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Worthy Reads from February 27, 2019

Worthy Reads at Equitable Growth:

  1. Great conversation between Heather Boushey and Emmanuel Saez. My favorite highlight: Heather Boushey: In Conversation with Emmanuel Saez: "Kansas... illustrates beautifully from a research perspective even though it’s a disaster in terms of public policy... tax avoidance... pass-through businesses... huge incentives for high-income earners to reclassify... a big erosion of the wage income tax base in the state... a much bigger negative impact on tax revenue than would have been predicted mechanically.... When governments have actually to balance their budgets, they realize that taxes are useful, and that brings the two pieces of the debate together.... Certainly Kansas didn’t experience an economic boom...

  2. Damon Jones came to Equitable Growth and gave a paper about Alaska's Oil Dividend Fund that made me significantly more optimistic about Universal Basic Income: Damon Jones: Labor Market Impacts of Universal and Permanent Cash Transfers: "UBI-like cash transfer in Alaska: unconditional, universal, long-run, captures macro effects. The macro effects of Alaska PDF on labor supply less negative than the macro effects of an unconditional cash transfer... a very small *(0.001) and insignificant effect on employment to population...

  3. Excellent from the very sharp Elena Prager and Matt Schmitt down at UCLA and out by Lake Michigan. Hospital mergers appear to be as much about gaining market power with respect to health-care workers as about gaining market power with respect to patients and their insurers.There continues to be very little evidence that they are about efficiencies of any kind: Elena Prager and Matt Schmitt: Employer Consolidation and Wages: Evidence from Hospitals: "We find evidence of reduced wage growth in cases where both (i) the increase in concentration induced by the merger is large and (ii) workers’ skills are at least somewhat industry-specific. Following such mergers, annual wage growth is 1.1pp slower for skilled non-health professionals and 1.7pp slower for nursing and pharmacy workers than in markets without mergers.... Observed patterns are unlikely to be explained by merger-related changes aside from labor market power. Wage growth slowdowns appear to be attenuated in markets with strong labor unions, and we do not observe reduced wage growth after out-of-market mergers that leave employer concentration unchanged...

  4. I did not go to last month's Niskansen Center Conference on "Beyond Left and Right": Reviving Moderation in an Era of Crisis and Extremism. But I did watch it. And watching it did provoke a tweetstorm about what I think it needs to do that some have found interesting: Brad DeLong: I think it is fair to say that the already-broken American political public sphere has become significantly more broken since November 8, 2018...

  5. The WCEG has money to spend to support research. It is very easy and straightforward to apply: Equitable Growth: Request for Proposals: "Equitable Growth supports inquiry utilizing many different kinds of evidence, relying on a variety of methodological approaches and cutting across academic disciplines. We are especially interested in projects using data linking individuals, households, and/or firms, and those that utilize geocoded data or rigorous comparative case studies—including across places in the United States, as well as comparing the experience of different countries—that allow for insight into the role of place in shaping economic opportunities and outcomes...

 

Worthy Reads Elsewhere:

  1. Now compiling and sending out fewer links than in the past, but still by far the best sorter and selector of what is interesting in economics: Mark Thoma: Economist's View: Links (2/19/19)

  2. I am still recovering from my joint appearance at San Francisco's Commonwealth Club with Steve Moore, and my having to listen to an extraordinary number of things from his mouth that simply were not true. It is draining to find oneself thinking over and over again: "But this is different than you said last year" and "but that prediction will be so obviously wrong in six months". Menzie China has a similar reaction: Menzie Chinn: Why Isn’t Stephen Moore Still Bragging about Coal As #1?: "Recall from July 2017, when Stephen Moore wrote an article entitled 'When It Comes To Electric Power, Coal Is No. 1'? No more. Now, lying has never been an impediment to Mr. Moore claiming something that was untrue (see [1] [2] [3] [4] [5] [6] [7] )—but in this case perhaps it’s just so clearly untrue, he was chastened. So much for 'winning' (coal edition). Not that I’m complaining: http://econbrowser.com/wp-content/uploads/2019/02/powergenshares-1.png

  3. Jacob Levy: Democracy for Republicans: "American conservatism and market liberalism... overlook the deep relationship between democratic government and modern commercial capitalism.... The kind of positive-sum market economy that has transformed the world since 1800 through compounding productivity increases and economic growth is very different from the ancient Rome riven by class conflicts over zero-sum land distribution, but the Founders understood the Roman precedents better than they understood the world that was about to emerge. And that economic world emerged with, not against, the development of a kind of democratic government they also did not foresee, government by contending, permanent political parties alternating in power by competing for votes in a mass-suffrage society...

  4. Pedro Nicolaci da Costa, newly-installed over at EPI, is doing a bang-up job: Pedro Nicolaci da Costa: These 5 Charts Show Inequality Is Bad for Your Health—Even If You Are Rich: "Pickett and Wilkinson kept coming back to a single uniting factor—inequality: 'What the research shows—not just ours but that of hundreds of researchers around the world—is that inequality brings out features of our evolved psychology, to do with dominance and subordination, superiority and inferiority, and that affects how we treat one another and ourselves, it increases status competition and anxiety, anxieties about our self worth, worries about how we are seen and judged'.... Here are five charts from their presentation...

  5. Wise from Simon: a "Green New Deal" needs to be not just technocratically efficient but politically popular: Simon Wren-Lewis: How to Pay for the Green New Deal: "Tackling climate change is resisted by powerful political forces that have in the past prevented the appropriate taxes, subsidies and regulations being applied. Which is a major reason why the world has failed to do enough to mitigate climate change.... Just as proponents of a Green New Deal are savvy about the need to overcome the resistance of, for example, the oil and gas industry, they also realise that the Green New Deal needs to be politically popular. So the New Deal package has to include current benefits for the many, perhaps at the expense of the few.... If you cannot make the polluter pay, it is still better to take action to stop climate change even if future generations have to pay the cost of that action...

  6. Excellent insight into police-community relations in America from a very observant and thoughtful peace officer: Patrick Skinner: "One of the questions I ask every class: When was the last time you had a positive encounter with a cop who didn’t know you were a cop in which she wasn’t telling you to do something (Traffic) or you weren’t asking something. The answer 100% has been ‘never’. That’s an issue.... I’m speaking to literally the most cop supportive group-other cops-and they can’t think of a positive voluntary encounter with a cop. The problem isn’t our neighbors. It’s us the cops. It doesn’t have to be this way. So, that’s my whole 1 day course kinda.... We need to train cops entirely as if they didn’t have a badge and a gun. And only at the end say ‘by the way, you have this authority, use it as a parachute.’ The badge gets you in the door. The rest is anti-drama. Act accordingly...

  7. What does the left—the Democratic—wing of the Democratic Party find itself reading this winter? Well, it looks like it is reading, in part, me and my coauthor Steve Cohen. Admittedly, "tells much of the same story... in language even more accessible and unobjectionable to mainstream and centrist audiences" is not the most enthusiastic endorsement I have ever had. But I will take what I can get: Demond Drummer: New Consensus Reading List: "A new consensus in economic thought is emerging.... This reading list is designed with the goals of winning over people who–whether they’re progressives or centrists–are still entrenched in the old consensus of neoliberalism, and also providing converts with a deeper understanding of various aspects of the new consensus....  Bad Samaritans [by]... Ha-Joon Chang.... Concrete Economics [by Steve Cohen and Bard DeLong].... Made in the USA ... [by] Vaclav Smil.... Mariana Mazzucato _The Entrepreneurial State.... Kate Raworth['s] Doughnut Economics.... Rana Foroohar... _Makers and Takers.... [Invisible Hands by Kim Phillips-Fein.... Mariana Mazzucato and Michael Jacobs [Rethinking Capitalism].... Ha-Joon Chang [Economics].... Justin Yifu Lin [Against the Consensus].... The Public Banking Solution [by] Ellen Brown.... Ann Pettifor [The Production of Money].... The End of Alchemy by [Mervyn King].... Martin Wolf [The Shifts and the Shocks].... Mohamed El-Erian [The Only Game in Town].... +Freedom’s Forge [by Arthur Herman].... Mark Wilson’s Destructive Creation.... [When Small States Make Big Leaps) by Darius Ornston].... The Park Chung Hee Era [by Byung-Kook Kim and Ezra Vogel].... MITI and teh Japanese Miracle [by Chalmers Johnson].... Why Europe Grew Rich and Asia Did Not [by Prassanan Parthasarathi]...

  8. Dani Rodrik has, I think, a better way to frame the problems that he and Richard Baldwin are both thinking about this winter: Dani Rodrik: The Good Jobs Challenge: "[For] developing countries... existing technologies allow insufficient room for factor substitution: using less-skilled labor instead of skilled professionals or physical capital. The demanding quality standards needed to supply global value chains cannot be easily met by replacing machines with manual labor. This is why globally integrated production in even the most labor-abundant countries, such as India or Ethiopia, relies on relatively capital-intensive methods.... The standard remedy of improving educational institutions does not yield near-term benefits, while the economy’s most advanced sectors are unable to absorb the excess supply of low-skilled workers. Solving this problem may require... boosting an intermediate range of labor-intensive, low-skilled economic activities. Tourism and non-traditional agriculture... public employment ... non-tradable services carried out by small and medium-size enterprises, will not be among the most productive, which is why they are rarely the focus of industrial or innovation policies. But they may still provide significantly better jobs than the alternatives in the informal sector...

  9. Richard Baldwin has a new book and has coined the ugliest word I have ever seen to promote it. It is very interesting, and I think it is largely right. But I think it does have a big problem with the word "globotics": "globalization" and "robots", even robot-enabled globalization and globalization-enabled robots, are two very different processes with very different implications. Squashing them into one makes his argument less coherent than it might have been: Richard Baldwin: The Globotics Upheaval: Globalization, Robotics, and the Future of Work: "A new form of globalization will combine with software robots to disrupt service-sector and professional jobs in the same way automation and trade disrupted manufacturing jobs.... Software robots... pervasive translation that open[s] new opportunities for outsourcing to tele-migrants.... Future jobs will be more human and involve more face-to-face contact since software robots and tele-migrants will do everything else...

  10. Some of us may be intellectually quicker than others. Some of us may have a greater breadth or depth of real or virtual experience than others. But intellectual quickness, depth or breadth of experience, and depth or breadth of virtual experience—none of those make us smart, or wise. Being stupid is a choice. We can all train ourselves not to make that choice: Morgan Housel: Different Kinds of Stupid: "Smart is the ability to solve hard problems, which can be done many ways. Stupid is a tendency to not comprehend easy problems. It’s also is a diversified trait. A few kinds of stupid.... 1. Intelligence creep: Not knowing the boundaries of what you’re good at.... 2. Underestimating the complexity of how past successes were gained in a way that makes you overestimate their repeatability.... 3. Discounting the views of people who aren’t as credentialed as you are.... 4. Not understanding that in the... real world it’s you vs. coworkers, employees, customers, regulators, etc., all of whom need to be persuaded by more than having the right answer.... 5. Closed-system thinking: Underestimating the external consequences of your decisions in a hyperconnected world, or dismissing how quickly those consequences can backfire on you...


#noted #weblogs #2019-02-27

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