No wonder Britain's saving habit is
collapsing. Debt is now a way of life by Suzanne Moore
“No wonder many
gamble, as they no longer save. Can’t save/won’t save. New figures show that
Britain’s “saving habits” are collapsing. This can be put down to the record
low in interest rates and the attempt to boost consumer spending. Surely this
is also to do with stagnating wages and a culture where saving for many is just
impossible.”
Wednesday, August 31, 2016
US Corporate Sector – Addicted to Debt?
Record corporate bond sales may pose a risk in the future:
http://www.bloomberg.com/news/articles/2016-08-31/america-s-corporate-bond-party-goes-on-as-sales-near-1-trillionBrazil – Light at the End of the Tunnel
Brazil’s prospects will improve as political uncertainty
diminishes:
Brazilian economy is still struggling:
http://www.wsj.com/articles/brazils-economy-shrinks-again-1472648269Tuesday, August 30, 2016
Manufacturing Fetishism
John Kay’s timely piece is worth reading – The
economics and politics of manufacturing fetishism
“The rear cover of
the iPhone tells you it is designed in California and assembled in China. The phone sells, in the absence of carrier
subsidy, for around $700. Purchased
components – clever pieces of design such as the tiny flash drive and the small
but high performing camera – may account for as much as $200 of this. The largest
supplier of parts is Apple’s principal rival in the smartphone market, Samsung.
‘Assembled in China’ costs around $20. The balance represents the return to
‘designed in California’, which is why Apple is such a profitable company.
When you buy a
drug, or an aircraft engine, or an iPhone, you are not paying for the
materials. Nor for the manual labour that put it together. You are paying for
the research and the design. When you buy the suit, or the aircraft engine, you
are paying for some labour – but the highly skilled labour which (at Rolls
Royce) controls the machine or (on Saville Row) cannot yet be matched by
machine.”
Related:
http://vivekjayakumar.blogspot.com/2016/08/the-misguided-obsession-with.htmlMonday, August 29, 2016
Global Economy Still Dependent on Chinese Growth
Economist Stephen Roach notes:
https://www.project-syndicate.org/print/china-still-global-growth-engine-by-stephen-s--roach-2016-08
“Despite all the hand-wringing over the vaunted China slowdown, the Chinese economy remains the single largest contributor to world GDP growth. For a global economy limping along at stall speed – and most likely unable to withstand a significant shock without toppling into renewed recession – that contribution is all the more important.”
“Despite all the hand-wringing over the vaunted China slowdown, the Chinese economy remains the single largest contributor to world GDP growth. For a global economy limping along at stall speed – and most likely unable to withstand a significant shock without toppling into renewed recession – that contribution is all the more important.”
Sunday, August 28, 2016
China, India, Japan and the Scramble for Africa
Asian powers compete to establish closer ties with Africa
http://www.economist.com/news/middle-east-and-africa/21704804-india-china-and-japan-are-battling-influence-asias-scramble-africaEconomic Update - Advanced Economies
Housing Markets in Europe
An interesting piece:
Brexit and the UK Immigration debate
The Economist
notes:
“HOSTILITY to
immigration was a key driver of Britons’ vote on June 23rd to leave the EU.
Theresa May has duly said that freedom of movement from the EU cannot continue
as before. Yet curbing migration will be both tricky and costly.”
US GDP Update: 2016 Q2 Second Estimate
Great Recession Legacy
http://www.cbpp.org/research/economy/chart-book-the-legacy-of-the-great-recession
http://www.cbpp.org/research/economy/chart-book-the-legacy-of-the-great-recession
Saturday, August 27, 2016
Understanding Asia – Book Recommendations
Of the approximately 7.4 billion human inhabitants on planet
earth, around 4.4 billion are Asians. Almost 60 percent of all humans reside in
Asia.
A few recent books related to Asia that are worth reading:
Asia - Regional Focus
The Ocean of Churn — How the Indian Ocean
Shaped Human History by Sanjeev Sanyal
Easternisation:
War and Peace in the Asian Century by Gideon Rachman
Makers of
Modern Asia by Ramachandra Guha (Editor)
How Asia Works by
Joe Studwell
China
The China Model: Political Meritocracy and
the Limits of Democracy by Daniel A. Bell
Age of Ambition: Chasing Fortune, Truth, and
Faith in the New China by Evan Osnos
Deng Xiaoping
and the Transformation of China by Ezra F. Vogel
Markets Over
Mao: The Rise of Private Business in China by Nicholas R. Lardy
India
Half - Lion: How P.V Narasimha Rao Transformed
India by Vinay Sitapati
Modi and His Challenges by Rajiv Kumar
India: A
Portrait by Patrick French
India: A Sacred Geography by Diana L
Eck
Japan
Bending Adversity: Japan and the Art of Survival
by David Pilling
Japan and the
Shackles of the Past by Taggart Murphy
Indonesia
Indonesia,
Etc.: Exploring the Improbable Nation by Elizabeth Pisani
Middle East/Islamic World
From Deep State
to Islamic State: The Arab Counter-Revolution and its Jihadi Legacy by
Jean-Pierre Filiu
All the Shah's
Men by Stephen Kinzer
The Wrong Enemy by
Carlotta Gall
Magnificent
Delusions by Husain HaqqaniCashless Society – The Debate Continues
Harvard economist Ken Rogoff makes a case for shifting
towards a cashless society - The Sinister Side of Cash
It is, however, a complex topic with good arguments from
both sides of the debate:
How a Cashless Society Could Embolden Big
Brother – The Atlantic
“In a cashless society, the cash has been converted into
numbers, into signals, into electronic currents. In short: Information replaces
cash.
Information is lightning-quick. It crosses cities,
states, and national borders in the twinkle of an eye. It passes through many
kinds of devices, flowing from phone to phone, and computer to computer, rather
than being sealed away in those silent marble temples we used to call banks.
Information never jangles uncomfortably in your pocket.
But wherever information gathers and flows, two predators
follow closely behind it: censorship and surveillance. The case of digital
money is no exception. Where money becomes a series of signals, it can be
censored; where money becomes information, it will inform on you.”
Would a Cashless System Reduce Corruption?
ECB decides to ditch the 500-euro note
Friday, August 26, 2016
Behaviorism and Modern Technology
Fitter, dumber, more productive: How the
craze for Apple Watches, Fitbits and other wearable tech devices revives the
old and discredited science of behaviourism by STEVEN POOLE
“The school of
behaviourism arose in the early 20th century out of a virtuous scientific
caution.…
The behaviourists
discovered that the actions of laboratory animals could, in effect, be
predicted and guided by careful “conditioning”, involving stimulus and
reinforcement. They then applied Ockham’s razor: there was no reason, they
argued, to believe in elaborate mental equipment in a small mammal or bird; at
bottom, all behaviour was just a response to external stimulus. …
The problem with
Ockham’s razor, though, is that sometimes it is difficult to know when to stop
cutting. And so more radical behaviourists sought to apply the same lesson to
human beings. What you and I think of as thinking was, for radical
behaviourists such as the Yale psychologist Clark L Hull, just another pattern
of conditioned reflexes. A human being was merely a more complex knot of
stimulus responses than a pigeon. Once perfected, some scientists believed,
behaviourist science would supply a reliable method to “predict and control”
the behaviour of human beings, and thus all social problems would be overcome.”
Welfare Systems in Advanced Economies – A Comparison
An interesting report from the BBC: How US welfare compares around
the globe by Taylor Kate Brown
http://www.bbc.com/news/world-us-canada-37159686Human Irrationality
The Neuroscience Behind Bad Decisions: Irrationality
may be a consequence of the brain’s ravenous energy needs by Emily
Singer
American Politics – Dumb and Dumber
The Dumbed Down
Democracy by Timothy Egan
“The dumbing down
of this democracy has been gradual, and then — this year — all at once. The
Princeton Review found that the Lincoln-Douglas debates of 1858 were engaged at
roughly a high school senior level. A century later, the presidential debate of
1960 was a notch below, at a 10th grade level. By the year 2000, the two
contenders were speaking like sixth graders. And in the upcoming debates —
“Crooked Hillary” against “Don the Con” — we’ll be lucky to get beyond
preschool potty talk.”
Related:
Donald Trump
finally did a non-Fox News interview. It didn’t go very well – Washington Post
https://www.washingtonpost.com/news/the-fix/wp/2016/08/26/donald-trump-finally-did-a-non-fox-news-interview-it-didnt-go-very-well/Impact of Brexit on UK – Expect Negative Economic Fallout
Don’t be fooled. There will be damaging
fallout from Brexit by Will Hutton
The sharp costs of Brexit will be felt soon
enough – FT
https://www.ft.com/content/fdd5a8ca-691c-11e6-a0b1-d87a9fea034fCentral Banks and Monetary Policy – Theory and Practice
Fed Chairwoman Janet Yellen – The Federal Reserve’s
Monetary Policy Toolkit: Past, Present, and Future
WSJ piece - Central Bankers’ Main Challenge: Staying
Relevant
An interesting critique of Fed policies:
Years of Fed Missteps Fueled Disillusion with the
Economy and Washington by Jon Hilsenrath
“In the 1990s, a period known in economics as the
“Great Moderation,” it seemed the Fed could do no wrong. Policy makers and
voters saw it as a machine, with buttons officials could push to heat or cool
the economy as needed. Now, after more than a decade of economic
disappointment, the central bank confronts hardened public skepticism and
growing self-doubt about its own understanding of how the U.S. economy works.
For anyone seeking to explain one of the most
unpredictable political seasons in modern history, with the rise of Donald
Trump and Bernie Sanders, a prime suspect is public dismay in institutions
guiding the economy and government. The Fed in particular is a case study in
how the conventional wisdom of the late 1990s on a wide range of economic
issues, including trade, technology and central banking, has since slowly
unraveled.”
Related:
http://www.telegraph.co.uk/business/2016/08/22/jackson-hole-the-three-tough-questions-central-banks-must-ask-th/
Concerns grow over negative interest rates:
http://www.spectator.co.uk/2016/08/why-negative-interest-rates-are-mad-bad-and-dangerous/Thursday, August 25, 2016
International Affairs – Interesting Readings
China’s Urbanization Process – A Transformation of Epic
Proportions
Update: Turkey – America’s Not-So-Friendly Ally
From NYT - Saudis’ Harsh Vision of Islam Blamed for Rising Extremism
German Chancellor Angela Merkel’s Momentous Decision on Refugees
Australia’s Complicated Relationship with China
India’s Foreign Policy Evolution:
http://www.wsj.com/articles/modis-tougher-line-with-pakistan-and-china-1471452127The Search for ‘Earth-Like’ Planets
Discovery of earth-like planets:
“…But the most
intriguing exoplanets are those few dozen that are believed to be Earth-like:
rocky planets, roughly the size of our own or slightly larger, that orbit their
stars at a distance that is neither too close nor too far, in the potentially
habitable Goldilocks Zone, where the climate could be temperate and any water
could be liquid. Last year, with great fanfare, Nasa announced the discovery of
Kepler-452b, “a planet and star which most closely resemble the Earth and our
sun,” fourteen hundred light-years away, in the constellation Cygnus. Today, in
the journal Nature, an international team of astronomers has announced the
discovery of yet another. Called Proxima b, it orbits Proxima Centauri, the
nearest star to our sun. Only 4.3 light-years away, Proxima b is tantalizingly
close by—as close to us as any extrasolar planet is ever likely to be.”
Related:
http://blogs.reuters.com/breakingviews/2016/08/25/new-planet-may-help-silicon-valley-live-its-cliche/Wednesday, August 24, 2016
History Lesson - The Origin of Property Taxes
An interesting piece from The Atlantic on the origin of property taxation:
http://www.theatlantic.com/business/archive/2016/08/the-feudal-history-of-property-tax-in-america/497099/
http://www.theatlantic.com/business/archive/2016/08/the-feudal-history-of-property-tax-in-america/497099/
Tuesday, August 23, 2016
EpiPen – An Example of Market Barriers and US Healthcare Dysfunction
How entry barriers (often created by a ridiculous patent
system) restrict competition in US healthcare sector and lead to exorbitant
prices.
Update –
MYLAN CEO happens to be a US Senator’s daughter:
“Members of
Congress are in an unusual position as they demand an explanation for Mylan
NV’s 400 percent price hike for the EpiPen and focus attention squarely on its
CEO: Heather Bresch.
If lawmakers follow
the usual script, Bresch could get called up to Capitol Hill next month to
explain her company’s justification for raising the price on the life-saving
allergy shot. But that could be awkward, since she’s the daughter of Democratic
Senator Joe Manchin of West Virginia....
The Mylan
controversy fits a similar pattern. Mylan has increased the price of its EpiPen
from about $57 a shot when it took over sales of the product in 2007 to more
than $600 for two auto-injectors. But the company’s EpiPen is a more mainstream
drug used to treat life-threatening allergic reactions from bee stings, food
allergies or other triggers, which could give the issue a larger constituency.”Related:
http://www.theatlantic.com/health/archive/2016/08/epi-pens/497126/
Monday, August 22, 2016
What Do Economists Think of the 2016 US Electoral Cycle?
A survey of US business economists conducted by the National Association for Business Economics:
Highlights from the survey:
“Growing Number of
NABE Economists See Monetary Policy as Too Stimulative, Fiscal Policy Too
Restrictive; Want Next President to Focus on Stimulating Stronger Economic
Growth.
A significant majority
of respondents (62%) believes that uncertainty about the national election is
holding back U.S. economic growth somewhat (52%) or significantly (10%). About
one-third (35%) of respondents indicates uncertainty is not holding back
growth. In the March survey, participants were asked if uncertainty about fiscal policy was holding back
growth, with 46% indicating “yes” and 50% indicating “no.”
As for which
presidential candidate would do the best job as president of managing the U.S.
economy, a majority— 55%—choose Hillary Clinton, while 15% pick Gary Johnson,
and 14% select Donald Trump. Fifteen percent indicate “Don’t know/no opinion.
Almost two-thirds of respondents (65%) indicate that trade policy under the next presidential administration and Congress should become more open and free. Twenty-three percent favor the status quo, and just 9% favor a more protectionist trade policy.”
Almost two-thirds of respondents (65%) indicate that trade policy under the next presidential administration and Congress should become more open and free. Twenty-three percent favor the status quo, and just 9% favor a more protectionist trade policy.”
Aging Population and Economic Growth
New research suggests that aging population may lower
potential growth of advanced economies:
Related article:
The Effect of Population Aging on Economic Growth by Nicole
Maestas, Kathleen J. Mullen, David Powell
Abstract –
Population aging is widely expected to have detrimental effects on aggregate economic growth. However, we have little empirical evidence about the actual existence or magnitude of such effects. In this paper, we exploit differential aging patterns at the state level in the United States between 1980 and 2010. Many states have already experienced high growth rates of the 60+ population, comparable to the predicted national growth rate over the next several decades. Furthermore, these differential growth rates occur partially for reasons unrelated to economic growth, providing a natural approach to isolate the impact of aging on growth. We predict the magnitude of population aging at the state-level given the state's age structure in an initial period and exploit this predictable differential growth to estimate the impact of population aging on Gross Domestic Product (GDP) growth, and its constituent parts, labor force and productivity growth. We estimate that a 10% increase in the fraction of the population ages 60+ decreases GDP per capita by 5.7%. We find that this reduction in economic growth caused by population aging is primarily due to a decrease in growth in the supply of labor. To a lesser extent, it is also due to a reduction in productivity growth. We present evidence of downward adjustment of earnings growth to reflect the reduction in productivity.
Population aging is widely expected to have detrimental effects on aggregate economic growth. However, we have little empirical evidence about the actual existence or magnitude of such effects. In this paper, we exploit differential aging patterns at the state level in the United States between 1980 and 2010. Many states have already experienced high growth rates of the 60+ population, comparable to the predicted national growth rate over the next several decades. Furthermore, these differential growth rates occur partially for reasons unrelated to economic growth, providing a natural approach to isolate the impact of aging on growth. We predict the magnitude of population aging at the state-level given the state's age structure in an initial period and exploit this predictable differential growth to estimate the impact of population aging on Gross Domestic Product (GDP) growth, and its constituent parts, labor force and productivity growth. We estimate that a 10% increase in the fraction of the population ages 60+ decreases GDP per capita by 5.7%. We find that this reduction in economic growth caused by population aging is primarily due to a decrease in growth in the supply of labor. To a lesser extent, it is also due to a reduction in productivity growth. We present evidence of downward adjustment of earnings growth to reflect the reduction in productivity.
Sunday, August 21, 2016
US Equity Market Performance Under Different Presidents
Obama years have been unusually good for American equity markets:
http://www.nytimes.com/2016/08/21/your-money/the-obama-years-the-best-of-times-to-be-a-stock-investor.html
http://www.nytimes.com/2016/08/21/your-money/the-obama-years-the-best-of-times-to-be-a-stock-investor.html
World's Tallest and Longest Glass Bottom Bridge
An interesting new approach to building bridges -
http://www.bbc.com/news/world-asia-china-37127725
http://www.bbc.com/news/world-asia-china-37127725
Saturday, August 20, 2016
Maritime History – The Indian Ocean and Ancient Trade Links
A fascinating new book by economist and amateur historian
Sanjeev Sanyal: The Ocean of Churn — How the Indian Ocean Shaped Human History
http://www.livemint.com/Leisure/2GYBckosLVkNrM1TMSgRAK/Book-review-The-Ocean-Of-Churn-by-Sanjeev-Sanyal.htmlHypocrisy and Double Standards – The Norm in International Affairs
From the Guardian:
How Britain is
cashing in on the Middle East’s hunt for weapons - Human rights violations in
Yemen by Saudi Arabia, the UK arms industry’s biggest customer, have thrown a
stark light on the murky defence trade
Related piece from The
New York Times:
http://www.nytimes.com/2016/08/22/opinion/international/saudi-arabia-kills-civilians-the-us-looks-the-other-way.htmlTuition Rates at American Universities – More Noise than Actual Information
A timely piece from the Washington Post:
“At Ivy Leagues and
top liberal arts colleges, whose tuition announcements get lots of attention,
the tuition is only a “sticker price.” The majority of families whose children
attend these elite schools pay less, as determined by their level of financial
need. Increases to tuition matter only for the full-payers. For those on
financial aid, changes to aid policies, not to tuition, are what matter. These
policies get little public attention or transparency….
Economists talk about the ratio of signals to noise. Efficiency requires that the meaningful signals in a communication far outweigh any accompanying noise. “Tuition” is almost all noise, no signal. Or, we might say, it is sound and fury, signifying next to nothing.”
Economists talk about the ratio of signals to noise. Efficiency requires that the meaningful signals in a communication far outweigh any accompanying noise. “Tuition” is almost all noise, no signal. Or, we might say, it is sound and fury, signifying next to nothing.”
India Gets a New Central Banker
Modi government plays it safe and appoints the well-regarded
Urjit Patel to the post of RBI Governor
“Urjit Patel, 52, a
deputy governor of the central bank for the past three years, is the key
architect for the fundamental change in how monetary policy is framed in India….
A Ph.D in economics
from Yale University and a M.Phil from Oxford, he was an advisor to the Boston
Consulting Group before his stint at the RBI. Patel has also worked
with the International Monetary Fund (IMF) and with think-tank, The Brookings
Institution.”
Friday, August 19, 2016
International Affairs – Interesting Items
Immigration and Japan
Japan’s Economic Policies – In Need of a Reassessment
India versus China
Could Economic Cooperation Help Build Trust between India
and China?
Is There a Medal for Being the World’s Dumbest Athlete?
Lochte – The Obnoxious Buffoon
Sally Jenkins notes:
“Ryan Lochte is the
dumbest bell that ever rang. The 32-year-old swimmer is so landlocked in
juvenility that he pulled an all-nighter with guys young enough to call him
uncle. His story to NBC’s Billy “what-are-you-wearing” Bush had the quality of
a kid exaggerating the size of a fish, and notice how he was the hero of every
detail. That was always the most dubious, implausible part.”
Marina Hyde's excellent piece on the Lochte affair:
https://www.theguardian.com/commentisfree/2016/aug/19/ryan-lochte-olympic-tale-gold-medals-white-privilege-rio
Marina Hyde's excellent piece on the Lochte affair:
https://www.theguardian.com/commentisfree/2016/aug/19/ryan-lochte-olympic-tale-gold-medals-white-privilege-rio
Related:
Swimmers tale of gunpoint robbery was apparently completely
made-up.
“The Daily Mail, a British news outlet, reported, citing
Brazilian police, that Lochte and the other swimmers damaged a gas station
bathroom in the West Rio suburb of Barra de Tijuca and refused to pay for the
damage until a security guard waved a gun at them and demanded payment.
Brazilian news outlet O Globo reported, also citing police sources, that Lochte
and his teammates urinated on the gas station’s building and vandalized the
property…
In Brazil, however, outrage is mounting over the
possibility that the American swimmers lied. The sense of indignation is
heightened by the bad publicity Rio has received during the Games.”
Thursday, August 18, 2016
British Empire – The Unsavory Aspects
Harvard historian Caroline Elkins is not just a brilliant
academic but someone making a difference in the world. A great story worth a
close read:
https://www.theguardian.com/news/2016/aug/18/uncovering-truth-british-empire-caroline-elkins-mau-mau
“A London law firm
was preparing to file a reparations claim on behalf of elderly Kenyans who had
been tortured in detention camps during the Mau Mau revolt. Elkins’s research
had made the suit possible. Now the lawyer running the case wanted her to sign
on as an expert witness. Elkins was in the top-floor study of her home in
Cambridge, Massachusetts, when the call came. She looked at the file boxes
around her. “I was supposed to be working on this next book,” she says. “Keep my
head down and be an academic. Don’t go out and be on the front page of the
paper.”
She said yes. She
wanted to rectify injustice. And she stood behind her work. “I was kind of like
a dog with a bone,” she says. “I knew I was right.”
What she didn’t know
was that the lawsuit would expose a secret: a vast colonial archive that had
been hidden for half a century. The files within would be a reminder to
historians of just how far a government would go to sanitise its past. And the
story Elkins would tell about those papers would once again plunge her into
controversy.”
Related:
http://vivekjayakumar.blogspot.com/2016/06/history-lesson-british-rule-in-africa.htmlLending Club – A Cautionary Tale of Finance
How Lending Club’s Biggest Fanboy Uncovered
Shady Loans [from Blommberg BusinessWeek]
http://www.bloomberg.com/news/features/2016-08-18/how-lending-club-s-biggest-fanboy-uncovered-shady-loansGDP Growth versus GDP Per Capita Growth
Economist Kocherlakota makes an important point:
“The Organization
for Economic Cooperation and Development pointed out recently that U.S. GDP has
expanded by more than 10 percent in inflation-adjusted terms since the end of
2007, while the euro area and Japan economy have stagnated.
It's important, however, to take account of population growth. The U.S. population is growing much faster than those of either Europe or Japan, so its economy should almost automatically grow faster as well. Yet what really matters for individuals is how much output per person has changed.”
It's important, however, to take account of population growth. The U.S. population is growing much faster than those of either Europe or Japan, so its economy should almost automatically grow faster as well. Yet what really matters for individuals is how much output per person has changed.”
The Best of Times
Johan Norberg - Why can’t we see that we’re living in a
golden age?
“Global trade has
led to an expansion of wealth on a magnitude which is hard to comprehend.
During the 25 years since the end of the Cold War, global economic wealth — or
GDP per capita — has increased almost as much as it did during the preceding
25,000 years….
Part of our problem
is one of success. As we get richer, our tolerance for global poverty
diminishes. So we get angrier about injustices. Charities quite rightly wish to
raise funds, so they draw our attention to the plight of the world’s poorest.
But since the Cold War ended, extreme poverty has decreased from 37 per cent to
9.6 per cent — in single digits for the first time in history.”
Wednesday, August 17, 2016
Politics, Media Hysteria, Jingoism and the Decline of the Olympic Spirit
An excellent piece by Simon Jenkins – This
Olympics hysteria shows that Britain has turned Soviet
Related:
Australians and continental Europeans express amazement
at the sudden and unusual success of the British in Olympic cycling events:
“Germany's Kristina Vogel, gold medallist at the
London games and bronze winner here, has said she finds Great Britain's
dominance of Olympic Games after they perform nowhere near as well other
meetings such as world championships "very questionable".”
A neat Bloomberg piece: Jingoism Is the Ugly Side
of Olympic Competition
“A swimmer or long jumper represents herself and her
coaching team as much as her country. Celebrating human achievement, regardless
of nationality, makes more sense in a globalized world than turning an archery
competition or a 100-meter race into a proxy war between countries.
While many athletes feel the highest honor is to
represent their country in their sport, that doesn't change the fact that the
goal of high achievement sports is ultimately to set records and celebrate
individual mastery. There ought to be rules for TV companies requiring equal
coverage for individual events (they can do whatever they want with team
ones). There is even a good argument for removing the national flags
from individual competition -- allowing the athletes to wear sponsored kit
instead of the team kit -- so that only team events count in the final medals
tally.”Class Hierarchy in America - History Lesson
Related:
An interesting piece from The Atlantic:
http://www.theatlantic.com/magazine/archive/2016/09/the-original-underclass/492731/
“For England, the New World beckoned as more than a vast store of natural resources, Isenberg argues. It was also a place to dispose of the dregs of its own society. In the late 16th century, the geographer Richard Hakluyt argued that America could serve as a giant workhouse where the “fry [young children] of wandering beggars that grow up idly and hurtfully and burdenous to the Realm, might be unladen and better bred up.” The exportable poor, he wrote, were the “offals of our people.” In 1619, King James I was so fed up with vagrant boys milling around his Newmarket palace that he asked the Virginia Company to ship them overseas. Three years later, John Donne—yes, that John Donne—wrote about the colony of Virginia as if it were England’s spleen and liver, Isenberg writes, draining the “ill humours of the body … to breed good bloud.” Thus it was, she goes on, that the early settlers included so many “roguish highwaymen, mean vagrants, Irish rebels, known whores, and an assortment of convicts,” including one Elizabeth “Little Bess” Armstrong, sent to Virginia for stealing two spoons.”
http://www.theatlantic.com/magazine/archive/2016/09/the-original-underclass/492731/
“For England, the New World beckoned as more than a vast store of natural resources, Isenberg argues. It was also a place to dispose of the dregs of its own society. In the late 16th century, the geographer Richard Hakluyt argued that America could serve as a giant workhouse where the “fry [young children] of wandering beggars that grow up idly and hurtfully and burdenous to the Realm, might be unladen and better bred up.” The exportable poor, he wrote, were the “offals of our people.” In 1619, King James I was so fed up with vagrant boys milling around his Newmarket palace that he asked the Virginia Company to ship them overseas. Three years later, John Donne—yes, that John Donne—wrote about the colony of Virginia as if it were England’s spleen and liver, Isenberg writes, draining the “ill humours of the body … to breed good bloud.” Thus it was, she goes on, that the early settlers included so many “roguish highwaymen, mean vagrants, Irish rebels, known whores, and an assortment of convicts,” including one Elizabeth “Little Bess” Armstrong, sent to Virginia for stealing two spoons.”
Tuesday, August 16, 2016
Are Central Banks Stoking Asset Bubbles?
A good read for monetary economists:
Amar Bhide – Easy money is a dangerous cure for a debt
hangover
http://www.ft.com/cms/s/0/f378d6ec-63b6-11e6-8310-ecf0bddad227.htmlGDP – History and Background
An interesting piece by Philipp Lepenies:
“Fundamentally, GDP
is a materialistic concept: higher production is the sole imperative; the more
goods produced and services rendered, the better. Whether any of this actually
makes people better off is a different matter entirely.
Dissatisfaction
with the myopia of GDP has led policymakers in recent years to explore
alternative, more people-oriented aggregate indicators. But moving beyond GDP
has proved difficult, given its history.”
Research Challenges in Medicine/Psychology
Related:
P-Values and Statistical Significance
Abuse of P-Values in Financial Circles – An Example
http://www.fool.com/investing/general/2015/06/27/making-big-bucks-with-biotech-why-the-p-test-is-ke.aspx---
As psychologists face fundamental questions about their research, one academic decides to do something about it:
A Grad Course I Would Love to Take
Oregon Psychology Professor Srivastava's syllabus for an
imaginary course:
https://hardsci.wordpress.com/2016/08/11/everything-is-fucked-the-syllabus/
https://hardsci.wordpress.com/2016/08/11/everything-is-fucked-the-syllabus/
Monday, August 15, 2016
The Rio Olympics – Brazil versus the Western Media
NYTIMES Roger Cohen’s excellent piece is a must read: Brazil’s
Uplifting Olympics
“First, Brazil was
never going to get the job done in time for the Olympics; now that it has, and
held a magnificent opening ceremony, it’s blamed for not having resolved every
one of its social problems in time for the Games.
There is something
in the developed world that does not like a developing country that organizes a
major sporting event. I heard the same jeremiads in South Africa at the time of
the World Cup in 2010: the crime that would ruin things, the poverty that was
shameful, and the inefficiency that would plague visitors. The tournament was a
triumph. I don’t recall reporters combing the poorest, most crime-ridden parts
of Britain in 2012 to find people ready to grumble about the London Olympics.”
Technology Might be Making You Stupid
Pernicious effects of modern technology on human mental
faculties –
“Why bother
learning ten things when your phone can find out any one of a million things in
a few seconds?
The answer is that
the brain requires exercise, and we allow it to atrophy at our peril. While we
get better at juggling ideas, our memories are taking a battering. An academic
study into the ‘Google effect’ showed that people tend not to bother
remembering something if they believe it can be looked up later. People were
more likely to index; to remember where information was-located rather than the
actual information itself. That study was five years ago and technology has
moved on significantly. Want to bet that people’s memories have got better — or
worse — since then? Last year, 91 per cent of people surveyed for another study
into ‘digital amnesia’ said they used the internet as an ‘online extension’ of
their brain and 44 per cent relied on their smartphone. Of 6,000 adults
surveyed across Europe, more than a third turned to computers to help recall
information. The UK had one of the worst rates: more than half of British
adults admitted that they don’t even try to remember answers, they just search
online. We are becoming a flabby-brained nation.”
Interesting New Books
For fans of the Seinfeld TV show
SEINFELDIA by
Jennifer Keishin Armstrong
On Geo-Politics -
Easternisation: War and Peace in the Asian Century by Gideon Rachman
On Economics –
How Big Should Our Government Be? By Jon Bakija, Lane Kenworthy, Peter
Lindert, and Jeff Madrick
https://www.washingtonpost.com/posteverything/wp/2016/08/08/whats-slowing-growth-sorry-conservatives-its-not-the-size-of-governments/
https://www.washingtonpost.com/posteverything/wp/2016/08/08/whats-slowing-growth-sorry-conservatives-its-not-the-size-of-governments/
Why Are There So Many Olympic Medal Events in Swimming?
Unusual (and unrepresentative) distribution of medals across
events gives certain countries a huge advantage in Olympic medals tally.
WSJ’s Mathew Futterman asks:
“There are plenty of
folks who gripe about the prominence of swimming at the Olympics.
The sport accounts for
nearly 10% of the medals and it’s only pursued seriously in a handful of
countries. Do we really need 100- and 200-meter races of every stroke and even
200- and 400-meter individual medleys? Why not just have a 300, declare a
world’s greatest medley swimmer and be done with it?...
The Americans won 16
gold medals and 31 overall in the Olympic pool in London, roughly one-third of
their overall total.”
Many countries in the world (especially those from Africa
and much of Asia) do not even have sufficient access to drinking water. These
countries are unlikely to build a large enough number of modern 50-meter swimming pools
to support competitive swimmers. Not surprisingly, they are not even represented in most of the
swimming events.
--
Countries that medal in a more diverse group of sports should
also be feted – it represents an impressive accomplishment even if they fall
well short of total US medal count.
The following site allows one to look at the various medals
won (and the sport in which medal was awarded) by individual countries at Rio
2016:
http://www.theguardian.com/sport/ng-interactive/2016/aug/05/rio-olympics-2016-medal-table-and-results-in-full
One interesting comparison – US versus China (contrast the variety of sports in which athletes from the two sporting powers have medaled)
---
Personal Pet Peeve -
Why the bloody hell is Dressage (Equestrian) an Olympic sport (or even a sport)?
One interesting comparison – US versus China (contrast the variety of sports in which athletes from the two sporting powers have medaled)
---
Personal Pet Peeve -
Why the bloody hell is Dressage (Equestrian) an Olympic sport (or even a sport)?
The Fiscal Stimulus Debate
An interesting piece from Robert Samuelson of The Washington Post:
“It’s worth
remembering that China essentially did what American critics suggest we should
have done — and should do now. China launched a huge stimulus program in 2008
(bigger than ours relatively) of public-works spending and industry investment.
This did shield China from the worst of the crisis. But it didn’t solve China’s
underlying economic problems, which are now worse for having festered.”
The Economist on
fiscal multipliers:
http://www.economist.com/news/economics-brief/21704784-fiscal-stimulus-idea-championed-john-maynard-keynes-has-gone-and-outSunday, August 14, 2016
The Next Financial Crisis - Evaluating Potential Triggers
What can set off another financial crisis
by Satyajit Das
http://forbesindia.com/article/column/what-can-set-off-another-financial-crisis/43995/0
http://forbesindia.com/article/column/what-can-set-off-another-financial-crisis/43995/0
Related:
Toxic cocktails: Over-valued assets and high
debt by Satyajit Das
http://forbesindia.com/article/column/toxic-cocktails-overvalued-assets-and-high-debt/43621/0Poverty, Race and Political Economy in America
An interesting piece from LA TIMES:
How do Americans view poverty? Many
blue-collar whites, key to Trump, criticize poor people as lazy and content to
stay on welfare BY DAVID LAUTER
“Sharp differences
along lines of race and politics shape American attitudes toward the poor and
poverty, according to a new survey of public opinion, which finds empathy
toward the poor and deep skepticism about government antipoverty efforts.”
Friday, August 12, 2016
Economics of Trump Supporters
An elaborate new study attempts to decipher the motivations
driving Trump voters:
“Yet a major new
analysis from Gallup, based on 87,000 interviews the polling company conducted
over the past year, suggests this narrative is not complete. While there does
seem to be a relationship between economic anxiety and Trump's appeal, the
straightforward connection that many observers have assumed does not appear in
the data.
According to this
new analysis, those who view Trump favorably have not been disproportionately
affected by foreign trade or immigration, compared with people with unfavorable
views of the Republican presidential nominee. The results suggest that his
supporters, on average, do not have lower incomes than other Americans, nor are
they more likely to be unemployed.”
Risk and Financial Markets
Buildup of Risks in Retirement Accounts
El-Erian notes:
“With interest
rates extremely low and the prices of stocks and bonds at historic highs,
finding safe investments that can help guarantee a comfortable retirement has
become increasingly difficult. This has put the managers of pension funds and
other institutions that invest on behalf of future retirees in a difficult
position, driving them to take ever greater risks in hopes of meeting their
performance objectives -- targets that are unlikely to be met absent a major
revamp of economic policies and corporate prospects. As a result, individuals
are increasingly being exposed to the threat of losses that cannot be recouped
quickly.”
Asymmetric Information in Finance
http://www.bloomberg.com/view/articles/2016-08-11/the-dirty-little-secret-of-finance-asymmetric-informationAre the Simplest Explanations Always the Best?
Occam’s razor and Scientific Explanations
http://www.theatlantic.com/science/archive/2016/08/occams-razor/495332/
Post-Brexit Decline in London Home Prices
Effect of Brexit vote on London real estate market:
https://www.washingtonpost.com/world/europe/londons-lavishly-high-home-prices-take-a-brexit-hit/2016/08/08/371f5770-58ce-11e6-8b48-0cb344221131_story.htmlThursday, August 11, 2016
Key Global Demographic Shifts
Aging population – a historic shift
http://www.ipsnews.net/2016/08/the-historic-reversal-of-populations/
The Economist on Aging
http://www.economist.com/news/briefing/21704788-fight-cheat-death-hotting-up-adding-ages
The Economist on Aging
http://www.economist.com/news/briefing/21704788-fight-cheat-death-hotting-up-adding-ages
Wednesday, August 10, 2016
Economics of Higher Education
STUDENT DEBT AND THE ECONOMIC RECOVERY
An interesting new CEA report – INVESTING IN HIGHER EDUCATION: BENEFITS, CHALLENGES, AND THE STATE OF
STUDENT DEBT
https://www.whitehouse.gov/sites/default/files/page/files/20160718_cea_student_debt.pdf
https://www.whitehouse.gov/sites/default/files/page/files/20160718_cea_student_debt.pdf
Preliminary Evidence on the Effects of Minimum Wage Hike in Seattle
Jared Bernstein looks at recent findings on the effects
of Seattle’s minimum wage hike:
https://www.washingtonpost.com/posteverything/wp/2016/08/10/so-far-the-seattle-minimum-wage-increase-is-doing-what-its-supposed-to-do/?utm_term=.419ea037f0df
https://www.washingtonpost.com/posteverything/wp/2016/08/10/so-far-the-seattle-minimum-wage-increase-is-doing-what-its-supposed-to-do/?utm_term=.419ea037f0df
Consequences of Climate Change – An Early Warning from the Middle East
An epic Middle
East heat wave could be global warming’s hellish curtain-raiser –
Washington Post
“Parts of the
United Arab Emirates and Iran experienced a heat index — a measurement that
factors in humidity as well as temperature — that soared to 140 degrees in
July, and Jiddah, Saudi Arabia, recorded an all-time high temperature of nearly
126 degrees. Southern Morocco’s relatively cooler climate suddenly sizzled last
month, with temperatures surging to highs between 109 and 116 degrees. In May,
record-breaking temperatures in Israel caused a surged of heat-related
illnesses.
Temperatures in
Kuwait and Iraq startled observers. On July 22, the mercury climbed to 129
degrees in the southern Iraqi city of Basra. A day earlier, it reached 129.2 in
Mitribah, Kuwait. If confirmed by the World Meteorological Organization, the
two temperatures would be the hottest ever recorded in the Eastern Hemisphere.”
Related: The Not-Fertile Crescent – Middle East Faces
Climate Challenge
http://www.economist.com/news/middle-east-and-africa/21703269-more-war-climate-change-making-region-hard-live-infertileTuesday, August 9, 2016
Disaffection in the Modern World
NYTIMES columnist David Brooks has written a thought-provoking piece: The Great Affluence Fallacy
http://www.nytimes.com/2016/08/09/opinion/the-great-affluence-fallacy.html
http://www.nytimes.com/2016/08/09/opinion/the-great-affluence-fallacy.html
What is Time?
Physicists, like economists, have trouble coming up with clearcut answers
to fundamental questions in their field. For instance, physicists do not have a
proper theory of time:
“Einstein once
described his friend Michele Besso as “the best sounding board in Europe” for
scientific ideas. They attended university together in Zurich; later they were
colleagues at the patent office in Bern. When Besso died in the spring of 1955,
Einstein — knowing that his own time was also running out — wrote a now-famous
letter to Besso’s family. “Now he has departed this strange world a little
ahead of me,” Einstein wrote of his friend’s passing. “That signifies nothing.
For us believing physicists, the distinction between past, present and future
is only a stubbornly persistent illusion.”
Einstein’s statement
was not merely an attempt at consolation. Many physicists argue that Einstein’s
position is implied by the two pillars of modern physics: Einstein’s
masterpiece, the general theory of relativity, and the Standard Model of
particle physics. The laws that underlie these theories are time-symmetric —
that is, the physics they describe is the same, regardless of whether the
variable called “time” increases or decreases. Moreover, they say nothing at
all about the point we call “now” — a special moment (or so it appears) for us,
but seemingly undefined when we talk about the universe at large. The resulting
timeless cosmos is sometimes called a “block universe” — a static block of
space-time in which any flow of time, or passage through it, must presumably be
a mental construct or other illusion.”
Related:
Time’s (Almost) Reversible Arrow by
Frank Wilczek (Nobel Prize-winning physicist at the Massachusetts Institute of
Technology)
Ruminations on the meaning of time:
http://www.nybooks.com/articles/archives/2013/jun/06/time-regained/Japan's Railway Infrastructure - The World's Best
Japan possesses the world’s most sophisticated railway system:
https://www.cnet.com/roadshow/news/8-hours-across-japan-by-train/
https://www.cnet.com/roadshow/pictures/8-hours-across-japan-by-train-pictures/
https://www.theguardian.com/world/2015/apr/21/japans-maglev-train-notches-up-new-world-speed-record-in-test-run
https://www.cnet.com/roadshow/pictures/8-hours-across-japan-by-train-pictures/
https://www.theguardian.com/world/2015/apr/21/japans-maglev-train-notches-up-new-world-speed-record-in-test-run
On a side note,
If the ultimate goal is to ferry people from point A to point B in comfort and safety, then a great railway system is superior to autonomous/driverless car systems any day. The hoopla surrounding driverless cars is a bit silly when one considers the underlying goal - which is still to move people around efficiently. From a physics standpoint, it is not very efficient system if you need a 2000 pound vehicle to transport one individual from point A to point B (even if the vehicle is self-driven).
Monday, August 8, 2016
Democratic Disconnect - Intergenerational Differences
Interesting new essay: The Democratic Disconnect
by Roberto Stefan Foa and Yascha Mounk
http://journalofdemocracy.org/sites/default/files/Foa&Mounk-27-3.pdfNegative Interest Rates and Saving Rate
Negative Interest Rates and Saving Rate – Income Effect vs.
Substitution Effect
WSJ piece notes:
“Policy makers in
Europe and Japan have turned to negative rates for the same reason—to stimulate
their lackluster economies. Yet the results have left some economists
scratching their heads. Instead of opening their wallets, many consumers and
businesses are squirreling away more money.”
US States - Tax Havens for Very Rich
From the NYTIMES - States Vie to Shield the Wealth of the 1
Percent by PATRICIA COHEN
“...Although most
out-of-town visitors are drawn to the city’s roulette wheels and slot machines,
Mr. Oshins and a battalion of tax lawyers, accountants, advisers, trust
administrators and bankers cater to an elite clientele that insists on a much
more reliable way to build a fortune.
With their backing,
Nevada has stoked an aggressive rivalry among a smattering of states to babysit
the wealth of the nation’s top 1 percent, pressing public officials to pass
laws, streamline regulations, lower fees and replace D.M.V.-level service with
concierge treatment.”
Meanwhile, debate regarding the appropriate taxation of the wealthy is
getting interesting:
http://www.theatlantic.com/business/archive/2016/08/is-america-due-for-a-tax-hike/494795/
Long-Term Growth Prospects
Wise words from Northwestern economist Robert Gordon:
“…Yet the
widespread unease goes beyond slow growth and the accompanying wage stagnation.
Underlying deep-seated voter anxiety follows trends that are decades in the
making, including fears of insecurity that plague millions of Americans.
Some of these problems
can be tackled with bold presidential policies. But there are limits, and other
problems may lie beyond the realm of feasible solutions.”
William D. Nordhaus on Gordon’s Rise and Fall of American Growth
http://www.nybooks.com/articles/2016/08/18/why-economic-growth-will-fall/
We’re in a Low-Growth World. How Did We Get Here? By NEIL
IRWIN
US Post-Crisis Economic Recovery Continues to be
Disappoint:
“Even seven years
after the recession ended, the current stretch of economic gains has yielded
less growth than much shorter business cycles.
In terms of average
annual growth, the pace of this expansion has been by far the weakest of any
since 1949.”
Efficient Market Hypothesis – Fama versus Thaler Debate
Two leading economists debate a controversial economic/financial
theory – Efficient Market Hypothesis:
Sunday, August 7, 2016
The Asian Century
FT’s Gideon Rachman on why the 21st Century
will be the Asian Century
“For centuries, the
wealth and technology gap between west and east was so enormous that western
nations dominated international affairs and business — no matter the difference
in population. But rapid economic development in Asia during the past two
generations means that this wealth-gap has narrowed sufficiently for the weight
of numbers in Asia to begin to tilt the balance of power in the world.”
Economic Development – Interesting Items
Egypt’s Economic Woes
The Not-Fertile Crescent – Middle East Faces Climate
Challenge
Bulging Youth Population and Economic Turmoil in the Middle
East
Vietnam – East Asia’s Next Economic Star?
India – Industrialization and Development
Justin Yifu Lin on China and Economic Development
https://www.project-syndicate.org/commentary/china-g20-summit-investment-framework-by-justin-yifu-lin-2016-08Saturday, August 6, 2016
Oil Market Update
Supply versus Demand
US Shale Oil Producers versus Saudi Arabia
http://www.telegraph.co.uk/business/2016/07/31/texas-shale-oil-has-fought-saudi-arabia-to-a-standstill/Isolationism and US Foreign Policy
US Foreign Policy Swings Towards Isolationism
http://www.wsj.com/articles/the-isolationist-temptation-1470411481Friday, August 5, 2016
US Labor Market Update – A Solid Rebound in July
Strong job growth in July eases fears of a sharp economic
slowdown
http://blogs.wsj.com/briefly/2016/08/05/july-jobs-report-the-numbers-2/
Labor Market and Broader Economic Conditions
http://www.bloomberg.com/view/articles/2016-08-05/great-jobs-report-now-the-economy-must-followA Fascinating Empirical Study – Allergies and Modern Lifestyles
Does modern society worsen allergies and
asthma? Ask the Amish
“The Amish
communities concentrated in America’s rust belt share many similarities with
other traditionalist sects, including the Hutterites, a group of Anabaptists
that live largely in Canada and in the northwestern United States. Both are
Christian groups that eschew most modern technology and make much of their
livelihood from farming. But they have a key difference: Amish families farm
traditionally, using hand-held or livestock-powered tools, while Hutterites use
modern farm implements.
And that appears to
make a crucial difference to their health: While less than 10 percent of Amish
schoolchildren have asthma and allergies, the prevalence in Hutterite children
is over 20 and 30 percent respectively.”Link to original study published in the New England Journal of Medicine
http://www.nejm.org/doi/pdf/10.1056/NEJMoa1508749
Thursday, August 4, 2016
The ‘Great Flood’ and the Emergence of Chinese Civilization
A fascinating read for anyone interested in history or archaeology:
Related:
Emperor Yu’s Great Flood: Geological data
provide support for a legendary flood in China ~4000 years ago by David R. Montgomery
Summary
We know of the legendary Emperor Yu through the story of China's Great Flood, a tale already ancient when first recorded around 1000 BCE (1). On page 579 of this issue, Wu et al. offer a provocative new explanation for this story. They present evidence for an enormous landslide dam break 1922 ± 28 BCE (2) that coincided with the major cultural transition from the Late Neolithic to the Early Bronze Age in China and that also helps explain curious details of Yu's story.
We know of the legendary Emperor Yu through the story of China's Great Flood, a tale already ancient when first recorded around 1000 BCE (1). On page 579 of this issue, Wu et al. offer a provocative new explanation for this story. They present evidence for an enormous landslide dam break 1922 ± 28 BCE (2) that coincided with the major cultural transition from the Late Neolithic to the Early Bronze Age in China and that also helps explain curious details of Yu's story.
Outburst flood at 1920 BCE supports historicity of China’s Great Flood
and the Xia dynasty
Summary
China’s historiographical traditions tell of the successful control of a Great Flood leading to the establishment of the Xia dynasty and the beginning of civilization. However, the historicity of the flood and Xia remain controversial. Here, we reconstruct an earthquake- induced landslide dam outburst flood on the Yellow River about 1920 BCE that ranks as one of the largest freshwater floods of the Holocene and could account for the Great Flood. This would place the beginning of Xia at ~1900 BCE, several centuries later than traditionally thought. This date coincides with the major transition from the Neolithic to Bronze Age in the Yellow River valley and supports hypotheses that the primary state-level society of the Erlitou culture is an archaeological manifestation of the Xia dynasty.
China’s historiographical traditions tell of the successful control of a Great Flood leading to the establishment of the Xia dynasty and the beginning of civilization. However, the historicity of the flood and Xia remain controversial. Here, we reconstruct an earthquake- induced landslide dam outburst flood on the Yellow River about 1920 BCE that ranks as one of the largest freshwater floods of the Holocene and could account for the Great Flood. This would place the beginning of Xia at ~1900 BCE, several centuries later than traditionally thought. This date coincides with the major transition from the Neolithic to Bronze Age in the Yellow River valley and supports hypotheses that the primary state-level society of the Erlitou culture is an archaeological manifestation of the Xia dynasty.
GST Bill - India's Biggest Tax Reform in Decades
India finally gets a much needed federal sales tax system:
http://www.bloomberg.com/news/articles/2016-08-03/india-passes-landmark-sales-tax-reform-in-modi-s-biggest-win-yet
http://blogs.wsj.com/briefly/2016/08/04/5-sectors-that-will-benefit-from-indias-proposed-tax-overhaul/
http://www.bloomberg.com/news/articles/2016-08-03/india-passes-landmark-sales-tax-reform-in-modi-s-biggest-win-yet
http://blogs.wsj.com/briefly/2016/08/04/5-sectors-that-will-benefit-from-indias-proposed-tax-overhaul/
UK Interest Rates Hit Record Lows
BOE cuts policy rate as a post-Brexit slowdown becomes more likely:
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