Seth Lloyd on free will, complexity, & unpredictability; the demographic transition & the population explosion; very briefly noted; Trump claims Nikki Haley is Obama’s sockpuppet; Josh Barro on...
Trump always says he will return any attack with 5x the severity. One can imagine what he will do to Biden et al after teh humiliation of the loss of the 2020 election.
"The men of my generation have not lost the memory of the years 1931-1935. While Anglo-Saxon currencies were devalued, the value of the franc was proudly maintained, but the French economy was ruined. In short, our partners do not refuse to put pressure on the American authorities; they fear triggering a crisis of which the entire Western world would be a victim."
Hmm. I don't think David Glasner would put it quite like that; he'd probably say something about "the insane Bank of France."
"American privilege is largely responsible for the origin of the deficit, namely capital outflows."
Isn't this a reversal of causality? Please accept my abject apologies if I am misremembering or misrepresenting your friend Barry Eichengreen, but my recollection was that he identified three advantages to printing the reserve currency:
1) Your domestic firms pay no FX-related transaction costs.
2) Your domestic firms are not exposed to currency risk (or do not have to pay the cost of hedging) because they buy their inputs and sell their outputs in the same currency.*
3) You accrue seigniorage; foreign entities must sell you something of value in order to maintain a working balance to lubricate international transactions, and their central banks must maintain a prudent reserve holding in your currency (hence its *reserve* status.)
Point 3 seems to *require* the reserve currency provider to run a current account deficit?
* Not only domestic firms! For example, this is how a Canadian hedge fund makes a bet on a US stock: they do not sell CAD for USD, take a position in the stock, then buy CAD for USD when they liquidate the position. Instead, they borrow USD and post CAD as collateral, and put on the stock position with borrowed USD. This exposes them to collateral calls, and they must pay the difference between the USD rate and the CAD rate; but of course, the latter is often negative. But the point is that if their USD bet is correct and results in a nominal profit in USD, that always translates to a nominal profit in CAD, instead of potentially being wiped out by an adverse FX swing.
There are lots of ways to do anti-trust without breaking up a company. IBM, for example, was forced to make OS\360 available for other hardware vendors and publish its device interfaces. Xerox was forced to license the rotating charged drum technology put not its dry fixing technology so that other companies could compete. Kodak was forced to license its color film developing process. With computer technology, it's about providing a suitable API, though there are some companies that would be more valuable and effective if split into multiple entities.
"‘I didn’t go to [George H.W. Bush] and say, you know, Darman is blocking—he didn’t want to hear staff infighting…. Darman was so clever. The guy was demonically clever…. Lucy and the football, at the last minute you pull it away. I thought I was going to get the meeting. I thought that I was going to get the meeting. I always thought it was going to happen. And by now, I realize how I got burned by Darman, who—God, he’s charming, funny, and just, you don’t want to disbelieve the guy, because he’s so funny, and he’s so brilliant. You don’t want to think he’s a goddamned liar. But he is. He was. And so you get head faked all the time"
In one of Martin von Crevald's books, _Command in War_ IIRC, he described how Napoleon had a system in place to get additional information on key topics from trusted sources outside his inner circle exactly to prevent any one advisor from controlling the entire information flow to him. It strikes me as a crippling management flaw for a senior executive to allow a Chief of Staff or equivalent to impose his viewpoint unilaterally in the manner described. Albeit the higher you get in an organization the more likely that a COS will have the personality to try to do that.
A very engaging talk with a different approach than I have read or seen before. I like that he doesn't determine if free will exists, just proposes a light-hearted test for it based on a long exposition of the problem of modeling. It does neatly undermine the neural argument that our brains come to make the decision before we are aware of it (although I was never particularly enamoured with this argument). Lloyd's argument seems better and does avoid the need to argume whether the universe (or at least our brain) is deterministic or not.
Like consciousness, this is not an easy problem. However, if we did determine we have no free will, that might make how we run our societies today, problematic.
Barro: ‘For me, the problem starts with the replication crisis…. A decent amount of what I was taught in Harvard’s social psychology courses was just wrong… replications failing… p-hacked… fraudulent data…. Universities’ level of interest in addressing widespread research dishonesty in behavioral science has been… mixed.
There is a reason STEM subjects are more rigorous and less subject (nut not entirely) due to poor reserach practices. Social sciences, and that includes economics are hard to do rigorously. The subjects can be "squishy". I recall a friend of mine who picked a socialogy unit at our alma mater in the UK in teh early 1970s, and he was appalled at the poor quality of the teaching. No wonder British tv comedies lampooned sociologists.
More fool Barro taking such courses - often chosen as "easy" units to avoid the harder courses. But agrguing from this particular to the general quality of Harvard is absurd. The beef I have with ivy league institution teaching quality is with the grade creep that has reached ridiculous levels at Harvard. reports suggest Harvard's priviledged students consider they have paid for an A grade, so Harvard should give it to them. No doubt an attitude acquired from their [super-wealthy] parents.
My problem with Barro is his use of the word "industry" in relation to academia. That's MBA-think at its worst. Yes, universities must pay their bills. But that's a constraint, not a raison d'etre. I rather like the Catholic word "sodality."
Similarly with public utilities such as water, commuter rail, public education, and postal services: they aren't intended to turn a profit and should be be expected to do so; heading down that road leads to ruin. Which is often the intention of course.
Eichengreen: W/O reading the book, I should keep my mouth shut, but I’ve never followed that rule before; why start now?
Seigniorage is indeed a privilege and like any other privilege, can be abused. It is proximate to the much greater advantage that US financial institutions enjoy as a result of the dollar being the currency in which most international trade and investment is denominated. At a policy level these privileges are assets to be managed.
Chronic deficits have made the dollar a bit TOO attractive as a safe asset and the resulting shift in the internal terms of trade from tradeable to non-tradables has been unfortunate. BTW, I do NOT think that the causation runs the other way, that te US has run large fiscal deficits BECAUSE it could borrow abroad cheaply.
It’s not clear that there is anything the US should do to maintain the role of the dollar in international trade that we shouldn’t do anyway (be careful in using financial sanctions as an instrument of foreign policy?), but here perhaps Eichengreen has some ideas.
Kogan, Stone, DaSilva, Rejeski: Interesting, but it useful mainly the discount rate implicit in an NPV fiscal rule. It does NOT mean as these things are sometimes said to imply, that we should be less concerned about fiscal deficits. Financing expenditures with debt instead of taxes is a drain on investment and future growth, whatever the discount rate.
re: Racism and neofascism.
And the thin-skinned Trump was intent on dismantling Obama's successes in retaliation for the humilation Obama meted out on him at the White House Correspondents dinner. https://www.youtube.com/watch?v=zeGpLg0b3DE&pp=ygUqb2JhbWEgaHVtaWxhdGVzIHRydW1wIGF0IGpvdW5hbGlzdHMgZGlubmVy
Trump always says he will return any attack with 5x the severity. One can imagine what he will do to Biden et al after teh humiliation of the loss of the 2020 election.
"The men of my generation have not lost the memory of the years 1931-1935. While Anglo-Saxon currencies were devalued, the value of the franc was proudly maintained, but the French economy was ruined. In short, our partners do not refuse to put pressure on the American authorities; they fear triggering a crisis of which the entire Western world would be a victim."
Hmm. I don't think David Glasner would put it quite like that; he'd probably say something about "the insane Bank of France."
"American privilege is largely responsible for the origin of the deficit, namely capital outflows."
Isn't this a reversal of causality? Please accept my abject apologies if I am misremembering or misrepresenting your friend Barry Eichengreen, but my recollection was that he identified three advantages to printing the reserve currency:
1) Your domestic firms pay no FX-related transaction costs.
2) Your domestic firms are not exposed to currency risk (or do not have to pay the cost of hedging) because they buy their inputs and sell their outputs in the same currency.*
3) You accrue seigniorage; foreign entities must sell you something of value in order to maintain a working balance to lubricate international transactions, and their central banks must maintain a prudent reserve holding in your currency (hence its *reserve* status.)
Point 3 seems to *require* the reserve currency provider to run a current account deficit?
* Not only domestic firms! For example, this is how a Canadian hedge fund makes a bet on a US stock: they do not sell CAD for USD, take a position in the stock, then buy CAD for USD when they liquidate the position. Instead, they borrow USD and post CAD as collateral, and put on the stock position with borrowed USD. This exposes them to collateral calls, and they must pay the difference between the USD rate and the CAD rate; but of course, the latter is often negative. But the point is that if their USD bet is correct and results in a nominal profit in USD, that always translates to a nominal profit in CAD, instead of potentially being wiped out by an adverse FX swing.
Lloyd: Waiting for the GPT4 summary. :)
There are lots of ways to do anti-trust without breaking up a company. IBM, for example, was forced to make OS\360 available for other hardware vendors and publish its device interfaces. Xerox was forced to license the rotating charged drum technology put not its dry fixing technology so that other companies could compete. Kodak was forced to license its color film developing process. With computer technology, it's about providing a suitable API, though there are some companies that would be more valuable and effective if split into multiple entities.
"‘I didn’t go to [George H.W. Bush] and say, you know, Darman is blocking—he didn’t want to hear staff infighting…. Darman was so clever. The guy was demonically clever…. Lucy and the football, at the last minute you pull it away. I thought I was going to get the meeting. I thought that I was going to get the meeting. I always thought it was going to happen. And by now, I realize how I got burned by Darman, who—God, he’s charming, funny, and just, you don’t want to disbelieve the guy, because he’s so funny, and he’s so brilliant. You don’t want to think he’s a goddamned liar. But he is. He was. And so you get head faked all the time"
In one of Martin von Crevald's books, _Command in War_ IIRC, he described how Napoleon had a system in place to get additional information on key topics from trusted sources outside his inner circle exactly to prevent any one advisor from controlling the entire information flow to him. It strikes me as a crippling management flaw for a senior executive to allow a Chief of Staff or equivalent to impose his viewpoint unilaterally in the manner described. Albeit the higher you get in an organization the more likely that a COS will have the personality to try to do that.
re: Seth Lloyd: A Turing Test for “Free Will”
A very engaging talk with a different approach than I have read or seen before. I like that he doesn't determine if free will exists, just proposes a light-hearted test for it based on a long exposition of the problem of modeling. It does neatly undermine the neural argument that our brains come to make the decision before we are aware of it (although I was never particularly enamoured with this argument). Lloyd's argument seems better and does avoid the need to argume whether the universe (or at least our brain) is deterministic or not.
Like consciousness, this is not an easy problem. However, if we did determine we have no free will, that might make how we run our societies today, problematic.
Barro: ‘For me, the problem starts with the replication crisis…. A decent amount of what I was taught in Harvard’s social psychology courses was just wrong… replications failing… p-hacked… fraudulent data…. Universities’ level of interest in addressing widespread research dishonesty in behavioral science has been… mixed.
There is a reason STEM subjects are more rigorous and less subject (nut not entirely) due to poor reserach practices. Social sciences, and that includes economics are hard to do rigorously. The subjects can be "squishy". I recall a friend of mine who picked a socialogy unit at our alma mater in the UK in teh early 1970s, and he was appalled at the poor quality of the teaching. No wonder British tv comedies lampooned sociologists.
More fool Barro taking such courses - often chosen as "easy" units to avoid the harder courses. But agrguing from this particular to the general quality of Harvard is absurd. The beef I have with ivy league institution teaching quality is with the grade creep that has reached ridiculous levels at Harvard. reports suggest Harvard's priviledged students consider they have paid for an A grade, so Harvard should give it to them. No doubt an attitude acquired from their [super-wealthy] parents.
re: population and growth:
1. The chart has no y-axis values. (not your fault, neither has the source)
2. The growth rate fall is projected - but what is the evidence for this contiinued fall and why?
(The source aticle explains nothing other than teh data to date, with no further explanation)
3. Your link does not point to the source, but to your substack image.
A google using image source, that found the image on wikipedia and thence the correct links to the article and chart:
https://ourworldindata.org/population-growth-over-time
This should be your link.
My problem with Barro is his use of the word "industry" in relation to academia. That's MBA-think at its worst. Yes, universities must pay their bills. But that's a constraint, not a raison d'etre. I rather like the Catholic word "sodality."
Similarly with public utilities such as water, commuter rail, public education, and postal services: they aren't intended to turn a profit and should be be expected to do so; heading down that road leads to ruin. Which is often the intention of course.
Yes. Very much so...
Anna Stansbury & Robert Schultz:
Plausible, (I'm in the minority of neither parent having a college degree.) I wonder how the comparison stacks up against equally lucrative degrees.
Eichengreen: W/O reading the book, I should keep my mouth shut, but I’ve never followed that rule before; why start now?
Seigniorage is indeed a privilege and like any other privilege, can be abused. It is proximate to the much greater advantage that US financial institutions enjoy as a result of the dollar being the currency in which most international trade and investment is denominated. At a policy level these privileges are assets to be managed.
Chronic deficits have made the dollar a bit TOO attractive as a safe asset and the resulting shift in the internal terms of trade from tradeable to non-tradables has been unfortunate. BTW, I do NOT think that the causation runs the other way, that te US has run large fiscal deficits BECAUSE it could borrow abroad cheaply.
It’s not clear that there is anything the US should do to maintain the role of the dollar in international trade that we shouldn’t do anyway (be careful in using financial sanctions as an instrument of foreign policy?), but here perhaps Eichengreen has some ideas.
Kogan, Stone, DaSilva, Rejeski: Interesting, but it useful mainly the discount rate implicit in an NPV fiscal rule. It does NOT mean as these things are sometimes said to imply, that we should be less concerned about fiscal deficits. Financing expenditures with debt instead of taxes is a drain on investment and future growth, whatever the discount rate.
Ritholtz: For judging "inflation" we are supposed to be looking at CPE, not CPI, although getting selter into any index will be tricky.
Note to Janet Yellen: in addition to adding more intermediate tenor TIPS to the menu, why not run them off the PCE instead of the CPI?
Note to BLS: Could we have wage indexes instead of unite value indexes, plese?