1. NPR Morning Edition covers Complacent Class.
2. Video of (non-complacent) hitchhikers; long, rambling, recommended. It’s called “The Greater Good: A Hitchhike Perspective.”
3. American man claims to be King of England.
4. All 17 species of penguins.
I assume the American’s name is Ralph.
I did not read the article, but I did see the movie.
#3. An excellent piece of performance art, which I hope the British fully embrace.
Obama claimed to be the king of America.
Hoo hoo hoo!
Absolutely REKT.
Keepin’ it real up on the MR comment boards 8-).
#TakeThatObama
Not sure how the Trump2024 comment relates to the “Assorted” post for the day.
Anyhow, the past eight years with Obama (as emperor); with the Democrats/liberals, the media, and the academy (as the swindlers); and with the American people (as the losers) Hans Christian Andersen’s “The Emperors New Clothes” was staged guerrilla-theater-style.
Elections matter. During Obama’s dastardly, disastrous directorate,Democrats suffered yuge losses in state legislatures, state houses and congressional seats. Since Obama became boss, the Democrats lost 63 House seats, 10 Senate seats and 14 governorships. And, they lost the White House to a reality TV star! .
#TakeThatDemocrats –
President Donald J. Trump will fill at least 108 Federal judicial vacancies. I’m happily hopeful that the GOP will gain up to 10 more Senate seats in the 2018 elections.
#HappyDaysAreHereAgain
I get trolled by my own team
NPR repeats a choice between “cyclical history” and “ongoing progress”. What if both these simplifications are false? What if history continues to be one damn thing after another? I think it is, and these cyclical/progress metaphors hide more than they reveal. We may pay too little attention to the ongoing impacts of technology – as we wait for some big wheel of time to turn. We may not wrestle with a loss of faith in market economics – as we wait for a phantom drama to unfold.
Tyler is a great infovore and maven on matters of political economy, but I think he has chosen the wrong theme to bind it all.
All of the above can be true.
Things being sort of cyclical in many ways, but with progress which also appears a lot like one damn thing after the other.
Politics is like pop music. Popular dreck from 20 years ago becomes popular again, and those of who suffered through it the first time wonder what the hell these kids today are thinking.
It’s from 60 years ago, Original D.
1. If Cowen hid his belief in cyclical history in the preceding chapters, it’s right there in full view in the final chapter. A believer in efficient markets myself, it’s undeniable that what goes up will eventually come down, as overreaction spawns its opposite overreaction. The Complacent Class is both an explanation and a warning. Cowen’s rather pessimistic view of what lies ahead (the reset) ends on an upbeat note (renewal), not unlike that of an apocalyptic preacher. To repeat, not unlike that of an apocalyptic preacher. I’m Christian, but like many, I struggle to understand all the suffering in the world. Of course, the believer’s explanation is that the suffering comes first followed by salvation. The Complacent Class is oblivious to the suffering that lies ahead. But here’s my secular comment to an earlier thread:
For those not paying close attention, Thomas Piketty (or Brad DeLong et al.) could have written The Complacent Class. Cowen’s observations are spot on, which is why the review in the WSJ says that conservatives, liberals, and libertarians will find something to like. Here’s just a few of Cowen’s observations, from which I will connect the dots (as I see them). A public education system that is declining, a transportation system that is eroding, a government that is failing. What do these have in common? Lack of commitment: lack of commentment to funding (through taxes) education and transportation, lack of commitment to public service. It wasn’t always so. In the last century, America was committed to public education, America was committed to transportation, and Americans were committed to public service. What has changed? Put it this way, what interest does a banker working in Manhattan and living in Connecticut, or an investor or boy wonder working and living in Silicon Valley, have in funding public education or transportation, or in public service? Not much. By comparison, an industrialist in Pittsburgh or Cleveland or Buffalo or Detroit was dependent on both an educated work force and a modern and efficient transportation system and in public servants who would provide both. As economists like Cowen and Tabarrok remind us, people respond to incentives, and the wealthy complacent class has little incentive to support public education, a modern and efficient transportation system, or public servants devoted to providing them. So here we are.
Unintentionally, you invoke a contradiction. Efficient markets follow a random walk, not cycles.
Personally I believe Mandelbrot, that markets are random-ish, but with unpredictable excess volatility. Again, no cycles.
https://blogs.scientificamerican.com/news-blog/benoit-mandelbrot-and-the-wildness-2009-03-13/
Efficient markets self-correct excesses. And that includes excessive inequality. How do I know? 1929 and 2008.
Not really.
Markets are not efficient in so many ways, that methods which assume they are will not arrive at good results.
Defining a certain point as “optimal unemployment” (maximizing long-term growth), we then have periods above and below that rate of unemployment. Which is kind of like a cycle.
Absurd amounts of work have been done on such questions for stock markets and other highly liquid investments, but the stock market only represents part of the economy.
Good results! Are you daft? Cowen’s book is about the false belief in good results.
I heard the interview this morning and people weren’t willing to move to new jobs. But if they are staying place in one city all their lives, shouldn’t those people be most willing to invest in long-term institutions and infrastructure in their area?
I barely use public transit anymore because the transit authority does too little to keep the system safe. Would public transit thrive if ordinary people felt safer on it? Yes. Keep the riffraff away. You can have a good transit system or a system that drug dealers and drug users use; you can’t have both. And I’m a big pretty fit guy.
Where do you live? Or maybe I should ask “when?” This sounds like something out of the early nineties.
New York has a good transit system, but the entire city is crawling with cops, everywhere. It’s not up to me to deal with the guy who wants to start a shoving match on the MBTA platform.
Whatever issues education and transportation have, lack of funding ain’t it. Why does the US spend more per kid to educate than other countries? ALL other countries? Why doe the US spend more per mile for transportation than other countries? ALL other countries?
Education for sure- that’s all about democrats funneling money to one of the few clients they have left. That said an argument could be made that transportation funding has been below what it should have been or misallocated to new projects rather than maintaining old ones.
It’s not “all about democrats funneling money.”
Most states are republican run. Most education funding comes at the state and local level that is often republican run. To blame one party is ignoring the part that those in control play in maintaining the status quo. I have noticed that many more property tax initiatives to fund education are getting voted down now, so maybe change is on the horizon.
The areas with the most obscene dollar per student spending are almost entirely Dem-controlled. Of the top twenty spending states maybe three are Red states. So I’m going to go ahead and give this a politifact rating of two pants on fire.
We spend more on transportation because we have longer distances between cities and do not effectively use rail in the urban centers. Moreover, we do build our roads to last as they do in Europe. How does our spending compare to Canada?
I question your claim that we spend more on education, can you give us a source for that? Educators are the worse paid college graduates in the US and that is not necessarily true in other countries.
Interestingly, the federal government has a very small role in US education. It is largely financed and controlled by state and local governments. Only graduate education is largely financed by the federal government and it is the best in the world.
We usually aren’t at the very top of per-student spending, but we are usually very close and the largest country to be up that high (Norway, Switzerland, Austria are the high-up compatriots).
And The Engineer’s claim is that we spend more PER MILE on transportation. Not sure if this is true, but if it is, the fact that we are such a large spread-out nation would actually be a further mark against us. You would think that when building 1,000 miles of road across a huge country, versus 100 miles of roads in a small country, that we would realize some kind of scale economies that would make the per-mile cost lower than for a smaller nation.
http://www.cbsnews.com/news/us-education-spending-tops-global-list-study-shows/
http://www.politifact.com/ohio/statements/2016/sep/21/donald-trump/trump-us-spends-more-almost-any-other-major-countr/
Only four OECD countries spend more per student than the USA.
Educators are the worse paid college graduates in the US
They are also among the worst performing college students. Having government owned and operated schools in the U.S. is not a recipe for creating an especially effective and efficient school system.
Are you talking about primary and secondary school, where teachers tend to get paid less than most comparator countries and results are also much worse on average than many comparator countries?
Or are you talking about the famously extremely expensive US universities?
I dunno … what do they spend all that money on?
(Also, things like “high” teacher salaries in NY or LA are kind of ridiculous. Take out rental cost for the average family of four, and I doubt they’ve got all that much left).
6. Reading about China’s economy still sounds like they are Fast-Fowarding the Japan Growth model from 1955 – 1990.
a) Lots of capital accumulation with positive currency accumulation.
b) Productive manufacturing with relatively lower wages.
c) Heavy urban movement
d) Small Family formation.
That growth model’s denouement was ‘desperate capital outflows,’ which parallel China’s recent buying spree almost exactly. Japanese firms bought up foreign real estate, entertainment companies, hotels, etc. (a staple of late-80s/early-90s sitcoms), but when the Japanese economy stumbled and banks needed recapitalized, too much capital was tied up in illiquid foreign assets. I’m not saying China is at this stage exactly, but if they do stumble, they may find too much capital has been poured (often literally!) into ghost cities, zombie companies, and foreign assets.
6. Balding explains that China’s capital accumulation cannot be sustained. If only we had that problem. We borrow to consume, China borrows (or will borrow) to invest. Which position would you rather be in? I know, the Chinese can copy but they cannot create, so all that capital accumulation will amount to little or nothing. Sure.
Mal-investment also exists.
How to reconcile the Complacent Class thesis with poor US education performance given high spending? I suggest asking a teacher. Do you know how micro-managed they are these days? How much paperwork and bureaucracy there is in public schools? And IEPs are proliferating like crazy. There’s an industry of people telling teachers what to teach, how to do it, that they have to tailor a lesson to ten different learning styles, etc…
It would surprise American education mandarins to visit a Singapore High School. There are a few national tests to do and a core philosophy and goals to meet but inside the classroom teachers have a lot of freedom to choose how to teach, even to the extent of creating their own note packets often with no mandated textbooks.
Regulation is always good. So it should work for state employees as well as for private industry.
Do you want polluted waters and polluted minds?
First description I’ve ever seen of anything about Singapore which might bring phrases like “relatively free” to mind. (excluding rights to import/export, hire/fire, etc.)
Balding said:
“In 2016, fixed asset investment was equal to almost 82% of nominal GDP. That is simply an astounding number.”
Yes, astounding, but perhaps not in the way he intended.
In America, 70% of GDP is consumption, an astounding number. Do Americans believe there is no tomorrow. Who are these complacent Americans?
King of Great Britain.
though both are absurd claims, king of england would be more absurd since I think this title has been dead for some time now.
also, if he wants to be king of anything, how and what what army will he do this?
“A man armored in truth and armed with righteousness needs no army.”
– Evans the Bold, True King of England, on his way to the gallows
RE China’s debt: The author of this poorly written article suggests we go back to simple principles to forecast the future for China. Yes, the numbers don’t look pretty. China is held together with rising debt now, also true. But an economy is more than just numbers. Sure, it would seem obvious that a country in which most companies couldn’t pay back debt would head for either nasty inflation or a depression.
But I view debt (in China) differently. Say you’re a lender and give a company money to build houses. People are employed, they consume from other growing industries and the economy advances from mud huts to modern housing. But many nail houses (or other assets) sit empty and eventually the company can’t pay back the money. In western countries, the company then goes under and lays off workers. The bank gets stressed, and like a poked snail, withdraws into its shell (no lending). The economy crashes, causing lots of collatoral damage to sectors that are totally unrelated. But this crude form of capitalism is not what is happening in China. Because they are on some level a planned economy trying to copy the growth of the West, the banks/government already knows which industries to support next. They know our history, they know exactly how a Korean garage mechanic grew his company to become Samsung. How to advance from bunsen burners to full science labs. The Chinese economy works by building up a massive capacity to building basic things, then money gets funneled into the next industry level required to climb up the economic ladder of sophistication.
That is what China has been doing. It feels a bit like cheating from an outside perspective, but it’s genius if you’re a Chinese citizen. My hypothetical company, after getting good at building apartments, is not allowed to go under. It gets another loan, this time to build airports, and the payoffs are big enough to paper over whatever losses occured in the previous, imperfect expansion.
The Chinese character of nationalism, their feeling of shame that their ancient central kingdom has missed modernization are powerful secular driving forces. That’s one reason why I’m not too worried about their recent slow-down. After all, using this method, China has almost caught up to the West. Of course as China transitions from a second world country to a first world country, less improvements can be copied. The future hasn’t been invented yet. That is not to say the trend of fantastic growth is over: Their central planning committees are staffed by smart people who are pretty savvy about future developments. It’s what they’ve had to direct and plan for the last 3 decades, so they’ve developed quite some know-how in that area. Already China invests heavily into green energy, robots, their 4G network is fantastic and they seem totally committed to embrace the coming automation revolution. Their people are more connected to the net than in the West (my personal impression). Lately the government has even implemented policies to change their education system to reward inventiveness, a sticky problem for the current learn-by-rote and copy-from-your-neighbor generations. Weibo fan groups for anything robots vastly outnumber similar groups in the US on a per capita basis, for example. Their original thinkers are bold, if a bit arrogant, but in any case all gung-ho to take the next step. There’s something in the air over there.
In the end the exponential debt growth might not even matter with enough automation in an economy. Economics has been wrong so many times it’s not even funny anymore. China could just order everyone to keep doing what they were doing at their levels of peak prosperity. The robots will still work, products will flow. Gazillions of debt, no one has money to spend? No problem, just strike all the zeros off the debt and implement a new economic structure based more on Basic Income. People still not consuming? Tell them that the West is laughing at them, that it is their patriotic duty, and the Chinese will spend far more vigorously then when Bush asked for spending. If they’re still not spending out of fear of economic collapse, make unspent Basic Income expire at the end of the month. No one would be so stupid as to let good money go to waste. Still funked up? Who knows, maybe economics will be solved by then, by which I mean somewhat accuratly forecast as weather is today. Stranger things have happened.
5. The Inside Higher Ed report is BS. The so-called experts are all working for online ed. They are not impartial; they have vested interests. It’s garbage. Shame on Inside Higher Ed for not getting a balanced panel of experts–or heck, even one PhD economist working in the field and not benefiting from online ed.
Until we hear from impartial experts, I’m still waiting for valid criticism. This doesn’t count.