Adam Tooze, in a remarkable post, starting with the Brazilian agricultural revolution:
“The essential point about the Brazilian case from The Economist's point of view is that it is not simply a story of natural endowments. "So although it is true Brazil has a lot of spare farmland, it did not just have it hanging around, waiting to be ploughed. Embrapa had to create the land, in a sense, or make it fit for farming."
"This echoes key works on modern economic history by Paul David and Gavin Wright (1997). As they famously put it about the ascent of the United States as a mineral exporter after the civil war: 'natural resource abundance' is an "endogenous, 'socially constructed' condition that was not geologically preordained." The exploitation of natural resource potential is a function of "complex legal, institutional, technological and organizational adaptations that shaped the US supply-responses to the expanding domestic and international" demand for a particular resource. "Natural resources" are not separable from capital, scientific research, legal structures etc.”
Tooze quotes this story from The Economist:
"Between now and 2050 the world's population will rise from 7 billion to 9 billion. Its income is likely to rise by more than that and the total urban population will roughly double, changing diets as well as overall demand because city dwellers tend to eat more meat. The UN's Food and Agriculture Organisation (FAO) reckons grain output will have to rise by around half but meat output will have to double by 2050. This will be hard to achieve because, in the past decade, the growth in agricultural yields has stalled and water has become a greater constraint. By one estimate, only 40% of the increase in world grain output now comes from rises in yields and 60% comes from taking more land under cultivation. In the 1960s just a quarter came from more land and three-quarters came from higher yields. So if you were asked to describe the sort of food producer that will matter most in the next 40 years, you would probably say something like this: one that has boosted output a lot and looks capable of continuing to do so; one with land and water in reserve; one able to sustain a large cattle herd ...; one that is productive without massive state subsidies. ... In other words, you would describe Brazil.”
His post goes on to collapsing oxygen levels in the oceans.
From a Science paper: "The open ocean lost an estimated 2% (77 billion metric tons), of its oxygen over the past 50 years. Open-ocean oxygen-minimum zones (OMZs) have expanded by an area about the size of the European Union (4.5 million km2, based on water with <70 μmol kg−1 oxygen at 200 m of depth), and the volume of water completely devoid of oxygen (anoxic) has more than quadrupled over the same period. Upwelling of oxygen-depleted water has intensified in severity and duration along some coasts, with serious biological consequences.”
And: "The summer of 2017 witnessed the most massive dead zone [in the Gulf of Mexico] since records began."
Tooze continues: "The collapse of oxygen levels in the Gulf of Mexico turns out to be a story about the Mississippi. It is nitrogen and phosphates flowing down America's greatest river system that tip the chemical balance of the Gulf. … More nitrogen pollution flows into the Gulf every year than tonnage of oil was released by the BP Deepwater Horizon disaster. And what is responsible for these gigantic nitrogen and phosphorous run offs? Not the oil and gas industry in the Gulf, but Midwestern agriculture. … The scales of pollution are massive. They are driven by the high intensity agro-industrial complex centered on Tyson the giant meat producer and its feed suppliers. …
"More rapidly than at any time since the dustbowl era, American grassland have been brought into agricultural production.” From a paper in PNAS: “Our results show that rates of grassland conversion to corn/soy (1.0–5.4% annually) across a significant portion of the US Western Corn Belt (WCB) are comparable to deforestation rates in Brazil, Malaysia, and Indonesia, countries in which tropical forests were the principal sources of new agricultural land, globally, during the 1980s and 1990s. Historically, comparable grassland conversion rates have not been seen in the Corn Belt since the 1920s and 1930s, the era of rapid mechanization of US agriculture. Across the WCB, more than 99% of presettlement tallgrass prairie has been converted to other land covers, mostly agricultural, with losses in Iowa approaching 99.9% of an original 12-million ha of tallgrass prairie."
He concludes: “we are now entering a phase when the number of people entering middle class affluence globally will hover around 160 million, per annum. The impact of their demand on the world food supply chain will be more spectacular than anything we have seen to date. We ain't seen nothing yet."
James Bridle on Medium:
"Whether it's Peppa Pig on children's TV or a Disney movie, ... they are carefully produced and monitored so that kids are essentially safe watching them, and can be trusted as such. This no longer applies when brand and content are disassociated by the platform, and so known and trusted content provides a seamless gateway to unverified and potentially harmful content.
(Yes, this is the exact same process as the delamination of trusted news media on Facebook feeds and in Google results that is currently wreaking such havoc on our cognitive and political systems) ...
"A huge number of these videos are essentially created by bots and viewed by bots, and even commented on by bots. … What I find somewhat disturbing about the proliferation of even (relatively) normal kids videos is the impossibility of determining the degree of automation which is at work here … This is content production in the age of algorithmic discovery — even if you're a human, you have to end up impersonating the machine. …
"what is concerning to me about the Peppa videos is how the obvious parodies and even the shadier knock-offs interact with the legions of algorithmic content producers until it is completely impossible to know what is going on. ("The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”) …
"online kids' content is one of the few alternative ways of making money from 3D animation because the aesthetic standards are lower and independent production can profit through scale. It uses existing and easily available content (such as character models and motion-capture libraries) and it can be repeated and revised endlessly and mostly meaninglessly because the algorithms don't discriminate — and neither do the kids. …
"YouTube and Google are complicit in that system. The architecture they have built to extract the maximum revenue from online video is being hacked by persons unknown to abuse children, perhaps not even deliberately, but at a massive scale. I believe they have an absolute responsibility to deal with this, just as they have a responsibility to deal with the radicalisation of (mostly) young (mostly) men via extremist videos — of any political persuasion. They have so far showed absolutely no inclination to do this, which is in itself despicable. However, a huge part of my troubled response to this issue is that I have no idea how they can respond without shutting down the service itself, and most systems which resemble it. We have built a world which operates at scale, where human oversight is simply impossible."
Jay Livingstone observes:
"the Republican leaders' obsequiousness to Trump after they'd passed the tax bill ...Paul Ryan: "Something this big, something this generational, something this profound could not have been done without exquisite presidential leadership.” Mitch McConnell: "Mr. President … this has been a year of extraordinary accomplishment for the Trump administration."
This despite Trump having insulted them on Twitter ("Our very weak and ineffective leader, Paul Ryan." "Can you believe that Mitch McConnell, who has screamed Repeal & Replace for 7 years, couldn't get it done.”) … I wondered how these leaders, public and important men, could fawn like this. Don't they know what they look like? Don't they know how others see them?
My sociological spider sense tells me to think about them the way we think about any small-group culture. American sociology, since its early days, has shown how groups develop a set of ideas about what they do, especially when what they do is seen by others as strange or wrong. Howie Becker's essays on marijuana-using musicians in the 1940s may be the best known example. … [T]he question implicit in Becker's Outsiders and all those other studies of deviance in groups: How do you insulate yourself from the perceptions of others?"
Grover Whitehurst at Brookings:
On the Tennessee pre-K follow up: "Using the state test data and the full randomized sample, the evaluators report negative impacts for reading, math, and science scores at the end of third grade for children assigned to TVPK. The negative impacts on math and science are statistically significant and substantive: children randomly assigned as preschoolers to TVPK had lost ground to their peers who had randomly not been offered admission to the pre-K program. The loss was equal to about 15 percent of the expected gap in test scores between black and white students at that age. In other words, children who were given the opportunity to attend TVPK were, on average, harmed by the experience in terms of their academic skills in elementary school. The reasons for this are not clear. One speculation is that the TVPK program was developmentally inappropriate, i.e., too much like kindergarten or first grade.
There is no longer a methodological escape hatch for people who want to dismiss the results of the evaluation. It, along with the national Head Start Impact study, are the only two large sample studies in the literature that have applied a random assignment design to modern scaled-up pre-K programs and followed children’s progress through school. Both show sizable positive effects for four-year-olds at the end of the pre-K year, but these effects either have either diminished to zero by the end of kindergarten year and stay there in later grades (Head Start) or actually turn negative (Tennessee). Advocates of greater public investment in state pre-K programs are beginning to incorporate these results into their thinking."
On Heckman and Abecedarian: "Abecedarian was a full-day, year-round program with a very low teacher-child ratio (1:3 for infants and 1:6 for five-year-olds), and unusually qualified staff and management [at UNC]. Children received their primary medical care on site through staff pediatricians, nurses, and physical therapists. There was a defined curriculum intended to foster language and cognitive skills and thereby increase IQ. Many efforts were made to involve families through voluntary programs. Supportive social services were provided to families facing problems with housing, food, and transportation. The annual direct expenditure per participant has been reported as roughly $19,000 in present dollars. ...
"Abecedarian is not a childcare intervention, nor a realistic model for one. It is a hothouse university-based program from nearly a half century ago for a few dozen children from very challenging circumstances who were deemed to be at risk of mental retardation. Its relevance to present day policies on childcare for the general population is uncertain, at best. Even ignoring this failure of external validity, the reported results from Abecedarian favoring the treatment participants are in doubt because the evaluation of Abecedarian’s impacts on participants is seriously compromised by a large imbalance in decline-to-participate rates by those assigned to the treatment vs. the control condition; and by the presence in the treatment group of an appreciable proportion children who were not randomized into that condition."
He concludes: "Go forward with promising ideas with a public acknowledgement of uncertainty and an approach designed to learn from error. Don’t place big and irrevocable bets on conclusions and recommendations that are far out in front of what a careful reading of the underlying evidence can support."
Pre-K Gains Fade Fast
Greg Duncan and others in WaPo:
“Why don't boosts in these early foundational skills lead to permanent advantages in the academic trajectories of disadvantaged kids? Our work suggests that much of what children learn in early-childhood intervention programs are skills that kids typically pick up in kindergarten or first grade anyway. Fadeout is really a process of other children catching up — learning their letters, learning to count, learning to control their emotions and impulses.
What holds disadvantaged kids back throughout their schooling is not a failure to master the basics. More fundamental to achievement are hard-to-change characteristics such as intelligence and conscientiousness, as well as persistent environmental factors that are difficult to change with a one-time educational intervention. ...
For lasting effects, we need to focus on skills that wouldn't otherwise develop, do more to change a child's environment and provide ongoing support, especially during sensitive periods of development such as early adolescence. …
Another worthy model for interventions targets not just children but their caregivers, with the idea that improving parent-child interactions can affect the whole course of a child's development [For example, Nurse-Family Partnerships]…
We need to focus on older children as well. Intensive interventions can help with mastery of advanced skills. A high school program offering a double dose of algebra classes has been shown to boost graduation rates. And students who attend career academies, which restructure large high schools into small learning communities and promote concrete vocational skills, can typically expect higher earnings as adults. Vocational skills, advanced math and literacy skills, and achievement-related beliefs and motivations are examples of what we call "trifecta skills" — skills that are malleable, fundamental to success and unlikely to develop in the absence of an intervention."
Poverty in Europe
"A broad ‘at-risk-of-poverty or social exclusion rate’ indicator was proposed by the European Commission ... This indicator is an aggregate of three sub-indicators: monetary poverty, severe material deprivation and very low work intensity (the latter is limited to people aged 0 to 59). … People are counted only once in the headline indicator, even if they fall into more than one category.
Monetary poverty has been increasing gradually since 2005.
The number of people aged 0 to 59 living in households with very low work intensity declined between 2006 and 2008, but has since returned to the previous levels.
The number of severely materially deprived people has shown the largest swings compared to both 2005 and 2012, ... with significant reductions in recent years [2012-15]. … The decline in the amount of materially deprived people was mainly driven by improvements in Romania, Poland and Bulgaria [decrease between 7 and 10 pp]. …
"Greece, Cyprus and Spain experienced the most substantial increases in the share of people at risk of poverty or social exclusion, by 5-8 pp. ...
In 2015, 17.3 % of the EU population earned less than 60 % of their respective national median equivalised disposable income, the so-called poverty threshold. [2008: 16.5 %] ...
Most countries also experienced growth in the number of people below the monetary poverty line, regardless of whether they had low or high levels to begin with. Increases were most pronounced in Hungary, Sweden and Spain, with rises of between 2.3 and 2.5 percentage points. Croatia, Finland, Austria, the United Kingdom and Latvia were the exception, with monetary poverty in these countries decreasing. ...
The monetary poverty threshold is set at 60% of the median disposable income. That means that if the median income increases, but the inequality of the income distribution remains unchanged or even increases, the number of people below the poverty line does not decrease. Absolute poverty measures reflecting a person’s ability to afford basic goods, however, are likely to decrease during economic revivals when people are generally more financially better off.
Material deprivation is defined as living in households unable to afford 4+ items out of a list of 9 considered by most people to be desirable or even necessary for an adequate life. The nine items are: to pay their rent, mortgage or utility bills; to keep their home adequately warm; to face unexpected expenses; to eat meat or proteins regularly; to go on holiday; a television set; a washing machine; a car; a telephone. ...
Very low work intensity: the working-age members of the household worked no longer than 20 % of their potential working time during the previous year … Hungary, Germany and Poland showed substantial improvements in the work intensity of the working age population, with reductions ranging between 2.6 and 1.1 pp. The opposite was true in the southern European countries Greece, Spain, Cyprus and Portugal as well as Ireland, where the shares increased between 4.6 and 9.3 pp. ... In 2015, 7.7 % of the working EU population were at risk of poverty despite working full time …
"Single parents: had a 47.9 % chance of being at risk of poverty or social exclusion in 2015. … large increases in Denmark and Finland (6.9 and 6.7 pp). The biggest falls, besides Malta, were in Latvia and Germany (-13.7 and -10.4 pp). …
Low education: In 2015, 65.6 % of children of parents with at most pre-primary and lower secondary education were at risk of poverty or social exclusion. This was over six times higher than for children of parents with first or second stage tertiary education. Moreover, between 2010 and 2015 the increase in the risk of poverty or social exclusion was particularly high for children of parents with the lowest educational attainment while the increase was minimal for the other children. ...
Immigrants: In 2015, people living in the EU but born in a non-EU country had a 40.2 % risk of living in poverty or social exclusion. … The countries with the greatest difference in at-risk-of-poverty rate between people from non-EU countries and those living in their home country are Greece, Belgium and Spain (34, 34, and 31 pp gaps). [these numbers are just insanely high..]
Rural vs urban: The countries with the highest poverty rates in rural areas compared with urban areas are Romania and Bulgaria (26.7 and 23.1 pp higher). In other countries, such as Denmark, Austria, Belgium, the United Kingdom, the Netherlands and Germany, the opposite is true: a clearly larger share of urban residents live in poverty or social exclusion compared with residents in rural areas or towns."
Claude Fischer writes: “But what about the voters who shifted from voting for Obama to voting for Trump?, some analysts ask. Do they not demonstrate the greater importance of economic complaints over racism? First, it is not clear that there were really that many such switchers, although they may well have been exquisitely located in the Great Lakes region. Second, the anomaly was not their Trump vote, but their Obama vote. Remember that in November, 2008 the economy seemed to be in free fall and fear of a crash moved some would-have-been McCain voters to Obama. In 2012, some of those stayed with the incumbent as the economy slowly rebounded. But the two Obama elections seemed to mask a longer, deeper trend–displayed in the rise of the Tea Party–of growing cultural grievances driving votes for the GOP. …
However gripping the story of the WWC, its members account for a minor portion of Trump's eventual 46 percent. One analysis estimates that WWC voters made up only about one-eighth of the 2016 electorate, a bit less than they did in 2012. The bigger story is that middle class Republicans overwhelmingly voted for Trump.”
A Hirschmanian analysis, by Eyal Press in the New Yorker: "Hirschman was aware that exit could be ineffectual, even counterproductive. In his book he noted that, because the first people to leave failing institutions were the ones most sensitive to signs of deterioration, and most likely to serve as “creative agents of voice” if they stuck around, their departure could have perverse consequences, accelerating mismanagement and decline. But he saw this mainly as a problem in the business world (where, unlike in government, the impulse of “quality conscious” customers was to resort to “exit” rather than to “voice”). In the past year, though, it has become apparent that it is no less of a problem in the political arena, both at agencies like the E.P.A. and in another institution from which people concerned about dysfunction have been leaving: the Republican Party."
Ryan Enos on Twitter: "we are looking for the wrong signs of the death of democracy. It will not die through fascism … Rather it will suffocate through legal means. Just in the last few days, the President and his supporters have threatened to use the courts to stop investigations and block critical writing. As Levitsky and Ziblatt show, this is a common pattern of late 20th century autocrats - using the institutions of government to make dissent, not illegal, but difficult. We should be very worried."
Via NBER, a new-ish paper on the union wage premium in 1950, at peak union power:
“The wage premium was larger at the bottom of the income distribution than at the middle or higher, larger for African Americans than for whites, and larger for those with low levels of education. Counterfactuals are consistent with the view that unions substantially narrowed urban wage inequality at mid-century.”
And, via Timothy Taylor, union density patterns in the OCED:
"1) Labor union power is weaker just about everywhere.
2) The extent of labor union power varies considerably across countries, many of which have roughly similar income levels. This pattern suggests that existence of unions, one way or another, may be less important for economic outcomes than the way in which those unions function. The chapter notes the importance of "peaceful and cooperative industrial relations," which can emerge--or not--from varying patterns of unionization."
Those peaceful and cooperative industrial relations are a big reason for Germany’s relative success in recent years. Relations were good, and so firms were able to ask for concessions from labor without too much backlash. The unemployment rate stayed low, so it's possible that in some dimensions this works quite well.
But it makes sense to think of those relations as a form of capital, or as a reservoir of goodwill: something that can be spent to achieve your ends (e.g., lowering labor costs), but not indefinitely. At some point, your reservoir's depleted, the capital spent, and your left with disgruntled workers who don’t trust "the powers that be." Germany's distinctive in that there’s both a cultural trope that saving/austerity/belt tightening is really crucial, and there’s enough social cohesion for people to believe everyone is tightening their belt and accepting pay cuts. That is, the cuts aren’t perceived as unfair.
In the long run, though, cooperative industrial relations are fragile; they are particularly hard to maintain when workers accept pay cuts. All it takes is for another group to do ok (e.g., immigrants / refugees, or the corporation / managers) for the setup to be perceived as unfair.
Larry Bartels argues :
"the attitudes fueling right-wing populism have been remarkably stable since at least 2002. … anyone tracking European attitudes over the past 15 years would have a hard time guessing that anything at all had happened. Anti-immigrant sentiment actually declined slightly, despite millions of new immigrants. …
There is no clear relationship between levels of populist sentiment and actual support for right-wing populist parties. ...
Political observers in the grip of what Christopher Achen and I have called “the folk theory of democracy” naturally assume that significant developments in democratic politics must somehow be animated by significant shifts in public opinion. If right-wing populist parties are gaining support, that must be because “populist views have been growing” and citizens are “more and more disillusioned with mainstream politics.” But that is an illusion. In reality, the populist views were there long before the current populist “wave” made them salient. What happens next will depend on the ability and willingness of political elites to exploit or defuse them."
Freddie deBoer, in what may be one of his last posts: "I think it’s a noble and necessary goal to help identify talented students from poor families. The point is that it’s odd to think of this as a project for increasing equality as such. We’re simply looking for more “diamonds in the rough,” and hopefully helping to pull them out from their peers – who are thus left even further behind. Here’s a point to stress: the very purpose of educational testing is to identify inequality. That is, we develop and administer tests precisely to better understand how students are not the same. …
"we talk about education as fulfilling two functions that are not just in tension with each other but directly contradictory: education is discussed as a tool for creating greater socioeconomic equality, and as a system for identifying excellence and rewarding it with status and economic opportunity."
Cool new paper by Jeremy Freese and others: “Accurate understanding of environmental moderation of genetic influences is vital to advancing the science of cognitive development as well as for designing interventions. One widely reported idea is increasing genetic influence on cognition for children raised in higher socioeconomic status (SES) families, including recent proposals that the pattern is a particularly US phenomenon. We used matched birth and school records from Florida siblings and twins born in 1994–2002 to provide the largest, most population-diverse consideration of this hypothesis to date. We found no evidence of SES moderation of genetic influence on test scores, suggesting that articulating gene-environment interactions for cognition is more complex and elusive than previously supposed."
The Pure People and The Corrupt Elite
Cas Mudde and Cristobal Rovira Kaltwasser's Populism: A Very Short Introduction:
"we define populism as a thin-centered ideology that considers society to be ultimately separated into two homogeneous and antagonistic camps, "the pure people" versus "the corrupt elite," and which argues that politics should be an expression of the volonté générale (general will) of the people." (kl 700-705)
"Pluralism is the direct opposite of the dualist perspective of both populism and elitism, instead holding that society is divided into a broad variety of partly overlapping social groups with different ideas and interests. Within pluralism diversity is seen as a strength rather than a weakness. Pluralists believe that a society should have many centers of power and that politics, through compromise and consensus, should reflect the interests and values of as many different groups as possible. Thus, the main idea is that power is supposed to be distributed throughout society in order to avoid specific groups— be they men; ethnic communities; economic, intellectual, military or political cadres, etc.— acquiring the capacity to impose their will upon the others." (kl 733-738).
h/t Dan Little
Deborah J. Schildkraut of Tufts at the Monkey Cage: "when we disaggregate young Americans by race, the standing of the Republican Party with young people is not as precarious as many think. Although Americans younger than 30 are less likely to identify as Republicans than are older people, the trend has been stable. … the gap between different age groups that emerged in the early 2000s has stabilized. There is no clear downward trend in Republican identification among young people. …
Second, within the Republican Party, young people are not always more consistently liberal than older people. For example, although young people are often described as racially progressive, younger Republicans do not have different views of African Americans. …
Young whites were more similar to older whites than to young nonwhites on many issues, including their views of African Americans, affirmative action and immigration. To be sure, young whites and young Republicans are not as conservative as older whites and Republicans on every issue. In the 2016 ANES, young whites and young Republicans were more opposed a border wall but more supportive of paid leave for new parents, legalizing marijuana and government action to fight climate change. …
And on other social issues, young Republicans are more conservative than older Republicans. … abortion … gun control ... The overall patterns do not suggest a massive Democratic or liberal surge among the young, or a significant number of liberal young Republicans on the cusp of leaving or changing the party."
I missed this last year, but a new-ish paper from Elizabeth Cascio “reveals a substantial positive effect of attending pre-K on cognitive test scores at age 4, but only for low-income children enrolled in universal programs. Both universal and targeted programs displace enrollment in other center-based care, and differences in state standards cannot explain the higher impacts of universal programs for low-income children. Together, these findings suggest that universal programs offer a relatively high-quality learning experience for low-income 4 year olds not reflected in the quality metrics frequently targeted by policymakers.”
Peter Lindert at VoxEU: "Since the late 1970s, several governments have shown a mission drift away from investing in lower-income children and working-age adults, while concentrating social insurance on the elderly. Japan, the US, and some Mediterranean countries have missed an opportunity for pro-growth income-levelling."
Poverty in the South, hookworm edition: “Hookworm was rampant in the deep south of the US in the earlier 20th century, sapping the energy and educational achievements of both white and black kids and helping to create the stereotype of the lazy and lethargic southern redneck. As public health improved, most experts assumed it had disappeared altogether by the 1980s. But the new study reveals that hookworm not only survives in communities of Americans lacking even basic sanitation, but does so on a breathtaking scale.”
From Larry Summers: “"[T]he current WHO budget for pandemic flu is less than the salary of the University of Michigan's football coach.”
rAlex Harrowell’s answer to why politicians got so awful: "For many years ... conservative parties' material basis rested on their ability to get enough company directors and top managers to contribute their time and money to the cause. Conservative politicians therefore faced a mechanism of responsibility with multiple triggers. … Extreme right-tail inequality has essentially destroyed this mechanism of responsibility. There are now quite a lot of private fortunes around whose discretionary spending power is large compared with the cost of political campaigning. … Rather than needing to make credible commitments to a significant fraction of the directorate, political entrepreneurs can now concentrate on finding themselves a couple of big individual donors who share their special interests or particular obsessions." The real threat from inequality is not coercion, it's that it lets the financial elite set the agenda.
Good sentences in the Monkey Cage, by Babak Bahador at George Washington U: “While foreign propaganda efforts to influence U.S. politics and society are a disturbing trend, it is important to realize that such messaging is, likewise, not manufactured out of whole cloth and is created and situated within an era’s existing political conversations. Social media messaging can only exploit and amplify polarization if a democracy is already polarized and politically torn. Online social networks are not the source of the problem; they are just a medium, albeit one with a new set of tools whose vulnerabilities we are just discovering."
Will Wilkinson at Niskanen: "If you know that you can’t know in advance what the freest social system looks will look like, you’re unlikely to see evidence that suggests that policy A (social insurance, e.g.) is freedom-enhancing, or that policy B (heroin legalization, e.g.) isn’t, as threats to your identity as a freedom lover. Uncertainty about the details of the freest feasible social scheme opens you up to looking at evidence in a genuinely curious, non-biased way.” This is a deep point, I’ve come to appreciate it more over the last years.
Puerto Rico population projection: “Fertility, aging/mortality, and lowest-low inflows are the real story here.“
Jeffrey Williams, from 1998: A “more accurate narrative of globalization experience in the decades prior to the World War I would read like this: A spreading technology revolution and a transportation breakthrough led first to a divergence of real wages and living standards between countries; the evolution of well-functioning global markets in goods and labor eventually brought about a convergence between nations; this factor price convergence, however, planted seeds for its own destruction because it created rising inequality in labor-scarce economies [the US] and falling inequality in labor-abundant economies [Italy, Sweden]. The voices of powerful interest groups who were hit hard by these globalization events were heard, generating a political backlash against immigration and trade.
A late-19th-century globalization backlash made a powerful contribution to interwar de-globalization. … history does supply a warning: a backlash against globalization can be found in our past, so it might reappear in our future."
Good paragraph from Citylab: "Perhaps the central problem of housing affordability is one of scale: the number of units that we're able to provide is too small. That's true whether we're talking about Section 8 vouchers (that go to only about 1 in 5 eligible households), or through inclusionary zoning requirements (which provide only handfuls of units in most cities). The very high per-unit construction costs of affordable housing only make the problem more vexing: the pressure to make any project that gets constructed as distinctive, amenity-rich and environmentally friendly as possible, means that the limited number of public dollars end up building fewer units. And too few units—scale—is the real problem here."
Sarah O'Connor in the FT writes: “[I]n Britain, it is increasingly on the country's physical edges, in its seaside towns, that you find people on the outside of the economy looking in. Blackpool exports healthy skilled people and imports the unskilled, the unemployed and the unwell. As people overlooked by the modern economy wash up in a place that has also been left behind, the result is a quietly unfolding health crisis. More than a tenth of the town's working-age inhabitants live on state benefits paid to those deemed too sick to work. Antidepressant prescription rates are among the highest in the country. Life expectancy, already the lowest in England, has recently started to fall. … For Jonathan Portes, chief economist at the DWP between 2002 and 2008, … "There's an argument for saying you can't do [welfare reform] separately from having some sort of place-based economic strategy as well — and we never really had that.”
Ryan Avent in the NY Times: "why should productivity growth have fallen in recent decades? … economic growth has contributed very little to the inflation-adjusted wages of workers without a college education — and since the turn of the century, everyone but the top 1 percent of earners. And so companies have felt very little pressure to replace stockers with robots, cashiers with touch-screens and customer-service staff with chatbots. Neither has there been much reason to squeeze more productivity out of workers by investing in training or by finding ways to equip them with new, productivity-enhancing technologies. Today, despite an unemployment rate at just 4.1 percent and fat corporate profits, wage growth remains well below the peak rates of the 1990s and 2000s.”
The NBER Digest on new research by Haltiwanger et al: "Upward movement of workers on a "job ladder" from low-productivity to high-productivity firms is heavily dependent on the business cycle. During booms, net employment at high-productivity firms grows faster than at low-productivity firms, resulting in workers moving up the ladder. During busts, these upward job-to-job changes essentially stop. Net employment flows are instead driven by layoffs, with low-productivity firms losing comparatively more workers than their higher-productivity counterparts. …
The researchers find that younger workers are disproportionately likely to climb the ladder by moving to more productive firms. … Less-educated workers also are disproportionately likely to move up the job ladder during expansions. More-educated workers are less likely to enter employment at low-productivity firms in the first place, but once in such firms they are less likely to separate from them. The researchers hypothesize that more-educated workers may be more specialized, and thus less mobile across firms. … Economic slowdowns, while imposing costs throughout the labor market, are particularly harmful to the employment prospects of younger, less-educated workers.”
They use Census LEHD data on firm productivity from 2003–11.
Return to Piketty
From the monster new NBER paper, The Rate of Return on Everything:
“Our paper introduces, for the first time, a large annual dataset on total rates of return on all major asset classes in the advanced economies since 1870. ...
residential real estate and equities [i.e., risky assets] have shown very similar and high real total gains, on average about 7% per year. Housing outperformed equity before WW2. Since WW2, equities have outperformed housing on average, but only at the cost of much higher volatility and higher synchronicity with the business cycle... housing returns are similar to equity returns, yet considerably less volatile. ….
After WW2, ... across countries equities experienced more frequent and correlated booms and busts. The low covariance of equity and housing returns reveals significant aggregate diversification gains (i.e., for a representative agent) from holding the two asset classes …
It is not just that housing returns seem to be higher on a rough, risk-adjusted basis. It is that, while equity returns have become increasingly correlated across countries over time (specially since WW2), housing returns have remained uncorrelated.”
They have a great summary of the secular stagnation hypothesis: "We are living longer and healthier lives and spending more time in retirement. The relative weight of borrowers and savers is changing and with it the possibility increases that the interest rate will fall by an insufficient amount to balance saving and investment at full employment.” The hypothesis is that the economy can fall into low investment traps. Their evidence is compatible with that view.
Also: “Piketty (2014) argued that, if the return to capital exceeded the rate of economic growth, rentiers would accumulate wealth at a faster rate and thus worsen wealth inequality. Comparing returns to growth, or “r minus g” in Piketty’s notation, we uncover a striking finding. Even calculated from more granular asset price returns data, the same fact reported in Piketty (2014) holds true for more countries and more years, and more dramatically: namely r>>g... In peacetime, r has always been much greater than g."
Sentences in Bloomberg: “Even after the Great Recession, mobile capital continued to concentrate wealth in the hands of a transnational minority ... Much of the success of demagogues such as Trump lies in this minority's ability to redirect public anger onto trade and immigration, while dodging blame for the consequences of financialization."
From the new Demography issue. Ezra Fishman’s paper:
"For the 1920 birth cohort, the average dementia-free 70-year-old male had an estimated 26.9 % (SE = 3.2 %) probability of developing dementia, and the average dementia-free 70-year-old female had an estimated 34.7 % (SE = 3.7 %) probability. These estimates of risk of dementia are higher for younger, lower-mortality cohorts and are substantially higher than those found in local epidemiological studies in the United States, suggesting a widespread need to prepare for a life stage with dementia.”
Alan Krueger finds that "nearly half of prime age men who are not in the labor force take pain medication on a daily basis.”
Our World in Data blog: "Today, the world can produce almost three times as much cereal from a given area of land than it did in 1961.”
Happy, hapless, perhaps, mishap, happen, and haphazard all come from from the same Norse root "hap" – meaning "chance”.
Canada does remarkably well on Pisa: "If Canadian provinces entered Pisa tests as separate countries, three of them, Alberta, British Columbia and Quebec, would be in the top five places for science in the world … Within three years of arriving, the Pisa tests show the children of new migrants have scores as high as the rest of their schoolmates. It makes Canada one of the few countries where migrant children achieve at a level similar to their non-migrant counterparts. Another distinguishing feature is that Canada's teachers are well paid by international standards - and entry into teaching is highly selective."
Taiwan’s brain drain: "To add to Taiwan’s woes, graduate salaries have stagnated. In 1999, a university graduate could expect an average monthly salary of around $900. By 2016, this had risen to just $925. “If China is growing at 6 percent a year and Taiwan is growing at 2 percent a year, which is going to be the most attractive place to go to stake out your career?”"
Inside Higher Ed reports on the targeting of and threats against scholars: "Grollman and others described a common cycle of a professor’s comments on a politicized topic first appearing on a right-wing website such as Campus Reform, which is supported by the conservative Leadership Institute. It’s soon followed by other, similar websites and news outlets and, finally, Fox News. Then, they said, “ensue the death threats, the threats of sexual violence, calls for them to be fired and lose their jobs. This is not a whimsical thing -- there’s an actual system in place.”
White nationalists are getting DNA tested and don’t like the results: “Specialists both inside and outside these companies [like 23andMe] recognize that the geopolitical boundaries we use now are pretty new, and so consumers may be using imprecise categories when thinking about their own genetic ancestry within the sweeping history of human migration. And users’ ancestry results can change depending on the dataset to which their genetic material is being compared — a fact which some Stormfront users said they took advantage of, uploading their data to various sites to get a more “white” result."
Politico reports on voter machines and hacking: "they have no idea what happened, or [way] of knowing. I'm not suggesting votes were switched or voters were deleted from voter files, but the point is the security is so lax and so bad that they have no way of going back and doing the forensics and saying one way or the other.”
And: "'Unhackable' is absurd on its face," Braun said. "If the Russians and Chinese and whoever else can get into NSA and Lockheed Martin and JP Morgan, they absolutely can get into Kalamazoo County or the state of Ohio or the [voting machine] vendor.”
Occupations with the highest proportion of Blacks, Hispanics, Asians.
This is my notepad.