BRIEFLY NOTED: For 2024-05-07 Tu
Curbing intergenerational poverty cycles; the extended internet universe today; very briefly noted; Janeway on Kurz on techno-monopoly; journamalism: is there any value here other than that Klippenstein does not like McRaven?; journamalism: Kaus says laws should protect but not bind Trump; & READING: John Lukacs on Nationalism vs. Patriotism; [U.S.] Federal Debt: Frog in the Pot?; & BRIEFLY NOTED: For 2024-05-04 Sa…
Brookings: Reducing Intergenerational Poverty:
ONE IMAGE: The Extended Internet Universe:
Very Briefly Noted:
Economics: Tim Duy: Fed Watch, 5/6/24: ‘Rate cuts are still about the inflation story…. The Fed needs a string of low inflation to regain its confidence…. We don’t think the Fed is actively considering a July move…. We set a baseline of a December cut. We think it more likely that a cut gets pushed from December into next year rather than pulled forward to September, but that call hinges heavily on the outcomes for shelter inflation. If shelter inflation falls as the Fed anticipates, and there is no substantial upward inflection of new rents to lead the Fed to be cautious about the durability of low shelter inflation, then risks will shift toward a September cut…
Dale W. Jorgenson & Koji Nomura (2007): The Industry Origins of the US – Japan Productivity Gap: ‘This paper presents a comparison of total factor productivity (TFP) levels between the US and Japan for the period 1960–2004 and allocates the gap to individual industries…. We also measure industry-level PPPs for capital, labor, energy, and materials inputs and output for 42 industries common to the US and Japan, based on detailed estimates for 164 commodities, 33 assets, including land and inventories, and 1596 labor categories. The US–Japan productivity gap shrank during three decades of rapid Japanese economic growth, 1960–1990. The Japanese manufacturing sector achieved parity with its US counterpart by the end of the period. With the collapse of the Japanese economic bubble at the end of the 1980s, the US–Japan productivity gap reversed course and expanded to 79.5% by 2004. This can be attributed to rapid productivity growth in the IT-producing industries in the US during the late 1990s and the sharp acceleration of productivity growth in the IT-using industries in the US during 2000–2004. Wholesale and Retail Trade emerged as the largest contributor to this gap, accounting for 25.1% of the lower TFP of the Japanese economy… <https://scholar.harvard.edu/files/jorgenson/files/industryoriginsus_japanproductivitygap_economicsystemsresearch.pdf>
Economic History: David Fiderer: Fragile By Design: A Review: ‘The book’s central argument is that the proximate cause of the financial collapse was the risky lending mandated by Community Reinvestment Act (CRA) and by affordable housing goals set for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. This familiar narrative, identified as “The Big Lie” by Joe Nocera, Barry Ritholtz, and others, is still deemed valid by a lot of people who should know better…. Calomiris and Haber embrace The Big Lie, and double down by tracing everything to Bill Clinton’s grand strategy of income redistribution as a response to economic inequality or as a sop to community activists at ACORN…. The GSE loans… [they claim] “required only a 3% down payment, no documentation of income or employment, and a far from perfect credit score”… [and] changed “the risk calculus of millions of American families.” There is zero evidence… [these] loans… ever existed. From 2001 through 2006, GSE originations that had loan-to-value (LTV) ratios of 95 percent or higher and FICO scores of 639 or lower represented between 1 and 2 percent of total originations…. Homes financed by the GSEs never experienced the steep rise, or drop, in prices that was measured by the Case-Shiller composite…. The amount of low-down-payment loans available in the marketplace was never decided by the GSEs. It was decided by private mortgage insurers, which were not regulated by the federal government… <https://ritholtz.com/2014/11/fragile-by-design/>
Gillian Brunet: ‘I am so thrilled that my JMP found its home, and grateful to the editor and referees for a review process that helped me make the paper better: REStat: “Just Accepted new paper, ‘Stimulus on the Home Front: The State-Level Effects of WWII Spending’ by Gillian Brunet… <https://direct.mit.edu/rest/article-abstract/doi/10.1162/rest_a_01432/120188/Stimulus-on-the-Home-Front-The-State-Level-Effects?redirectedFrom=fulltext><https://twitter.com/gillian_brunet/status/1787867220502003975>
Central Country: Peter Berezin: ‘Chinese home prices are dropping faster than in Japan after its own bubble burst… <https://twitter.com/PeterBerezinBCA/status/1787134440814039256>
YIMBYism: Justin Fox: America Wasn’t Made for Walking, and It’s Killing Us:
‘Outside of a few big cities, it’s hard to put in 10,000 steps a day in the US, and the pandemic seems to have made things worse…. A key metric… was… “activity inequality.”… Some people will exercise a lot no matter where they are, but places where even those at the low end of the walking scale get in a respectable number of steps are likely to have better health outcomes. The US had the fifth-highest activity inequality among 46 countries for which this was measured, behind only Saudi Arabia, Australia, Canada and Egypt (Hong Kong’s was lowest). Among US cities… activity inequality was highest in Arlington, Texas; Tucson, Arizona; Fort Worth, Texas; Virginia Beach, Virginia; and Cleveland; it was lowest in New York, Boston, Jersey City, Washington and San Francisco… <https://www.bloomberg.com/opinion/articles/2024-05-05/america-wasn-t-made-for-walking-and-it-s-killing-us>
MAMLMs: Steve Troughton-Smith: ‘Showing the M4 chip so early gives Apple a rare opportunity to show off high-end iOS 18 AI features at WWDC that might otherwise have relied on the new SoCs in September’s iPhones… <https://mastodon.social/@stroughtonsmith/112400750518287236>
Alon Halevy, Peter Norvig, & Fernando Pereira (2009): The Unreasonable Effectiveness of Data: ‘Eugene Wigner’s… “The Unreasonable Effectiveness of Mathematics in the Natural Sciences” examines why so much of physics can be neatly explained with simple mathematical formulas…. Meanwhile, sciences that involve human beings rather than elementary particles have proven more resistant to elegant mathematics. Economists suffer from physics envy…. An informal, incomplete grammar of the English language runs over 1,700 pages…. We should stop acting as if our goal is to author extremely elegant theories, and instead embrace complexity and make use of the best ally we have: the unreasonable effectiveness of data…. A trillion-word corpus—along with other Web-derived corpora of millions, billions, or trillions of links, videos, images, tables, and user interactions—captures even very rare aspects of human behavior. So, this corpus could serve as the basis of a complete model for certain tasks—if only we knew how to extract the model from the data…. The first lesson of Web-scale learning is to use available large-scale data rather than hoping for annotated data that isn’t available…. For those with experience in smallscale machine learning who are worried about the curse of dimensionality and overfitting of models to data, note that all the experimental evidence from the last decade suggests that throwing away rare events is almost always a bad idea, because much Web data consists of individually rare but collectively frequent events. For many tasks, words and word combinations provide all the representational machinery we need to learn from text. Human language has evolved over millennia to have words for the important concepts; let’s use them. Abstract representations (such as clusters from latent analysis) that lack linguistic counterparts are hard to learn or validate and tend to lose information. Relying on overt statistics of words and word co-occurrences has the further advantage that we can estimate models in an amount of time proportional to available data and can often parallelize them easily. So, learning from the Web becomes naturally scalable… <https://static.googleusercontent.com/media/research.google.com/en//pubs/archive/35179.pdf>
Public Reason: Matthew Yglesias: How to make a difference in the 2024 election: ‘Giving money intelligently and posting mindfully…. Money is more valuable down-ballot…. Jared Golden… Yadira Caraveo… Don Davis… Gabe Vasquez… Adam Gray… Curtis Hertel Jr… Kristen McDonald Rivet…r Janelle Bynum to win the primary…. A Biden-Harris lawn sign, bumper sticker, t-shirt…. My sense is that there is a large-ish cohort of non-conservative people under forty who will, in fact, probably vote for Biden but who operate in a social circle where saying anything positive about him is cringe…. Create social license for people who do not like Trump, do not want abortion to be banned, do not want to see sweeping Medicaid cuts, and do not think a 10 percent tax on all imports will fight inflation to actually say this to their peers…. Biden’s best issues are abortion rights and prescription drug pricing (especially the insulin thing) and, more broadly, health care…. If you are arguing about the election… drag the conversation back to your personal interest in the stakes related to abortion rights, prescription drugs, and, more broadly, health care… <https://www.slowboring.com/p/how-to-make-a-difference-in-the-2024>
Science Fiction: John Scalzi: The Aesthetics of Spectacle: A Look at Dune in 1984 and 2024: ‘It would be an error to suggest that what Villeneuve is doing in his Dune films is less stylized than what Lynch is doing in his—for example, in his absolutely monochromatic-yet-still-gonzo portrayal of Geidi Prime, home of the Harkonnens—but what is accurate to say is that the current state of cinematic technology lets Villeneuve choose his stylistic battles with more precision, and with a wider set of options. He gets to make his spaceships and spice miners and worms look less obviously stylized, which buys him highly stylized choices elsewhere… <https://www.uncannymagazine.com/article/scalzi-on-film-the-aesthetics-of-spectacle-a-look-at-dune-in-1984-and-2024/>
SubStack NOTES:
Economics: In every increasing returns to scale economy some factors of production must be paid less than their marginal products: there is simply not enough money and product to go round. Factors of production that are rival can usually get the government to help their “owners” take care of themselves, as it is soon clear whose use of a factor is elbowing others out of the way. Rivalry in production is thus soon followed by effective excludability as long as the government can learn your address. Non-rival factors have a much harder time. Hence the likelihood of massive underinvestment in them. And the likelihood that what investment is made in and around non-rival factors of production will gravitate toward not boosting productivity but toward creating monopoly market power. This is, I believe, an insoluble problem for a market economy:
Bill Janeway: ‘[Mordecai] Kurz challenges the view that any monopoly based on technology will be necessarily transient, subject to the Schumpeterian process of “creative destruction.” Once market power becomes entrenched, he argues, targeted state interventions become the only means of restoring meaningful competition. Accordingly, Kurz proposes a radical program of reforms to disestablish market power where it exists and minimize the risk of its recurrence…. Investing in innovation means investing in the unknown… technology risk (“When you plug it in, does it light up?”)… market risk (“If it lights up, will anyone care?”). What would motivate a firm to undertake such investments? The prospect of monopoly profits, of course…. In Kurz’s analysis… the crucial insight is that innovation relies on the permanent availability of market power as the needed incentive for investing in R&D in the first place…. The implication is that the state should establish a strict limit on the share of the national R&D stock that any one firm can own… [plus pruning back] competition-destroying “patent thickets” and acquisitions by market leaders of potential competitors…. To say that Kurz’s proposals are currently unrealistic may be missing the point. Such radicalism underscores the power of the techno-economic engine that it analyzes and attacks. Making that power a topic of public debate is the first step toward shifting the Overton window of acceptable government policies and letting in some fresh ai: Mordecai Kurz, The Market Power of Technology: Understanding the Second Gilded Age, Columbia University Press, 2023… <https://www.project-syndicate.org/onpoint/us-big-tech-monopolies-market-power-from-key-innovations-by-william-h-janeway-2024-04>
Journamalism: Someone who does not necessarily wish me well sends me a link to an ex-Intercept reporter, Ken Klippenstein.
He is doing what appears to be a version of the Bari Weiss flounce to SubStack.
The context? It appears that Amazon centibillionaire mogul Jeff Bezos is writing checks and diverting $100 million that would otherwise be spent on investment and on upper- and upper-middle-class consumption. Instead, as a result of his checks:
$50 million will be spent on educational programs, scholarships, mentorship, and entrepreneurship opportunities, particularly to Latinas, channeled though Eva Longoria’s Eva Longoria Foundation.
$25 million will be spent on the Special Operations Warrior Foundation, which supports the families of fallen service members, channeled via William McRaven.
$25 million will be spent on the BrainHealth Project, which provides mental health resources to veterans, also via William McRaven.
These are part of Bezos’s overarching “Courage and Civility” plan to boost the social power of and fund causes found worthy by people who “aim high, pursue solutions with courage, and always do so with civility…”
Now comes Ken Klippenstein with a story on this that erases half the lead entirely: the Latina-focused programs boosted by Longoria are not in Klippenstein’s field of vision at all. And the other half of the lead? It is buried in ¶22—that is when we learn that Bezos is not, in fact, making McRaven a multimillionaire, but where the McRaven-channeled money is in fact going.
Apparently some people at the Intercept were not 100% happy with Klippenstein’s lead-erasure take. Not, mind you, that he was in any sense “canceled”, but that he was nearly canceled: “the Intercept… attempt[ed] to kill [my] story…”
Now what is really going on here?
I can see four important questions that could and should be addressed by four different important, informative, and critical stories about this. They are, in order:
Is shifting $100 million from investment and on upper- and upper-middle-class consumption to the causes of the Eva Longoria Foundation, the Special Operations Warrior Foundation, and the BrainHealth Project, a good thing to do, and how good a thing to do is it?
What are the other, better things one might do with the money? It sucks that we are not doing those things.
Why aren’t the truly worthy parts of these causes already amply funded by our democratically elected government? It really sucks that these get done only when a Bezos-figure funds them.
What do we think of our system in which funding decisions like these are made by a single guy like and in the position of Jeff Bezos? That really sucks—they should be made in much better ways.
But Klippenstein is not interested in writing any of those four stories.
What Klippenstein wants to write about is:
How he is resigning from an Intercept that has been “taken over by suits… I can’t continue… where fear of funders is more important than journalism itself…”
How writes “without fear of billionaires, wealth or Wall Street… being a thorn in the side of our self-appointed betters…”
How “I knew I had to do a story on this…” because “Bezos’s grant, totaling an eye watering $100 million, was the exact same sum the Bezos-owned Washington Post had lost last year amid punishing layoffs…”
How the “Intercept… attempt[ed] to kill [my] story… to avoid comparisons to their own billionaire benefactor…. I’m frankly shocked that The Intercept’s general counsel… tried to kill such a straightforward story… obviously in The Intercept’s wheelhouse… a layup…. You have to wonder what kind of chances a genuinely edgy story stands of going to print—at a website that bills itself as ‘fearless’ and ‘adversarial’, no less…”
“The racket… [is] a billionaire pays a famous admiral, to pay charities… he is connected with… to pay disabled veterans… victims of the failures of the national security elite…. It is a modern trickle-down parable… leav[ing] the worst off with a shiny consolation prize for sacrificing life and limb…. National security-obsessed, veteran-loving, cowboy-hat-adorned Bezos has become the ultimate commander in chief of the national security elite, an ersatz Mr. Magoo with a trillion-dollar business that actually tears at the seams of America’s mottled social fabric, decimating small businesses that, unlike McRaven, cannot survive on “courage” and “civility” alone. Alongside Bezos, McRaven has formulated a certain conception of civility in which niceties that maintain the status quo emerge as the highest form of service. The destruction of the working class and the injuries sustained in their mad-man wars go unexamined as the admirals hand out Band-Aids. They perpetuate a certain elite consensus with regard to national security, one that drowns out every attempt to impact the societal needs like inequality and climate change which Bezos claims to address. (Bezos evidently doesn’t care that McRaven collects millions from the oil industry)…”
Now, especially with Klippenstein’s point (3), let us be clear:
Klippenstein thinks he “had to do [the] story” because the $100 million going to Latina uplift via the Eva Longoria Foundation, the Special Operations Warrior Foundation, and the BrainHealth Project is equal to the $100 million loss that Bezos ate for the Washington Post last year—that these are, in some sense, the same funding flows, and that Bezos has, in some sense, switched one to the other.
But that is not what is happening here.
You have to feel very, very sorry for the people trying to keep the Intercept going. We can all imagine the conversations:
Look, we get that you must be independent.
Look, we get that independence requires you sometimes bite the hand that feeds you— you have to lean against giving your funding sources and their connections any benefit of the doubt.
But this story: its energy is that the $100 million loss at Bezos’s Washington Post loss is in some sense the same money as the $100 million total of Bezos’s new round of “Courage and Civility” grants.
But this story: its energy is that evil Jeff Bezos is taking $100 million out of the mouths of hard-working Washington Post reporters and used it to make a sexy actress and a sinister national security apparatchik into multimillionaires.
That is the story that Klippenstein works very hard to try to tell.
But does the Intercept have no accountants to teach Klippenstein that when the WaPo loses $100 million, that is not Jeff Bezos grabbing $100 million out of its corporate accounts and depositing them in his personal accounts?
Does the Intercept have no one to teach Klippenstein that the total effect of all these transactions is not that Jeff Bezos netted zero as he simply transferred money from WaPo reporters to the sexy actress and the apparatchik, but rather that Jeff Bezos wrote not $100 million but $200 million in checks?
And why the erasure of the Latina, beneficiaries of the Eva Longoria Foundation?
And what is the reason for the sock-puppet use of the brain-injured and of the surviving families, who show up only in paragraph 22 and are then hustled offstage?
And yet the Intercept published the story.
Given this, what assurances can you give that money spent on the Intercept will in fact deliver important, hard-hitting, accurate journalism?
Let me say that in my experience, people who just want to be a fact- and context-free “ thorn in the side of our self-appointed betters” are not typical of reporters at the Intercept. As a rule: they care, and they care about getting the facts and the context right. Not all Intercept reporters, after all.
Journamalism: Mickey Kaus has come into my timeline for the first time in years, saying that although Trump falsified business records as part of his hiding contributions to his campaign from the FEC, he should not be convicted because… it is not clear… perhaps because he did not have to falsify business records in order to pay off Stormy Daniels?
I suppose we are now down to Mickey Kaus’s bedrock political philosophy here: Donald Trump is a person whom the law should protect, but should not bind. “He could not have committed the thing that was the crime, so he is ‘essentially’ innocent” is a truly galaxy-brain take:
gtconway3: ‘“Yes, much as I hate to do it, I freely admit here that Donald Trump committed felony violations of both federal and state law…”
To be clear: if Trump had just written a check directly to Stormy (the hypothetical presented by the listener), he could have done that legally under FECA if he later disclosed the payment accurately (which of course he never would have done since he was trying to hide it).
IRL, what happened was the money was advanced by Cohen. That made what happened both an illegal contribution (by Cohen over the legal limit) and a disclosure violation (failure to disclose the Cohen illegal contribution and the failure to disclose the reimbursement), which was a crime for which Cohen served federal prison time.And that makes the falsification of business records a felony under New York law… <threads.net/@gtconway3
Julian Sanchez: ‘This seems to be the gist of the emerging consensus line in the defense of Trump: It’s not inherently criminal to pay hush money, and he could have done it in a way that would have been perfectly legal. And he could have. But that’s neither here nor there as to whether what he actually did was legal…
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