Better to be Lucky than Good?

The arXiv paper below looks at stochastic dynamical models that can transform initial (e.g., Gaussian) talent distributions into power law outcomes (e.g., observed wealth distributions in modern societies). While the models themselves may not be entirely realistic, they illustrate the potentially large role of luck relative to ability in real life outcomes. We’re used to …

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Big Tech compensation in 2018

I don’t work in Big Tech so I don’t know whether his numbers are realistic. If they are realistic, then I’d say careers in Big Tech (for someone with the ability to do high level software work) dominate all the other (risk-adjusted) options right now. This includes finance, startups, etc. No wonder the cost of …

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100 Billionaires In Beijing Alone

Real talk from former Australian Prime Minister Paul Keating on the strategic outlook for Australia in Asia, the rise of China, and the likely future military balance of power in the Pacific region. More from the Australian strategic viewpoint. Balance of power in the Western Pacific. From the YouTube transcript: 29:18 [Eventually… Total] Chinese GDP is twice as …

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On developing my dissertation

“What are you researching?” Since starting my PhD program at MSU this fall, I have been asked this question countless times, but it is one to which I have no definite answer yet. Some grad students start their studies by joining an ongoing project, while others begin from scratch and create their own project. I fall …

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A Sinkhole That Is Pulling Us All Down

While most local papers probably did not splash the news on their front page or headline their evening news last week, our largely bought Congress just gave the Military-Industrial-Complex (MIC) a sizable raise in thanks for their contributions and lobbying pursuits. President Trump’s initial budget request for the Pentagon was for a sizable $54 billion increase for the military …

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Robots taking our jobs

The figures below are from the recent paper Robots and Jobs: Evidence from US Labor Markets, by Acemoglu and Restrepo. VoxEU discussion: … Estimates suggest that an extra robot per 1000 workers reduces the employment to population ratio by 0.18-0.34 percentage points and wages by 0.25-0.5%. This effect is distinct from the impacts of imports, …

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Not Capitalism- But What Else?

What follows are excerpts from two books I’ve recently finished. The first I pulled from my own bookshelf long ago purchased at a used book sale, but never read. It was referenced in something I read earlier this year. The book was written in 1969 and I was reading it simultaneously while I was reading …

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Oldies But Goodies

There is probably a built in mechanism in our culture’s brain that the newest ideas and thoughts are better than older ones. Today’s thinkers have the chance to stand on the shoulders of those who came before. I know I’m always looking for fresh new ideas in the books recently published, thus my almost weekly …

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The Rush to Avoid Taxes

We now have less than 30 days to finish up our federal tax forms and get them to the IRS and state capitols. As I noted recently in this blog, “taxes are dues for living in a civilized society”. So why do we all seek every advantage to reduce those taxes? We want deductions for …

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MSU Students Do Microfinance

Several years ago, I found out about Kiva.org, an online “microfinance” site where individuals can make small loans ($25 is the standard increment at Kiva) to entrepreneurs in low income settings. The entrepreneurs actually apply for larger amounts, which they typically receive from third-party “field partners”. The entrepreneurs repay the loans with interest to the …

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Independent Streams (week of January 23)

Our weekly roundup of policy-relevant reads and IPPSR-connected research Problems Betsy DeVos’ Accountability Problem (link is external) IPPSR Affiliate David Arsen comments on charter school organization in light of President Donald Trump’s pro-charter school education secretary nominee Betsy DeVos. Senate Hearing, DeVos Shows Ignorance Central Debate Over How To Measure Schools (link is external) IPPSR …

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Publication – The Economics of a Food Fraud Incident – Case Studies and Examples, Including Melamine in Wheat Gluten

We all know Food Fraud occurs for economic gain, but it is more complex than just “profit margin” or “commodity price swings.” Reviewing the incidents provides insight on exactly how and where bad guys are attacking… which is critical to prevention and selecting countermeasures. New Publication: The Economics of a Food Fraud Incident – Case …

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Shift Commission on Work, Workers, and Technology (New America Foundation and Bloomberg)

I spent yesterday at this event. If you look carefully you can see Tim O’Reilly in one of the photos below. New America and Bloomberg are convening the Shift Commission on Work, Workers, and Technology to bring together a community of leaders from different disciplines — technology, business, policy, civil society, academia, and others — who want to understand …

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The Sell-Off of Democracy

In the past few months we have seen an acceleration of mergers among giants in many industries. Dow Chemical and Dupont, followed by Monsanto and Bayer, Marriott and Starwood, Microsoft and Linked-In, Verizon and Yahoo, and recently Miller and Budweiser. Each of these firms were giants before a merger. By combining they not only grab …

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The Vanishing Trash Collector

July | 2016 | American Myths A few days ago the trash collector came along on his usual route. Typically, one person would drive while the other collected the trash bins and moved them to an automatic lift that dumped them into the truck. Afterwards, the same trash collector would deposit the empty bins on …

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Arthur Kroeber (Gavekal) on Chinese economy

Highly recommended. Kroeber gives a realistic assessment of the Chinese economy, covering topics such as historical development models, infrastructure investment, debt levels, SOEs vs private enterprise, corruption pre- and post-Xi, demographics, hukou reform, etc. In this episode of Sinica, we present an in-depth interview with Arthur Kroeber, founding partner and head of research for Gavekal …

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Enlightened Minds in a Darkening Time

It’s been more than a month since I finished reading two very insightful books, Sheldon Wolin’s Democracy Incorporated (2008) and John Ralston Saul’s The Collapse of Globalism. I have been wanting to write about them but have felt mentally paralyzed by fear that I could not possibly provide an adequate synopsis of their depth of …

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Putting a Lid On It

It is time for me to get off my duff. I have been sitting safely a bit too long, ensconced in my middle class security. A security a majority can’t share. Time to push forward some radical possibilities. Here’s one to start, some of which I’ve hinted around in the past. It’s time to enact …

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John Stuart Mill

My second “food ethics icon” for 2016 is John Stuart Mill. Mill is a pretty interesting figure in his own right and certainly one of the most important individuals of the 19th century. Mill inhabited a rarified intellectual and political environment from his London birth in 1806 to his death from a severe skin infection …

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A New Year, A New Economy?

I did not begin the day with any intention to write about anything in particular. Several ideas popped in and out of my consciousness during the day, but no one thing grabbed me. But then I skimmed the new January 2016 issue of Too Much, diligently compiled by Sam Pizzigati, and saw a familiar name …

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Saudis toast?

See also The one sided clash of civilizations. Telegraph: …If the aim was to choke the US shale industry, the Saudis have misjudged badly, just as they misjudged the growing shale threat at every stage for eight years. … The problem for the Saudis is that US shale frackers are not high-cost. They are mostly …

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Who’s on the other side of the trade?

A great conversation between Tyler Cowen and fund manager Cliff Asness, who has appeared many times on this blog. See, e.g., this 2004 post on his analysis of the well known Fed Model for equity valuation, also discussed in the interview. Hedge-fund manager Cliff Asness, one of the most influential—and outspoken—financial thinkers, will join Tyler Cowen …

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Dollar Empire

This speech emphasizes an under-recognized motivation for US adventurism abroad: local military and geopolitical conflicts enhance the strength of the US dollar as a reserve currency in the face of global volatility. The essay is long but worth reading as it gives a fresh look at superpower competition across multiple arenas, and some insight into …

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W-2s don’t lie

These numbers are derived from aggregate W-2 incomes for 158 million working Americans (see link for full table). The “raw” average wage, computed as net compensation divided by the number of wage earners, is $7,050,259,213,644.55 divided by 158,186,786, or $44,569.20. Based on data in the table below, about 67.2 percent of wage earners had net …

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