Three podcasts

I recently listened to three podcasts, involving James Bullard, Miles Kimball and Tyler Cowen.  In all three cases, I found myself agreeing with most of the ideas. Here I’ll mention a few areas of slight disagreement.

1.  David Beckworth interviewed James Bullard on monetary policy.  Most of what he said made a lot of sense, including his comment that the Fed might be more sympathetic to the NGDP targeting idea if it were starting from scratch, rather than already having invested a lot of credibility capital into inflation targeting (my words, not his.)  My only major area of disagreement was when Bullard worried that the NGDP target would have to be adjusted when the trend rate of RGDP growth changed.  In my view that’s not necessary, except perhaps for the part of RGDP growth changes that reflect changes in labor force growth.

2. Miles Kimball talks about the need for faster RGDP growth, and discusses some ideas for getting there.  He points out that we can’t get significantly faster growth from sectors that have shrunk to a small share of GDP, such as agricultural, and to some extent even manufacturing.  He suggests the big problem area is housing, which absorbs a big (and increasing) share of the consumer budget, but which is seeing virtually no productivity growth.  He focuses most of the talk on making the service sector more efficient.

It’s interesting listening to the Kimball and Cowen podcasts back to back.  In both cases you see Mormon cultural ideas lurking in the background (indeed both speakers alluded to this religion.)  Both are very idealistic, like top 2%.  Kimball suggests imposing a tax surcharge that can be avoided entirely if you donate the equivalent amount to an approved charity.  He argues that donating money makes people less cynical and more altruistic, as compared to being forced to pay taxes to a government bureaucracy that doesn’t seem interested in where you or I think the money should go.  Perhaps people would not work as hard to evade this sort of “tax.”

3.  Cowen notes that people who donate to charity tend to be happier.  He also believes that economic growth is the best way to boost living standards, even for the poor.  (Both Kimball and Cowen emphasize that “growth” should include factors like the environment.)  I’m agnostic on the happiness studies—I wonder if perhaps we’ve got causation wrong; maybe happiness causes altruism and high incomes, not vice versa.  But given that we don’t know, we should probably err on the side of assuming that at least some correlation runs from charity and growth to happiness. (Tyler has a very interesting discussion of what we should do when we don’t know for sure which theory is true.)

Cardiff Garcia did a great job in his interview of Tyler.  Much of it focused on Tyler’s new (unpublished) book, which discusses the philosophical ideas that underlie his other writings. They ended with a discussion of the NBA.  In my view, this is a golden age of basketball.  Never have there been so many great players (AD, Paul George, Chris Paul, Jimmy Butler, Isaiah Thomas, Giannis, John Wall, etc.) who are not even in the top 6 NBA players.  Some of these guys would have been borderline MVPs in previous generations.  But I do have one complaint. The NBA really needs to change one of its rules, as defense gradually evolves to make any sport less entertaining.  Here goes:

New rule:  Officials should ignore minor intentional fouls on fast breaks, where a call would clearly favor the defense.  If the intentional foul is so extreme as to physical stop the fast-breaking offensive player (such as tackling or wrapping up) the official should award (one or two) free throws plus the ball.

In other words:  Discretion, not rules!

I miss the old “showtime era” of the 1980s, when fast breaks were more common. There is something wrong with a rule where:

1.  Calling the foul helps the team that commits the foul.

2.  Calling the foul makes the game more boring.

In economic terms, calling a foul has a “cost”, as they make the game more boring. Fouls can only be justified if they have an even greater benefit to fans.  Often they do—preventing excess physicality—but not minor intentional fouls on fast breaks.

PS.  Westbrook should be the MVP.  He won 47 games with the rest of his team being worthless.  He outplayed Harden when both were on the floor in the playoffs, despite Harden’s supporting cast being far, far better.  He only lost because the Thunder were complete garbage in the 5 minutes he wasn’t on the floor each game. Obviously LeBron is the best player in the NBA, but he’s not the MVP this year.  His team is talented, and should have won more games.




22 Responses to “Three podcasts”

  1. Gravatar of Gordon Gordon
    30. April 2017 at 12:52

    Scott, do you have any comments on Bullard saying that the FOMC targets headline inflation?

  2. Gravatar of Mike Sandifer Mike Sandifer
    30. April 2017 at 13:23

    I’m not a big fan of this era of basketball. I preferred the 90s, which was more physical and somewhat less dependent on the 3 point game, though it was still too dependent on it. There’s no substitute to me for watching Olajuwon or Jordan play, who were the best from that era.

  3. Gravatar of ssumner ssumner
    30. April 2017 at 13:47

    Gordon, Yes, that;’s right, the target is headline inflation. I think people get confused by the fact that the Fed regards core inflation as a better predictor of future headline inflation than headline inflation itself. Thus if core is 1.5% and headline is 2.5%, then the Fed expects future headline to be around 1.5%.

    Mike, Yes, I’m also not a fan of the 3 point shot. I prefer the old days. But in terms of players, the current crop is the best yet.

    30. April 2017 at 19:33

    For the Bullard podcast, the credit market portion provides the best reason for PCE headline inflation level targeting (PCEHLT?) versus NGDPLT. A perfect creditor/debtor transaction would somehow fix the real value of future payments.

    In practice, debtor and creditor fix the future interest payments in nominal terms to lower frictional costs. If a mythical, perfect inflation figure could be obtained, then a constant level target is closest to fixing real value of future interest payments even with fixed nominal interest payments. Without level targeting, one time of undershooting or overshooting changes all of the future interest payments’ expected real values.

    NGDPLT has a variable interest rate due to demographics and productivity changes. The best argument for NGDP over inflation is NGDP is much easier to measure.

  5. Gravatar of flow5 flow5
    1. May 2017 at 02:33

    It’s impossible to target N-gDp under an IOR regime.

  6. Gravatar of Randomize Randomize
    1. May 2017 at 08:47

    Bernanke’s comments on Border Adjustment tax:

  7. Gravatar of Dtoh Dtoh
    1. May 2017 at 12:30

    Comments on econ later.

    Two shots and possession would eliminate intentional fouls.

  8. Gravatar of Dtoh Dtoh
    1. May 2017 at 12:40


    Just an idea but what about a target of RGDP as a function of inflation. For example if RGDP < 1.5 x inflation + 2, then step on the gas.

  9. Gravatar of Gordon Gordon
    1. May 2017 at 14:00

    Scott, thanks for the clarification on how the Fed uses core versus headline. It makes sense that core is a better predictor of future headline. But that leaves me wondering as to all the statements regarding tightening of policy by various FOMC members. Growth in PCE core flattened out about 1.7% at the end of Q3 last year. Are they letting the Phillips curve influence their inflation forecasts? Or is it that the FOMC is behaving as if 2% inflation is a ceiling despite their statements to the contrary? Or is there some other factor coming into play?

  10. Gravatar of Larry Larry
    1. May 2017 at 23:09

    Among the players who did 2500 minutes, whose +/- was the highest? MVP

  11. Gravatar of flow5 flow5
    2. May 2017 at 03:21

    As I said:

    30. April 2017 at 06:25
    “Trump boom is dead”
    NO, When the Fed raises the remuneration rate (2 in succession:

    The economy is likely to surprisingly: rebound – immediately after the contractionary impact of raising the remuneration rate altogether expires. The frequency of economic oscillations has increased. Stop-go monetary mis-management is now the norm.

    The initial GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 4.3 percent on May 1.

    I am just the best in history. Why do you think rates are rising?

    Like I said:

    Bonds should be sold. M1:
    Feb. 27, 2017 ,,,,, 3,474.00
    Mar. 6, 2017 ,,,,, 3,342.20
    Mar. 13, 2017 ,,,,, 3,328.70
    Mar. 20, 2017 ,,,,, 3,440.70
    Mar. 27, 2017 ,,,,, 3,573.00
    Apr. 3, 2017 ,,,,, 3,653.30
    Apr. 10, 2017 ,,,,, 3,330.90
    Apr 21, 2017. 06:41 AMLink

  12. Gravatar of ssumner ssumner
    3. May 2017 at 08:55

    Dtoh, I’m not sure I follow. Are you saying “step on the gas” is RGDP growth is below 5% (at 2% inflation)? If so I disagree for two reasons. RGDP growth doesn’t matter, and if we were targeting it the figure should be lower.

    Gordon, They may be putting too much weight on the Phillips curve.

    Larry, Probably someone like Curry or Durant.

  13. Gravatar of anon/portly anon/portly
    5. May 2017 at 13:39

    Bill Simmons makes the case for Harden:

    Key paragraphs:

    “Remember when we came out of the 2016 playoffs raving about how much we liked Steven Adams, Enes Kanter, and Andre Roberson? Why didn’t they get any better? Why wasn’t Adams as devastating in OKC as the Capela-Nene-Harrell trio was for Houston? Why wasn’t Oladipo BETTER on a much better team? Why did they dump Ersan Ilyasova after only three games, and why wasn’t it a bigger deal when he thrived in Philly and Atlanta? Why such a wasted rookie year for Domantas Sabonis? Everyone acts like Russ is playing with the Washington Generals — he has two top-three lottery picks and three other lottery picks in their playing rotation. Kanter and Oladipo have near-max deals. Adams has a nine-figure deal coming. Ilyasova scored 15 a night on Philadelphia. Those guys sucked? If a superstar guarantees you 45 wins, then Westbrook dragged them to … 47 wins? What?

    “Meanwhile, the Rockets were pegged as a fringe playoff team with only one All-Star and even lower expectations than OKC. And we didn’t know what to expect with Harden. After he finished second in the 2015 MVP voting, the Dwightbola virus turned him into a smoke-and-mirrors superstar last season. Why didn’t it seem like he cared? Was he turning into a glorified DH? This year, a rejuvenated Harden grabbed the point guard reins (why doesn’t he get more credit for switching positions, by the way?), made a bunch of role players better and transformed the Rockets into the league’s second-best offense. And not just that — they finished with one of the TEN BEST REGULAR-SEASON OFFENSES OF All TIME. (Here, look.)”

    I’m with Simmons – I wasn’t surprised in the least when Durant left. Maybe Westbrook is always making the correct, Jordanesque “who should take this shot” calculation in the moment, but I think you can argue that both OKC and Westbrook would be better if he would be less ball-dominant.

  14. Gravatar of Scott Sumner Scott Sumner
    6. May 2017 at 06:07

    Anon, Couldn’t disagree more. If Westbrook prevents his teammates from excelling, how does Durant win an MVP in OKC?

    The modern NBA needs three point shooters, and OKC can’t shoot. Even Oladipo is not a very good shooter.

    And if Westbrook is holding them back, why does his team collapse while he is off the court for a few minutes, while Houston can keep rolling without Harden?

    I also get annoyed at the way that Harden takes advantage of a flaw in the NBA rulebook, which allows offensive players to create fouls on the people guarding them. Westbrook is much more fun to watch. His big problem is that he plays so hard he runs out of gas in playoff games. He should play fewer minutes, but OKC doesn’t have scorers like Lou William and Gordon to bring in when he’s not playing. Houston does.

    As far as Durant leaving, he played very poorly at the end of last years GS series, otherwise they would have beat the Warriors. Durant should look in the mirror.

    One thing we can probably agree on is that if OKC still had all three superstars, they’d be really good.

  15. Gravatar of anon/portly anon/portly
    6. May 2017 at 09:04

    “If Westbrook prevents his teammates from excelling, how does Durant win an MVP in OKC?”

    I don’t think this is a great point. Durant is a great, great, scorer, and a great pure scorers will generally score more points on a weaker team, so really his chances of winning an MVP are perhaps higher on a team that moves the ball worse (like OKC) than a team that moves the ball better (like GS).

    “As far as Durant leaving, he played very poorly at the end of last years GS series, otherwise they would have beat the Warriors. Durant should look in the mirror.”

    I would say this is not a good point either. If Durant was playing poorly, and not hurt, I’d say this was more of a team thing than a Durant thing. Good players don’t magically become bad players for no reason.

    Hmmm, looking at the box scores, GS won the last three games, by 9, 7 and 8.

    In game 5 Durant played 45 minutes and went 12/31; Westbrook played 41 minutes and went 11/28; the rest went 16/32. Outscored 39-34 in the 4th quarter.

    In game 6 Durant played 45 minutes and went 10/31; Westbrook played 44 minutes and went 10/27; the rest went 18/32. Outscored 33-18 in the 4th quarter.

    In game 7 Durant played 46 minutes and went 10/19; Westbrook played 45 minutes and went 7/21; the rest went 17/49. Only gave up 25 in 4th this time, but down 11 heading in.

    I don’t remember the series that well but I’d say that both Durant and Westbrook were being asked to do too much. The GS stars played pretty big minutes too but at least they got *some* rest, and didn’t have to shoot so much.

    Of course GS was the better regular-season team, although OKC was very good also. Maybe Durant shot poorly in those last three games, but he only committed 8 turnovers (10 assists), which is pretty respectable for a guy taking all those shots.

    I think I’d blame OKC’s inability to stop GS in the 4th quarter before I’d blame Durant (and Westbrook, who shot even worse). Plus the rest thing, probably, but maybe they were getting killed when only one of them was on the floor.

    Hmmm, Durant’s plus/minus numbers were -4, -6, and -4. Westbrook’s were -9, -11 and -14. So they outscored GS by 10 when Westbrook was sitting and GS outscored them by 10 when Durant was sitting.

    My first thought on seeing the words “Durant should look in the mirror” were, What is a lame-ass sportswriter cliché doing here? This is my source for sophisticated analysis on all topics! Anyway, looking at those box scores reinforces my (admittedly subjective and knowledge-light) view that Durant was not likely to re-sign with OKC; OKC was a very good team because its two stars were so good, but there are plenty of teams that would be as good as OKC once they added Durant (maybe less talented but a better brand of basketball), so why stay?

    I wouldn’t say “Westbrook is holding them back,” see my “making the correct … calculation” point. My main point is that OKC would be a lot better if they would evolve in a “Westbrook less ball-dominant” direction. Now, why they haven’t done that, that’s a good question. Personnel? Coaching? Westbrook’s personality? Here I admit I am unsure. I think Simmons makes a good point that Harden bought into D’Antoni’s changes, but was the key to Houston’s unexpected excellence Harden’s buy-in or D’Antoni’s changes? Maybe the real problem with OKC is the coaching or the personnel, sure. (But is Westbrook essentially the coach, like LeBron? – I don’t know).

    It’s a good point that 3-point shooting is very important. SA, GS and Cleveland went 1-2-3 in % this year; OKC was last. But I think having good ball movement is a big key to that. How much of it is the shooters and how much of it is the shots?

    Of course you should discount anything I say about OKC; I’m a Sonics fan; we all want Clay Whathizname’s kids to die of pox and if, when running down the court, an OKC player’s limb happens to fall off? We just chortle.

  16. Gravatar of anon/portly anon/portly
    6. May 2017 at 10:39

    “Obviously LeBron is the best player in the NBA, but he’s not the MVP this year.”

    When everyone was talking about the MVP race, it was Harden’s flashy stats vs. Westbrook’s flashy stats and then a nod to how good Leonard and James were….

    I couldn’t help but think, is it a coincidence that Harden and Leonard are putting up the flashy stats in the same year, or is that just the NBA now? I kinda thought Leonard and James were really just as valuable as Harden and Westbrook.

    James is kind of interesting because back when he didn’t have so many rings, he was obviously the most under-rated player in history. Now that he has the rings, he’s more properly rated, but his *teams* are over-rated now, in my view.

    One little piece of math that almost no sports fans can grok is this: suppose there are three great teams basketball. Then suppose two are on one “side” (e.g. the Western Conference). Those teams have a 25% chance of winning the title (they have to meet in their conference or league finals) and the other team has a 50% chance.

    I wonder if LeBron hasn’t been the greatest beneficiary of this math ever. Every year, he gets to coast through the regular season, then coast through three rounds of the playoffs. He only has to win 4 meaningful games to win a ring.

    B-Ref dot com has an adjusted point differential number. Look at this year:

    1. GS 11.4
    2. SA 7.3
    3. Houston 5.8
    4. LA 4.4
    5. Utah 4.0
    6. Toronto 3.7
    7. Cleveland 2.9
    8. Boston 2.3

    Look at 2015/2016:

    1. GS 10.4
    2. SA 10.3
    3. OKC 7.1
    4. Cleveland 5.5
    5. LA 4.1
    6. Toronto 4.1
    7. Atlanta 3.5
    8. Boston 2.8

    Look at 2014/15:

    GS 10.0
    LA 6.8
    SA 6.3
    Atlanta 4.8
    Portland 4.4
    Cleveland 4.1
    Houston 3.8
    Memphis 3.6

    Look at 2013/2014

    SA 8.0
    LA 7.3
    OKC 6.7
    GS 5.2
    Houston 5.1
    Portland 4.4
    Miami 4.2
    Indiana 3.6

    Look at 2012/2013:

    OKC 9.2
    Miami 7.0
    SA 6.7
    LA 6.4
    Denver 5.7
    Memphis 4.3
    NY 3.7
    Houston 3.7

    That’s right, the mighty 2014/2015 Atlanta Hawks, the only top 5 NBA team in the last 5 years that came from the East and didn’t have LeBron.

    Here are the adjusted point differentials of the three teams LeBron’s team has played to get to the finals the past 7 seasons, followed by the Finals results and the APD’s of the teams the other team played in the West:

    1.0, 4.8, 6.5 (then lost to Dallas; 1.9, 6.0, 3.8)
    2.4, 2.6, 2.3 (then beat OKC; 1.8, 2.0, 7.3)
    -1.8, 0.0, 3.3 (then beat SA; 1.5, 1.8, 4.3)
    -0.9, -1.6, 3.6 (then lost to SA; 2.9, 4.4, 6.7)
    -0.4, 2.5, 4.8 (then lost to GS; 1.1, 3.6, 3.8)
    0.4, 3.5, 4.1 (then best GS; 0.3, 1.0, 7.1)
    -0.6, 3.7, 2.3 or 1.4 (then play GS?; -0.2, 4.0, 5.8 or 7.1)

    6 times LeBron’s team faced a tougher foe (in a given playoff round before the finals); 15 times the West champ faced a tougher foe. 2 or 3 years the overall slate has been pretty close and the other 4 or 5 years significantly tougher for the Western team.

    And I actually think these numbers don’t really capture Cleveland’s advantage. In the East, with fewer good teams, they can coast during the regular season and still get a #2 seed, like this year or 14/15, knowing they won’t really have to play a high caliber team until the finals. If they were in the West, or if one or two of the better teams were in the East, this strategy would be less efficacious, since now they might get a higher seed and then face a much tougher road to the finals, maybe having to knock off a really good team in the conference semis.

    I don’t think Atlanta (in 2014/2015) or Boston (this year) frightened them much, and I don’t think any East team has frightened them much for years. What if just one or two of the good West teams – say, the Clippers and/or Grizzlies – had been in the East all this time. The Clippers have been really good in the regular season but struggled in the playoffs; being in the East, maybe the easier route to a high playoff seed would make them a more rested and dangerous playoff foe, and maybe they’d match up well against Cleveland. Who knows?

  17. Gravatar of anon/portly anon/portly
    7. May 2017 at 07:37

    My last comment was probably a bit long already, but I really meant to point out that the claim that Cleveland “should have won more games” may make sense in one way (they lost a lot of games to inferior teams) but I would really argue that they should have won *fewer* games. Their optimal strategy, really, was just to make the playoffs, and not worry at all about seeding, since obviously the Eastern conference playoffs were going to be little or no problem, and just as obviously trying to get home court for the finals wasn’t worth it.

    As we are seeing now, Cleveland could play every playoff game (before the finals) on the road and it wouldn’t really matter…. I don’t think LeBron is wildly surprised at how easy it’s been.

    (Note this is mainly speculation about Cleveland’s internal view; of course it’s hard to know looking from the outside whether a team is “coasting” or whether they just aren’t that good!)

    I guess you could argue that maybe one of those East teams had the potential to be pesky, especially if they’d made a deadline deal (like Boston acquiring Paul George in return for some of their Nets booty). But I still think Cleveland was smart to take it easy. I mean, if they can’t dispose of Toronto, Boston and/or Washington very easily, it’s not like they’ll be good enough to beat Golden State anyway.

    So if anything they should have rested their stars even more. They probably played them more than they really wanted due to the various pressures exerted on teams to play their best players more often.

    Golden State had a lot more reason to win games, since the Western conference playoffs looked to feature much better teams, where home court at least couldn’t hurt.

  18. Gravatar of anon/portly anon/portly
    7. May 2017 at 08:06

    One last (I promise) followup on “[Durant] played very poorly at the end of last year’s GS series.”

    I assume this comment must be about Durant’s shooting, and not his defense and/or rebounding or other contributions, but maybe that’s wrong. Anyway, if he was missing a lot of shots, there would be various potential causes:

    1. Poor shot selection due to decisions made by (or something in his mindset attributable to) Durant himself.

    2. Poor shot selection due to decisions made essentially by his coach and teammates, in conjunction with Golden State’s defensive effort and/or philosophy; i.e. OKC is running an offense where it often falls on Durant (i.e. their best option is for him) to take low-percentage shots.

    3. Just missing a lot of good shots, due to normal random variation.

    4. Just missing a lot of good shots, due to playing long minutes and having tired legs.

    The only way I’d go along with “Durant playing badly” is #1, and I suspect most of his difficulty was more due to some combination of the other three. Basketball to me is not a game where you can really have “good games” and “bad games,” at least from own experience (lots and lots and lots of pickup, mostly) you are what you are. Sure, some days you shoot better, but you don’t really play better, at least I don’t think there was much variation in my own level of play (which of course was not very good).

    On the other hand, I can sure see the idea of a *team* playing better or worse. Put me on the right pickup team, and I was pretty useful (I could and would, for example, block out); put me on the wrong one, and I was pretty useless (if my teammates weren’t blocking out, I wasn’t going to be able to out-jump anyone for the rebound).

    I would contrast this with, say, golf, where because of the heightened mental/concentration side, you do have good and bad days, or at least I do. (It’s a really hard sport when you’re tired).

    Anyway philosophically I just don’t believe in NBA players having “good” and “bad” games, really, I think they are who they are, pretty much all the time. If they’re playing “bad” that means their team just isn’t good enough, basically. I don’t believe Durant played bad; I think it was much more GS making adjustments and/or getting healthy.

  19. Gravatar of Scott Sumner Scott Sumner
    7. May 2017 at 13:55

    Anon, Regarding Durant, there is much more to performance that shooting stats. And he did have poor shot selection at the end of that series. Also don’t forget that his 10/31 was in game 6, the one OKC really needed to win.

    Westbrook gets his teammates plenty of wide open 3s, they just can’t hit them.

    You said:

    “Their (Cavs) optimal strategy, really, was just to make the playoffs,”

    You and I have a very different view of things. The optimal strategy is to win lots of regular seasons games because that’s why fans of regular season are paying $50 a ticket. It’s entertainment.

    I agree that the West is way better than the East. Even Utah had a better regular season than Cleveland. Also agree that LeBron has been underrated. But he wasn’t the regular season MVP. OKC won almost as many games as the Cavs, with a supporting cast that is trash compared to LeBron’s supporting cast. In their 9 man rotation, there is one guy who is not a good 3 point shooter (Tristan Thompson.)

  20. Gravatar of Floccina Floccina
    8. May 2017 at 10:52

    I like your rule. Also at the end of the game the fouled team should have the option of getting the ball.

    I also do not like the 3 point shot. The 3 on 2 break used to be a thing of beauty now they setup on the 3 point line. Also the 3 point shot makes it is less important to race down court before the other team can set up.

  21. Gravatar of anon/portly anon/portly
    8. May 2017 at 14:05

    “You and I have a very different view of things. The optimal strategy is to win lots of regular seasons games because that’s why fans of regular season are paying $50 a ticket. It’s entertainment.”

    I think my view is closer to the Cavs own view. Sure, more wins are preferred to less, but it seems to me that 51 is not that far from their regular-season “not caring at all” win expectation – maybe I overrate them. Anyway as long as the rest games for Kyrie and LeBron were mostly or all road games, did winning 51 instead of (say) 61 cost them anything, really? I can’t see it. Given how well they seem to be playing now (which maybe isn’t all that great, given the opponents, but I didn’t think Indiana looked that bad), it seems like they came into the playoffs reasonably well rested.

  22. Gravatar of ssumner ssumner
    9. May 2017 at 05:16

    anon, I’ve always felt that the NBA should get rid of back to backs, and reduce the regular season to 60 games.

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