I'm with Rand Paul on this one

This law looks to be totally bogus. Even if we grant that enforcing laws is all well and good, those who may have committed a crime deserve a speedy trial. You know, I think I read that somewhere.

Collected links

1. A strain of MRSA has been definitely tied to pig farming. The question of "which gift from God have we squandered most outrageously?" has some stiff competition, but tossing away antibiotics, surely one of the greatest discoveries in history, so we can eat slightly cheaper meat for a few decades at most takes the crown for me. Tossing pearls before swine, you might say.

2. The new Romer & Romer paper on marginal tax rate incentive effects.

3. Ferociously critical look at Steve Jobs. The shine is definitely coming off the old Jobs mystique.

4. The fall of Scott Ritter.

5. John Sullivan on DFW and his last book, The Pale King.

Good writing

I really enjoyed this Men's Journal piece on the rise of bodybuilding I linked earlier. It's written in a kind of goofy, exaggerated, hyper-manly style that fits the subject perfectly:

"Robby Robinson, a wedge of black marble, arrived in Venice Beach in 1975 with one oversize suitcase and seven dollars."

"Wherever Arnold went, his Rat Pack followed; he rolled eight-deep, even to breakfast."

"No one had to hunt and peck for a source, either: Mexico’s farmacias were two hours south, every shelf stocked with prime gear."

Well done.

Economics and climate

Noah Smith has a great post laying out a kind of bird's eye view of macroeconomic models. Here are two pulls; first, a look at the simplifying assumptions behind the first iteration of the most common macroeconomic model:

1. The assumption that the economy can be modeled with a representative agent; in other words, that the macroeconomy behaves as if there's only one person in it.

2. The assumption that government doesn't exist, or exists only to transfer income from one person to another.

3. The assumption that prices are fully flexible.

4. The assumption that firms are simple profit-maximizers and make zero profits in equilibrium.

5. The assumption that individuals have rational expectations.

6. The assumption that risk preferences can be entirely modeled using people's utility of consumption, and that this utility can be modeled using a small number of parameters that do not change over time.

7. The assumption that labor markets clear.

8. The assumption that "technology" is represented by the Solow residual, and that technology is exogenous and evolves according to a simple time-series process (for example, an AR(1)).

9. The assumption that the business cycles we observe represent small enough fluctuations that the model that describes them can be linearized around its steady state.

Second, a list of the things which the latest version of this model doesn't include:

Fast-forward to 2007, and have a look at the Smets-Wouters model of the business cycle. This "New Keynesian" model is currently considered the "best" DSGE model in terms of forecasting performance. Which is to say, it performs ever so slightly better than the judgment-based forecasts of well-informed individuals. Consequently, some variant of the Smets-Wouters model is used by most central banks as their DSGE model of choice (which they use as a complement to other types of models, such as SVARs, reduced-form models, and judgment-based forecasts). Of course, the fact that Smets-Wouters is the "best" DSGE model does not mean it is very "good." Its forecasts are basically useless more than one quarter into the future...

And yet, despite being so complex, and despite making heroic assumptions about the "structural-ness" of certain parameters, and despite being 25 years in the making, the Smets-Wouters model does not come even close to capturing all of the "frictions" that people believe are at work in the macroeconomy. It does not include the financial frictions that many people believe caused the 2008 financial crisis. It does not include behavioral effects like habit formation, hyperbolic discounting, etc. It does not include learning. It does not include limited enforcement of debt contracts. It does not include hysteresis in labor markets. It does not include income or wealth heterogeneity among households or firms. And this is not even close to an exhaustive list of the relevant things that it doesn't include. To include all those things in one model is prohibitively difficult with current technology; the state space of the model explodes, and you would need a supercomputer to solve it if it could be solved at all.

I thought of climate modeling when I read this post. Both climate and the macroeconomy are clearly chaotic systems, in that they are impossible to rigorously predict on a short-term basis. One can no more predict the exact number of people that will be hired in New York City in August 2014 than one can predict exactly how much rain Portland, Oregon will get in the same month. But chaotic systems, though they are noisy, have some deep structure:

The climatologists seem to have it basically figured out. They've got models which, while pretty damn complicated, give reasonably accurate descriptions throughout many time periods for overall climate behavior. Economics is clearly missing that qualitative accuracy.

So what's the problem? Is the macroeconomy fundamentally more complicated than climate? Or are agents just tougher to include than carbon dioxide molecules? Or are we starting from bad premises? Further study is required.

Xhosa is hard to say

Over at The The Crux, Julie Sedivy has an interesting breakdown of how clicks are used in both African languages and English:

If clicks do sound like exotic noises to you, it might surprise you to know that there’s nothing especially difficult about making click sounds in speech—they’re easily mastered by toddlers who still struggle making truly difficult sounds like s and z. And it might really surprise you to learn, as found in a recent study by Melissa Wright at Birmingham City University, that as an English speaker, you likely riddle your own speech with click sounds, using them much more frequently and systematically than just the occasional “tsk” of disapproval. If that’s so, why on earth do the African clicks sound so strange to English speakers, to the point of being un-language-like?

It's a good post, and that might be an easy thing for toddlers to learn, but as a grown adult, it is devilishly tricky to master even the three basic click sounds in Zulu and Xhosa. Especially the "q" sound, which involves popping your tongue off the roof of your mouth. During a vacation in Eastern Cape once, it took me hours of practice to just be able to make the noise right, let alone stick it in a word with anything approaching accuracy.

Collected links

1. Big NYT piece on Iran and war. Much better than the last go-round.

2. The rise of muscle culture.

3. Mark Kleiman has a basically reasonable piece on Mexico and the drug war.

4. Matt Yglesias' new book is coming out March 6th. Reserve your automatically delivered e-copy now, only $4!

5. Conor Friedersdorf has a magnificent piece on beer in his life. Utterly wonderful.

Everyone hates Utah

Kevin Drum has a crazy chart looking at the favorability ratings of each state:

Coincidentally, Colorado (where I lived from age nine) is the fifth-most popular state, while Utah (where I was born and lived until age nine) is the fifth-least popular state. This is nuts, in my view. Sure, Utah has more than its fair share of crazies, but that's more than balanced out by its superior scenery and generally high-quality governance.

Parfit on the morality of abortion

Karl Smith complains that the discourse around the morality of abortion lacks philosophical rigor:

Abortion seems to me to be a particularly poor example of a lack of moral resolution. From listening to the discourse from almost every corner its clear that bordering on no one takes the issue seriously and is primarily just posturing.

I have heard no mention of whether or not fetuses or infants for that matter are p-zombies and if so would that matter. I have heard no serious treatment of the difference between the duty to prevent miscarriages and the duty to prevent abortion. I have heard no mention of whether or not all potential existing persons have moral relevance. I have heard no mention of wrongful life. These are trivially basic issues underpinning all this, yet the conversation does not even try to address them. Not fail. Not wave away. They simply don’t try.

Now, it seems here Smith is talking about the mainstream conversation, not academic philosophy, but since I've been plowing through Derek Parfit's Reasons and Persons (on the recommendation of Tyler Cowen and Yglesias), I feel like hoisting a bit out of that book. It's from the section dealing with personal identity. Here "Reductionist" refers to a view saying that identity of a person is reducible to certain physical and psychological facts, which has the implication that personal identity is fluid. I may be just as much a different person compared to a nearby friend as compared to my younger self. "Non-Reductionist" means rejecting that view. (I'm probably bungling it a little, but that's pretty close.)

On the Non-Reductionist view, since my existence is all-or-nothing, there must have been a moment when I started to exist. As in my imagined Spectra, there must be a sharp borderline. It is implausible to claim that this borderline is birth; nor can any line be plausibly drawn during pregnancy. We may thus be led to the view that I started to exist at the moment of conception. We may claim that this is the moment when my life began. And, on the Non-Reductionist View, it is a deep truth that all the parts of my life are equally parts of my life. I was as much me even when my life had only just started. Killing me at this time is, straightforwardly, killing an innocent person. If this is what we believe, we shall plausibly claim that abortion is morally wrong.

On the Reductionist view, we do not believe that every moment I either do or don't exist. We can now deny that a fertilized ovum is a person or a human being. This is like the plausible denial that an acorn is an oak-tree. Given the right conditions, an acorn slowly becomes an oak-tree. This transition takes time, and is a matter of degree. There is no sharp borderline. We should claim the same about person, and human beings. We can then plausibly take a different view about the morality of abortion. We can believe that there is nothing wrong in an early abortion, but that it would be seriously wrong to abort a child near the end of the pregnancy. Such a child, if unwanted, should be born and adopted. The cases in between we can treat as matters of degree. The fertilized ovum is not a first, but slowly becomes, a human being, and a person. In the same way, the destruction of this organism is not at first but slowly becomes seriously wrong.

[Quick note here that late-term abortions are almost always for medical reasons.]

I think most liberals, seeing that argument, would probably accept it, but the underlying architecture is a bit more difficult to accept. One of Parfit's famous thought experiments involves a tele-transportation device, which destroys my body in one location and constructs an exact replica somewhere else. On Parfit's view of Reductionism, the question as to whether or not I survive this experience is empty, or devoid of meaningful information. He thinks also that the survival of my Replica is about as good as ordinary survival; or, stated differently, ordinary survival is about as bad as being destroyed in one place and rebuilt in another.

That's a tricky thing to believe, but he has about convinced me. (There are, as you might imagine, a lot more to these arguments.) It's a good book, though dense. I've had to stop a couple times and chow through a quick Terry Pratchett just for a breather.

Pointless accumulation

Steve Randy Waldman brings us an equation, with a graph and some comments:

UNIT_LABOR_COSTS = PRICE_LEVEL × LABOR_SHARE_OF_OUTPUT 

An increase in unit labor costs can mean one of two things. It can reflect an increase in the price level — inflation — or it can reflect an increase in labor’s share of output. The Federal Reserve is properly in the business of restraining the price level. It has no business whatsoever tilting the scales in the division of income between labor and capital.

Yet throughout the Great Moderation, increases in unit labor costs were the standard alarm bell cited by Fed policy makers as an event that would call for more restrictive policy. And all through the Great Moderation, except for a brief surge during the tech boom, labor’s share of output was in secular decline. (More recently, the Great Recession has been accompanied by a stunning collapse in labor share. Record corporate profits!)

In case it's not clear, the graph is showing labor's share of total economic output. Steve goes on to make the point that if the Fed uses rising labor costs as a proxy for dangerous inflation, and tightens fast at the faintest whiff of such an increase, while doing nothing if the opposite happens, you will tend to see a secular decline in labor compared to capital.

Meanwhile, Karl Smith brings a similar graph, this time of the price markup over unit labor costs:

One more related fact: Apple has accumulated a staggering hoard of $100 billion, and it's increasingly clear the firm's management isn't going to give it back in the from of dividends or stock buy-backs. Instead they look like they'll invest it in other things, which means either accumulating even more money or squandering it on some boondoggle.

This discussion gets rapidly technical, but on a basic level, here's the picture I'm forming in my head. Roughly speaking, capital has thoroughly beaten labor in the last 30 years, and has used the increased leverage to direct large and increasing profits to owners and managers. Because the small cadre of very rich couldn't possibly spend all this money, it resulted in a global savings glut, which in turn sparked huge demand for AAA-rated investments and thus a large part of the 2008 meltdown. Since then, the Lesser Depression walloped labor again, even harder, and now that the economy seems to be picking up, pointless accumulation seems to be accelerating again.

The decreasing leverage of labor is certainly partially caused by globalization, but as Steve notes in his comments:

I don’t know the magnitudes. I don’t think anyone does, and attempts to estimate would be very contestable. Globalization, communications, and cheap transport have certainly created “real” headwinds for labor bargaining power. Labor is not as scarce a factor as it once was. But then, for much of the decade preceding 2008, we had a “global savings glut”. In the US, capital was not at all a scarce factor, Wall Street was cheating to invent means of deploying it. That should would have militated towards to an increase in labor share, but we certainly didn’t see that.

The main point in favor of trying to increase labor share, and thus restrain corporate profits, would be to prevent this pointless accumulation. Worldwide, vast hoards of money are inherently unstable, and that money would be less dangerous placed in as many hands as possible.

UPDATE: Here's Karl Smith's version. It's actually surprisingly similar, though I suspect Smith would not be too sympathetic to my more power-based version:

Labor’s share began a secular collapse sometime in the 1990s, leading to a large run-up in loanable funds. That run up put large downward pressure on the natural rate of interest. This was offset for a time by finding ways of expanding the pool of credit worthy borrowers through financial innovation. Once a major set of those methods was revealed to be untenable [RLC: as in, financial apocalypse] the natural rate of interest collapsed not only below the Funds rate but well below zero. The large gap between between the natural rate and the Funds rate put large downward pressure on aggregate labor demand resulting in the Great Recession.

To have cleared the labor market with the pool of borrowers available in 2009, real wages would have had to make up for over a decades worth of missed decline. This was exacerbated by the fact that falling nominal wage disbursements (whether from pay cuts or layoffs) further depress the pool of eligible borrowers by raising real debt levels, requiring even further falls in the real wage.

On the strict economics, that seems reasonable. Just why "labor's share" collapsed is the next question, and that's where Smith has some fairly wild theories.

Big-time bloggers have fathers too

Yglesias pulls one of my old tricks: outsourcing a post to the old man!

I swore I was going to hang up. What I had done so far was foolish, but romantic. This was merely stupid. I barely recognized the voice that gave them my credit card number for three seats $230 each. I expected my sons to have me committed in order to save what was left of their inheritance.

Good stuff. It even kind of sounds like my dad. Rafael Yglesias, I should note, is actually a very successful novelist in his own right.

Collected links

1. Science has spoken: the rich really are more morally depraved.

2. Chunks of virus DNA has been found in critical human genes.

3. Physics have built a "single atom transistor." Not quite as miraculous as that headline sounds, but still cool.

4. Christina Romer's favorite books.

5. Obama's idiotic, and inexplicable, hard turn against medical marijuana. WTF, man?

Speaking of God

Here's Daniel Larison making a fairly obvious riposte against Rick Santorum's vicious swaggering:

Santorum has defended his statement in terms of affirming a Biblical understanding of man’s role as a steward of creation, but if we took this later remark at face value we would have to say that Santorum doesn’t understand the concept of stewardship very well. After all, the purpose of Christian stewardship isn’t simply to serve human needs (much less desires), but to preside over the natural world as God’s viceregents and to rule it in a manner pleasing to God, all of which is directed towards giving God glory and thanksgiving for the blessings He has bestowed upon us. We are to see creation as something entrusted to us by God, and as something that we are responsible for preserving and keeping as part of our obedience to Him. That necessarily involves limiting and restraining our desires so as not to exhaust or waste what has been entrusted to us. Viewed that way, we are here to care for the earth and for one another, and in so doing serve the Creator Who made both.

This seems uncontroversial from a Christian perspective.

Listening to the King James

So far I'm nearly done with Exodus, and it is by turns tedious and astonishingly beautiful. (Well performed by Alexander Scourby, I should add.) The verse that has thus far stuck in my mind the most is from Genesis 41: 47. It's when Joseph is in Egypt and running the Pharaoh's business. Pharaoh has a dream which Joseph interprets as seven years of good harvests followed by seven years of famine. Here's how the KJV describes the good years:

And in the seven plenteous years the earth brought forth by handfuls.

Isn't that something? Compare that to the New Living Translation:

As predicted, for seven years the land produced bumper crops.

It's as written by an accountant. Blah.

The morality of content

Kevin Drum has a provocative thought:

I am, as always, speaking only for myself, but I think this is too cramped. The Constitution says that the purpose of patents and copyright is to "promote the Progress of Science and useful Arts," but the fact that the Constitution says this doesn't mean it's the only reason to grant patents and copyrights. There's another reason too: because creators have a moral right to profit from their works. In real life, pretty much everyone acts as if they believe this, and I suspect that for most of us it's the real underpinning of our support for IP law.

I don't think this works, though as a broke-ass writer I would much like it to be true. The act of writing, or making music, or whatever, is not an intrinsically worthy undertaking. Suppose I write some book and put it in a cabinet in my basement. Do I deserve to profit from that, simply from the act of creating it? If Hitler yet lived would he have a moral claim to monopoly rents from Mein Kampf? Does everyone who borrows a book from a friend, or checks one out from the library, have a moral obligation to pay the author? This is absurd.

I do think, however, that some moral principle might be salvaged. The readers are what is missing from the equation. No one deserves to profit from something that is not read. Here's a try: anyone who consumes some content, and likes it, has a moral obligation to compensate the creator in some way. This is to say that abject illegal downloading is morally wrong. It could take several forms, including just passing the word that it was a great work and you enjoyed it, especially if you are famous yourself. Publicity, especially for relative unknowns, is often more valuable to the creator than cash.

Can anyone come up with a better principle?

Ta-Nehisi Coates and the unbearable whiteness of journalism

Here's the great man riffing off the latest racism directed at Jeremy Lin (people claiming he only gets attention because he's of Asian descent):

I would bet that part of the attention that Neil Degresse Tyson gets has to do with people geeking out on a black astrophysicist who can make science interesting. If were not black he probably would be somewhat less interesting. But if he weren't a good communicator, he would not be interesting at all.

I consider myself a writer of some merit and talent, who says some interesting things from time to time. That's all very nice. But I understand that if I were in my exact same job, and happened to be just another white dude from an Ivy, I'd attract less interest. Race, as lived by individuals, is biography and people are always interested in biography when it differs from the norm in any field. I have no idea why it should be any different with Lin.

Coates is right on this score, and his forthrightness is as always impressive. I always think about this sort of thing in the context of journalism, which is (as Coates has said before) surely one of the white-malest professions out there. At the Monthly, all of the editorial staff are white men (save the new intern, who is a Chinese woman, and an amazingly good fact-checker, I might add). Of the Atlantic bloggers, seven out of nine are white men. Now, I should note that I don't think there is much in the way of conscious racism on the part of most publications in journalism, certainly not on the part of the Monthly. But something has developed which has fenced out most minorities and women in some way.

That is bad for a lot of reasons, most of them well-trodden. But one which comes up unbidden in my own mind is selfish irritation about being lost in the crowd. No wonder I can't get a job—I'm just another mid-twenties balding white guy in a profession (and city) that has them like a plague of locusts. But I really do have an interesting background, pleads the whining child in my head. I didn't go to an Ivy school! I grew up working-class, in an absurdly small town in an interesting and beautiful state! My parents met in Grand Canyon! My dad builds awesome tables out of stone! I lived in South Africa for two years!



It's hard to imagine anything more preposterous than a decently accommodated white man whinging about his lot. And yet, I have these thoughts. No point pretending I don't, except to make like I'm better than I really am. What interests me is that this is just one more example of the harm that oppression inevitably inflicts upon its perpetrators as well as its victims, how it erases our personhood into the various categories. In that video above, it's telling that Folds' parody band is composed of a bunch of copies of himself.