Noted: Boushey & Cumming: Coronavirus Recession

Much more attention should be being paid to the class skew in the economic pain being caused by the coronavirus recession: Heather Boushey & Carmen Sanchez Cumming: Coronavirus Recession Deepens U.S. Job Losses in April. Especially Among Low-Wage Workers & Women ‘many of the workers most affected by the swift economic downturn hold jobs that are not classified as essential and cannot be done from home. This month about 90 percent of job losses happened in sectors where less than one in five workers reported in a survey conducted between 2017 and 2018 that they have the option to telecommute. It is likely that this measure somewhat misrepresents the number of workers who have been able to work from home since the onset of the pandemic. Even so, with 7.7 million jobs lost in the leisure and hospitality industry alone, which makes up nearly half of all the jobs in that sector, jobs where workers previously rarely had the option to telecommute accounted for more than a third of this last month’s economy-wide decline in employment…

#coronavirus #depression #equitablegrowth #inequality #macro #noted #2020-05-13

Noted: Sahm & al.: Household Response to the 2008 Tax Rebate

Claudia R. Sahm & al.: Household Response to the 2008 Tax Rebate 'Only about one-fifth of respondents in the Reuters/University of Michigan survey report that the 2008 tax rebates led them to mostly increase spending, while over half said it would lead them to mostly pay off debt. Of those in the mostly-spend category, the response was swift, with over 80 percent reporting increasing their spending within three months of receiving their rebate. Older households, households with higher wealth and higher income, and those expecting future income growth were generally more likely to spend the rebates. A review of other surveys confirms the general pattern of results and suggests that small changes in survey design do not have a major effect on the distribution of responses. The distribution of survey answers corresponds to an aggregate MPC after one year of about one-third. The paper combines this survey-based estimate of the MPC and the survey-based estimate of the timing of spending to show that the rebates help explain the aggregate movements in saving, spending, and debt in 2008. Because the rebate was large and distributed over a short period, it had a non-trivial effect on total spending in the second and third quarters of 2008. Nonetheless, the results imply that the rebates provided only a modest stimulus to spending per dollar of rebate...

#fiscalpolicy #macro #noted #2020-05-13

Noted: Card & al.: Gender Neutrality in Economics

Economics's woman-underrepresentation problem appears due to a drip, drip, drip, drip of small factors everywhere along the pipeline. Here Nagore Triberri and coauthors find that there is a substantial slice of papers of high enough "quality" (as measured by future citations) to get published that do not get published because they are written by women. Yet referees assess papers written by men and women similarly. And editors do not seem biased in their use of referees:

David Card, Stefano DellaVigna, Patricia Funk, and Nagore Iriberri: Gender Neutrality in Economics: The Role of Editors and Referees 'Women economists are under-represented across the discipline, from university departments to academic conferences and publishing houses. This column focuses on the editorial process and asks whether the referees and editors of four leading economics journals made gender-neutral publishing decisions between 2003 and 2013. The findings suggest that the gender of the referee does not affect the valuation of a paper and that editors are gender-neutral in valuing advice from referees. However, papers written by women appear to face a higher bar in the quest to be published...

#discrimination #economics #gender #noted #universities #2020-05-13

Noted: Steve M.: Better to Reign in Randian Hell

Steve M.: Better to Reign in Randian Hell ‘Danes kept their jobs. The trauma of massive numbers of people losing jobs and health insurance, of long lines at food banks—that is the American experience, but it’s not what’s happening in Denmark.... Our response to the pandemic has been worse than Sweden's or Denmark's, and one consequence is that our economy will be in the toilet for years to come. I understand that we're reopening much of America prematurely because our corporate overlords have contempt for their employees and their customers and just want revenue to start flowing again as quickly as possible. But why are they unable to grasp the obvious point that their customers are afraid to come back, and that they'll be even more afraid when, inevitably, the premature reopenings cause a spike in COVID-19 cases and deaths? In other words, why aren't the CEOs who have Donald Trump's ear telling him that, for his benefit and theirs (they really don't care about ours), he should be working harder to bend the curve and increase testing and tracing, because that's what it will take to give Americans the confidence to go out and consume?... I've come to the conclusion that many American capitalists aren't seekers of pure profit. They often prefer control.... They don't like being ordered to shut down by the government. They want to forcibly reverse the shutdown—even though it's likely to mean more death and less business, and even though letting the lockdown run its course would make them more money in the long run...

#coronavirus #noted #orangehairedbaboons #publichealth #2020-05-13

Noted: WHO: An Historical Document: Novel Coronavirus (2019-nCoV) SITUATION REPORT—1 21 JANUARY 2020

WHO: Novel Coronavirus (2019-nCoV) SITUATION REPORT—1 21 JANUARY 2020 ‘Event highlights from 31 December 2019 to 20 January 2020: • On 31 December 2019, the WHO China Country Office was informed of cases of pneumonia unknown etiology (unknown cause) detected in Wuhan City, Hubei Province of China. From 31 December 2019 through 3 January 2020, a total of 44 case-patients with pneumonia of unknown etiology were reported to WHO by the national authorities in China. During this reported period, the causal agent was not identified. • On 11 and 12 January 2020, WHO received further detailed information from the National Health Commission China that the outbreak is associated with exposures in one seafood market in Wuhan City. • The Chinese authorities identified a new type of coronavirus, which was isolated on 7 January 2020. • On 12 January 2020, China shared the genetic sequence of the novel coronavirus for countries to use in developing specific diagnostic kits. • On 13 January 2020, the Ministry of Public Health, Thailand reported the first imported case of lab-confirmed novel coronavirus (2019-nCoV) from Wuhan, Hubei Province, China. Situation update: • As of 20 January 2020, 282 confirmed cases of 2019-nCoV have been reported from four countries including China (278 cases), Thailand (2 cases), Japan (1 case) and the Republic of Korea (1 case); • Cases in Thailand, Japan and Republic of Korea were exported from Wuhan City, China; • Among the 278 cases confirmed in China, 258 cases were reported from Hubei Province, 14 from Guangdong Province, five from Beijing Municipality and one from Shanghai Municipality; On 15 January 2020, the Ministry of Health, Labour and Welfare, Japan (MHLW) reported an imported case of laboratory-confirmed 2019-novel coronavirus (2019-nCoV) from Wuhan, Hubei Province, China. On 20 January 2020, National IHR Focal Point (NFP) for Republic of Korea reported the first case of novel coronavirus in the Republic of Korea…

#coronavirus #noted #publichealth #2020-05-13

Noted: Smalligan & Boyens: Paid Medical Leave Research

What we know about the importance and the benefits of paid medical leave, compressed and explained: Jack Smalligan & Chantel Boyens: Paid Medical Leave Research ‘Paid medical leave may have an effect on health outcomes… [through] improved health management, earlier treatment, greater healthcare utilization, improved income stability, reduced financial stress, and enhanced return-to-work supports. Research on short-term paid sick leave shows clear societal and personal benefits…. [In] provid[ing] return-to-work services for newly ill and injured workers… the most effective programs emphasize early intervention following the onset of a new condition or worsening of a chronic condition… #equitablegrowth #noted #socialinsurance #2020-05-13

Noted: Boushey: The Path to Recovery

It really is not too late to turn the coronavirus recession into a sharp V-shaped recession. But I would say that the odds that we are going to do so are less than 10%. Only a very small number of people with any access to the levers of power or the megaphones understand that the keys to rapid recovery lie in boosting aggregate demand quickly by enough and in ensuring that businesses are not sent miss leading "bankruptcy shut down” signals. Heather Boushey understands this. Only a small proportion of other people of status and influence in Washington DC understand this:

Heather Boushey: It’s Not too Late to Put the American Economy on a Path to Recovery ‘We know what we need to do in a recession...

...Unemployment Insurance, aid to the states, enhanced nutrition support, direct payments—and infrastructure and job programs—are the tried-and-true programs that stabilize the macroeconomy while supporting America’s families. Decades of evidence show these programs work. Now, in this package, Congress should ensure that the supports we put in place stay in place by crafting them so that they trigger off when the labor market recovers, and not before… #coronavirus #macro #noted #2020-05-12

Noted: Yes: Time Feels Weird Right Now

Emily VanDerWerff: Why Quarantine Has Made Time Feel so Weird, Explained ‘March felt longer to people because you could look back to the first half of March, before we were in quarantine, and say, “Oh, all of this stuff happened.” And in the second half of March, people were forced out of their routines, their flow. But April has been the same thing over and over, and retroactively, it feels much shorter... #coronavirus #noted #2020-05-12

Martha Wells Is Having too Much Fun Here...

Highly recommended. Martha Wells appears to have had an illegally large amount of fun writing this novel. Here a newly-created instantiation of Murderbot sets out on what is supposed to be a suicide mission. Murderbot's first person POV:

Martha Wells: Network Effect: A Murderbot Novel 'Obviously some things had happened since [the] A[--hole ]R[esearch ]T[ransport] had... cop[ied the old me to create me]...

...And ART was right, it couldn’t risk a comm contact, even to get intel. If the Targets managed to deliver the threat to kill ART’s crew, it would put them in control of the situation and we had to avoid that any way we could.

I said, "I’m not actually a human baby, ART, I remember the f---ing directive—I helped write it".

"You’re not making this any easier", ART said.

"You can either have an existential crisis or get your crew back, ART, pick one".

ART said, "Prepare for deployment..."

#books #highlyrecommended #noted #sciencefiction #2020-05-12

Noted: Morley: New Normal?

Neville Morley: The New Normal? ‘Microsoft Teams... [might] be... used for a seminar of 10-12 students, where a class of 150 is clearly a non-starter. But having now had a couple of department meetings via Teams, I’m sceptical.... [Is] online class discussion... what we actually need to prioritis[e?].... Might it be possible to get more people more involved—and even more so if it takes place asynchronously, so people have time to think and compose their answers, rather than privileging the ability to come up with coherent thoughts spontaneously?… #internet #noted #universities #2020-05-11

Noted: Kelly: 68 Bits of Unsolicited Advice

Kevin Kelly: 68 Bits of Unsolicited Advice ‘Learn how to learn from those you disagree with, or even offend you. See if you can find the truth in what they believe. Being enthusiastic is worth 25 IQ points. Always demand a deadline. A deadline weeds out the extraneous and the ordinary. It prevents you from trying to make it perfect, so you have to make it different. Different is better... #cognition #noted #2020-05-11

Noted: Gibbon: Roman Tolerance

Edward Gibbon: Roman Tolerance 'The various modes of worship, which prevailed in the Roman world, were all considered by the people, as equally true; by the philosopher, as equally false; and by the magistrate, as equally useful. And thus toleration produced not only mutual indulgence, but even religious concord...

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Noted: Tufekci: Coronavirus and the Blindness of Authoritarianism

Zeynep Tufekci: Coronavirus and the Blindness of Authoritarianism 'China’s use of surveillance and censorship makes it harder for Xi Jinping to know what’s going on in his own country...

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Noted: Davidow & Malone: Dopamine Capitalism

A Precis of the thoughts that Bill Davidow and Mike Malone have been having recently on how modern high tech information age capitalism is increasingly finding it much more profitable to create evanescent and ultimately pointless desires then to satisfy durable and important needs: William H. Davidow & Michael S. Malone: Dopamine Capitalism ‘It is no secret that with the digital revolution has come many new forms of addiction, as users chase after social-media "likes" and other online stimuli. But less understood is the extent to which most of the tech industry now relies on behavioral manipulation to maximize profits at the expense of our wellbeing.... The powerful companies (and, in some cases, governments) that control the Internet have moved from accidentally or unwittingly creating human “robots” to knowingly doing so. Contrary to the usual warnings about artificial intelligence and automation, the biggest near-term threat to humanity is coming not from our machines, but from the people designing them. Those shaping the current technological era have violated the public trust by choosing business models that are openly amoral or even immoral. Following in the footsteps of the tobacco companies and the casino business, they are consciously creating and fostering addictive behavior in the name of profits...

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Noted: The Career of Gylippus

William Smith: A Dictionary of Greek and Roman Biography & Mythology 'For all that we know of the rest of the life of Gylippus we are indebted to Plutarch (Nic. 28 ; Lysand. 16, 17) and Diodorus (13.106). He was commissioned, it appears, by Lysander, after the capture of Athens, to carry home the treasure. By opening the seams of the sacks underneath, he abstracted a considerable portion, 30 talents, according to Plutarch's text.... He was detected by the inventories which were contained in each package, and which he had overlooked. A hint from one of his slaves indicated to the Ephors the place where the missing treasure lay concealed, the space under the tiling of the house. Gylippus appears to have at once gone into exile, and to have been condemned to death in his absence. Athenaeus (vi. p. 234.) says that he died of starvation, after being convicted by the Ephors of stealing part of Lysander's treasure; but whether he means that he so died by the sentence of the Ephors. or in exile, does not appear. None can deny that Gylippus did the duty assigned to him in the Svracusan war with skill and energy. The favour of fortune was indeed most remarkably accorded to him; yet his energy in the early proceedings was of a degree unusual with his countrymen. His military skill, perhaps, was not much above the average of the ordinary Spartan officer of the better kind. Of the nobler virtues of his country we cannot discern much: with its too common vice of cupidity he lamentably sullied his glory. Aelian (Ael. VH 12.42; comp. Athen. 6.271) says that he and Lysander, and Callicratidas, were all of the class called Mothaces, Helots, that is, by birth, who, in the company of the boys of the family to which they belonged, were brought up in the Spartan discipline, and afterwards obtained freedom. This can hardly have been the case with Gylippus himself, as we find his father, Cleandridas, in an important situation at the side of king Pleistoanax: but the family may have been derived, at one point or another, from a Mothax...

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American Carnage: For Project Syndicate

The Project Syndicate people titled this "American Carnage": a good title. They also had to cut it massively. Here is the draft I am most satisfied with: J. Bradford DeLong: American Carnage ‘Throughout Donald Trump's presidency, it has been obvious that the American political system and public sphere are broken. But only with the federal government's embarrassingly incompetent response to the COVID-19 pandemic has that breakdown translated into a significant loss of life…

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Employment Population Ratio

Not as bad as I had feared it would be. But the Coronavirus Depression was here in April: BLS: Employment Situation Summary ‘Total nonfarm payroll employment fell by 20.5 million in April, and the unemployment rate rose to 14.7 percent, the U.S. Bureau of Labor Statistics reported today. The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it.... This is the highest rate and the largest over-the-month increase in the history of the series (seasonally adjusted data are available back to January 1948).... The labor force participation rate decreased by 2.5 percentage points over the month to 60.2 percent, the lowest rate since January 1973 (when it was 60.0 percent). Total employment, as measured by the household survey, fell by 22.4 million to 133.4 million. The employment-population ratio, at 51.3 percent, dropped by 8.7 percentage points over the month. This is the lowest rate and largest over-the-month decline in the history of the series (seasonally adjusted data are available back to January 1948).... Establishment Survey Data: Total nonfarm payroll employment fell by 20.5 million in April, after declining by 870,000 in March…

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Matthew Yglesias: Coronavirus Mitigation Could Kill Thousands. Suppress the Virus, Don’t Just “Flatten the Curve” ‘With the disease seemingly beaten back domestically, Hong Kong is now in a position to start switching emphasis to a strategy focused on border controls.... The city has a clearly articulated strategy that it calls “suppress and lift”: ease restrictions now when cases are at zero, but then clamp back down as necessary to push cases back down if they pop up. Taiwan has also had no new cases for several days.... New Zealand has not done quite this well, but the government believes it has successfully identified and isolated all of the country’s coronavirus cases and is lifting restrictions, on the claim that the virus has been “eliminated” in the country. South Korea’s outbreak is now down to single-digit numbers of new cases per week.... The United States, meanwhile, is moving to open up on the basis of a vaguely articulated assumption that settling for mitigation is good enough.... The United States has not really tried the strategies that have made suppression successful. To accomplish that, America would need to invest in expanding the volume of tests, invest in more contact tracers, and create centralized quarantine facilities.... Since the US didn't spend April doing that, trying to achieve suppression—along the lines of Taiwan, Hong Kong, Korea, and New Zealand—would necessarily involve more delay and more economic pain. But doing so would save potentially tens or hundreds of thousands of lives and almost certainly lead to a better economic outcome by allowing activity to truly restart…

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Jo Walton (2004): The Dyer of Lorbanery (Spearpoint Theory) ‘There comes a point in writing, and it’s a spear-point, it’s very small and sharp but because it’s backed by the length and weight of a whole spear and a whole strong person pushing it, it’s a point that goes in a long way. Spearpoints need all that behind them, or they don’t pack their punch in the same way. Examples are difficult to give because spear-points by their nature require their context, and spoilers. They tend to be moments of poignancy and realization. When Duncan picks the branches when passing through trees, he’s just getting a disguise, but we the audience suddenly understand how Birnam Wood shall come to Dunsinane.... You certainly need to do a lot of set-up, carefully, towards what you want to do later, and the reason for that is so that when you actually get to doing it, it can stand alone at that point, be that point, because the spear needs to be behind it, and a spear-point supported right there with scaffolding doesn’t have any impact at all. It needs to be moving when it hits you, and it needs to have the spear already there, whether you and the reader built the spear together along the course of the book or whether the reader came into the room with it. And if you’re building the spear, you have to come by it honestly, even though you’re doing set-up, it all has to fit with what’s there it all has to work in its own context or you won’t end up with anything but a pile of splinters. And sometimes you don’t have room and it isn’t going to be fully there until afterwards, and I think it’s better to suck that up and trust the reader to think, to come back and re-read, to get the impact then, than to try to hammer the spear-point in when there hasn’t been time to build the spear…

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David Anderson: Cubic Fits & Department of D'OH ‘The first thing a data analyst trainee should learn is that playing with Excel’s functions and tools is a great way to get into trouble when you don’t have an underlying understanding of the fundamental data’s behaviors AND don’t understand the functions and tools core assumptions.  This is important.  The second or third lesson a data analyst trainee will learn is to not use Excel but that is advanced training. Why does this matter? It seems like the White House is using Excel and not understanding the phenonomenon they are trying to model. Eyeballing the data, there sure as hell seems to be a day of the week seasonality. But let’s go beyond that. If we were to assume that a cubit fit is an appropriate choice to model the data, and that we can project out of the current data to the near future so that there are almost no deaths on May 15th, that requires a What the Hell response…


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Things that have not aged well at al. From 2017: Letter in Support of the Nomination of Kevin Hassett to be Chairman of the Council of Economic Advisers ‘Dr. Hassett has a record of serious scholarship on a wide range of topics, including tax policy, business investment, and energy. He has engaged on an even wider range of topics in the public policy debate and in his work at the Federal Reserve and as a consultant to the Department of the Treasury during the Administrations of President George H.W. Bush and President William J. Clinton. In addition, we appreciate that Dr. Hassett has consistently made an effort to reach out to a wide range of people from across the ideological spectrum both to promote economic dialogue and to collaborate on research and public policy proposals. For all of these reasons we believe that Dr. Hassett would be an excellent choice for Chairman of the Council of Economic Advisers and urge the Committee to move as expeditiously as possible to ensure that the Administration has the benefit of his economic advice...

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Jonathan Chait: Trump’s Use of Nonexpert’s Coronavirus Model Not Going Well ‘President Trump’s habit of promising unrealistically low casualty counts is one of the more inexplicable unforced errors in the administration’s handling of the coronavirus pandemic. “One is too many,” he said on April 20, “but we’re going toward 50 or 60,000 people.” Just four days later, the number of confirmed deaths had already exceeded 50,000. A few days after that, he tacked on another 10,000 to the upper and lower bound, saying, “we’re probably heading to 60,000, 70,000.” That figure is already moot. Trump’s normal sales pitch is to juxtapose his results against a horrific alternative.... Why, this time, did he establish a target he couldn’t meet? Indeed, why did he throw out numbers that were obviously going to be exceeded very quickly? A chief culprit in the blunder turns out to be Kevin Hassett, the former chair of the Council of Economic Advisers... Hassett is one of the subtler and more measured adherents of the supply-side creed, but this is a bit like being Santa’s tallest elf. In 1999, he notoriously co-authored Dow 36,000, a book arguing, via his own idiosyncratic calculations, that the stock market’s true value was massively higher than anybody forecast. (More than 20 years later, it remains well below that level.) Hassett is less kooky than Art Laffer, Lawrence Kudlow, or Stephen Moore, but... pinning your hopes to a Kevin Hassett spreadsheet turns out to be a giant error! Who could have guessed?

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Christopher Eisgruber: To the Princeton Community: The State of the University, and Planning for the Academic Year Ahead ‘We will be dealing with COVID‑19 for months or longer.  This University, like all of America and the world, must proceed accordingly.... Our ability to restart our in-person teaching and research will depend upon whether we can do so in a way that respects public health and safety protocols.... [About] laboratories, libraries, and other facilities... we are optimistic.... We are also optimistic about resuming on‑campus graduate advising and instruction this summer and in the fall.... Undergraduate education presents more vexing questions.... The interpersonal engagement that animates undergraduate life makes social distancing difficult. That is partly because undergraduates live in close proximity to one another, but even more fundamentally because they mix constantly and by design in their academic, extracurricular, and social lives. Many people have pointed out that COVID-19 infections are rarely fatal or even severe in people as young as our undergraduates.... Young people can, however, spread the virus to others.... To bring back our undergraduates, we need to be confident of our ability to mitigate the health risks not only to them, but also to the faculty and staff who instruct and support them, and to the surrounding community. We do not yet know enough about the path of this pandemic, and the medical response to it, to determine whether that is possible.... We are accordingly asking faculty members to begin planning now under the assumption that their classes will be online in the fall. In the event that we are able to resume residential instruction, we will be able to pivot quickly back to the instructional techniques more familiar to all of us—though we should anticipate that even if we can return to on-campus instruction in the fall, University life will be subject to significant restrictions for as long as the pandemic continues…

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Notes from Lockdown (from Project Syndicate)

I. Where We Are & What I Am Doing

As of now, the guess is that one person in 80 in California has or had the coronavirus. We rank 30th among the United States with 40 confirmed (and probably 60 true) coronavirus deaths per million. I am trying not to catch the disease, so that I do not then become one of those who spread it. I am going for long (isolated) walks in the hills of Berkeley and Oakland. I am watching lots of old movies. I am trying to let the orange-haired baboon who is President Trump live rent-free in my brain only between 8:00-8:15 PM, and spend only 8:15-9:00 PM thinking about coronavirus. And otherwise I am trying to play my position.


II. I Am, Right Now, for Relaxation...

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Note to Self: Heterogeneity in the S, I, R Model...

So instead of doing my day job this afternoon, I began wondering about how much the Susceptible, Infected, Recovered (or Not)'s suppression of individual heterogeneity affects its conclusions.

Suppose that people have different amounts of gregariousness/infectiveness. If everyone were like the most gregarious and vulnerable people the R_0 for the epidemic would be 5. If everyone were like the least gregarious and vulnerable people the R_0 for the epidemic would be 0. And suppose we have the population varying linearly between those extremes.

How much different would the course of the epidemic be than for a society where everyone was identical, and R_0 was 2.5?

The answer is: substantially.

If I have not made a mistake in my model-building or my python code—always an "if"—then the difference is substantial: 26% of the population escapes the epidemic for R_0 distributed between 0 and 5 with an average of 2.5. Only 10% escapes the epidemic if everyone's R_0 is 2.5.

The intuition is clear: By the time half of the population has been infected, an overwhelming number of those with high R_0's have been infected. Thus those who are still susceptible have personal R_0's much lower than the average. In the early stages, however—before any noticeable component of the population has been infected—the course of the epidemic tracks the average R_0 very closely. It is when it begins to fall off the exponential that the differences become apparent: not only are some of those who would be infected by exponential growth now immune (or dead), but those left who could be infected have lower R_0's than the average.

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Worthy Reads for May 2, 2019

  1. There are lots and lots of business practices that could and should be ruled illegal restrains on trade: Colleen Cunningham, Florian Ederer, and Song Ma: Killer Acquisitions: "This paper argues incumbent firms may acquire innovative targets solely to discontinue the target’s innovation projects and preempt future competition. We call such acquisitions “killer acquisitions.” We develop a parsimonious model illustrating this phenomenon. Using pharmaceutical industry data, we show that acquired drug projects are less likely to be developed when they overlap with the acquirer’s existing product portfolio, especially when the acquirer’s market power is large due to weak competition or distant patent expiration. Conservative estimates indicate about 6% of acquisitions in our sample are killer acquisitions. These acquisitions disproportionately occur just below thresholds for antitrust scrutiny...

  2. William Darity Jr., Darrick Hamilton, Mark Paul, Alan Aja, Anne Price, Antonio Moore, and Caterina Chiopris: What We Get Wrong About Closing the Racial Wealth Gap: "The white household living near the poverty line typically has about 18,000 in wealth, while black households in similar economic straits typically have a median wealth near zero.... The 99th percentile black family is worth a mere $1,574,000 while the 99th percentile white family is worth over 12 million dollars. This means over 870,000 white families have a net worth above 12 million dollars, while, out of the 20 million black families in America, fewer than 380,000 are even worth a single million dollars.... We... contend that a number of ideas frequently touted as 'solutions' will not make headway in reducing black-white wealth disparities... are wholly inadequate to bridge the racial chasm in wealth...

  3. An event coming on May 16: Preparing for the next recession is perhaps the most productive and urgent policy-analysis task op[en today: Equitable Growth: Preparing for the Next Recession: Policies to Reduce the Impact on the U.S. Economy - : "A Hamilton Project and Washington Center for Equitable Growth Policy Forum.... Historically, the U.S. has responded to recent recessions with a mix of monetary policy action and discretionary fiscal stimulus. However, since monetary policy options may be limited during the next recession, policymakers should consider adopting a range of fiscal policy measures now to help stabilize the economy when a future downturn inevitably occurs. This can be achieved with a range of fiscal policy responses aimed at expediting the next recovery through strengthening job creation and restoring confidence to businesses and households...

  4. In the real world, sometimes threats need to be exercised to move price, and sometimes they don't. I have high hopes that we will learn a lot about this from Antoine Arnoud's forthcoming dissertation: Equitable Growth: Automation Threat and Wage Bargaining: "One doctoral grant will support research on how economic inequality affects the quantity and quality of innovation, and whether technological innovations, in turn, impact inequality: Antoine Arnoud (Ph.D. candidate, Yale University) proposes to study a novel mechanism through which automation in the labor market might have an impact on wages through the threat, rather than the actuality, of automation...

  5. Greatly looking forward to what comes out of this: Equitable Growth: Equitable Growth Announces 2018 Class of Grantees: The impact of Antitrust on Competition: "Fiona Scott Morton (Yale University School of Management) will collect empirical metrics of antitrust enforcement outcomes to create a novel dataset, which she will use to analyze merger effects beyond prices such as employment, and to determine whether mergers in the high-tech sector are motivated by increased efficiencies or by the elimination of competitors...

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What Did I Think About Coronavirus When?

I Am Aware of Coronavirus in Early February

The first time I can find myself speaking publicly about the coronavirus outbreak came on February 3, 2020, in the introductory lead-in to my twentieth century economic history lecture. I then said, roughly:

The next six to nine months are likely to be quite unpleasant for the world

Globally, the public health authorities are still hoping to keep deaths at much, much less than 30 million dead worldwide. This will be accomplished largely by slowing down international travel, and interregional travel in China, for a great deal of time. The National Institutes of Health and other research organizations need to figure out what this sucker is and how to train all of our immune systems up to deal with it. Border control authorities will have to pull people with symptoms aside and quarantine them until they conclude that they do not have it.

This is a new age.

In some ways, however, this new age is like a very old age.

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Worthy Reads for April 25, 2019

Worthy Reads at Equitable Growth:

  1. Go back and read Alyssa Fisher on the problem generated by underfunding the IRS: Alyssa Fisher: Greater IRS Funding Can Help Ensure the Wealthy Pay the Taxes They Owe: "The majority of underreported income and underpaid taxes... occurs among the top decile.... What the IRS is doing about underpayment... is less and less.... Since 2010, congressional majorities... underfund[ed] the IRS... pressured the agency to devote greater attention and resources to some of the nation’s lowest-income working families—those who claim the Earned Income Tax Credit...

  2. Two years ago we published Owen Zidar's excellent piece on how the only tax cuts that boost aggregate demand are rate cuts for lower-income Americans: Owen Zidar: Tax cuts for Whom? Heterogeneous Effects of Income Tax Changes on Growth and Employment: "How tax changes for different income groups affect aggregate economic activity... a measure of who received (or paid for) tax changes in the postwar period using tax return data from NBER’s TAXSIM... by income group and state. Variation in the income distribution across U.S. states and federal tax changes generate variation in regional tax shocks that I exploit to test for heterogeneous effects. I find that the positive relationship between tax cuts and employment growth is largely driven by tax cuts for lower-income groups, and that the effect of tax cuts for the top 10% on employment growth is small...

  3. A shout-out to Equitable Growth network member Eileen Applebaum, holding down the fort at CEPR. Read her stuff—especially her stuff here at Equitable Growth!: Eileen Appelbaum: "Co-Director at the Center for Economic and Policy Research and Visiting Professor in the Department of Management at the University of Leicester, UK. She has 20 years of experience carrying out empirical research on the effects of public policies and company practices on outcomes for companies and workers. She studies work processes and work-life practices of organizations and their implications for organizational effectiveness...

  4. Ian Malcolm: "Fall List Preview #5: Heather Boushey's Unbound. One of Washington's most influential voices on economic policy shows how reducing inequality can stimulate growth. HB also explains a quiet revolution for the better in the dismal science...

  5. Friend of Equitable Growth Josh Bevins correctly calls out as "remarkably stupid, even relative to my expectations baseline" a piece by Trump Federal Reserve nominee Herman Cain. The 1980s and 1990s simply did not see a "stable dollar" in any sense those words might ever possibly mean: Herman Cain: The Fed and the Professor Standard: "The 1980s and 1990s brought prosperity across the board. This success was driven by a voting bloc of Fed governors, such as Wayne Angell and Manley Johnson, who favored a stable dollar and were able to swing the consensus. The dollar is a unit of measure—like the foot or the ounce—and keeping units of measure stable is critical to the functioning of a complex economy. The result of their stable-dollar policy was prosperity...

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The Hoover Institute's Richard Epstein Is an Intellectual Fraudster, Pure and Simple...

Clowns (ICP)

A good liar needs to have a good memory. Richard Epstein has a bad memory. Richard Epstein is a bad liar

On Mar 16 he forecast that the U.S. would see about 500 deaths from coronavirus.

He then on Mar 23 wrote that that 500 estimate was low, and that he now had a revised forecast of 2,500.

Today the March 16 article—still datestamped March 16—has been silently changed. Why? To make it appear that on Mar 16 he forecast not 500, and not 2500, but 5000 U.S. deaths.

Today the Mar 16 article contains a "Correction & Addendum as of March 24"—the datestamp Mar 24 of which is false—that states that he had intended on Mar 16 to forecast 50,000 U.S. deaths: "my original erroneous estimate of 5,000 dead in the US is a number ten times smaller than I intended to state..."

The Mar 24 datestamp is false because the "Correction & Addendum as of March 24" has itself been silently revised: the "Correction & Addendum as of March 24" originally read: "That estimate is ten times greater than the 500 number I erroneously put in the initial draft of the essay...

Could this be funnier?

Confused? Epstein is now claiming that he originally intended on Mar 16 to forecast 50,000 U.S. dead but "erroneously" put 5,000 in his "initial draft".

  • In actual fact, his original Mar 16 forecast was 500.

  • In actual fact, on Mar 23 Epstein stated that his initial calculations had been in error, and that a better forecast was "2000-2500".

  • In actual fact, on Mar 24, Epstein added his "Correction & Addendum" raising his better forecast to 5,000, and acknowledging that that 5,000 forecast was a tenfold increase over his initial 500 forecast.

  • In actual fact, sometime between Mar 24 and today, Apr 21, Epstein silently revised his Mar 16 article—keeping the Mar 16 datestamp—so that it falsely appears that its forecast was not 500 but 5000.

  • In actual fact, sometime between Mar 24 and today, Apr 21, Epstein silently revised his Mar 24 "Correction & Addendum" to his Mar 16 article so that it now falsely claims that his original estimate was not 500 but 5000.

  • In actual fact, sometime between Mar 24 and today, Apr 21, Epstein silently revised his Mar 24 "Correction & Addendum" to his Mar 16 article to add the—previously never made, and so I conclude entirely false—claim that he on Mar 16 had "intended" to forecast 50,000 U.S. deaths from coronavirus.

I am with Paul Campos here: This is intellectual fraud, pure and simple.

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Note to Self: Francois Velde on Economic Effects of Spanish Flu: European Macro History Online Seminar

Note to Self: "European Macro History Online Seminar: session 1" will begin in 1 hour on: Date Time: Apr 21, 2020 04:00 PM Paris: Francois Velde on economic effects of Spanish Flu:


Employment in the Spanish Flu


The Early Amazon Effect: Mail-Order Retail in the Spanish Flu

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Note to Self: Why Do We Know So Little About Coronavirus?

Note to Self: If the mortality rate on true cases is 1% and if it takes two weeks from testing to death then, as the U.S. tested and confirmed cases in March, the U.S. 4/5 of the way through March was catching only one in fifteen cases:

That would suggest that currently something like 10 million people in America have or had the disease, and that some 500,000 a day are getting it.

If the share of deaths among those whom the virus brushes past close enough that they develop at least temporary immunity—which is the number we really wish we knew—is not 1% but 0.3%, than those csae numbers are 30 million, and 1.5 million a day...

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The United States Has Been Treading Water on Coronavirus since Early April

Other countries have managed to get R[0] well below 1—have begun substantially shrinking the daily number of new cases.

The United States has not:

Our current level of social distancing and lockdown appears to be producing about 30,000 new confirmed cases a day. We are no longer—and have not for two weeks been—ramping up and utilitizing our testing capabilities. On our current trajectory we look to be incurring about 2000 reported coronavirus deaths a day.


Our medical system is handling the current run of cases. But it would be nice to get the number of cases down and the number of tests up so that we could begin implementing test-and-trace. But that requires a lot more tests—which are not there. And that required more effective social distancing to get R[0] substantially below one—which is not there, certainly not at a nationwide level.

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Comment of the Day: Phil Koop ' Adjusting for lag presumably requires both a model and longitudinal data to input to the model. So the starting point is with cross-sectional random samples. If we guess the true rate of infections is about 3%, then we need a test with very good specificity. An RNA test, even if had 100% specificity, could only tell us about current infections, not cumulative infections. A serologic test can tell us about cumulative infections as of 2-3 weeks ago, provided it has good enough specificity. There is a list of serologic tests here: Some of these are claimed to have 100% specificity, but of those, none are yet approved for use in the US. Of the tests approved for use in the US, the only one with a listed specificity is 95.6% (a suspiciously precise number, given it was tested in "a total of 128 COVID19 positive patients, and 250 COVID19 negative patients (as detected by RT-qPCR).") 95.6%, even if correct, would not be nearly good enough. I think that whatever is right is going to have to start with a good-enough test....

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Comment of the Day: Ronald Brakels 'It's 11:00 pm in Washington DC on the 10th of April. Australia's COVID-19 death toll is 54. The United State's is 18,747. The US has 13 times Australia's population, so the per capita death toll in the US is 27 times higher. Both countries had similar time to prepare. At current rates, the US death toll will end up hundreds of times higher on a per capita basis...

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Comment of the Day: Moving into life in an Isaac Asimov novel of the 1950s: Dilbert Dogbert 'Nice that NZ has a plan. I have a plan. For the rest of my life I will be in isolation, partial. Wear a mask and gloves when going anywhere there are people not family. I am not sure I will change behavior even if a vaccine and/or a drug becomes available. We, the wife and I, are lucky as we have lived in partial isolation for 11 years after moving from Palo Alto to the outer fringes of the Gamma Quadrant. Our risks will be medical appointments, grocery shopping and obtaining needed hardware supplies. Most of our other shopping is via the internet. I am a semi-isolate naturally even though I like people. The wife does her group clubs over the internet. I have a shop and she has a garden. Lucky to have the resources to keep horses that allow us to get out and about in isolation. Damn Lucky!...

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What is the Real Prevalence of Coronavirus Across States?


Tests per million times cases per test gives you confirmed cases per million. But we want true cases per million.

Tests per million are different across states because (a) the states are undertaking testing with different levels of effort and (b) the prevalence of the virus is different in different states.

Confirmed cases per million are different across states because (c) states are testing at different rates and (b) the prevalence of the virus is different in different states.

Cases per test are different across states because (d) some states are not testing much and hence are still picking (relatively, for their state) low hanging fruit and (b) the prevalence of the virus is different in different states.

We have data on confirmed cases and tests across states. How do we use that to get real as opposed to fake estimates of where the virus is in the different states?

And then there is the lag: how do we do the nowcast, taking proper account of acceleration and deceleration in the progress of the disease?

Georgia, for example, is fifth in cases per test, at 0.24. Georgia is also fortysixth in tests per million, at 6598. And so Georgia is thirteenth in cases per million, at 1590.

If Georgia were testing at the same rate as New York—30000 per million—how many cases would it be reporting, and what would its confirmed caseload be? Its cases per test is presumably elevated because it is not testing very many people, so simply multiplying by 4.5 is not right. What is right?

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Comment of the Day: Meno: New Zealand has a plan 'New Zealand has an articulate plan for the next year. And we see this as a marathon, not a sprint. We started a month ago with 4 defined levels of social distancing response. We are now up at level 4 (everyone stays home). As the virus is eradicated we will step down to 3, 2, 1. Or back up if needed. Regions could end up on different levels, but probably not as roadblocks and checkpoints are difficult. Our testing rates will not go down as social distancing ends. The aim is zero cases a day, with border quarantine and strong testing levels finding zero cases, with contact tracing set up as a backstop. “Have your staff work from home if practical” comes in early at level 2: my partners and I own a NZ IT firm so we expect our staff will wrk from home for another 2 or 3 months, while schools and etc will open earlier and so will construction work, factories, shops. The govt will not guarantee timing, there are many unknowns, and our tourism industry is totally screwed: but the govt are doing their best to help businesses plan for the upcoming year. You could still do that. Stop just reacting, start planning...

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Note to Self: We could be New Zealand. We should be New Zealand: New Zealand has tested 1 in a 100 people, has a 2% positive rate, and has suffered only 0.8 deaths per million so far...

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Weekend Reading: Plutarch: Life of Cleomenes

Plutarch: Life of Cleomenes*.html: 'As long, then, he said, as the ephors kept within bounds, it had been better to bear with them; but when with their assumed power they subverted the ancient form of government to such an extent as to drive away some kings, put others to death without a trial, and threaten such as desired to behold again in Sparta her fairest and most divinely appointed constitution, it was not to be endured...

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Worthy Reads for April 11, 2019

stacks and stacks of books

Worthy Reads from Equitable Growth:

  1. Best thing of the week—a must-see: an incredibly engaging interview with Columbia's Alexander Hertel-Fernandez: Worker and Management Preferences for Specific Aspects of Labor Organization...

  2. The Quarterly Journal of Economics puts its stamp of approval on Cengiz, Dube, Linder, and Zipperer. This makes me even more surprised that the minimum-wage effects wars are till going on. At least for minimum wages near current U.S. levels, there literally is no downside to raising the minimum wage: Arindrajit Dube: On Twitter: "Pleased to announce that our paper quantifying the overall effect of US minimum wages on low-wage jobs is now forthcoming at the Quarterly Journal of Economics...

  3. I confess I do not understand why Jeff Miron and Dean Baker disagree with our Fearless Leader Heather Boushey's tame observation that more informaiton relevant to societal well-being is better than less: Emily Stewart: GDP: Democrats Want to Know Who’s Benefiting from the Economy’s Growth: "Democrats are pushing for is for the BEA to produce a new metric, the 'income growth indicator', to be reported quarterly and annually with GDP numbers starting in 2020 that would show who is and isn’t benefiting from economic growth...

  4. Methinks this oldie-but-very-goodie from Jesse Rothstein does go a little bit too far in its enthusiasm for the fact that the EITC is in the tax code. In fact, there are pluses and minuses. And the EITC is in the tax code not because of rational reasons but because Senator Russell Long chaired the Senate Finance committee back in the day: Jesse Rothstein (2015): The Earned Income Tax Credit: "The Earned Income Tax Credit is a federal refundable tax credit designed to encourage work, offset federal payroll and income taxes, and raise living standards.... The EITC has grown to be one of the largest and least controversial elements of the U.S. welfare state, with 26.7 million recipients sharing $63 billion in total federal EITC expenditures in 2013. The placement of the EITC within the tax code has three important effects...

  5. Equitable Growth alumnus Nick Bunker sends us to the always-valuable Brookings Hamilton Project on how the post-2000 prime-age female labor-force participation define was not due to anything other than a weak economy in which it was hard to get well-paying jobs: Trends in Women’s Labor Force Participation: "much like 2000 is now recognized as a pivotal year for the U.S. labor market, 2015 is beginning to look like another turning point. In part due to the ongoing strengthening of the labor market, both prime-age women’s labor force participation and prime-age men’s participation have increased sharply from 2015 through the beginning of 2019. Figure 1 shows that prime-age women now participate at higher levels than prior to the Great Recession and have now made up 70 percent of their January 2000–September 2015 decline...

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Lecture Notes: East Asian Miracles

4149 words:

East Asia was on the downside of the Malthusian cycle when western Europe erupted into the eastern Pacific in the 1800s: populous, with many ingenious and efficient non-machine technologies for squeezing output out of very limited resources, but desperately poor. “The West” brought machine technologies and the global market. It also brought a measure of contempt for east Asia. Nearly all western observers thought the idea that the Mysterious East might catch up to the north Atlantic in any reasonable historical timeframe was absolutely ludicrous.

Malthusian poverty meant no domestic middle-class to demand domestic manufactures, and productivity levels in Asia were hopeless as far as manufactured exports were concerned. The military and political power gradient vis-à-vis the north Atlantic meant no ability to impose tariffs, even had a domestic middle class on whose demand one might be able to build a community of engineering practice and progress existed. The lack of a powerful domestic bourgeoisie meant rule by princes for whom broad-based economic growth was simply not a priority. And in general a “Confucian” religious orientation meant that right moral attitude was more important than the rationalization of techniques and methods.

As Melissa Dale says: If we were sitting here in the 1950s, we would not have predicted anything like east Asia’s miracles.

Yet we have had four: first the early industrialization of Japan, then the extraordinary drive of Japan to global north status from 1950 to 1975, then the four east Asian tigers, and now coastal China.

All that surprises...

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Ludwig Wittgenstein: Wittgenstein's Ladder 'My propositions serve as elucidations in the following way: anyone who understands me eventually recognizes them as nonsensical, when he has used them—as steps—to climb beyond them. (He must, so to speak, throw away the ladder after he has climbed up it.) He must transcend these propositions, and then he will see the world aright...

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The Pattern of Normal Politics, 1870-1914: An Outtake from "Slouching Towards Utopia?: An Economic History of the Long 20th Century, 1870-2016"

Il Quarto Stato

Left-wing avowedly socialist—parties in pre-World War I Europe wanted, for the present, only weak tea. The Socialist Party of Germany’s Erfurt and Gotha programs seek things like: universal male and female suffrage; the secret ballot, proportional representation and an end to gerrymandering; annual government budgets; elected local administrators and judges; the right to bear arms; free public schools and colleges; free legal assistance; abolition of the death penalty; free medical care including midwifery; public burial insurance; progressive income and property taxes; a progressive inheritance tax; a 36-hour minimum weekend; an occupational safety and health administration; equal status for domestic and agricultural workers; and a national takeover of unemployment and disability insurance “with decisive participation by the workers in its administration”. Rather white bread, no? Even their declared intention that:

the German Social Democratic Party… fights… every manner of exploitation and oppression, whether directed against a class, party, sex, or race...

would raise few eyebrows today, in western Europe at least.

But there was also:

  • “By every lawful means to bring about a free state and a socialistic society, to effect the destruction of the iron law of wages by doing away with the system of wage labor…”
  • “The transformation of the capitalist private ownership of the means of production—land and soil, pits and mines, raw materials, tools, machines, means of transportation—into social property and the transformation of the production of goods into socialist production carried on by and for society…”
  • “This… emancipation… [is] of the entire human race…. But it can only be the work of the working class, because all other classes… have as their common goal the preservation of the foundations of contemporary society…”

There was a tension here.

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Lecture Notes: The Rise of Socialism, -350 to 1917

Let us talk about the rise of socialism, as background to the rise of really existing socialism—the system that lived behind what Winston Churchill called the Iron Curtain from 1917-1991, that shook the world, and that in the end turned out to be far, far, far from the brightest light on the tree of humanity’s good ideas.

Let us very briefly race through history—moral, intellectual, political, and social—from the year -350 to the year 1917, when Lenin and his Bolshevik Communist Party staged their coup in Russia.

There was a profound shift from the belief in “divine right” and “natural order” as the fundamental grounding for an unequal society to enlightenment values—that human institutions should be rationally designed on the basis of a rational understanding of human psychology in order to attain the greatest good of the greatest number, and thus that inequality is not given by the gods or by the requirements of nature, but rather is a thing to be allowed to the extent that it incentivizes cooperation and industry and thus enriches us all.

Back in the century of the -300s, Aristotle had taken it for granted that a good society was only possible if the society allowed for philosophy. And philosophy was only possible if you had a leisured upper class. And a leisured upper class was possible only with large scale-unfree labor—serfdom, or its harsher cousin slavery. Thus it was and thus it would always, be unless and until humans obtained the fantasy technologies of the mythical Golden Age...

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