Recent articles

1. Our tort system is a huge part of our broader regulatory system. Thus while repealing Section 230 (which shields tech companies from liability for material on their platforms) might be seen as “deregulation”, it would actually represent a huge increase in the government’s role in our economy.

Both Dems and Republicans want to get rid of 230, but for opposite reasons:

While the Constitution’s First Amendment protects the speech of these private companies, Republican lawmakers blame Section 230 for allowing Big Tech companies to moderate content too aggressively — and Democratic lawmakers say it promotes the companies not being aggressive enough.

What could go wrong?

2. A very interesting study by Pramod Kumar Sur and Masaru Sasaki showed that the Chinese famine of 1959-61 had severe long term effects on those born during this period, even for the very highest income groups in society:

We provide strong evidence suggesting that exposure to famine has a large negative effect on the wealth of individuals born during this period. Additionally, we show that the effect is present after more than half a century, and it is even persistent among the wealthiest cohort of individuals in China today.

As with any study that relies on natural experiments, our results can be considered local to our context. However, we believe this context is of particular interest as we examine the economic consequences of a famine of which millions of survivors are still living today. In particular, investigating the historical persistence of famine among ‘literally billionaires’ who belong to the strongest and wealthiest cohort of individuals in present-day China, and showing that decades of rapid economic development may not mitigate the adverse impact merits important implications for understanding how profound is the impact of famine in China.

Recommended.

3. Previously, I’ve discussed polls showing increasing support for international trade. Some commenters suggested that might just be an artifact of Trump being president. A new poll suggests that there is indeed a Trump effect, but just for Republicans. The increase in Dem support for trade seems more durable:

4. Matt Yglesias has a great post on one specific form of wokism that has gone off the rails:

Strange ideas about nonwhite people

At this point, I think it’s worth pointing out that Tema Okun is white.

She doesn’t put forward any evidence or arguments in favor of her claims (and indeed, “objectivity” is seen as a manifestation of white supremacy culture), but this is also not a lived experience argument. Instead she credits the second-hand wisdom of the late Kenneth Jones who was her co-author on the original version of the workbook that featured the list. And the reason it feels like an op to destroy progressive politics is that she’s pretty clearly not talking about race or racism at all. This whole document instead comes from a place of extreme characterological aversion to hierarchy and structure.

I don’t know if Trump is using his billions of dollars to fund the woke movement, but if not he should be. It’s the best way to advance his white nationalist agenda.

5. Unfortunately, both the left and the right tend to ignore the war on drug using Americans:

With so many states choosing to legalize marijuana, it’s easy to forget how draconian the penalties for possession can still be. Case in point: The Mississippi Court of Appeals just upheld a life sentence for 38-year-old Allen Russell for being in possession of about one and a half ounces of the drug.

Remember, Russell did absolutely nothing wrong in possessing marijuana, which is legal in 17 states. The legislators who passed these laws are the evil ones. Keep these cases in mind when you think about human rights in other countries.

6. I don’t read much sci-fi, and thus hadn’t even heard of Gene Wolfe until a few years ago. Now he’s one of my favorite writers, in any genre. Oddly, he’s not fully accepted by either the sci-fi community or the highbrow literary world. This article is a good introduction:

Gene is hailed as one of the greatest science fiction writers of all time, perhaps the greatest. He’s hailed as a great American writer, full stop. It’s because of New Sun that Ursula K. Le Guin later calls him science fiction’s Herman Melville. It’s because of New Sun that Neil Gaiman says he’s “possibly the finest living American writer.”

Yet the books don’t sell in large numbers, possibly because many people can’t make sense of them. He doesn’t inspire a wave of copycat writers, like William Gibson does around this time. He doesn’t conquer the bestseller lists like other creators of large-scale fantasy series. He doesn’t become a convention superstar like George R.R. Martin or a cultural icon like Le Guin. He’s written a work that proves (if you needed proof) that SF can be high art, yet not many people even within SF read it. He’s written one of the all-time masterworks of science fiction, and it’s hard to say whether he influences the genre at all.

Sci-fi requires two distinct talents. It’s rare to find someone that is really good at both.

Trump’s kind of Republican

What sort of Republican does Trump support for positions of leadership? Based on who Trump endorsed in the recent race for GOP conference chair, we can conclude that Trump likes:

  1. People who voted against the Trump tax cuts.
  2. People who vote against funding the border wall.
  3. People who favor the Paris Climate Accord.
  4. People who favor overturning the results of the 2020 presidential election, and putting Trump back in office.

Especially #4. In other words, in the modern GOP there is only one issue that matters—are you willing to kiss Trump’s ring? The Republican Party has now become nothing more that a Latin American style personality cult. When I warned of Trump’s authoritarian tendencies back in 2016, I was viewed as being “hysterical”. What do you guys think now? How many of you predicted that in 2021, Liz Cheney would be fired and replaced by Elise Stefanick? (And watch the comment section, I almost guarantee that some moron will think it appropriate to discuss the relative merits of Stefanik and Cheney, as if that has any bearing on this post. Some people can’t see the truth if you put it right in front of their faces.)

Make no mistake, Trump’s efforts would have caused a second civil war if he succeeded in overturning the election. Democrats would not have taken that lying down, there would have been a large and violent response. I would have actively supported the “terrorists”. Thank God Trump did not succeed.

In today’s GOP, it’s impossible to have a position of authority if you loudly proclaim that elections should determine who becomes president. It’s now an anti-democratic authoritarian party, which is what I warned against in 2016.

I told you so.

PS. Here’s another way of seeing the picture:

Trump = Darkside

Modern GOP = Colonial Pipeline

Eh, what could go wrong?

PPS. This caught my eye:

Be careful what you wish for

When the ECB was founded, it adopted inflation targeting with the implicit assumption that the purpose of the policy was to hold down inflation. In fact, the policy regime has mostly forced the ECB to try to raise inflation.

In 2020, the Fed adopted an average inflation targeting policy with the implicit assumption that it would be used to push inflation higher when at the zero bound. In fact, the policy may end up forcing the Fed to push inflation lower at the zero bound.

One commenter suggested that stocks were declining because of the fear that high inflation would lead to tight money. But the evidence doesn’t really support that view:

Notice that the rise in 10-year yields this year is all inflation premium, the real yield has not risen, and remains deeply negative. Nominal interest rates are rising due to the Fisher effect, not fear of tighter money. Admittedly, even real yields are not a foolproof indicator of changes in monetary policy (they can reflect growth expectations), but they are less unreliable than nominal yields. Whatever is causing the recent drop in stock prices, it is not a fear of tight money.

The real yield on 5-year bonds is even more sensitive to monetary policy than the 10-year yield, and it’s falling even more sharply:

And 5-year TIPS spreads have risen sharply, to 2.72%. That implies about 2.4% PCE inflation over 5 years, more than enough to make up for the recent shortfall.

Monetary policy is either about right or too easy; it’s certainly not too tight.

PS. Notice that people investing in 5-year TIPS are guaranteed a negative 2% annual return. But it’s even worse. They have to pays taxes on their nominal return, so the actual after-tax return is even lower. What happened to equalizing tax rates on wage and investment income?

Yes, the Fed is serious about creating inflation

In 2020, I got a great deal of grief from people who thought I was naive when I suggested the Fed’s new AIT regime was a big deal, and that it would lead higher inflation going forward. When TIPS spreads were 0.6% last March, I suggested that TIPS might be a good investment.

What do you people say today?

10% more democracy

This Matt Yglesias tweet from a few months back caught my eye: