about. A general tariff incentivizes onshoring the production that is cheapest and easiest to onshore—but it is likely the imports for which onshoring would be the most expensive and difficult that present the greatest security vulnerability, as I will explain. In the language of economics, I argue that the imports that present the greatest security vulnerability are those with the most inelastic import demand—while a general tariff most reduces those imports with the most elastic import demand.
I propose an alternative approach: general per-product quotas. These would better target vulnerability than a general tariff.
Instead of having tariffs, require that a certain number of several products be made domestically. That would be expensive, but we already put up with huge losses from tariffs. We already spend hundreds of billions of dollars on defense. The question is not whether we are going to spend money on defense. How can we spend money in the smartest way that recognizes how markets generate information? Think about the government buying 1,000 digital watches made on a friendly supply chain, and also dispensing with some costly tariffs.
Note that Leopold, if I understand him correctly, uses the word quota to mean that the government will buy a block of domestically produced goods at above-world-market prices. This is different from the way “quota” is sometimes used in international trade. See this MRU video narrated by Alex Tabarrok for a discussion of import quotas versus tariffs, a separate topic.
Dan Wang is a writer who currently lives in Beijing. He’s released another long letter about what is going on in China. I’ll share the part that caught my attention.
Waiting politely in line is a pretty strong norm in America. I had heard from several sources that Chinese norms for waiting in an orderly line were weak. Here’s an update on that:
And for years, Xi has emphasized following clear rules of written procedure, under the rubric of “law-based governance.” Since then, the state has improved regulatory systems, for example in setting clear standards for license approvals and in securities and antitrust regulation. The state has removed some of the arbitrary aspects of governance, thus bringing serious enforcement actions following the passage of relatively clear regulations. That has improved facts on the ground. Companies and lawyers tell me that a decade-long effort by the State Council to ease doing business has yielded real results. Obtaining business licenses no longer requires a relentless pace of wining and dining, and has instead become close to a matter of routine. I haven’t been able to verify this fact for myself, but one of my friends told me that the office of the National Development and Reform Commission used to be ringed by some of the fanciest restaurants in Beijing, offering mostly private rooms; many of these restaurants have now closed, following the professionalization of business approvals.
The lived experience of being in Beijing has improved in parallel. I remember what a nightmare it was to buy a high-speed rail ticket for the first time years ago, which involved lots of yelling and multiple people cutting in line. Today, I purchase one on my phone, with no need to obtain a paper ticket, and the lines to board are more or less orderly.
China is changing.
Incidentally, I tried to start a company when I was about 19 in New Jersey. Applying for a tax ID number for my sole proprietorship was quick and easy. All I had to do was fill out a form and pay a small fixed fee to some government office.
How likely is it that an opinion critical of [topic] will get expressed by someone on the internet?
My good friend (call her Anne) texted me this week. Anne sent me a link to a blog that declared some of her preferred works of art (i.e. musicals) to be inferior. She loves art, so to be told that her tastes were not exceptionally good was disappointing.
In my reply I wanted to make sure that Anne wasn’t putting too much weight on this new evidence:
How should we incorporate blogs into our beliefs about reality? (I see the irony – I’m writing a blog right now.)
The non-technical summary: you should be skeptical of what you read online.
The technical summary: the fact that some writer said “H” on the internet, should make you only slightly more confident that “H” is true.
I can’t improve on the Wikipedia presentation of Bayes’ theorem, so I’ll just paste in:
Let’s consider the probability that it is true that Anne’s favorite musical is bad. We’ll call that hypothesis “H”. What’s the probability of H, given that one person wrote an article stating that the musical is bad?
The evidence, E, is the article.
Instead of just evaluating whether the article is convincing or not, Bayesian inference requires that we consider
Were we confident that H was true BEFORE seeing the article? Was there good data up until this point that convinced us H is true?
If H is true, what’s the probability of this article being written?
What’s the overall probability of this article being written, regardless of whether H is true?
The probability that musical is bad given that someone wrote an article saying so is :
P(H|E) = P(bad|article)
P(bad|article) = ( P(article|bad) x P(bad) )/ P(article)
The right side of the equation asks whether we are likely to see the article if the musical is bad. If the musical is actually bad, then we are likely to see it condemned in print. HOWEVER, if we had a prior belief that the musical is not bad, then the numerator gets smaller.
Finally, we consider the denominator, P(E) or the probability of seeing an article that is derogatory towards the musical. If that probability is high, then the probability of the musical actually being bad goes down.
Here’s how Anne should think:
P(bad|article) = ( likely that article will be written if bad x prior evidence suggests not bad) / snobby think pieces get written regardless
P(bad|article) = (big x small)/ big = small probability that Anne’s favorite musical is actually bad
You should be just the right amount of skeptical when it comes to internet content. Be Bayesian.