James Pethokoukis: 3 key ideas from what will be one of the most important books of 2014: "Here is an excerpt of that excerpt.... 'We’re living in a time of astonishing progress with digital technologies—those that have computer hardware, software, and networks at their core.... Just as it took generations to improve the steam engine to the point that it could power the Industrial Revolution, it’s also taken time to refine our digital engines.... The transformations brought about... will be profoundly beneficial.... [But] digitization is going to... leave behind some people, perhaps even a lot of people, as it races ahead.... There’s never been a better time to be a worker with special skills or the right education... there’s never been a worse time to be a worker with only ‘ordinary’ skills and abilities to offer, because computers, robots, and other digital technologies are acquiring these skills and abilities at an extraordinary rate.'"
Paul Krugman: The Year of the Weasel: Just a brief thought about what didn’t happen in 2013, and what did. What didn’t happen was the same as what didn’t happen in 2012, or 2011, or 2010. Inflation didn’t take off; bond vigilantes didn’t turn America (or any nation that borrows in its own currency) into Greece, Greece I tell you. What did happen was a significant change in what the usual suspects--the people who have been predicting soaring inflation and interest rates, year after year--were saying. Did they admit having been wrong? No, of course not. But their excuses shifted. Through 2011 and even through 2012, it was still mainly “just you wait!”--inflation was coming any day now, or maybe it was already here but sinister statisticians were faking the numbers. In 2013, however, it became “I never said that!”--declarations that they only said that inflation was a risk, not that it would necessarily happen, so the failure of inflation to materialize was no big deal.
"This is, I’d argue, a significant development, because it gives us a new window into the nature of the disagreement. As late as last year you could view this as a legitimate contest between rival models. But we’ve now seen that one side of the debate not only refuses to take evidence into account, but tries to dodge personal responsibility for getting it wrong. This has gone from a test of ideas to a test of character, and a lot of people failed."
Tyler Cowen: Her: "As I tend to find Jonze’s work contrived I didn’t expect much, but I was bowled over by what is a must-see movie for anyone interested in tech, or the social sciences, or--for that matter--cinema. Two of its starting premises are a) we as humans now face shadow prices which lead us to deemphasize the physical world of things and live in a world of information, and b) if we are going to have AI, which consumes real resources, which Darwinian principles will govern what kinds of personal assistants survive or do not? Will they enslave us, will they be our dogs, our friends, our trading partners, or something else altogether? This movie is the single best place to start on that question."
Jonathan Andreas: Does The Median American Care About Median Income? Does The Median Even Know?: "The median American could be reacting to rising inequality like a frog in a pot of hot water. Not the mythological frog that allegedly just sits there and gets cooked, but a real frog which will continue to tolerate increasing discomfort for a while because of not wanting to spend the energy to risk making a change. But eventually the heat gets too uncomfortable and it leaps out with a splash. This is often how social revolutions happen. It is more like an earthquake than a gradual slide down a slippery slope. The tensions build beneath the surface without anyone noticing until suddenly there is a massive shift to a new equilibrium..."
Timothy B. Lee: Dogecoins and Litecoins and Peercoins oh my: What you need to know about Bitcoin alternatives: "Dogecoin is a joke. Though weirdly it's a joke that, at least on paper, is worth millions of dollars.... The founders of Dogecoin took the source code of another Bitcoin variant called Litecoin, made some further tweaks, and rebranded it as 'Dogecoin'. That's a reference to the canine variant of lolcats, an Internet meme where a grammatically challenged dog makes excited statements. Dogecoin has been around for less than a month. In that time, the value of all dogecoins in existence has skyrockted from zero to more than $8 million.... Bitcoin's pseudonymous creator, Satoshi Nakamoto, did an amazing job of building a payment network that is secure, scalable and useful. But he wasn't perfect; he made some design decisions that might not look so great in retrospect. The problem is that thanks to Bitcoin's decentralized design, it's not easy to change the core Bitcoin protocol. Hence, if you have an idea for an improved version of Bitcoin, it's easier to start your own virtual currency..."
Tim Harford: Mark Granovetter's "The Strength of Weak Ties": "Granovetter... brought together two disparate strands of work: a survey of how people with professional or managerial jobs had found those jobs; and a theoretical analysis of the structure of social networks.... The most irreplaceable social connections, paradoxically, are often rather weak or distant ones. A family group or clique of close friends all tend to know each other and know similar things.... Their social ties are strong but also redundant.... By contrast, 'weak ties' between one social cluster and another are valuable precisely because the social contact is unusual. Information passed along a weak tie will often be totally new.... Granovetter then supplemented this theoretical idea with his survey, showing that it was very common for people to find jobs--especially managerial jobs and jobs with which they were satisfied--through personal contacts.... The key contacts who helped jobseekers find jobs were typically distant rather than close friends--old college contacts, perhaps, or former colleagues. Granovetter’s analysis made this finding make sense: it’s the more peripheral contacts who tell you things you don’t already know."
Bill McBride: Calculated Risk: Unemployment and Profits: A dirty little secret: "Employers, although they’ll never say so in public, like [the current] situation? That is, there’s a significant upside to them from the still-weak economy. I don’t think I’d go so far as to say that there’s a deliberate effort to keep the economy weak; but corporate America certainly isn’t feeling much pain, and the plight of workers is actually a plus from their point of view. A high unemployment rate keeps wages down for most working Americans--and the recent income growth has flowed mostly to the owners of corporations and not to labor. This is not an ideal economic situation for most Americans (but ideal for a few). Enough rant--and I hope I don't repeat this again in another 2 years."
- Ledra Capital: The bitcoin series
- Ben S. Bernanke and Vincent R. Reinhart (2004):** Conducting Monetary Policy at Very Low Short-Term Interest Rates
Should Be Aware of:
John Holbo: Duck… Duck… Goose?: "What, they were going to cancel the show? Limp along without their lead? Leave a ton of money on the table? Hardly seemed the most likely option. The whole thing seems like it could have been, from the start, a deliberate marketing gimmick. Free publicity for the new season. Goose ratings! Get the show’s fan base lathered up and loyal. Why should A&E mind being subject to a two-minute hate, so long as it gets to sell ads? Were I truly devious, I might hypothesize that the whole episode was engineered as part of a vast liberal media conspiracy to keep the GOP boxed as a regional ethnic party. Seriously: even NRO went for a HuffPo-style ‘stand with Phil’ slideshow. (You can click it after reading Steyn’s column on 'The Age of Intolerance'.) Man, there’s no way GOP outreach proceeds by convincing lots of undecideds this sort of ‘the only intolerance is intolerance of intolerance!’ double-talk is the bright future of freedom."
Mike the Mad Biologist: Security Theater: The Waiting In Line Edition: "So in 2001, thanks to the tightened security, people were only being let in through one door. Thousands of people all trying to get in, while having their purses and bags searched. So there is a huge single file of Jews standing outside on the sidewalk, and all I can think is 'We’re kind of exposed'. Paranoid? Perhaps, but consider this by the former head of security for Ben Gurion airport in Tel Aviv: 'But thanks to the layout of modern American airports, he doesn’t even have to get through security. The TSA conveniently packs hundreds of travelers together in cramped security lines. Terrorists love crowds because they can inflict the most harm that way. Anyone who watches the news knows that. So what does American airport security do? It gathers folks together in long lines BEFORE they’ve been scanned at all.' Our security theater isn’t really keeping us safe, but it is heightening tensions and anxieties. I don’t think that was the original intent, but, on the other hand, it’s probably not an undesirable outcome. It also allows politicians and other officials to claim they’re doing something, even if it’s ineffective."
- Oliver Sacks: Speak, Memory