Thursday, September 10, 2020

Never simple

MLK's I Have Dream speech was beguiling in many ways. But I heard a Stokely Carmichael speech shortly thereafter and felt deflated. Didn't he get the word that it must be about content of your character rather than color of your skin? Fast forward and everywhere you look it is about the color of everyone's skin. How awful. And history cannot be simple. But seemingly educated adults can be tone-deaf and push the likes of the NYT 1619 Project (I will forego the link).

But here is a bright spot. Williamson Evers has compiled some reading lists to help those with blind spots in their education. Thank you, Mr. Evers! 

Wednesday, July 22, 2020

What could go wrong?


From Wikipedia: “Executive Order 10988 is a United States presidential executive order issued by President John F. Kennedy on January 17, 1962 that recognized the right of federal employees to collective bargaining. This executive order was a breakthrough for public sector workers, who were not protected under the 1935 Wagner Act.”

JFK thought this was smart politics. What could go wrong? Lots. Some of America’s big problems these days can be traced to under-performing big-city public schools and those big-city cops who fall short. What do these two have in common? They are not easily removed because their unions and the unions' political cronies protect them.

From the New Yorker: “The Rubber Room: The battle overNew York’s worst teachers”. These people are so awful that they cannot be left to tech. But they cannot be fired either. So they are warehoused in the “Temporary Reassignment Center” instead. NYC has more than one of these. Eric Hanushek has famously shown the harm done by bad teachers. But removing them is almost impossible in the big city unionized districts.

Walter Olson makes the same point re unionized big city police forces. The damage done by the few bad cops is well understood. But there is no rubber room. They are kept on the job, usually until they retire. The consequences are also well known and easily seen on various media platforms.

Presidential power and executive orders and cronyism have always been areas of concern. Executive Order 10988 and its effects are clear. I would not be surprised if the consequences of the two orders contribute to the same boiling point.

ADDED

AFSCME political efforts.

ADDED

Great conversation.

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Friday, July 03, 2020

Happy July 4


Tribalism is natural and often hideous. But over many years, it had been tamed – to some extent.

Every group has historical grievances. These are incited and nurtured by demagogues (mostly politicians) as a matter of course. They are even assisted by some who actually want to be seen as victims, very odd way to seek (and find) status.  Strange but apparently true.

Retrogressing, we get more tribalism. The consequences range from awful to catastrophic.

There is a new ingredient. Jonathan Haidt and Martin Gurri (and others) note that social media (especially “like” buttons and the re-tweet option) magnify the tendency to vilify and tribalize. We get more polarization, in politics, in media, in the arts.

Print media outlets have lost advertising revenue and pander for subscribers any way they can, including pushing tribalist themes. (NYT “1619 Project” and many more.)

Many elites have been cowed and/or displaced – with positive and negative consequences. Think about groupthink in schools and universities. Grievance studies. These elites lose credibility.
Can we right the ship? Various thinkers, including Haidt and Gurri and others, are pointing the way. 

Godspeed. Happy July 4.

Monday, May 25, 2020

Not static

In the time of pandemic, changes that had been underway speed up. People adapt and change a little faster, technology adapts and changes faster, even the rules-of-the-game change and adapt. The three prompt each other.

Rules-of-the-game involves politics and is the most sluggish of the three. The first two are dynamic and involve trial-and-error learning. (There is always some path dependence.) The third corner of the triangle, institutional change, involves all the problems of public choice. Early pandemic CDC and FDA missteps are well known.

But all three changes tug on and constrain each other. Even the severest critics of markets should (perhaps) appreciate the speed at which tele-medicine, remote work, on-line teaching and meeting as well as new modes of shopping have developed and adapted in just weeks. Hotels, restaurants, airlines, are scrambling to find new ways to perform and earn trust. Where will they be in two more months -- and beyond?

If you thought that less than 50 years from the Wright Bros. to the moon landing was fast, don't even think about long-run forecasts and what futurists say. Peak oil and peak population never came. Long-run sustainability is a worry if the world is static. But one lesson from the last two months, for those who need reminding, is that it is not static.




ADDED Yes, there's an app for that. Many more to follow.

Wednesday, May 13, 2020

Common sense choices

Economists tell students and others that there are "needs" and "wants". And the distinction is subjective and personal for most people. "I need a drink." Likewise, who knows which are "essential services."?  Politicians, of all people?

The news have been full of examples of questionable calls by various politicians on this question. Daycare? Essential for many working parents. "Green" Teslas?  Essential for "Greens"?

The even tougher questions involve how and where and when.

"Fatal conceit" is a wonderful two-word gem. "Central planning is hard work" is too wordy. Both refer to the obvious fact that most knowledge is beyond the ken of politicians. This is one reason why we want to limit their powers. And why we rely on trial-and-error experimentation by people with "skin in the game" to figure things out.

Does the governor of California know what is essential for 40-million Californians? With the best of intentions, he cannot know. By now, he should know that not all individuals are equally at risk, not all environments are equally risky and that heavy doses of humility are in order.

My favorite local retailer has a special line for the over-60 folks.Fine. Perhaps require them to wear masks. Even take their temperature if you like. Let the over-60s and all others decide if they want to shop at such a place. My favorite grocers and my favorite restaurants have never given me food poisoning. They know their business.

The list goes on. Publish common-sense guidelines (even though they are well known) if you must. But rely more on common sense choices than what politicians prescribe.

CORRECTION

Body temperature not enough. Face masks and social distancing until we are past the crisis.

Sunday, April 19, 2020

Covid 19 in Santa Monica and Sweden


Palisades Park in Santa Monica has long been my favorite weekend escape. Many others feel the same way. It is a pleasant place for walks, picnics, exercise and much more. Some weeks ago, the City authorities posted Closure signs that no one took seriously. People kept on enjoying and the cops patrolled with loudspeakers. That failed. Now, the whole thing is fenced off. Why? Keeping a safe distance in this place is easy.

Santa Monica's rulers are left-wing and presumably admirers of Swedish policies. But they could not be further apart. The Swedes seemingly rely on the good judgment of their citizens to be prudent in public. But that is not the way in Santa Monica. Seemingly, it is the good judgment of the City's leaders that is missing.


Image preview

ADDED

Report from Sweden.

More on Sweden

Moving sand, Venice Beach

Outdoor transmission
















Second image is a 5-minute walk from fenced off Ocean Ave. People are hard to control.

Monday, April 06, 2020

What do we know? What are we learning and re-learning? My top ten



   -- Black swans can happen anytime, anywhere.

2 -- Initial responses are inevitably confused. But trial-and-error learning happens and we do get better. The U.S. was horribly unprepared going into WWI and WWII but, once on track, American productivity stunned enemies as well as friends.

3 -- Policy makers are inevitably pressed to do something. They often flail and go off in wrong directions. Some of the errors have tragic consequences. Others just feed political cronies.

4 -- Scientists as well as investors are quickly mobilized and they do perform. There will be new and better treatments. Doomsday forecasts are almost inevitable but usually too pessimistic.

5 -- Philanthropy and generosity (by the wealthy and by the less wealthy) is widespread and a great blessing.

6 -- Prescriptions for more high-density living and greater use of public transit are once again seen as misbegotten. Romantics and many planners are seen (once again) as not informed by the wiser choices of real people.

7  -- Crises speed up change. All of us chose a blend of communications channels. The shift from eye-to-eye in-person contact to electronic has been going on for some time. It is always a matter of discovering whether there is a better blend for any of us. Technology changes and people change. Both evolve more or less in concert.

8 -- Just as exuberant post-WWII spending finally ended the Great Depression (not the New Deal, not war expenditures) there will be exuberant spending and shopping once the lock-down orders are lifted. This will help to blunt some of the economic doomsday forecasts.

9 -- Fewer people are interested in Bernie Sanders-Elizabeth Warren “democratic socialism”.  Otherwise, all political bets are off. No one can know what silly things any political candidate can say or do at any time.

1 -- In times of crises, there is base behavior and also glorious and gracious behavior. My belief is that there is more of the latter.

Sunday, March 08, 2020

Envy


The 10 richest men of all time
  • Mansa Musa (1280-1337, king of the Mali empire) wealth indescribable
  • Augustus Caesar (63 BC-14 AD, Roman emperor) $4.6tn (£3.5tn)
  • Zhao Xu (1048-1085, emperor Shenzong of Song in China) wealth incalculable
  • Akbar I (1542-1605, emperor of India's Mughal dynasty) wealth incalculable
  • Andrew Carnegie (1835-1919, Scottish-American industrialist) $372bn
  • John D Rockefeller (1839-1937) American business magnate) $341bn
  • Nikolai Alexandrovich Romanov (1868-1918, Tsar of Russia) $300bn
  • Mir Osman Ali Khan ( 1886-1967, Indian royal) $230bn
  • William The Conqueror (1028-1087) $229.5bn
  • Muammar Gaddafi (1942-2011, long-time ruler of Libya) $200bn
Source: Money.com, Celebrity Net Worth (found at Marginal Revolution).
Two of the all-time top ten are well known American capitalists. The other eight perhaps a bit unsavory. Note that inequality warriors presume that all wealth is a sure sign of bad behavior. This often works. Non-zerosum is subtle and envy runs deep and is exploited by politicians.

We know that Carnegie and Rockefeller did us much good -- just like Jeff Bezos and Bill Gates. But they are suspect nevertheless. "Robber Barons" is the unfortunate term routinely applied by those who think we live in a zero-sum world.

Innovators, on average, get about 4% of the wealth they create (Nordhaus). A better prepared Michael Bloomberg might have tried this approach. Would many in the audience and celeb interviewers have fainted?

The Economist reviews Thomas Piketty's latest and notes "... it is hard to to conclude that, deep down, Mr. Piketty believes the worth of a society is measured by its Gini coefficient." He and many others.

ADDED

Billionaires and super-billionaires.
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Tuesday, February 11, 2020

Because they can

I never took the Stanford Marshmallow test but presume that I am patient.  The current issue of The Economist notes that transportation in Los Angeles ought to involve more buses and less rail transit -- and also congestion pricing on the freeways. Finally.

Tom Rubin sent this:


Image preview

It is hard to fathom the bizarreness of the situation but the graphic helps. While $20-$25 billion have been spent on rail transit in LA county since the mid-1980s, transit use is down -- while the area's population is up by over 1 million (many of them low-income immigrants). It boggles and it would be hard to engineer a worse outcome but our social engineers are at work.

It's about anti-car greenness and all of the silliness that the romantics conjure -- while in bed with those on the receiving end of all the billions.  Drive down LA's Wilshire Blvd right now and observe subway work in progress. Bootleggers and Baptists having a party.

Beyond LA, politicians from both U.S. parties borrow and spend because they can. There are no bond market signals that the world is tiring of ever more U.S. debt. Pres Trump just sent Congress a budget proposal. The only contest will be over who gets the most pork.

Arnold Kling recently posted that there are 13 countries in the world with populations over 100 million. He mentions that all except the U.S. and Japan are "very authoritarian, incompetent, or both."
Both of these countries' treasuries are heavily in debt. What Americans can hope for is to remain the tallest pygmy.


Thursday, February 06, 2020

Be careful out there

Watching last night's State of the Union was not easy. With cameras on and the nation watching, preening and pandering were on full display.  That's our democracy (our politics). Some of the post-event talking heads, who were obliged to say something cited perennial stats about the low esteem/low approval that the public accords to "Congress."  But that's a silly view in light of the fact that these guys get re-elected at astoundingly high rates, mostly in the 90-percent range, always over 80-percent, year after year.

It's simple to reconcile the two points. People's view of Congress is almost irrelevant.  But people tend to like "their guy". Or he/she becomes their guy by "bringing home the bacon". After all, incumbents have to make it their business to know their constituents and also what buttons to push. It's a simple point. Consider the players, not the categories.

On a similar theme, a favorite political topic is "worsening" income inequality. But the bulk of the arguments made compare snapshots of different groups over time, not the progress of real people over time. Even better, what is inter- generational mobility? What are the odds that someone born at the bottom can move to the top? Where and when?

Data are great but a some judgment is always essential. Big Data alone cannot do the job.

ADDED

Here is a brief post about the anomaly of people who trust their government less but want it to do more.



Monday, January 27, 2020

The romance and the news

It's election season and we see sides of human nature that are not pretty. Seeking votes, candidates make promises they cannot keep. Voters chose to suspend disbelief. Many seek to be on a winning team.

Americans (and others) enjoy prosperity that is out of all proportion to the other-worldliness of their politics. Davies writes: "People alive today, even the poor, are the luckiest people in human history." This is in spite of what happens in their politics and government. The markets (and the culture that supports them) must be formidable. McCloskey spells it out.

We vote with our wallets, with our feet, with our voices, our ballots, etc. Problems of voting with ballots have been well studied via a considerable body of public choice analysis. Yet, this approach remains beyond "mainstream" economics because it undermines so many "market failure" analyses. How many scholarly papers have posited an implausible model of "perfect" markets, found that perfect ("nirvana economics") is unlikely and proposed a policy fix?

Public choice notes the limitations of voting. Intensities of preference are ignored. Rational ignorance is expected. Voter turnout is low. Interest groups have an advantage and often win. We get large deficits, large bureaucracies, large cronyism, etc. Buchanan famously told reporters that his contribution was all about "politics without romance." Yet, there remain many romantics who expect that voting aggregates and transmits preferences.

Briefly compare voting for President to shopping. You get one vote every four years. You transmit how many personal preferences? Vote or nor? Vote for D or for R? Contribute money or not? Contribute to D or to R? Contribute time or not? Contribute time to D or to R.  I see between one and six choice points.

But how many household shopping trips per week?  This site says about 1.6. How many items purchased per trip? Let's say 10. How many aspects of each purchase matter? Let's s say price and familiarity and quantity/size. Roughly, 2,500 decisions per household per year.  There are probably many more. We're pretty good when thinking fast so all this is easily manageable. Sellers know the story and are incentivized to make it simple and manageable and even appealing. Go to a state liquor store (if you state has them) and quickly see the contrast.

We have a much better chance of making our preferences known (and counted) in the market than in our democracy. Not everyone votes (for obvious reasons) but those who do, enjoy the romance. I get that. But I also see/read the news.


Wednesday, December 25, 2019

Big data and big plans


The year-end issue of The Economist includes a nice essay on planning. “Beware of the Borg” (title in print edition). Everyone plans; plans can be coordinated by markets or usurped by top-down grand plans. The latter often fail, ending in calamity and often much worse. We have heard about Venezuela, USSR, North Korea and many more. Top-down plans fail because utopians ignore the fact that knowledge is complex and dispersed. Promises are inevitably broken, people go hungry, and autocrats resort to terror and corruption to stay in power. 

In the real world, specialization and exchange prompt resource allocation and innovation, but only if rights are credible and secure.

Just as no one person can make a pencil, and yet pencils are everywhere, supply chains are everywhere. Supply chains are emergent. They are formed and maintained by savvy entrepreneurs. Add that there are supply chains for ideas and information. Commodity supply chains begin with supply chains for ideas. We all search for useful information all the time.

Just as entrepreneurs decide what to make vs what to buy, they also choose what to make and buy where. Sometimes the “where” question evokes various shades of nearby as part of the answer. The cities we get are actually a complex mesh of supply chains, including supply chains for ideas.

Transactions all across any chain are most likely where there is trust; trust is established when and where there is communication. Communication can be electronic or face-to-face. All of us pick the blend of communications channels that works best for us. In so doing, we pick a location that is best for the chosen blend.

Hayek (and many others) have argued that top-down planners cannot accomplish any of this. They could not replace the market’s discovery process and would always be badly informed. They are also (by definition) highly politicized which makes a bad situation worse.

All this is clear enough but utopian romances are hard to dislodge. Class struggle and the romance of righting historical grievances are always a problem and always fanned by opportunist politicians.
The Economist’s survey also links an old debate about markets and planning with a new one (a new utopian romance) about the potential of "big data" to change the old debate. David Gelernter argues that big data will not replace human imagination or ingenuity. The Economist also quotes Alex Tabarrok: "the problem of perfectly organizing an economy does not become easier with greater computing power precisely because greater computing power makes the economy more complex." Do read The Economist's whole essay.   

Tuesday, December 10, 2019

It takes a horrific hurricane

Where to start? We have too much crony capitalism. Many of our young people graduate unprepared for productive work. Productivity gaps translate into income and wealth gaps. Some of our poorest children are condemned to the worst schools.

Terry Moe and Russ Roberts report that these are all wound up as one big problem: the ways in which the education establishment has succeeded in choking off reform and innovation and experimentation. And many of the people who fret most about all these things are dug in on the anti-reform side.

Moe's research centers on the pre- and post-Katrina New Orleans schools. The school board resisted reforms and the outcomes were predictable -- and awful. Graduation rates were in he mid-20% range. But the Katrina devastation was so severe that not only buildings but the administrative infrastructure that ran the schools had to be replaced. In desperation, charter schools were allowed. Parents became involved. A freer atmosphere that allowed experimentation followed. Graduation rates doubled,

Moe and Roberts emphasize that none of this was planned. Good news and bad news. A small measure of openness brings welcome change. But it takes a mighty hurricane. What can we expect for the rest of the country? 

Sunday, October 27, 2019

So many confusions

In the current the New Yorker, Adam Gopnik writes "We Built This City: What we can learn from a long-reviled master of 'urban renewal" which is a long-winded review of Lizabeth Cohen's Saving America's Cities: Ed Logue and the Struggle to Renew Urban America in the Suburban Age. (which I have not read). Gopnik is seemingly perplexed and ends this way: "What aspects of Ed Logue's legacy do we really want to revive? Essentially it's the intentions not the edifices."

The review meanders between discussions of projects that Logue was involved with and very general discussions of cities. The discussions do not mesh because the problem of scale is not addressed.

More than anyone, Sandy Ikeda has pointed out that Jane Jacobs' criticisms of planners (like Logue) is that they did not pay adequate attention to the fact that cities are beyond the design capabilities of humans. "Intricate minglings of different uses in cities are not a form of chaos, On the contrary, they represent a complex and highly developed form of order." (Jacobs, 1961). Could Hayek have said it any better?

We are indebted to clever designers for creating almost anything within reach. But their human capabilities only scale up so far. City planners (and many others, especially their architect colleagues) simply presume that their design skills can be scaled up and up. Alain Bertaud recently published Order without Design: How Markets Shape Cities. Precisely.

Bertaud notes (p. 7). "Some urban regulations are indispensable. I only advocate periodically auditing urban regulations to eliminate the ones that are irrelevant and malignant." Yes. The folks in City Hall can do nothing about climate change which is a global commons. But they can posture and grandstand. Trouble is that this is not an innocent error. Road diets can kill people.