Category Archives: links to my essays

More FITs links

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Including links to two essays from the prolific Joel Kotkin. Also,

John Cochrane interviews Casey Mulligan about the massive budget reconciliation bill (Mulligan actually knows what’s in it). It sounds like it was written by Wesley Mouch. I say that in practice government policies subsidize demand and restrict supply. So the bill will subsidize day care and insist that day care be unionized. If you think that the total spending in the bill is what is wrong with it, you are wrong. If the bill did not increase spending by a dime but all of its disincentives to work and invest were imposed, it would be an economic disaster.

Have a nice day.

Explaining our moral framework

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I review The Mind Club, one of the most insightful books that few people have read.

Wegner and Grey say that we use two different approaches for trying to enter the minds of others. When we try to understand their feelings, we use simulation. We try to imagine ourselves in a similar situation. When we try to understand their actions, we use theorizing. We try to imagine the chain of reasoning that someone used in order to arrive at an action.

It seems that often we can understand either feelings or motives, but not both. When we perceive only feelings, we see a moral patient. When we see only motives, we see a moral agent.

Although the book was written several years before the death of George Floyd, it clearly anticipates the frequent depiction of Floyd with the features of a big baby.

Schools and restorative justice

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Michael Goldstein writes,

Here’s sort of what you wanted to read about: Rand Corporation RCT of “Restorative Justice” which includes measures of achievement.

“The most troubling thing: There were significant and substantial negative effects on math achievement for middle school students, black students, and students in schools that are predominantly black.”

As background, I had come across an article about a high school in my old neighborhood. The school was troubled, and it tried a “restorative justice” program. The article reported that the program reduced suspensions and absenteeism. This smelled to me like “p-hacking,” in which you measure a bunch of different outcomes and only report the ones with good news. I hinted at my suspicions near the end, and Goldstein’s comment, which has more than what I excerpted here, confirmed those suspicions.

My essay is mostly wistful and autobiographical, and you’re welcome to read it if that appeals.

More FITs news

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I have three new updates. Each includes several links.
1. Keeping up the FITs, No. 11

[Emily Oster] says that she would vaccinate her own children.

I do not want them to get COVID. I am worried about their immune-compromised grandparent. I would like to avoid quarantine and keep them in school. I’m confident in the vaccines and the FDA process.

I would arrive at a different decision. The benefit seems small, almost negligible in the grand scheme of things. Although it is likely that the long-term risks of the vaccine are small, we do not know this. I say leave the kids alone.

2. And No. 12

I discount nearly all claims about aggregate productivity trends. You would not pay attention to “trends” in a poll for a political contest if the differences over time are smaller in magnitude than the margin of error. But economists commit that sin all the time with productivity data.

3. And No. 13.

Tyler Cowen looks at the coverage of President Biden’s economic proposals.

given all the stuff about Biden’s agenda on the internet, there has been remarkably little policy debate about it, and remarkably little attempt to persuade the American public that this spending is a good idea.

…My colleague Arnold Kling put it well: “With the reconciliation bill, there is no attempt to convince the public that it is desirable to enact an enormous child tax credit or to mandate ending use of fossil fuels in a decade. Instead, what we read is that if you’re on the blue team you want the number to be 3.5, but a few Democrats are holding out for something lower.”

Self-recommending, as Tyler would say.

Kling interviewed

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by Isadore Johnson.

Tyler Cowen expresses a lot of ideas that sound outlandish. I think he hopes that some of them will turn out to be right, even though not all of them will. I often disagree with his ideas at first, but then sometimes I change my mind. Andrew Sullivan expresses himself fervently, and when I agree with him, I like that. But I do disagree with him on some things. He and Jonathan Rauch overstate the negatives about Donald Trump, in my view. Conversely, there are those who understate those negatives, but I don’t have any strong Trump supporters among my mental list of great minds. Rauch and Sullivan are on that list, and they both frustrate me at times, and I have written about that, particularly about Rauch.

It’s a wide-ranging interview, conducted over email, so I get to be more coherent than in a live interview. Wide-ranging, and I’ll bet you’ll find a new thing or two in it.

Curating talent

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Dwarkesh Patel writes,

if talent, not capital, is the bottleneck to growth, we should use our excess capital to empower the world’s underleveraged talent.

The question is, why aren’t more people trying to curate talent, whether for philanthropic reasons or simply for their own benefit?

But they are. Today, every business that isn’t in its death throes is trying to figure out how to acquire the best talent. But the significance of talent is easier to appreciate in the 21st century than it was previously.

In 1998, I wrote

In an agricultural economy, land is the scarce resource. In an industrial economy, capital is a scarce resource. The institutions that evolved in an industrial economy differ from those in an agricultural economy. This raises the question: what is the economic problem today, and how might institutions evolve in order to address it?

…To me, it is easier to understand the economic challenge today as one of allocating talent to solving problems. Furthermore, when we consider the nature of software as a quasi-public good, the problem is one of allocating talent to producing quasi-public goods.

Does Ken Rogoff think this time is different?

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My latest essay is on stock prices and interest rates.

So this time is different because interest rates, after adjusting for inflation, have declined to record levels. For example, the interest rate on inflation-indexed Treasury securities is negative.

The decline in the real interest rate is the subject of a paper by Atif Mian, Ludwig Straub, Amir Sufi. They write,

The evidence suggests that rising income inequality is the more important factor explaining the decline in r*. Saving rates are significantly higher for high income households within a given birth cohort relative to middle and low income households in the same birth cohort, and there has been a large rise in income shares for high income households since the 1980s. The result has been a large rise in saving by high income earners since the 1980s, which is the exact same time period during which r* has fallen.

Of I and We

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In a review of Jonathan Sacks’ Morality, I write

I think that the problems of loneliness and loss of meaning that Sacks identifies are due to a breakdown of covenants at a small-scale level. I wish that families were larger and stronger. I wish that neighborhoods had more continuity. I wish that the school environment for children could be informal rather than bureaucratic. I wish that long-term friendships were more prevalent.

For more on these topics, see the biography of
Alexis de Tocqueville in the Online Library of Liberty; and the EconTalk podcast episode Yuval Levin on The Fractured Republic. See also “Camping-Trip Economics vs. Woolen-Coat Economics,” by Arnold Kling, Library of Economics and Liberty, Feb. 2, 2015.
But at the macro level, I think we are better off with a society of contract than with a society of covenant. The more weight we place on “We” at the national level, the less room for the sort of community that I would like to see at a local level. As we think in terms of larger scale, I think it helps to lose the “We.”