Another one by Noah. It is very unusual for pundits to go back and revise their commentary, and to retract the data they’ve used to back up their claims. This one deserves applause.
This piece reminded me of Nick Szabo’s things as authorities, and how much of our interactions are intermediated by ideas that are tacitly embedded in culture. Society is built on the fact that we can agree without burning mental cycles on things. We encode accepted behavior in culture and technology, relying on those crystals of knowledge to abstract away complexity and layer even more complexity on top. We offload our question of who should go ahead first to traffic lights, and our questions of who must pay back for their actions to courts and judges. If we think of governments as platforms (an analogy from Tim O’Reilly’s WTF), we can see that government’s role is the construction of and upholding of these mechanisms that legitimize sources of authority. The platform coordinates behavior to reliably improve the relation between the individuals who build on top of it, and it does so by setting the rules of what’s admissible and what is not to the point that we don’t need to stop and think about them.
Also available as a podcast.This is not a new argument from Russ. He posits that our newfound tribalism isn’t all that new, and that it’s simply been exacerbated due to the incentives of the media industry, the filter bubbles of the internet, and the availability of content. He uses restaurants to illustrate the explosion of available choices, and contrasts how this explosion isn’t all that meaningful when choosing what to eat or shopping for shoes, becoming problematic only when there are high externality costs without a feedback mechanism that makes us pay the price from our mistakes. If we buy an uncomfortable pair of shoes, or order a bad plate of pasta, we suffer. Immediately. If we vote for the wrong candidate, our contribution to their election is minuscule, and their actions are diffused over many years - there’s no clear-cut feedback loop. This dynamic means that the ROI on truth isn’t all that high for any one individual, and in aggregate, we end up with a market failure in which media is louder and angrier, as it sells more than nuanced positions would, and each one of us becomes more entrenched in our beliefs, disconnected from each other. Let’s all try to be more nuanced?
Trade wars are good and easy to win. Really cool economics data viz work from the NY Times, however sad the topic.
This is one of the best articles on politics I’ve read in a while. In essence it is a Rawlsian veil of ignorance argument over how much power the Supreme Court has, and how strange the process of electing its memebers is. “A country where half the citizens feel their concerns have been placed beyond redress or appeal is a country that is headed for trouble.”
For a while now, Noah has been pushing a comprehensive case to open up immigration in the US. Including a slew of facts that show why the current nativist wave is based on false premises, as well as economic arguments for further opening up the borders, his platform is one I can definitely get behind. I’m biased, and I believe there’s a moral case for the US to open up, but the strongest arguments Noah makes are all in the economic interest of the country, not just the immigrants. This conversation is a good summary of his views.
Years after living here, I’m still wrapping my head around the way that American politics revolves around money, and how exorbitant the amounts necessary to run a successful campaign are. In this episode of TAL there is a broad discussion of how this works within the Democratic Party, as they tell the story of Jeff Beals, a primary candidate for Congress who tried to stand against some of these ideological stances - and lost.
If you believe in specialization, you should believe Krugman’s argument on trade wars. He basically says there’s two reasons for the stock market’s current drop re the potential trade war: 1) Efficiency loss imposed by artificial costs on international trade, which undo specialization (tariffs). 2) Stranded assets, which are worth more on paper than on the market. I’d say there’s a third thing in play here: behavioral overshooting. In any case, the stranded asset thing is interesting. It isn’t just the soon-to-be unproductive factories in China that lost value, but also their counterparts in the US, like real estate owned by foreigners.
Sadly, Szabo has not yet released the second part of this series yet. He argues that we’ve forgotten that money used to exist outside of the State’s purview, and it is implied in his argument that cryptocurrencies are just a reversion to older models of money without state intervention.
A thousand times yes. The average citizen knows nothing, is easily manipulated, and does not consider second and third order consequences. The 95 percentile citizen is not that different either. We outsource policy decisions and let politicians take care of things not because people are dumb, but because understanding the nuances of policy takes time and effort. Modern society believes in specialization and, by extension, if we let politicians be politicians while dentists take care of teeth and farmers take care of farms, everyone is better off.
An extension of Albert’s well known idea of bot representation. For most people “bot representation” is too abstract, but his rephrasing to “any system with 1 million+ users should by law be required to issue users with personal API keys” is quite clear. Brings up questions about the boundary of one user’s data and the next user’s data (ie, MY post on YOUR profile), what constitutes enough APIs to meet said standard, and who gets to decide these terms. These systems do things on many layers, not all available via UI. They’re different per user and change over time. The data that the API consumes and produces today looks different than it will tomorrow. The software engineering side would be a nightmare. But that can be solved with incentives. The more interesting question is whether we get access to the derived data, or just the raw. Am I only allowed access to my data points, or also the aggregates computed over time and in relation to other users? It’d be awesome to see something like this implemented.
In these days of political craziness, it’s good to remember history. “Trump supporters who thrill to the idea of a ‘big, beautiful wall’ on the border largely fail to grasp that the ancestors of many of the people they want to keep out have been here all along, and that people cross back and forth over the border in part because the border crossed a people.”
Bottom up or top down? I think neither. Lately I’ve been really conflicted about this idea of whether single humans can effect change in the world, and how.
Hannah listened to this before me, and insisted that I had to hear it. I truly don’t understand how this has been acceptable behavior for so long.
Episodes of TAL are divided in several acts, and for the most part the various acts are of similar quality in any given episode. On this one, act one knocks it out of the park with a story of immigration into Europe via two tiny Spanish enclaves in Africa.
People hold all sorts of bizarre unfounded beliefs. People also tend to think that their bizarre beliefs are more valid than others’ bizarre beliefs. When reality fails to agree with our mental models, and we’re pushed to reconcile those gaps, we crash. Rao watched Jake Tapper’s interview with Ted Crockett (the one where Crockett insists that elected officials must be sworn in on a bible) and proceeded to write a whole essay on how hard Crockett crashed, and why.
Limits on a ruler’s power strengthen a country’s credibility. Krugman compares the English and French monarchies, and explains how, back in the olden days, the English king was constrained by parliament while the French king didn’t have an equivalent division of powers, leading to healthier politics in London than in Paris. He then continues to make an analogy with the US today, where Congress should be the one reining in the executive. What’s the point of having a division of powers if people are not willing to stop toeing the party line?
And on that note… “Politics has become like a game of football in which the only thing that matters is that our side wins and nobody cares about the quality or even basic honesty of the game. Most of us have forgotten that we are citizens as well as partisans.” Dillow is talking specifically about Brexit, and the relationships between capitalism and democracy, and the fact that news and information markets don’t lead to the most informed citizenry.
I had no idea that desegregation in the US was pushed through congress via the commerce clause. There are some really interesting questions on how far the federal government can reach into state actions, and individual decisions. Making everything about money has its issues, and this episode does a good job of poking holes into some basic tenets of the US political system.
This is true capitalism at work. At a certain point, the demographics and economics of small towns make it impossible for private businesses to survive. This is why we have governments! Certain human processes are just not profitable, no matter how necessary they are, and we ask the government to step in and do the work to align those incentives, or to put up its own offices instead. A relevant example of this is USPS which is not meant to be a profitable business, but a useful service. Capital flowing out of these towns is inevitable - it is up to local governments to figure out how to provide the necessary services for its people. If that means these little towns should not exist, so be it.
And speaking of little towns, and local governments, here’s a piece on Taleb and his views on what governments should and should not do. Essentially, he advocates for small units of governemnt spurring from bottom up local knowledge. His quintessential example of this seems to be the Swiss canton system. Having just read Jane Jacobs’ amazing book on city building, I have to say I am starting to like these bottom up approaches more and more.
Something strange about my experience living in the US for the past ~7 years is that the average person I meet in the US (who is FAR from the average US citizen in most respects) is convinced that the US is great, if not the best, in nearly every field. While I don’t necessarily agree with some of the arguments and examples given here, I definitely agree with the overall sentiment: people in the US have a misplaced superiority complex, and if things keep going in the direction they’re going, they’re only going to fall further behind.
Speaking of falling behind, here’s Mankiw making some very reasonable arguments for things that we should not be arguing. The higher education system in this country might need some reform, especially on its financing and in the administrative arms race it has triggered in the last couple of decades, but the tax scheme critiqued by Mankiw here is definitely not a solution. Disincentivizing people from going to college is not necessarily a bad idea - we might be subsidizing too much education in some areas - but if that is the goal, there are more direct ways to address it than through taxing endownments.
Ever heard about this fake news thing? Here’s some evidence that, at least in Mexico, it goes deeper than you’d think. I wouldn’t be surprised if the exact same thing is happening in the US right now.
A great analysis of labor and immigration in a little town in Alabama during the 90s, including interviews with locals, and research by several economists, who together make very solid arguments for immigration. The real issues are xenophobia and complacency. Don’t miss part two.
A spin on the basic income idea. Having a large sovereign fund that redistributes its profits seems smart at face value, especially if one believes in r > g. However, it brings up second order questions, like how to ensure such fund is properly managed, or whether those same assets could be more productive out of state’s hands. Sam Altman pushes a similar idea in American Equity, expressing the payout as “an annual share of GDP”. Intriguing, but perhaps too simple to actually work without unexpected effects.
I tweeted this out as an “Interesting argument from Milanovic” and he humbly corrected me, saying the argument really is Smith’s. Discussing interactions between democracy and power distribution during the colonial period, Milanovic summarizes Smith’s view: “More democratically-governed colonies (like the British) treat slaves worse because the elite which, in a system of oligarchic republicanism, controls the levels of power is reluctant to punish its own members who are particularly brutal towards slaves.” An unexpected lesson. It made me think of Roberts and Munger’s discussion about slavery, and how plantation owners argued the slaves were better off as slaves than on their own. The system must be full of perverse incentives if that is an idea put forth with a straight face.
This investigation of the publication Peter Thiel started while at Stanford was fascinating. Surely, there are other such clubs, at Stanford and elsewhere, with similar outsized influence in the business world. What makes the Stanford Review so interesting is the ideological aspect in this moment in history. I played a bit with the data and built a simple network visualization. As Granato mentions in a different piece, it is strange that by virtue of having been to an elite institution both him and I are just one link away from the people in this group, and of each other.
An odd thing about coming to the US, was realizing that no one here knows about filibusters. In Costa Rica, their existence is a defining chunk of history. The Walker Affair is disproportionately important to Costa Rican identity. There’s a national memorial holiday, parks named for its heroes, and, after some revisionist history, even the main airport in San Jose got its name from it. Reading this, and listening to Nate DiMeo’s Memory Palace episode on the topic made me notice that while we learn of the incident, in Costa Rica we’re never taught about the motivation. The fact that slavery was deemed legal south of the 36°30′ parallel gave people all sorts of messed up incentives.
…Especially because government doesn’t seem to be the right answer here. Regulation of tech companies is especially hard because the zero marginal cost model in which they operate does not match the original point of antitrust. Consumer surplus might be high, but the real problems being tackled here are not simply about prices, supply, and demand. Having the government police feeds is a freedom of speech question, but we also don’t want Zuck & friends to explicitly start censoring what can and can’t be seen. Lots of stuff to think about.
…speaking of which. Krause makes good arguments of how to fix up San Francisco. Some make sense, and some don’t. I agree with him that it’s not a problem of resource constraints. It’s an issue of political will. There’s no BART going up to Marin because of NIMBYs, not because there was no money to build it. I remember listening to a similar arugment on the YIMBY pocdast, where they discussed how the arbitrary geographic divisions in the Bay Area’s landscape makes coordination basically impossible.
So much of this seems familiar. The “thinking as a form of emasculation” and the attacks on “modern culture and the liberal intelligentsia for betraying traditional values.” Reading Eco’s memories of his childhood in Italy, and comparing them to today’s environment is frightening. In short some features of fascism as described by Eco are:
- Cult of tradition.
- Rejection of modernism.
- Veneration of action for action’s sake.
- Repudiation of criticism - disagreement is treason.
- Fear of difference, structured against the intruders.
- Appeal to a frustrated middle class, suffering from an economic crisis, and frightened by the pressure of lower social groups.
- Lack of a clear social identity. The only privilege is to be born in the same country, with identity defined by enemies within and without.
- Shifting rhetoric - the enemies are at the same time too strong and too weak.
- Life as permanent warfare.
- Aristocratic and militaristic elitism, which implies contempt for the weak. Power is based upon the weakness of the masses.
- Heroism as the norm, which leads to a cult of death.
- Disdain for women, and intolerance and condemnation of nonstandard sexual habits.
- No Individuals rights - The People conceived as a monolithic entity expressing the Common Will. The Leader pretends to be their interpreter.
- Impoverished vocabulary, and an elementary syntax, in order to limit the instruments for complex and critical reasoning. Newspeak.
Anyway go read Eco instead of my crappy summary.
I recently had a conversation with my girlfriend about how IP is a system of the past that is about to change. Here, Stiglitz and friends agree with me, and say that the solution should look a bit like open source software, but don’t really give a good answer to the question at hand: how can we change international IP law to maximize welfare in the long run? I’d love to learn more about this topic.
The demographics of the US Military are interesting, but I won’t pretend to know anything about them. The fact that there is such a strong divide on who signs up for it is a problem. Eventually, seemingly cohesive identities break. The distance is not only geographic.
I have been enjoying More Perfect recently. It has good insights into American History, and why things are the way they are in this country. They go deep. For example, there is a whole section of this episode about how the Black Panthers played a key role in the revival of the Second Amendment, and the rights to own guns. I had no idea, and fact that even this has a racial component is says a lot about the United States. On that note, if you have any general American History book recommendations, let me know, I’d like to learn more.
As I’ve mentioned again and again, the value of ICOs, tokens, and cryptocurrencies is in the new economic structures they enable. In her post, Ou goes through some late 90s/early 00s history of failed protocols and ideas which are now actually possible thanks to blockchains. However, the point of her post is that the potential benefit of the introduction of blockchain comes hand in hand with an increased friction in the form of transaction costs. Whether the benefit of deploying these ideas is greater than the friction introduced remains to be seen, and that is what will make or break each of these crypto projects.
I have long held the view that governments operate with relative ignorance from what their constituents want - not because of nefarious reasons, but because humans are humans and communicating our needs and desires is individually really hard, and nearly impossible at the collective level. The Silicon Valley mindset has its blind spots, but the fixation on experimentation and short feedback-loop iteration is something that could improve policy decisions. It is good to see the top brass realize some changes need to happen outside of the market.
A highly dystopian article. The presentation of this gig economy company as a consumer education platform is frightening. The fact that a team of engineers is building this, consciously, makes me upset. This is not an algorithm pulling the wrong thing into a feed, or acting upon the biases in a training dataset - these are people building the infrastructure for an ominous future. Why watch Black Mirror when non-fiction reads the same?
The article was really good. However, it’s something that the average person outside SV does not find problematic. People think of FB/Google/Amazon/etc as benign - we use them because they’re better than alternatives. The problem is, the more we use them, the more they become irreplaceable. Network effects/economies of scale here are a strange loop. Google is good because it has all our data, it’s bad because it has all our data. There’s a lot to be worked out here. How much of it is narrative, versus actual skepticism.
With in depth stories like these, it is clear that the NYT is working hard on showing more stories of Trump’s middle-America. There are many interesting topics here: identity and the meaning of work, the decreasing role of labor unions in US businesses, the politics and incentives of health care, the education system, race, gender, otherness, etc. What I was least expecting were the direct comparison between the Mexican workers and the Midwesterners - one’s perception of the other as rich with their multiple-times higher salary, and the other’s misconception of what things are like outside their geographic bubble. This is good reporting.
With this blog post, Krugman seems to have forgotten some of his pre-election punditry. Nevertheless, he makes a number of great arguments, backed by data and peer reviewed studies. Since most of you won’t click through, here’s the TLDR (all these are lies being fed to the American public):
- America is the most highly-taxed country in the world
- The estate tax is destroying farmers and truckers
- Taxation of pass-through entities is a burden on small business
- Cutting profits taxes really benefits workers
- Repatriating overseas profits will create jobs
- This is not a tax cut for the rich
- It’s a big tax cut for the middle class
- It won’t increase the deficit
- Cutting taxes will jump-start rapid growth
- Tax cuts will pay for themselves
I knew that Amazon employed a ton of seasonal workers, but I had no idea of the extent of the program, nor the fact that most of the laborers were retirees. Bruder does a great job in this exposé, giving us a window into the dystopian labor conditions that her protagonists endure. Most interesting is the fact that for a non-insignificant group of the population, the pangs of the financial crisis are still very much alive. I also read a review of her book in the NYT, where the reviewer pointed out a fact I kept thinking about as I read the column - this is all about old white people. A big error of omission in an otherwise great read.
A great summary of how social media’s influence creeped into the political landscape. Madrigal’s account is more thorough than I could even imagine. Perhaps the most interesting point about his piece - one that I had not seen made this clearly elsewhere - is that the 2016 election was not so much about blind-siding, but frog-boiling.
The notion that Trumpism arose thanks to the 2017 equivalent of a DDoS attack, or an SQL injection on social media has been going around for a while. Here, Thompson makes a good analogy between Facebook today and Microsoft in the early 2000s, and exposes the dangers of assuming people’s good intentions on your platform.
A lot of people are asking themselves how is it that the market is doing so well, when the political environment and various economic indicators make it seem like it should not. Many people predicted that with Trump as president, the US economy would not do well - myself included - so what’s going on? Fox argues that a good chunk of the growth is coming from increased consumption abroad, that investors expect Trump’s business friendly policies to be good for the market, and that maybe we’re just looking at the wrong metrics. One point he doesn’t make, and which I have not seen elsewhere, is that the dollar itself is losing value (nearly 6% since election day), so the bull-market is not actually as strong as it seems.
Racism is about ignorance, and this story is just one more example of it. I insist that all of politics distills down to applied otherness. Once you remove otherness, and you can see, um, others, as equals, it is much easier to agree on what a government should or should not do…
…and on that note, here’s Krugman showing how the administration, and a good chunk of the population, don’t see Puerto Ricans as Americans.
More on race, history, and immigration.
In case the Stratechery post above was not enough, here’s Ben doubling down. Aggregation theory paired with politics. Towards the end of the episode there is a discussion on how, via regulation, increased transparency in the decisions made by algorithms could enable journalists and citizens to openly review the outcomes of machine learned systems, which in turn would change the behavior of the advertisers and scammers. Overall, a good way to spend an hour.
I have been reading a lot of Levine’s writing lately (mostly his Money Stuff series/newsletter) and this is a great example of it: a nice mix of crazy, technology, and politics, viewed through the lens of finance. “People are worried that people aren’t worried enough” and “Blockchain blockchain blockchain,” are recurring sections that have kept me coming back.
But coal! The Rust Belt! Our jobs!
That’s trickle down economics for you. Not only is the US economy growing at a slower rate, but it is also growing extremely unequally. Intuitively, these curves should have negative slopes - it is much easier to find an opportunity to grow $100 into $102 than to turn $1M into $1.02M - so what changed in this complex system that lead us to the current state? Rules over wealth and wages are diverging more and more.
I have tried to avoid the discussion about the Google memo from last week, so I have read very few articles (and sadly way too many tweets) on the topic. I know I disagree with the author, and reading N think pieces won’t change that, so I’ve tried to shut it off. However, I read almost every post on Continuations, and Albert’s take seems like a sober response: we have overcome economic, historical and technological determinism, so it seems logical that even if the biological determinism implied by Damore (the memo’s author) were real, we could overcome them with… wait for it… technology!
Is it good for your country that everyone else speaks your language, and that the majority of the population can virtually ignore what’s going on outside its borders? I’ve always argued that it is not. Branko agrees with me. The average American is isolated in their culture. Relatedly, if they can’t find things on maps, they’re less likely to want to use diplomacy as a solution. That’s bad.
Fighting over immigration where there is virtually none. The first act, where they talk to a skeptic who tries to educate himself by reading news online, is just amazing.
How would an alternative history where the American Colonies get seats in the British Parliament have played out? In Imagined Communities, Anderson repeatedly mentions that the colonial nation state emerges in the Americas partly because creole colonists are not given the same opportunities as the “actual British” or the “Actual Spanish.” A colonist could rise in the state bureaucracy up to a certain point, but never reach the highest courts. This led to an imagining of “us” against “them” where the “us” were the colonists, and the “them” was the empire. This dynamic led to rebellions, and a variety of fights for independence across the continent. Are there any examples of colonies that were granted full “part of the empire” status? I couldn’t think of any.
As international student who landed in the Midwest for the first time for college, this was interesting. Granted that the cultural differences between the US and China are much larger than those with Costa Rica, but I can still relate to a lot of it. It was much easier to hang out with other Latin American students, and enclose myself in the international bubble, but spending time with people from all around the world, including the US, was one of the highlights of my college experience.
Last night I attended an event about the interaction between technology and housing. As you’d imagine, this is a hot topic in San Francisco. One of the panelists pointed out that unlike other countries, in the US home ownership is seen as an investment, and not as a means of shelter. From her perspective, this philosophy has led regulators to crystallize a perverse set of incentives into law, in order to preserve the value of those investments, at a huge social cost. And I totally agree. When I see all the single-family two story homes in the western side of San Francisco, or the low rise buildings neighboring the downtown area, I just get more convinced that this is a policy issue, not an innovation issue. Having an economic boom should be a good thing!
Disagreeing over the facts, and these levels skepticism over quantitative analysis is almost laughable, but NIMBYs, and other critics of the pro-housing movement do have some good arguments. Here’s a quick summary.
I have always said that who is president does not matter as much as the historical context, and who that person surrounds themselves with. The fact that things were going well when he got to power means that people shouldn’t be too unhappy (yet!) but they are. What will happen once the economy goes south?
This is funny, but it is also sad. Sad!
This is one of the topics I keep bringing back in conversations with friends, and which I keep getting made fun of for. People forget that the institution of the nation state as we know it is only a couple centuries old, and that it also replaced a seemingly irreplaceable structure. Reading Imagined Communities (see my notes as I go here) has convinced me that the status quo is fragile, and while it won’t change overnight, there is pressure at both ends to revise it. We’re moving towards globalization, while cities gain prominence and develop as smaller localized units that don’t necessarily respond to “the nation”. Countries will be around for a long time, but I am certain that within my lifetime the power balance will have shifted.
Lots of talk these days about insurance these days, for obvious reasons, so here’s another post by Wenger.
This one is less about the politics of it, but the actual mechanics. The business of insurance is one of pricing - the better you are at calculating the likelihood of whatever mishaps you are insuring against, the more money you’ll make. Harris explains the various players along the value chain, and discusses how the insurance market is structured.
Dillow lists three reasons. First, he starts with Marx’s view of economics as a historical process. Since the economy is “founded upon past injustices” and the “denial of the rights and freedom which libertarians celebrate,” the status quo can’t be regarded as legitimate by libertarians. Second, he discusses Marx’s perspective on property rights, and how they might discourage investment and innovation. Lastly, he posits that Marx’s gripe with capitalism was not that it was unfair, but that it robbed laborers from their freedom. As someone mentioned on HN a few days ago in the context of a minimum wage discussion, “When a person is desperate, ‘voluntary’ starts to lose all meaning.” I’m not a libertarian, but I should read Marx.
Hannah has been reading a lot of books on gentrification lately, so we’ve been discussing the topic more than usual. What is the meaning of gentrification today in these neighborhoods, when the gay population were the original gentrifiers? I live a few blocks away from the Castro, so you could put me in the bad-guys bucket in this story. This is a hot-button issue, and I have no answers on what’s the right way to solve it, but I am convinced the real cause is policy, not the people moving in.
Another fight over public governance, funding, and what happens when we can’t agree on what the government should and should not provide. This case on public education is insane. The religious side to this story makes me especially angry.
And if you really thought fiat is valuable, think again.
What are the implications of crypto for central banking? The written-in-stone aspect of the blockchain makes monetary policy way more credible, which is a good thing, but at the same time crypto knows no borders, making adjustments by one group of users spill over to others quite easily. A more in depth look here.
Currency areas, and defining regional economies is one of my long-time favorite topics. There is a trend in the US towards lower labor mobility, which has deep implications for the economy. Historically, if an economic shock hit a state like Oklahoma, its citizens would respond by migrating to California, where things were better. This is no longer the case. As this trend continues, the business cycles of different zones in the country may start to diverge, and at that point the monetary policy set by the Fed might stop making sense.
A note on inequality, since that’s another recurring theme here.
This article was awesome. The basic idea it tries to get across is that because cities are multicultural and inclusive, they are also more productive. This vision of the city as a bastion of openness and tolerance, unlike the insular rural communities that voted for Trump, is not new, but the post sparked some interesting conversation online. For example see Noah Smith’s, Ross Douthat’s and Chris Arnade’s takes.
This is another version of Noah Smith’s Beware of Thinking like an Economist. Here the argument is “there are certain problems that only sociologists can solve,” which is probably just as bad. However, the historical aspect is interesting, especially the fact that there could have been a Council of Social Advisers.
Starting with the case of Big Tobbaco vs. Medicine in the 50s and 60s, and continuing with Trump and Brexit, Harford makes an argument against ignorance. Agnotology, “the study of how ignorance is deliberately produced,” is a really interesting concept that I had never heard of. The punchline is that we need to get people excited about learning, and make them curious about the world in which they live in, so that they seek out truth on their own. Not an easy endeavor.
Americans are exceptional in their very own ways. This whole healthcare story is a fiasco, and I am amazed that the American people have allowed it to go this long.
I am reading Benedict Anderson’s Imagined Communities and Noah’s arguments in this blog post fit right into the framework that Anderson proposes at the beginning of his book. Nations are made up. Expect a blog post about this soon.
The average American has no clue of how immigration policy and actual immigration patterns work. Understanding how much effort other countries put into helping the US keep illegal immigrants at bay could be helpful in the current climate.
Having Russ Roberts and one of his guests debate on economic topics is fun. Having him and another three guests? Even better.
It has been interesting to see Ben apply aggregation theory to politics more and more. I agree with the views presented in this article about centralization (or lack thereof), regulation (or lack thereof), and market solutions (or lack thereof).
Not surprisingly, the past is different than we think it was. Thinking of the rise of segregation as a relatively new phenomenon is odd.
A great set of interviews. I constantly think about this topic of where identities overlap and how people view themselves vs. how they are sseen by others. More so these days. Belonging, otherness, and these social dynamics are very intriguing.
“Markets price risk, not hope.” In times like these, I wish I understood international finance better.
Something that surpised me about monetary policy rules when I studied them in college was how much their usefulness depended on people’s expectations of their usefulness. Individual agents’ beliefs on the predictability and stability of a state’s decisions about its monetary policies were the fulcrum of all the models we studied in these intermediate economics classes. Thinking about how these rules can be baked into a crypto currency, such as bitcoin’s pre-defined velocity rule, or freicoin’s holding fees, is really interesting. Like Albert, I’m excited about these experiments.
My friend Dana had already recommended that I read Kitchen Confidential, but after reading this, it got bumped up a few notches on my to-do list. Parts Unknown, Bourdain’s show, is one of my go-to “half an hour to kill” shows on Netflix. It is very entertaining, and it makes an effort to show more than just the food of foreign lands. As the article describes, there is a layer of political complexity to the show that is unusual for its kind. Make half an hour to read this, and then make another one to watch an episode of the show.
Data are the base on which we assess the validity of any policy, and on which we can measure the success or failure of ideas. When China announces growth numbers, no one believes them. Can the US potentially get to the same situation?
When I went back home, I was amazed by how many of my friends and family were convinced that having Trump in the White House was a good idea just for this. Someone with a little more experience tells us how simple the process would be.
The headline is a bit click-baity, but the content is good. Tax reform is not a bad idea. At face value, this variation on the VAT seems good, but to be honest I don’t understand the full implications yet. This Planet Money episode tries to explain the same idea from a different, lighter angle. If you have other good explanations on this topic, please send them my way.
I am very much in favor of a carbon tax. However, there is no way that the right kind of carbon tax will be instituted given Trump and friends’ stance on the fossil fuel industry. It’s not like the Secretary of State is the ex-chariman and CEO of the world’s largest refinery business. While Rex Tillerson might have said that a carbon tax is the best possible policy, there is no reason to believe that the government will curb the industry as much as it should.
By far, act two was the best part of this episode. The Trump Administration’s rhetoric implies that the current vetting system for immigration into the US is leaky, and useless. The wording of the executive order is one of “taking first steps,” while “extreme vetting” suggests that the current implementation is not strong enough. Hearing the opinion of one the interviewers who actually take part in the vetting process shows how naïve the narratives coming out of the White House can be.
The future exists, and we have a lot ahead of us. Let’s remember that.
Borders, names, in-groups and out-groups, are all arbitrary, and more fluid than we generally think. Herodotus spoke of the divide between Europe, Asia, and Africa 500 years ago: “I cannot conceive why three names [Asia, Europe, and Africa] should ever have been given to a tract which is in reality one.”
What is your red line?
The Consitution, Senate, Congress, are all institutions, and institutions are just people. We don’t live in a world of self-enforcing mechanics and contracts. We live in a world where rules and expectations put in place by people are enforced by people.
We’ve seen this before around the world. Let’s use those lessons.
This was originally published a full year before the election. Coming here legally is not an easy process. Even though Oman and Costa Rica are so different, I see myself, and echoes of my experience in the US in a lot of these stories.
What is a nation anyway?
Very excited for this. Hoping to take advantage of it at some point in the future.
Another great data visualization project out of the NYT’s “analytical journalism” desk, this time about the relationship between education and economic mobility. Finding your school is really easy. Here’s Northwestern, for example. There are no surprises: the numbers are stark, as expected.
This post has been making rounds on tech twitter, and several of the newsletters I follow shared it, too. I wholeheartedly disagree with Jessica here, which is exactly why I wanted to share this. I think Anil Dash’s response summarizes my thoughts well.
It is too easy to start listing groups which you identify with. The author talks about her family, and their identities. What does it mean for her to be European, when she’s faced with the contrast between her spouse’s Welsh-ness and her own German-ness? What does it mean to have a name, or a passport? More importantly, what will it mean in 10 years, or 20?
It is easy to draw a matrix to group the cases of what might be fake news, based on the belief of its publisher and its consumer. It is a simple confusion matrix, where the only quadrant we should really worry about is the one where “the supplier knows the story is false but the demander believes the story is true.” Kahn exposes important issues about the economic environment in which a market for fake news might arise.
Humans have learned to defer decision making and process to “things” since time immemorial. The main goal of this is to offload brain cycles into simple rules, and ease our interactions with the world around us. Szabo brings up examples like clocks ands traffic lights, which enable coordination between humans that would require way more effort otherwise. We can also think of learned heuristics, encoded in folklore and religion, as other means of offloading. Clocks ease friction as long as we agree on their time, just like ideas of good and evil ease friction as long as we agree on their base truth. Clocks and religion are trust-offloading mechanisms.
The perverse effects of signaling becoming more important than reality.
I’d say this title is misleading. The article really is about the world views and identities built by young Russians since the break up of the Soviet Union. The author focuses especially on those in rural areas, who long for more urban lifestyles, even if that means a lower standard of living. In many ways, the story isn’t that different from that of the US.
The scary story of the 1960s technology that manages the world’s nuclear arsenal. They had TDD back then, right?
There are way more immediate ethical issues with AI than “oh noes, it’s going to kill us!”. We can keep researching and building better systems, and in fact I’d argue we should, but instead of thinking about how to regulate the companies’ ability to kill us, we should regulate their ability to collect data indefinitely, as we don’t know where it will land. I am more scared of humans than machines.
It’d be great if governments, and whoever is striving for power could care about real problems. “A dam in Mosul that’s about to fail and potentially could kill a million people” sounds like a bigger issue than “those westerners are teaching us their disgraceful customs and insulting our god!” Kinda like how gun violence in the US is a bigger problem than bombs on airplanes.
A story about the most recent crisis, and how Neel Kashkari, who worked at the Treasury at the time, and is now the president and CEO of the Minneapolis Fed, plans to avoid the next one. As the podcast put it, the fact that Bernie Sanders and the WSJ editorial board agree that Kashkari’s proposal is a good way to move forward means that there is some intellectually solid ground in it.
The leaders of our industry are not bending their knee. At least not yet. Take it from Dave Pell: <a href="https://medium.com/@davepell/why-they-sort-of-have-to-go-77535544d2bd">they sort of have to go.</a> The real question is what will happen after the meeting, but Swisher got an important part right: “fuckfuckfuck.”
Tax cuts, and infrastructure spending are good ideas, but will he actually put them in motion?
Shared without comment.
A dose of historical perspective for these times of economic anxiety and anomie. Unbundling and specialization leads to recondensation and reformation. In cycles, humanity tends towards complexity.
This is not about Trump. This is about (macro)economics, business, and the mind-bending realization that they are inherently different. Macro versus micro, closed systems vs. open systems, zero-sum games vs. growing pies. Out of all my classes at Northwestern, International Finance was probably the most unexpectedly enlightening. This is it, in a nutshell.
Facebook is a scapegoat among the aggregators. Hacker News could be just as guilty of this same issue, but they don’t operate at scale, and are not frequented by Average Joe. People are lazy, including me, and we will read whatever confirms what we already think. Some of us just do a bigger effort than others to keep our biases at bay.
In classic Pinboard style, Cegłowski starts up high with evil armies, police, and governments, but shows how in the end individuals - in this case, technical individuals - are on the hook. Facebook, Amazon, Google, and yes, Apple, all are comprised of individuals. What do we do to make sure that our decisions remain moral?
The media is a shit-show. Yesterday I watched Amanda Knox (which I definitely don’t recommend), and the whole time I kept thinking of this article. Unfounded phrases get repeated over and over for views and clicks, making monsters and presidents out of thin air. Trump is bad, but I trust that things will not change that much in the short term.
Aggregation Theory applied to Trump.
Not much needs to be said about this, but Mark Suster makes great arguments about why backing Trump is completely wrong.
TL;DR, they were both “Wutbürgers,” or “Angry Citizens.” I don’t think they had much else in common. Despite the poorly chosen title, the article does a good job of recounting previous political movements driven by anger, some more constructive than others, and showing how history echoes across time, as well as geography.
Are we at the tail end of the up-cycle in San Francisco? The economic indicators make it seem like we might be. With rents flattening over the past few months, and unicorns falling from their sky-high valuations, the Bay Area might become a little less insane in the near future.
It will be interesting to see what happens with the Republican Party after Trump. Many key players have lost their credibility, but, sadly, I don’t think that really matters.
I was first exposed to Jane Jacobs through a class in college. We were assigned an excerpt of “The Death and Life of Great American Cities,” and it was odd how much Jacobs’ line of thought, once extranous, was so internalized into our own views that many of us didn’t understand why her writing was interesting. After learning more about her, and putting things in historical perspective, it all made much more sense.
People do not understand second order effects, and have trouble forseeing policy implications. I keep going back to how whenever we think of economics in terms of the study of “rational agents,” we’re making a mistake. And I don’t mean it in the behavioral econ “we all have biases” way, but in the “People are dumb and don’t have full information to make rational decisions” way. Democracy is hard.
An explainer on race in the US, which I can’t recommend enough. Norton’s two part post helped me re-contextualize the present via history I was unaware of (part two, here).
More of the same. I still believe modern nations might be unraveling. Another case of “we don’t want to pay for them, because they are not us”.
In which Kocherlakota explains so much of what’s wrong with techno-pessimism, while making a case for paying attention to second and third order effects.
Throughout history, not all generations get to be better off than the previous ones, and that seems to be the case of the United States today… unless things change. “The moral case for a fairer society is clear. But there is also a self-interested case.”
Tech Twitter blew up on YC’s face this week. It is rare for tech celebrities like David Heinemeier Hansson, Marco Arment, Thomas Ptacek, Jeff Atwood, and even Maciej Cegłowski to agree on things, but they have all come out with pitchforks after Sam Altman and Paul Graham for their defense of Peter Thiel. Even if Hillary wins, Trump has put strain on the Silicon Valley technorati.
Not suprisingly, the idea of redistribution is not taken well by Roberts, but the underlying themes are more interesting anyway. Touching on cosmopolitanism, identity, and other recurring subjects of this blog, Deaton and Roberts discuss the state of the US’s poor, questioning whether a poor person in the south is objectively worse off than a poor person in Africa, for example.
A short episode, based on a 1964 New York Times article. Nate DiMeo tells us a story we’ve all heard before, but which, sadly, must be retold over and over again.
I had never thought about the fact that passports are a recent construct. Obviously, it makes sense, but when I first read it I was baffled that they were a new necessity only a hundred years ago. In historical context, freedom of movement ties very nicely with a lot of themes I have been thinking about related to sovereignty, national identity, shared culture, and their implications. Be it due to globalization, radicalization, or you-name-it-ization, the modern nation-state may be slowly breaking down.
To continue the theme of freedom of movement, let’s talk immigration policy. In short, Dillow argues that the free market right should support open immigration in much the same way they support free trade. If freedom was something that the conservatives really cared about, they could not be this inconsistent, and they surely would push for more lenient immigration laws than the left. Once again, it is a matter of boundaries, and identity: freedom for whom?
More of the same. I am on a roll, I guess. It is odd that both US presidential candidates are against trade in this election, so the Planet Money folks compressed a quarter millenium of trade history for us. While superficial, there is a good discussion of The Wealth of Nations, and who benefits from tariffs vis-a-vis open borders and other trade policies. They touch on concentrated benefits and diffuse costs, which we can see across the ladder from regional to supranational deals. I assume the bipartisan anti-trade sentiment in the US is just a blip, and that we’ll soon revert to the trend of freer trade.
It is easier to sell people on a safe past than an unsure future. Our brain is hardwired with biases, trained by thousands of years of evolution. It can trick us on false positives and overblow our fears, or it can make us think that the past was, by its own nature, better than the future. What seems irrational is that no candidate has capitalized on this, realizing that there is a discrepancy between public discourse and the numbers. Soon, some candidate will catch the tailwind instead of falsely promising restoration.
A clear exposition one of my gripes about economics as a discipline: Once you layer in tax, after tax, after tax, and your policies start interacting with each other, they no longer achieve the desired effects.
In the real world, no agent -however rational- can make optimal choices, as they don’t have nearly full information. To make things worse, solutions proposed at a given time might alter the underlying reality before they even go into effect, and no longer work as expected! By the time they are in place, policies are hard to change (this week’s EconTalk touched on that topic) and we deal with it by adding more crap on top. Living in a complex society does not by definition require the levels of complexity of modern legislation.
If the political system in the US is hard, and confusing, the Fed is probably one of the most misunderstood. Even having taken several courses on the topic, understanding the intended effects of central banking, and monetary policy, is tough. Bernstein makes a good case for the importance about better understanding it.
The fact that this is not clearer to the public at large is insane. It is a bizarre time to live.
The events that are developing in the EU right now are potentially more important to the future of global culture than most people realize. Whatever conclusion comes from this case might define sovereignty and jurisdiction across national and supranational borders. As Tim Cook posits in his letter, “at its root, the Commission’s case is not about how much Apple pays in taxes. It is about which government collects the money,” and that is the actually interesting question here.
Over the last few weeks, I started watching The Wire. The longer I live in this country, the more I understand the tensions around race and class rooted in years and years of history. I want to spend more time reading about this, and exploring the narratives of the various sides. Building empathy is hard work.
A draft of a chapter of Taleb’s upcoming book. He argues that asymmetrical rules lead to minorities dictating choices when there are large benefits to a concentrated minority and small diffuse costs among the majority. All his examples are negative, but its not hard to think of how this same effect can affect us positively.
The world of politics is odd.
While the comparisons with WWII are extreme, this is one of those “better safe than sorry” situations. Go vote, I can’t.
One of the most intriguing aspects of bitcoin is what kind of effects a constant, predictable, and stable money supply would cause in our financial systems. Coming from the Bank of England, this post holds more water than the usual cryptocurrency wonk posts.
The world is a mess, its just less messy than it used to be.
I am very happy that I found Chris Arnade. His posts and tweetstorms provide amazing insight into a part of the United States that I otherwise would simply not have access to.
San Francisco and the Gold Rush, both old and new. Labor, unions, and narratives of success.
The expanded version of the tweetstorm. Poor people understand optionality, too. If your downside is flat, and your upside isn’t, logic says break the system.
An interesting take on the rise of trump. Similar to Chris Arnade’s twitter comments on the implicit understanding optionality of Trump voters, who desire volatility.
It is all a charade. At least the WWE embraces it.
If I am sharing an article by this guy, it must be good. Never thought I’d do that, but he does bring up good points.
Good analysis of why the US can’t play the isolation game going forward. Even if you don’t care about politics, and you should, it is worth your time just for the amazing list of books that Suster recommends.
While I understand the point of regulation, Opternative delivers exactly what it advertises: refractive eye exams. The incumbents are just using regulation to push their interests and avoid getting pushed out of the market. But, obviously, I am biased. I used to work there.
Economic models can be bent to lie. Usually, not this blatantly, though.
When reality contradicts your beliefs, most likely, you have to change your beliefs.
In this short and data-centric piece, Thompson makes the argument that since most mainstream media is based in large cities, “…well-educated journalists in these dense cities wind up with a skewed impression of the world” and they feed us their biases. “An irony of digital media is that the Internet distributes journalism, but it concentrates journalists.”
Perhaps a bit too paranoid, discussing conspiracy theories more than it should, but interesting nonetheless. Simler explains the economics behind the social structures that align our incentives to work together toward common goals.
A deep dive into the history (and disaster) of the San Francisco housing crisis.
Politicians in the San Francisco Bay Area are getting pulled in every direction, this NYT article tries to explain some of the complexities involved. In a strange coincidence, this article came out roughly a week after I read Kim-Mai’s article, linked above.
When I tweeted at him asking for resources to understand the math behind this research, Noah recommended reading this pdf. To be honest, I haven’t had time for it yet.
A clear economic analysis of the housing market in San Francisco, its history, its distortions, and its intricacies. Zac makes good arguments, proposes attainable solutions, and brings examples of other cities arount the U.S. that have solved similar housing crises before.
While the city officials’ skepticism is understandable, their stubbornness to work with a capable person due to his background is not. Two very unexpected things I learned from this piece: 1) San Francisco’s homeless population has been around 6000 for over 25 years. 2) between nonprofits and city departments, $241M/year are spent on supporting San Francisco’s homeless population. That is, roughly $40k per person.
As usual, Thoma asks the right questions. I am particularly interested in the “how is the social interest is defined?” aspect of his article. When companies, and identities, span across the world, our definitions of society change too.
As the source name implies, this is not about San Francisco, but Los Angeles. “…we can’t solve society’s mobility problems by trying to ensure that everyone gets a $250,000 car. We don’t need subsidized Lamborghinis, we need Honda Civics.”