Not all robots have faces

Joy Buchanan2 Comments

Through Twitter, I have become aware of the SNOO. I’m quoting SNOO literature

Unfortunately, babies don’t sleep well on flat, still beds in totally quiet rooms. In fact, over 50% of

babies still wake up once a night after 6 long months. That’s a problem because poor baby sleep

causes the #1 new parent stress: EXHAUSTION!

SNOO gives a perfect 4th trimester of gentle shushing and rocking…all night long. And, it quickly

responds to your babies’ fussies with stronger sound and jiggly motion…

The bed hears your baby cry and rocks them back to sleep! I can probably count the number of times I have slept through the night in the past 6 years on two hands. If used wisely, this machine sounds like an incredible gift to families. (I can also see problems if used unwisely.) If the baby is crying for longer than 3 minutes, then the machine turns off and the expectation is that a parent needs to step in.

This reminds me of Tyler Cowen’s book Average is Over.

Continue reading →

When will housing prices fall?

James BaileyLeave a comment

US housing prices shot up during the pandemic. People spending all day at home wanted bigger houses, and the Fed fueled their demand with low interest rates. But home owners didn’t want to sell- the total number of homes on the market is less than half what it was a year ago. This combination of rising demand & falling supply has sent prices way up & cut the time homes spend on the market.

Contrary to popular belief, its actually rare for economists to make market forecasts and most of us aren’t especially well-equipped to do so- but I’m going to try anyway! I think home prices will almost certainly stop growing so quickly, and may actually fall, within two years.

Why? The end of the pandemic, the rise of new construction, and the end of low interest rates.

Continue reading →

Let’s Talk About Inflation

Jeremy HorpedahlLeave a comment

You’ve probably seen the headlines. Corn prices are double what they were a year ago. Lumber prices are triple. You can find all kinds of other scary examples. Is runaway inflation just around the corner? Is it already here?

And yet, measures of prices that consumers pay are much more stable. The most widely tracked measure, the CPI-U, is up 4.2% over the past year. That’s through April — and keep in mind that it’s starting from a low base since March-May 2020 saw falling prices). The Personal Consumption Expenditures index, often preferred by economists, is up just 2.3% (though that’s only through March).

So what gives? Do these consumer measures understate inflation in some way? Or is the increase in commodity prices telling us that consumer prices will increase soon?

Let’s take that second question first. Do higher commodity prices necessarily lead to higher consumer prices? The answer is a clear no. First, we can see that in the data. The producer price index for all commodities (such as corn and lumber) is up 12% over the year (through March, with April data coming out tomorrow). That’s a big increase. But as the chart below suggests, that probably will not lead to 12% increases in consumer prices. It probably won’t even lead to a 5% increase in consumer prices.

Notice two things about this chart. First, commodity prices (the red line) are much more volatile than consumer prices, both on the upside and downside. Second, there really isn’t much of a lag, if any. The direction of change is similar in both indexes, almost to the month. When producer commodity prices go up, consumer prices also go up, that very same month, but not by the same amount. So all of that 12% increase in producer prices is probably already reflected in consumer prices.

Why might this be? Simple supply and demand analysis (hello Econ 101 critics!) can tell us why.

Continue reading →

Bracing for the Swarm of “Charismatic” Cicada Bugs

Scott BuchananLeave a comment

In the Mid-Atlantic region of the U.S., there are two basic types of cicadas. One type appears every year, but in small numbers. One bug up in a tree can fill a whole block with its buzzing sound. But every seventeen years, the periodic cicadas, also (incorrectly) called “17-year locusts”, emerge and drown out every sound but their own. They can make a residential neighborhood sound like an airport. The seventeen year swarm is due to emerge any day now.

Continue reading →

You simply must go

mdmakowsky1 Comment

There is no shortage of travel media. A million writers, marketers, and eternally-aspirational “influencers” are desperate for your ear, while a litany of airlines, trainlines, and cruiselines are more than happy to take you there. Every year there is a new place that “you simply must go”, it’s “transformative”. Places that remain untouched. Places that are now safe to go. Places that are exciting or sandy or have the best seafood you’ve ever had. All desperate to tell you where to go, where you have to go.

It’s all very stupid. Not because you shouldn’t travel, quite the contrary. No, it’s all stupid because there are more places to go than you’ll have months on this earth. There are so many interesting, wonderful places to go, most of which you’ve never been to and never will. You really don’t need that much advice. You just need to go to as many places as you can, which means economizing on your limited resources, which are invariably time and money.

We’re all getting vaccinated and it’s time to get outta here. So where do I think you should go? I have no idea, but here is how I travel:

  1. I write a list of places I/we want to go. It has to be at least 15-20 deep and I try to update it twice a year.
  2. I try to identify pockets of time when we can travel months in advance, the bigger the window, the better.
  3. When its time to book a trip, I just start googling airfare for places on the list and write down numbers.
  4. Whatever is currently the best price opportunity (not just the cheapest) we go and then cross it off the list when we get back. This is a fuzzy “within-destination” estimation. Nashville is always going to be cheaper than Paris, but if Paris is $400 cheaper than the last few times we looked, then that’s a better choice than Nashville at half the price.

That’s the search protocol. Then there is the single most important rule: Never pay for something that you don’t want. This is essentially an “off-season” rule.

  1. Only go to places with beaches in the winter if you don’t want to actually sit in the sand all week.
  2. Only go to the mountains in the summer, unless you plan on skiing everyday.
  3. Avoid large American cities around major holidays.
  4. Avoid ALL large cities around New Years.
  5. Avoid anywhere hosting an All-Star Game, Super Bowl, etc. Same goes for Kentucky during the major horse races unless you have a ticket.
  6. I’d say avoid Spring Break and Beach Week destinations, but is that seriously something you’d even consider? Please.

Simple rules once you are there.

  1. Find a hotel/airbnb walking distance from public transportation.
  2. Walk everywhere you can.
  3. Walk everywhere you intend to drink alcohol.
  4. Eat most meals standing up, sitting outside, or at the bar.
  5. Don’t spread your food budget evenly. It’s better to have one super expensive meal and 13 meals at trailers, trucks, and kiosks.
  6. Go to a local sporting event
  7. Go to the library
  8. Go to bookstores and junk stores, even antique stores, but never knick knack stores. Intentionally adorable is not the same thing as quirky or idiosyncratic.
  9. Drink what the locals are drinking.
  10. Find something they make there, maybe tour a factory or brewery or lavender field.
  11. If there is a major university, see if they have a History PhD program. If they do, see if there are students who will give you a walking tour for cash. I’ve done this twice and it was awesome. Don’t do this in Rome, the student will be arrested and fined.
  12. Find the art they care about that tourists don’t. Opera, theater, symphony, spoken word. If it sucks leave at intermission.
  13. Most tourist traps are traps but sometimes they are the Blue Lagoon hot springs in Iceland and you should actually go.
  14. Keep walking. Bring good socks and shoes, maybe a couple knee sleeves. Advil. Hydrate.

I don’t know where you should go, just go. You can probably still get a reasonable flight to Toronto or Berlin or Greenville and you should just go.

Covid Pandemic Diary Part 2

Joy BuchananLeave a comment

I pick up from my previous post in May 2020.

That tweet from early May captures some of the joys and frustrations of working from home with small children. It was hard to get work done. My career suffered. At the same time, in my case, there were happy moments. My kids got more time with me and also with each other. One reason I didn’t go crazy is that we could get outside and the weather was decent throughout “lockdown”.

Something that happened quietly is that two-income parents hired private nannies and never mentioned it on social media. I know there are lots of families who did not do that and had a hellish year trying to parent while working from home. In my case, daycare was back open in June with extra health precautions.

Late Spring was a time when it seemed like the United States might be the worst-performing country. Certain parts of Asia were models of efficiency and cooperation, by comparison.

Late May is when I breathlessly tweeted that I had purchased a box of masks. Finally, the supply caught up with demand. Masks became plentiful and cheap. That helped us find ways to be together without such a high chance of spreading germs.

July 2020 – My public school system (which had gone virtual in the Spring) announced that elementary parents would have a choice of in-person (with masks) or virtual for the Fall. Our schools have been open all year (with masks) and no major outbreaks.

High school and middle school students did more forced remote days than elementary-aged kids. I really appreciated the creativity and flexibility. Remote school is harder on younger kids (and parents of younger kids).

I emailed my city representative to ask for a drive-through testing site in our city. He said he would bring it up at the council meeting that night. Within two weeks, they had done it! This was incredible. I did not expect that because of one request this would suddenly just happen. I suppose there were enough people who wanted it already. It probably helped that city council elections were right around the corner and he could take credit for doing something helpful. Twice in 2020, I used my city hotline to get an appointment for a Covid test.  

In August, my university got ready to bring students back for some in-person classes, while also offering remote options for every class. The campus sprouted one-way walking stickers and masks were required everywhere.

Economists moved conferences online. On September 10, 2020 I stayed up a little late to catch one of my Chinese colleagues presenting at the ESA worldwide virtual conference. My daughter didn’t want to stay in bed, so I let her stare at the Zoom meeting for a bit.

I have said nothing so far about politics in 2020, the year of politics. The televised debate between President Trump and now-President Biden in September of 2020 was a stressful event for me. If we can’t even speak to each other, then no amount of good ideas will help us solve problems. That sad moment in American history made me more determined to maintain this blog as a place to talk about ideas.

The Fall of 2020 was when intellectual soldiers like Alex Tabarrok were alerting us to the fact that we could have vaccines if the government would let us. I was following that news and doing some signal-boosting. Some of my friends on social media announced that they were participating in vaccine trials – thanks!

My university offered rapid tests to employees at the end of the Fall semester. It almost felt like a miracle to be able to just know in 15 minutes if I was carrying Covid or not (yes, I know about the false negatives).

There were moments in peak-wave when local hospitals were full because of Covid. Alabama’s worst month as measured by deaths was January 2021. When Covid was spreading widely in December 2020, I believe a lot of people did not expect that vaccines would be available so soon in the future. On the margin, a few more people might have foregone holiday parties if they had known.

Vaccines became available to medical professionals around January 2021. That was exciting news, since we had all been feeling bad about the doctors and nurses treating infectious Covid patients.

Earlier than I expected, I was able to get the Pfizer vaccine because of my “educator” status in the state of Alabama. It is convenient that I live near UAB hospitals. They had the technology for cold storage and administering the Pfizer vaccine. It was a huge relief to get the vaccine while teaching in-person classes. Since I had been following vaccine news closely, it felt like a huge achievement.

There was a period of time when conversation among my neighbors and colleagues revolved around the vaccine. Water cooler talk was “which one did you get?” or “did you have side effects?”  People told stories about how a friend called to tell them that one place had extra doses at the end of the day. Even when it was technically reserved for old people only, some young people found connections. One of my students told me he wouldn’t be in class because he was going to drive 6 hours to another state to get a vaccine. I don’t want to make the system sound corrupt, because it largely was not. It’s just a fact that some places couldn’t distribute all of their doses to the people who were designated for them. It was better to get the leftovers into arms than waste them.

I treasured that energy, and I miss it. Now, in May 2021, after all the work that went into producing vaccines, Americans are refusing to show up for shots.

Covid Pandemic Diary Part 1

Joy BuchananLeave a comment

Last week on Twitter, a writer in France reached out for accurate information about what is going on the US right now with regard to vaccines.

This got me thinking about the value of narratives and true stories. I’m going to chronicle a few of the Covid events experienced by me personally. Myself and the adults in my family are fully vaccinated, so life is starting to feel normal again, even though I still wear masks in many public places. I’d like to write this down in case it is useful and so that I don’t forget it.

Continue reading →

Bad Jobs Exist

James Bailey2 Comments

I’m James Bailey, an economist at Providence College who studies how government policies affect health care and the labor market. Thanks to Joy for the chance to join the blog for a few months!

For my first post, I have to share the brand new book I wrote a chapter of, “Regulation and Economic Opportunity: Blueprints for Reform“. Normally academic volumes like this are sold for hundreds of dollars, so only a few people with access to academic libraries end up reading them. But the publisher of this volume, the Center for Growth and Opportunity, released it as a free Ebook– so I hope you’ll check it out. It covers everything from housing and health care to energy and education to beer and cigarettes.

I wrote chapter 5, on how various regulations affect wages and employment. Here’s an excerpt:

Continue reading →

The Pappy Pricing Puzzle

Jeremy Horpedahl2 Comments

If you drink bourbon whiskey (or even if you don’t) you’ve probably heard of Pappy Van Winkle. Bourbon has experienced something of a revival in the past two decades, after being in decline for much of the 20th century. As part of this revival, some bourbons have become very highly sought after by the nouveau bourbon enthusiasts. And the various offerings of Pappy Van Winkle are arguably the most highly sought after. Finding Pappy is almost impossible these days, though this was also true a decade ago so it’s not really a “new” phenomena.

So here’s the “puzzle” for economists: why aren’t Pappy and other rare whiskies sold at market prices? No one in the “legal” market seems willing to do so. I put “legal” in quotation marks because there is a robust secondary market for these bottles, and the legal status of these sales is entirely unclear to me as an economist (alcohol markets are, to say the least, highly regulated).

In these secondary markets, it is not unusual for a 20-year bottle of Pappy Van Winkle to sell for $2,000. The “manufacturer’s suggested retail price” is $199.99. But you will never find this bottle on the shelf for that price. The bottles are held by retailers, either to sell to friends, auction off for charity, or conduct a lottery for the right to purchase the bottle at well below market prices.

So why doesn’t the distillery raise the MSRP? Clearly, they do this from time to time. Ten years ago, if you were lucky enough to find this bottle it was around $100 (I was lucky enough, on occasion). Clearly, they recognize that prices can increase. And that’s not just “keeping up with inflation”: $100 in 2011 is about $120 in current dollars. By 2016, they had raised the MSRP to $169.99. But why doesn’t the distillery raise the price more, perhaps all the way up to the market clearing price? By doing so, they would, perhaps, be able to ramp up production so that in 2041 there might be a lot more Pappy on the shelf. At the very least, they could dramatically increase their profit.

Receipt for 1 bottle of 20-year Pappy and 2 bottles of 12-year Van Winkle “Special Reserve” from 2011.

Also, why don’t retailers just put bottles on the shelf at $2,000? Stores occasionally do this, but mostly because they are fed up with all of the customers calling about rare bottles. Sometimes they will price it even higher than secondary markets. But usually, they allocate the bottles by something other than the price mechanism. Why? Businesses don’t usually leave dollar bills, especially $1,000 dollar bills, on the table.

Continue reading →

Was “World War II” Just a Myth?

Scott BuchananLeave a comment

May 5, 2415

[To:] Mark Livingstone,

25 The Standards,

Verneville, Alassippi

Dear Mark:
in your last letter you made one palpable hit, but only one: I admit that the atomic wars of the Twenty-first Century and the cataclysms of the Twenty-second Century destroyed so much of our cultural inheritance, including nearly all our Nineteenth and Twentieth Century history, that there is very little we can turn to of those times that is authentic. Apparently that is the only point we will be able to agree on.

I cannot possibly believe, for instance, as you do, that there ever did exist an Abraham Lincoln as so glowingly portrayed by our two or three surviving “history” digests; nor can I believe there ever was a World War II, at least such as they described. Wars, yes – there have always been wars, and a World War II may have occurred – but certainly not with such incredible concomitants.

In short, your history is much too fictional for me.

Continue reading →