Sunday, June 30, 2019
Saturday, June 29, 2019
Global Supply Chains and Trade Fallacies
The guts of an Apple iPhone show exactly what Trump
gets wrong about trade
Corporate America in the Crossfire
Work and Career
At Work, Expertise Is Falling Out of Favor
Your Professional Decline Is Coming (Much) Sooner
Than You Think
Weekend Readings - Interesting Items
The Global Economy Runs on Parties You’re Not Invited To
https://www.nytimes.com/2019/06/26/opinion/global-economy-cannes.htmlReforms to revive global economic growth
Roger Cohen on the future of US Diplomacy
A rare peep at the finances of Britain’s 0.01%
Thursday, June 27, 2019
Political Redistricting: A Flawed Democratic Process
Politicians Can Pick
Their Voters, Thanks to the Supreme Court
Interesting and disturbing:
Christopher Ingraham notes:
“We tend to think that voters choose their
representatives, making Congress a reflection of the will of the people. But,
in reality, much of the makeup of the House is a product of politicians
choosing their voters”
A Summer School for Mathematicians Fed Up with
Gerrymandering by Dawn Chan
http://www.newyorker.com/tech/elements/a-summer-school-for-mathematicians-fed-up-with-gerrymandering
Chan notes:
Chan notes:
“Gerrymandering has been a thorn in the side of the
U.S. political system since before the very first Congress was elected. The
Times editorial board recently called the issue “as old as it is corrosive to a
representative democracy,” and last year, in a book titled “Ratf**ked,” the
journalist David Daley wrote that “Democrats and Republicans alike have the
sense that something in our politics is broken, that Congress is not responsive
to the will of the people.” Although Americans of all political persuasions are
able to agree on the problem, solutions, for now, are in short supply. In part,
this is because even the most equitable districts are drawn according to
subjective factors. A strangely shaped one might be a symptom of political
bias, or it might merely reflect the local geography. Many states, moreover,
explicitly call on their mapmakers to consider the needs of so-called
communities of interest.”
How Computers Turned Gerrymandering into a Science
Tyranny of the Minority
The Significance of the Monsoons
The South Asian monsoon, past, present and future
RELATED:
https://vivekjayakumar.blogspot.com/2018/04/the-monsoon-and-indian-economy.html
--
India's Water Crisis
India’s Water Crisis Is Man-Made
www.bloomberg.com/opinion/articles/2019-06-26/chennai-water-shortage-is-a-manmade-crisis
Chennai, an Indian City of Nearly 5 Million, Is Running Out of Water
Chennai, an Indian City of Nearly 5 Million, Is Running Out of Water
Wednesday, June 26, 2019
Bitcoin and Financial Market Irrationality
Bitcoin Surge Pushes Weekly Gain to 40%, and It's Only Wednesday
The Economist on the Bitcoin Bubble:
https://www.economist.com/finance-and-economics/2019/03/27/flaws-in-bitcoin-make-a-lasting-revival-unlikely
https://www.economist.com/finance-and-economics/2019/03/27/flaws-in-bitcoin-make-a-lasting-revival-unlikely
Efficient Market Hypothesis Debate
Interesting piece from The Economist:
Global Economy - Delicately Poised
The global economy is on a knife-edge
How to Invest and Profit in the Next Recession
https://www.bloomberg.com/opinion/articles/2019-06-17/how-to-invest-and-profit-in-the-next-recession
The choice of method for dating business cycles can make a significant difference.
The next US recession is likely to be around the corner
Do Longer Expansions Lead to More Severe Recessions?
Why Hasn’t Australia Had a Recession in Almost 30 Years?
https://www.theatlantic.com/ideas/archive/2018/12/what-australia-knows-about-recessions/578482/Tuesday, June 25, 2019
Zimbabwe's Currency Problem
Zimbabwe tries to bring back its dollar, a decade after hyperinflation killed it
How Zimbabwe paid the price for hyperinflation, offering a grim lesson for Venezuela
Different Models of Capitalism
The Debate Surrounding the Nordic Economic Model
What Americans Don’t Get About Nordic Countries
“But this vision of homogenous, altruistic Nordic lands is mostly a fantasy. The choices Nordic countries have made have little to do with altruism or kinship. Rather, Nordic people have made their decisions out of self-interest. Nordic nations offer their citizens—all of their citizens, but especially the middle class—high-quality services that save people a lot of money, time, and trouble. This is what Americans fail to understand: My taxes in Finland were used to pay for top-notch services for me.”
Paul Krugman notes:
https://www.nytimes.com/2019/02/07/opinion/trump-socialism-state-of-the-union.html
“What Americans who support “socialism” actually want is what the rest of the world calls social democracy: A market economy, but with extreme hardship limited by a strong social safety net and extreme inequality limited by progressive taxation. They want us to look like Denmark or Norway, not Venezuela.”
“What Americans who support “socialism” actually want is what the rest of the world calls social democracy: A market economy, but with extreme hardship limited by a strong social safety net and extreme inequality limited by progressive taxation. They want us to look like Denmark or Norway, not Venezuela.”
The new left economics: how a network of thinkers is transforming capitalism
Monday, June 24, 2019
US Economy - Important Topics
Is Slow Still the New Normal for GDP Growth?
Is a Weak Dollar Good for the US?
Profiles of Future Mega-Cities
Future Megacities
Humans v the city: the staggering scale of Chongqing – in pictures
Economics and Political Spin
Economist Stephen Roach notes:
“Trump’s vindictive bluster has steamrolled economic-policy deliberations – ignoring the lessons of history, rejecting the analytics of modern economics, and undermining the institutional integrity of the policymaking process. Policy blunders of epic proportion have become the rule, not the exception.”
Related:
https://www.washingtonpost.com/business/2019/06/24/this-is-absolute-worst-economic-theory-history-theories/
Related:
https://www.washingtonpost.com/business/2019/06/24/this-is-absolute-worst-economic-theory-history-theories/
Zero-Sum Thinking is Flawed
Recessions are a natural part of capitalism, not something to be avoided at all costs
Friday, June 21, 2019
Weekend Readings - Interesting Items
The National Debt Is Still a Problem
The Coming Sino-American Bust-Up
https://www.project-syndicate.org/onpoint/the-coming-sino-american-bust-up-by-nouriel-roubini-2019-06
The always insightful Roger Cohen offers his take
on the Iran-US Crisis
The Trumpification of the Federal Reserve
Thursday, June 20, 2019
Political Polarization in UK
The Economist on the growing political split in Britain
https://www.economist.com/briefing/2019/06/20/how-brexit-made-britain-a-country-of-remainers-and-leavers
Brexit and Future of UK Capitalism
https://www.economist.com/briefing/2019/06/20/how-brexit-made-britain-a-country-of-remainers-and-leavers
Brexit and Future of UK Capitalism
https://politicalquarterly.blog/2019/03/11/what-brexit-means-for-the-future-of-uk-capitalism/
A Bonkers U.K. Establishment Drags Everyone Down
A Bonkers U.K. Establishment Drags Everyone Down
The Humbling of Britain
Martin Fletcher notes:
“The original sin was that of David Cameron, now blithely writing his memoirs in his shepherd’s hut, enjoying exotic holidays and enriching himself on the speakers’ circuit.
The public was not clamouring for a referendum on EU membership. Cameron called it for the narrow purpose of uniting his party and fending off Ukip. He offered an ill-informed electorate a binary choice on an extraordinarily complex issue of profound constitutional importance without even the safeguard of a 60 per cent threshold for approval.
It was one of the most foolish gambles ever taken by a British prime minister, and one that unleashed the charlatans, rogues and demagogues of the Leave campaign.”
The Malign Incompetence of the British Ruling Class
https://www.nytimes.com/2019/01/17/opinion/sunday/brexit-ireland-empire.html
The Malign Incompetence of the British Ruling Class
https://www.nytimes.com/2019/01/17/opinion/sunday/brexit-ireland-empire.html
Mishra notes:
“Politicians and journalists in Ireland are understandably aghast over the aggressive ignorance of English Brexiteers. Business people everywhere are outraged by their cavalier disregard for the economic consequences of new borders. But none of this would surprise anyone who knows of the unconscionable breeziness with which the British ruling class first drew lines through Asia and Africa and then doomed the people living across them to endless suffering.”
Growing Evidence of Climate Change
With More Storms and Rising Seas, Which U.S. Cities Should Be Saved First?
Boston Built a New Waterfront Just in Time for the Apocalypse
Rising Temperatures Ravage the Himalayas, Rapidly Shrinking Its Glaciers
Extreme weather has made half of America look like Tornado Alley
Extreme weather is pummeling the Midwest, and farmers are in deep trouble
NASA: Climate change: How do we know?
Climate Change in America - Impressive Graphics
www.washingtonpost.com/graphics/2019/national/gone-in-a-generation/forest-climate-change.html
www.washingtonpost.com/graphics/2019/national/gone-in-a-generation/forest-climate-change.html
Wednesday, June 19, 2019
US Foreign Aid - In Need of a Radical Overhaul
Where Does American Foreign Aid Go?
A brilliant graphic (that illustrates the sad reality that it is neither the poorest nor the neediest that receive US foreign aid):
Question worth considering:
What if America redirected $3-4 billion from the Middle East towards the poorer countries in the Western hemisphere (Central America/Caribbean)?
If the poorer regions in America’s own backyard developed quickly, the problem of illegal/low-skilled migration would largely disappear. Instead of sending billions to far-off countries in the Middle East, it makes strategic and moral sense for the US to send foreign aid to poor central American countries. It is not clear why the US is still so involved in the Middle East given that it is now a major oil producer and exporter.
Southern Border Crisis Will End When Central America Prospers
The Economist on recent research findings related to foreign aid and development:
Empirical evidence on foreign aid effectiveness
A Rethink of the entire US foreign aid program may be warranted.
Davidson notes -
“For decades, grand theories were developed in rich countries about how to alleviate poverty, and huge amounts of money were spent, with stunningly little regard for their actual impact. There was the big-push model, the dual-sector model, the critical minimum effort, the Fei-Ranis surplus-labor model, capital accumulation, capacity building and, widely adopted and then thoroughly repudiated, the Washington Consensus. Each theory promised an elegant, compelling solution to world poverty. Each has fallen short, in many cases making poor people worse off. …
Alex Thier, head of policy at U.S.A.I.D., told me the agency has begun to experiment with such programs through its Global Development Lab. Moreover, he said, the agency is now making it a priority that poor recipient countries should play a much bigger role in deciding how aid money is spent. A vast majority of American and world aid, however, is still delivered according to wildly outdated models. It often seems designed to help American foreign-policy goals as much as the poor, disproportionately going to geopolitically important countries — Afghanistan, Iraq, Jordan, Pakistan. Also, there is a powerful political system supporting the ways aid is allocated. For example, lobbyists for American farmers and shipowners have kept in place an absurd law that requires much of the emergency food aid sent to crisis-racked countries to come from American farms and be carried by American ships.”
Shifting the Foreign Aid Paradigm— Paying for Outcomes by William Savedoff, Rita Perakis, and Beth Schwanke
Baumol’s Cost Disease and the Price of Education and Healthcare
The rising cost of education and health care is less troubling than believed
William Baumol – One of 20th Centuries Greatest Economists has passed away:
“In the 1960s, Baumol was trying to understand the economics of the arts, and he noticed something surprising: Musicians weren’t getting any more productive — playing a piece written for a string quartet took four musicians the same amount of time in 1965 as it did in 1865 — yet musicians in 1965 made a lot more money than musicians in 1865.
The explanation wasn’t too hard to figure out. Rising worker productivity in other sectors of the economy, like manufacturing, was pushing up wages. An arts institution that insisted on paying musicians 1860s wages in a 1960s economy would find their musicians were constantly quitting to take other jobs. So arts institutions — at least those that could afford it — had to raise their wages in order to attract and retain the best musicians….
This became known as Baumol’s cost disease, and Baumol realized that it had implications far beyond the arts. It implies that in a world of rapid technological progress, we should expect the cost of manufactured goods — cars, smartphones, T-shirts, bananas, and so forth — to fall, while the cost of labor-intensive services — schooling, health care, child care, haircuts, fitness coaching, legal services, and so forth — to rise.”
Related:
Baumol interview
http://www.homepages.ucl.ac.uk/~uctpagu/baum-inter.pdf
This became known as Baumol’s cost disease, and Baumol realized that it had implications far beyond the arts. It implies that in a world of rapid technological progress, we should expect the cost of manufactured goods — cars, smartphones, T-shirts, bananas, and so forth — to fall, while the cost of labor-intensive services — schooling, health care, child care, haircuts, fitness coaching, legal services, and so forth — to rise.”
Related:
Baumol interview
http://www.homepages.ucl.ac.uk/~uctpagu/baum-inter.pdf
Credibility of Experts
LSE economist ANDRÉS VELASCO notes:
“Policy gurus spend too much time with others like them – top civil servants, high-flying journalists, successful businesspeople – and too little time with ordinary voters. If they could become “humble, competent people on a level with dentists,” as John Maynard Keynes once suggested, voters might identify with them and find them trustworthy.”
Tuesday, June 18, 2019
Electric Scooters – A New Nightmare for Cities
Welcome, watch or ban: how should cities deal with electric scooters?
“The early “arrive first, ask later” tactics of
scooter companies had perhaps riled cities, and they wanted to show they were
in charge. Aaron Peskin, who co-wrote San Francisco’s e-scooter permit bill,
was quoted by Wired as saying: “It would be very nice if the tech bros could
come in and ask in a collaborative fashion for permission rather than
after-the-fact forgiveness.””
Why E-Scooters Are on the Rise, Along with Injuries
Scooter Madness
https://www.nytimes.com/2019/06/17/opinion/electric-scooters-nashville.html
Almost Every Electric Scooter in the World Comes from This Chinese Company
https://www.bloomberg.com/news/features/2018-12-05/almost-every-electric-scooter-comes-from-this-chinese-companyNot all Market Failures are the Same
Economic Lessons from Everest
Jim O’Neill (former chairman of Goldman Sachs Asset Management and a former UK Treasury Minister) notes:
“Recent images of long lines at the Mount Everest base camp, and at choke points on the way to the summit, offer a perfect real-world example of mismanaged supply and demand. As in a number of other economic-policy areas, a combination of price adjustments and regulation offers the only way off the mountain.”
Opportunity Zones and Urban Development
An Unlikely Group of Billionaires and Politicians Has Created the Most Unbelievable Tax Break Ever
Related:
Housing Sector - Economics
Cities Start to Question an American Ideal: A House with a Yard on Every Lot
https://www.bloomberg.com/opinion/articles/2019-06-14/america-s-battle-over-housing-is-just-getting-started
The one issue every economist can agree is bad: rent control
NIMBYism and Housing Shortage
Wall Street Puts the Squeeze on the Housing Market
Seattle: A look at how transportation can transform a city
https://www.washingtonpost.com/local/trafficandcommuting/a-look-at-how-transportation-can-transform-a-city/2019/01/31/da8418de-0ec4-11e9-8938-5898adc28fa2_story.html
Removing Barriers to Accessing High-Productivity Places
Removing Barriers to Accessing High-Productivity Places
https://www.brookings.edu/wp-content/uploads/2019/01/Shoag_PB_web_20190129.pdf
New Zealand Vowed 100,000 New Homes to Ease Crunch. So Far It Has Built 47.
New Zealand Vowed 100,000 New Homes to Ease Crunch. So Far It Has Built 47.
Facebook and the Digital Currency Debate
What is Libra? All you need to know about
Facebook's new cryptocurrency
https://www.theguardian.com/technology/2019/jun/18/what-is-libra-facebook-new-cryptocurrency
Related:
Meritocracy in Academics
Some Students Get Extra Time for New York’s Elite High School Entrance Exam.
“White students in New York City are 10 times as likely as Asian students to have a 504 designation that allows extra time on the specialized high school entrance exams. White students are also twice as likely as their black and Hispanic peers to have the designation. Students in poverty are much less likely to have a 504 for extra time.”
Admissions into American Universities – Not Always Based on Merit
“A 2009 Princeton study showed Asian Americans had to score 140 points higher on their SATs than whites, 270 points higher than Hispanics and 450 points higher than blacks to have the same chance of admission to leading universities. A lawsuit filed in 2014 accused Harvard of having a cap on the number of Asian students — the percentage of Asians in Harvard’s student body had remained about 16 percent to 19 percent for two decades…
Often cited examples of race blind meritocracy are New York City’s elite public schools, such as Stuyvesant High School, for which admission is based solely on a standardized test. Stuyvesant is about 74 percent Asian, 18 percent white, 3 percent Hispanic, 1 percent black, with 4 percent multiracial or other. In California, where race based affirmative action was eliminated in 1996, admission at the University of California at Berkeley is 42 percent Asian.”
A lawsuit reveals how peculiar Harvard’s definition of merit is
The Economist notes:
“Court filings also reveal how legacy preferences, which give significant advantages to the relatives of alumni, skew Harvard’s admissions system. A suppressed internal report shows that the preference is the same size as that given to black applicants. Roughly 34% of legacy applicants are admitted—more than five times the rate of non-legacy applicants. This is tantamount to affirmative action for well-off white students. According to a survey of freshmen conducted by the Harvard Crimson, the college newspaper, 88% of legacy students come from families making more than $125,000 a year. Recruited athletes, which Harvard admits in droves to fill its lacrosse teams and rowing eights, are also disproportionately white. By Mr. Arcidiacono’s reckoning, 22% of white students are legacies and 16% are recruited athletes.”
Smoking Gun on Anti-Asian Bias at Harvard?
https://www.insidehighered.com/admissions/article/2018/06/18/harvard-faces-new-scrutiny-over-how-it-evaluates-asian-american
Update:
Legacy Admissions at Elite Universities
http://public.econ.duke.edu/~psarcidi/legacyathlete.pdf
Update:
Legacy Admissions at Elite Universities
http://public.econ.duke.edu/~psarcidi/legacyathlete.pdf
Sunday, June 16, 2019
Weekend Readings: Economics and Politics
The policies created to pull the world out of
recession are still in place, but now they are strangling the global economy.
This Economy Is Not Aging Gracefully
How Data Can Help You Win in the Winner-Take-All
Economy
MMT and Japan
https://www.nytimes.com/2019/06/05/business/modern-monetary-theorys-reluctant-poster-child-japan.html
The Tories are throwing away their reputation for economic prudence
France’s president kicks off a second round of reforms
https://www.economist.com/europe/2019/06/15/frances-president-kicks-off-a-second-round-of-reforms
Elizabeth Warren Is Completely Serious
Can Elizabeth Warren Win It All?
Saturday, June 15, 2019
Financing Projects in Emerging Markets
Declining credit quality in the rich world prods
investors into pastures greener
https://www.economist.com/finance-and-economics/2019/06/14/buy-out-firms-are-the-new-banks-in-emerging-markets
https://www.economist.com/finance-and-economics/2019/06/14/buy-out-firms-are-the-new-banks-in-emerging-markets
Friday, June 14, 2019
Intellectualism, Politics and Societal Preferences
Braininess Is Now the Brand
Peter Beinart notes:
“Bush’s and DeLay’s attacks reflected a shift in the
culture of the GOP. As late as 1994, according to the Pew Research Center,
voters who had graduated college were 15 points more likely to identify as
Republicans than Democrats, and voters with graduate degrees were almost evenly
split between the two parties. By 2017, college graduates’ partisan leanings
had flipped: They now favored Democrats by 15 points. Among Americans with
graduate degrees, the shift has been even starker. The Democratic advantage,
which stood at two points in 1994, had grown to 32 points by 2017.
As a result, the educational composition of the two
parties has diverged. From 1997 to 2017, the share of registered Republican
voters who finished college stayed the same. Among Democrats, it rose by 15
points. This shift has influenced the way the two parties see education itself.
In 2010, Democrats were seven points more likely than Republicans to say that
colleges and universities have a positive effect on America. By 2017, they were
36 points more likely.”
The way Americans regard sports heroes versus intellectuals speaks volumes by Kareem Abdul-Jabbar
“Anti-vaxxers, climate change deniers, even flat-earthers are on the rise. Part of the reason for this is the promotion of fuzzy thinking as a positive political statement. All those people who were told in school that their opinions lack any meaningful support and are filled with logical fallacies can now band together in shared ignorance masquerading as conservative ethos. They get to thumb their noses at the “elite” thinkers….
We should have a healthy attitude of skepticism regarding experts because they have not always been proven right. But skepticism isn’t the same as believing nutty conspiracy theories. Skepticism means requiring evidence through scientific method (something that ushered in the Enlightenment). Instead, we even have what psychologists call the Dunning-Kruger Effect, in which people of low knowledge have the illusion that their opinions are superior to those of experts. They like to tout their innate “common sense”, which throughout history has been proven to be the worst kind of sense. Worse, because they eschew logic, politicians have targeted them with a constant barrage of emotional gobbledygook reasoning to pump up their egos without challenging their minds. They are led around by the nose, voting how they are told but thinking they are independent.”
Tokyo - The Near Perfect Megacity
Has Tokyo reached ‘peak city’?
https://www.theguardian.com/cities/2019/jun/14/has-tokyo-reached-peak-city
An excellent book on Japan:
An excellent book on Japan:
Bending Adversity: Japan and the Art of Survival by David Pilling
Thursday, June 13, 2019
Wednesday, June 12, 2019
Fed Rate Cut Debate
The market believes the Fed will cut rates by
September. Should it?
Is Low Inflation a Problem for the United States?
https://www.economist.com/finance-and-economics/2019/06/12/the-market-believes-the-fed-will-cut-rates-by-september-should-it
What Real Interest Rates Tell about the Recession to Follow
The Disconnect between Inflation and Employment in the New Normal by Governor Lael Brainard
Esther L. George, President and Chief Executive Officer Federal Reserve Bank of Kansas City
“As long as inflation was below its objective and unemployment was above its longer-run level, it was appropriate to run an accommodative policy to promote the movement of both variables back toward their longer-run sustainable levels. Accommodative policies tend to lower unemployment and, generally speaking, increase inflation.
But with the unemployment rate now below its longer-run level, should we still be concerned about inflation running slightly below target? As I listen to business and community leaders around my region, I hear few complaints about inflation being too low. In fact, I am more likely to hear disbelief when I mention that inflation is as low as measured in a number of key sectors.”
Higher Education - Interesting Items
Robert J. Nash explains why he believes one can
still be effective at age 80 as both a teacher and a scholar.
Student Loans – Historical Perspective
Free Speech on Campus Is Doing Just Fine, Thank You
Student Loans – Historical Perspective
An Excellent Critique of Free Tuition Proposals
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