Month: October 2021
Solve for the Haitian equilibrium
…now a powerful gang is trying something new: Holding the entire country hostage.
Since Sunday, Haiti’s largest gang has blocked access to the country’s largest fuel terminal, which provides 70% of gasoline supplies across the country, causing a severe shortage of fuel in the capital and several other cities, according to union leaders, government officials and gang members.
In a radio interview late Monday, Jimmy Cherizier, a former policeman who is the head of the so-called G9 coalition of criminal groups, said his men would prevent fuel from being distributed from the terminal until the government handed over $50 million and Prime Minister Ariel Henry stepped down.
Here is more from the WSJ, via Adam Tooze. #TheGreatUnraveling
Update on Rapid Antigen Tests
In July of 2020 in Frequent, Fast and Cheap is Better than Sensitive, I wrote:
A number of firms have developed cheap, paper-strip tests for coronavirus that report results at-home in about 15 minutes but they have yet to be approved for use by the FDA because the FDA appears to be demanding that all tests reach accuracy levels similar to the PCR test. This is another deadly FDA mistake.
It’s depressing that we are still moving so slowly on these issues but the media has finally gotten on board. Earlier I mentioned David Leonhardt’s article. Here is Margaret Hartmann in the New York Magazine.
In many Asian and European countries, at-home COVID-19 tests are cheap and easy to find in stores. CBS News reported this month that home antigen tests are now used routinely in the U.K., where they are free and “readily available at pretty much every pharmacy in the country.”
The situation is drastically different here because U.S. health officials focused on getting people vaccinated against COVID-19 and never leaned into asymptomatic testing as a strategy to fight the pandemic. While some foreign governments moved quickly to encourage screening and subsidize the cost of at-home tests, the Food and Drug Administration’s approval process moved much more slowly.
….The FDA said it needed to ensure that the tests were accurate, but many scientists countered that the agency was letting the perfect be the enemy of the good.
Note also that this is a way of saying that the politicians have now also had it with the FDA:
In addition to ramping up production of tests already on the market, the government is also working to speed up the approval process. On October 4, the FDA authorized Flowflex, an at-home antigen test produced by ACON Laboratories that is expected to retail for around $10 per test. And on October 25, the Department of Health and Human Services announced that the FDA will streamline its authorization process, and the National Institutes of Health will spend $70 million on a new program to “establish an accelerated pathway” to aid test makers seeking approval for their products.
Sunday assorted links
1. Carbon emissions embedded in trade.
2. How zoos convince animals to get vaccinated.
3. How will radical on-line ideology evolve? It is important whether or not this is true.
4. Some of them are frauds. And more from the NYT, is the debate really this insipid? I think so.
5. How fast do people improve their chess? And an HN thread on same.
6. In some ways, this is a better article than it will seem to you: “Why we should talk about what Kyrsten Sinema is wearing” (NYT)
Labor Market Participation Rates and Male Incarceration Rates
In our textbook, Modern Principles, Tyler and I write
Another factor that may be important in explaining the decline in the labor force participation rate of less-skilled men is the rise in mass incarceration. The male incarceration rate in the United States increased from 200 per 100,000 in 1970 to nearly 1,000 per 100,000 at is peak in 2007, as shown in Figure 30.18. Incarceration doesn’t reduce the labor force participation rate directly because the rate is measured as the ratio of the labor force to the adult non-institutionalized population. But what happens to prisoners when they are released? It’s difficult to get a job with an arrest record let alone a prison record. In fact, due to occupational licensing, it’s illegal for ex-felons to work in many industries. Approximately 7% of prime-aged men have been incarcerated. Thus, the rising incarceration rates of the past could be causing some of today’s low labor force participation rates.
A recent paper provides some evidence: Felony history and change in U.S. Employment rates, estimates that “a 1 percentage point increase in the share of a state’s adult population with a felony history is associated with 0.3 percentage point increase in non-employment (being unemployed or not in the labor force) among those aged 18 to 54.”
My favorite things Idaho
I used to blog “My Favorite Things…” all the time, but I ran out of new places to go for a while. Now there is Idaho! Boise in particular. Today, I can think of a few “favorite things” from Idaho, here goes and potatoes don’t count:
Artist: Matthew Barney. Filmmaker and artist, prominent in the avant-garde but much of his work is quite accessible if you don’t mind the near total absence of dialogue. Is the nine-hour Cremaster cycle his masterpiece? (I’ve only seen parts). According to the internet “Cremaster is a paired muscle of the pelvis and perineum that is fully developed only in the external genitalia of males. Being located between the internal and external layers of spermatic fascia, cremaster covers the testes and spermatic cord.” Many scenes from the movies have been turned into photos and artworks as well.
Do people in Idaho look like that?
Composer: LaMonte Young. Is he the most underrated twentieth century avant-garde composer? The Well-Tuned Piano is one of my favorite works, though it is a tough slog for many, being about five hours in length, here is a YouTube version. He was even born in a log cabin in Idaho, and grew up LDS. His career blossomed in New York, but he attributed his interest in drone sounds to the Idaho wind and other sounds from his boyhood.
Other music: Built to Spill.
Author: Jerry Kramer, who grew up in Idaho and later played football for the Green Bay Packers. I loved Instant Replay as a kid. But is there a “real author” from Idaho? Is it better or worse to be a “real author”? Marilynne Robinson has never clicked with me.
Poet: Ezra Pound, born in Idaho. A fascist and anti-Semite, and not a true favorite of mine, but he was talented and it seems odd not to list him. Can I name a better poet from Idaho?
Explorer: Sacagewea. I hope she is cancel-proof.
Drum Battle: Idaho. Gene Krupa and Buddy Rich. For some reason, it reminded me of Benny Goodman’s Clarinade (not from Idaho).
Film, set in: My Own Private Idaho and Napoleon Dynamite might be the best known. But perhaps I will go with Smoke Signals, Superman II (the one with Gene Hackman), and Beavis and Butt-Head Do America. Superman II, if I had to say.
Here is more Matt Barney:
I’ll be sure to report on my visit.
Why Are Relatively Poor People Not More Supportive of Redistribution?
We test a key assumption underlying seminal theories about preferences for redistribution, which is that relatively poor people should be the most in favor of redistribution. We conduct a randomized survey experiment with over 30,000 participants across 10 countries, half of whom are informed of their position in the national income distribution. Contrary to prevailing wisdom, people who are told they are relatively poorer than they thought are less concerned about inequality and are not more supportive of redistribution. This finding is consistent with people using their own living standard as a “benchmark” for what they consider acceptable for others.
That is from a newly published paper by Christopher Hoy and Franziska Mager.
Saturday assorted links
1. I should hope so.
2. Bruce Liu plays a Chopin etude.
3. Carlsen vs. Nepo checkmate challenge competition. Chess is getting so much better at marketing. And the difference in natural ability is…manifest.
4. Which professions marry which other professions the most?
“Potential” and the gender promotion gap
We show that widely-used subjective assessments of employee “potential” contribute to gender gaps in promotion and pay. Using data on 30,000 management-track employees from a large retail chain, we find that women receive substantially lower potential ratings despite receiving higher job performance ratings. Differences in potential ratings account for 30-50% of the gender promotion gap. Women’s lower potential ratings do not appear to be based on accurate forecasts of future performance: women outperform male colleagues with the same potential ratings, both on average and on the margin of promotion. Yet, even when women outperform their previously forecasted potential, their subsequent potential ratings remain low, suggesting that firms persistently underestimate the potential of their female employees.
Here is the paper by Benson, Li, and Shue. Via the excellent Samir Varma.
Will stablecoins have fluctuating prices?
That is the topic of my latest Bloomberg column, here is one excerpt:
Even if all goes well, why should those different brands of stablecoins remain priced at $1 apiece? In most well-functioning markets, suppliers compete on innovation, quality and price. That diversity is the natural outcome of trying to figure out which coin systems — fully stable or not — are best.
If market prices do not communicate this information, how can you discover it? In my vision, higher prices will signify a coin’s quality and attract more business; the coins with strictly fixed prices will fill a niche; and the coins with lower prices will lose business, or otherwise serve as discount issues for those of lower means.
And:
On a more positive note, if you think stablecoins serve so many new and marvelous functions, you would expect many of those assets to sell for more than a dollar.
And:
For another look at why prices won’t stay fixed, consider the incentives of a stablecoin issuer. Let’s say your issue is currently one-to-one with the U.S. dollar and you are holding 100% reserves of very safe assets. Might you then be tempted to go down to 98% reserves? 95%? If the price of your coin stays at $1, fine, you come out ahead. If the price declines in proportion to the new and higher risk, you as an issuer still have broken even. So it seems that coin issuers will have an incentive to test the one-to-one exchange rates by diluting their backing.
Recommended.
Friday assorted links
1. Good Mark Zuckerberg quotation, shows “founder energy.”
2. WaPo obituary for Anthony Downs.
3. The Economist on data-driven economics.
4. California condors can have virgin births (!).
5. Squid Game cryptocurrency is rising in value rapidly.
Sex Differences in Work Aspirations
Another important paper from Stoet and Geary
We investigated sex differences in 473,260 adolescents’ aspirations to work in things-oriented (e.g., mechanic), people-oriented (e.g., nurse), and STEM (e.g., mathematician) careers across 80 countries and economic regions using the 2018 Programme for International Student Assessment (PISA). We analyzed student career aspirations in combination with student achievement in mathematics, reading, and science, as well as parental occupations and family wealth. In each country and region, more boys than girls aspired to a things-oriented or STEM occupation and more girls than boys to a people-oriented occupation. These sex differences were larger in countries with a higher level of women’s empowerment. We explain this counter-intuitive finding through the indirect effect of wealth. Women’s empowerment is associated with relatively high levels of national wealth and this wealth allows more students to aspire to occupations they are intrinsically interested in. Implications for better understanding the sources of sex differences in career aspirations and associated policy are discussed.
…it has been four generations since Miner’s [10] assessment of adolescents’ occupational interests and core sex differences have not changed much, despite dramatic social and economic changes since that time. Boys continue to express a greater interest in blue-collar and white-collar things-oriented occupations than do girls, and girls continue to show a greater interest in people-oriented
occupations.…Policy makers have regularly expressed a desire to reduce the number of students choosing stereotypical careers (e.g., [49]) or to increase the number of girls aspiring to and women entering technical occupations, especially STEM occupations [22]. The results of this study and related ones reveal a policy-relevant conundrum [3,4,6,50]. Generally speaking, more developed and gender equal nations are better than less developed nations in attracting boys to more established things-oriented (often blue-collar) occupations, but they fail to attract girls to these areas. This problem is also occurring for the subset of things-oriented STEM occupations. In fact, the problem for STEM is even more profound, given that interest in STEM declines for both boys and
girls in more developed, innovative, and gender equal nations.
See also my previous post Do Boys Have a Comparative Advantage in Math and Science?
Hat tip: Steve Stewart-Williams.
Markets in everything
In the latest phase of the quest to turn everything into an NFT, crypto traders are now bidding to digitally own a 1,784-lb. cube of tungsten in Willowbrook, Illinois. According to the terms of the sale, which will have the receipt posted to the blockchain for posterity, the “owner” can have one supervised visit to the cube per year to touch or photograph it.
Over the past two weeks, a joke fired off by Coin Center’s Neeraj Agrawal about a nonexistent tungsten shortage thanks to crypto traders buying cubes of tungsten due to a meme actually caused one for Midwest Tungsten Service. The Illinois manufacturer actually creates small cubes of tungsten, and the tweet caused a 300 percent increase in sales that depleted the company’s stock on Amazon, Coindesk reported.
Last week, The Block reported that the company entered a partnership with crypto payment processor OpenNode to accept Bitcoin payments. One explanation as to why this is happening, which doesn’t really explain why this is happening, was offered to The Block by CMS Holdings’ Dan Matuszewski, who said “crypto just has a propensity for the density.” Tungsten is a very dense metal, comparable to uranium or gold, and its surprising weight is, apparently, pleasurable.
Midwest Tungsten told Coindesk that it primarily makes these cubes for industrial firms, and Sean Murray, the company’s director of e-commerce, suggested to Coindesk there would be a 14-inch cube next. The company offers cubes ranging from an 18-gram, 1-centimeter cube that costs $19.99 to a 41-pound, 4-inch cube that costs $2,999.99.
Well, the 14-inch cube is finally here. It weighs 1,784 poinds and is now listed on OpenSea as an NFT. Seemingly, it’s the biggest cube that Midwest Tungsten can create.
“Since we began selling the cube we have constantly asked ourselves, ‘What is the right size?’, and ‘Would anyone buy a bigger cube?’ Only recently has anyone asked us, or have we asked ourselves, ‘What is the biggest cube we can make?’
Here is the full story, via the excellent Samir Varma. You know, circa 2010 I thought MR was about to run out of startling “Markets in Everything” examples — how wrong I was!
Is inflation eroding monopsony?
I’m not a big advocate of the significance of the labor market monopsony hypothesis, but for the moment let’s just say it is true.
Now let high rates of price inflation enter the picture, say 5.4% a year. Does this limit the relevance of the initial monopsony assumption?
Presuambly when the price inflation comes, the monopsonistic employers do not have to give their employees offsetting nominal wage hikes, to restore the previous real wage. After all, by assumption, those employees don’t have anywhere else practical to go. And normal theories of wage stickiness explain why this real wage reduction had not happened in the first place (it also would have required a nominal wage reduction, without the inflation).
OK, so consider that monopsony assumptions are relative to a prevailing wage. An assistant professor might be subject to monopsony power if he is paid 95k a year, but not if he is paid 40k a year, as he could replicate that same salary at many alternate employments. So inflation, by lowering real wages, also lowers the degree of monopsony.
Right?
Newly hired workers might be getting locked into new monopsonistic positions, if new nominal wage contracts reflect the new rate of inflation (will they?), but the older stock of workers is seeing falling real wages and in that sense is becoming more potentially mobile.
OK, so for advocates of the monopsony hypothesis, how much do real wages have to fall before monopsony becomes a minor rather than a major condition?
And…given that answer, if the rate of price inflation is the standard 2% a year, and if a worker stays in a given job, how many years have to pass before that worker’s real wage falls to the point that monopsony does not really apply any more?
Bueller?
The new fluvoxamine results have been published
The core work, led by Edward J. Mills, is now refereed and published in Lancet. From the New York Times:
A large clinical trial has found that a common and inexpensive antidepressant lowered the odds that high-risk Covid-19 patients would be hospitalized. The results, published on Wednesday, could open the door to new guidelines for the drug’s use both in the United States and globally.
The drug, fluvoxamine, has been safely prescribed for nearly 30 years as a treatment for obsessive-compulsive disorder. But when the coronavirus started spreading, researchers were drawn to the medication because of its ability to reduce inflammation, potentially allowing it to quell the body’s overwhelming response to a coronavirus infection.
The researchers found that patients who received fluvoxamine were 32% less likely to be hospitalized than those in the placebo group. Among patients who stuck to the regimen closely and reported taking the drug or placebo for at least eight days of the 10-day course, there was an even bigger difference—a 66% reduction in hospitalization and 91% reduction in death rates.
This work was funded by a major investment from Fast Grants.
Thursday assorted links
1. Finding, mentoring, and rewarding potential shooters (WSJ).
2. Gavin Leech on cracking cultural codes.
3. How will DeFi evolve in China?
4. Justin Gest and Jack Goldstone on current politics and also the GMU Public Policy Master’s.
5. Social media don’t make you worse, but they do magnify jerks. And more cheating in contract bridge than in big business (NYT).