Conscience Warrior

29 March 2014

27 March 2014

Roundup of Arguments Contra-Piketty

Probably still too early for good, sound rebuttals to Capital in the Twenty-First Century, but, until we get one of those, have a look-see at this stuff:

Arnold Kling doesn't understand, because he thinks the premise is impossible because, well, he never quite says...

Will Wilkinson just doesn't want to talk about it.

Robin Hanson sees invisible taxes.

Tyler Cowen promises he'll have more to say later, and his readers say "THEFT! OMG!!"

Any more found will be added to this list. If you have one, leave it in the comments and I will add it on.

[Cross posted at the Newsfeed]

22 March 2014

Links of the Week - 21 March 2014

A weekly collection of links from the Conscience Warrior Newsfeed

An Assessment of the Effectiveness of Anti-Poverty Programs in the United States
Yonatan Ben-Shalom, Robert A. Moffitt, and John Karl Scholz

Redistribution, inequality, and sustainable growth: Reconsidering the evidence
Jonathan D Ostry, Andrew Berg, and Charalambos Tsangarides

How macro answered its critics
Noah Smith

What the collapse of the Ming Dynasty can tell us about American decline
Noah Smith

Redistribution and the Lesser Depression
Paul Krugman

Avoiding the cost of needless fear
Cass Sunstein

America’s Long and Productive History of Class Warfare
Justin Fox

Inequality in Capitalist Systems Is Not Inevitable
Mark Thoma

Whose Economy You Talkin’ About?!
Jared Bernstein

Wages of Fear
Paul Krugman

I’m a Slacker Not a Quitter and You Should be Too
Jared Bernstein

Piketty on Economists
via Matt Bruenig

Piketty’s Triumph
Jacob Hacker, Paul Pierson, Heather Boushey, Branko Milanovic

A response to another attack on the Great Gatsby curve—and can we call it the “line to serfdom” instead?
Carter Price

Needed: Meaningful Progress on Income Inequality
Chris House

15 March 2014

12 March 2014

NY Fed Labor Conditions

The Federal Reserve bank of New York has published a cool interactive guide to labor conditions, using some familiar and some unfamiliar metrics. It looks like they are still working out the kinks, but, when fully operational, this will be a great resource. Now, if they only make these graphics embeddable, they will be approaching the same league as the St Louis Fed...

08 March 2014

Links of the Week - 7 March 2014

A weekly collection of links from the Conscience Warrior Newsfeed

Have we been living in an age of austerity?
Zachary Goldfarb

In a Dark Year, a Lighter Side at the Fed
Annie Lowrey

Capitalism for the Masses – Part III
Jonathan Wight

Higher Education: Different Questions Yield Different Answers
Jared Bernstein

Winners Take All, but Can’t We Still Dream?
Robert Frank

The Fed in 2008
Chris House

Screw Up In High School, If You Are Rich
Matt Bruenig

Capitalism for the Masses – Part IV
Jonathan Wight

The Minimum Wage Increase and the CBO’s Job Loss Estimate
Jared Berstein

Natural Big Lies
Paul Krugman

Warren Buffett reveals the one stock fund you need to invest in
Jia Lynn Yang

Ben Bernanke’s Biggest Mistake
Matthew Yglesias

What Effect Will a Minimum Wage Increase Have?
Brad DeLong

Should the state support anti-gay discrimination?
Matt Bruenig

Choose Your Monetary Adventure, Mt. Gox Edition
Paul Krugman

01 March 2014

Links of the Week - 28 February 2014

A weekly collection of links from the Conscience Warrior Newsfeed

I Can’t Find Enough Skilled Workers! (At the Crappy Wage I’m Offering…)
Jared Bernstein

Time to mobilize against inflation paranoia
Ryan Cooper

Here’s why blocking the Comcast merger is good for free markets
Timothy B. Lee

Stupidity in Economic Discourse
Paul Krugman

Karl Rove: Presidents Who Leave Deficits, Bad Economies, and War Are the Worst
Jonathan Chait

Microfoundations and Mephistopheles
Paul Krugman

A Faustian Bargain?
Chris House

When Will Social Conservatives Stop Demanding Special Rights?
Josh Barro

Iron Men of Wall Street
Paul Krugman

Affairs, Domestic and Foreign
Joseph Joyce

Ferrari Capitalism
Jonathan Wight

The Trouble With Being Abstruse
Paul Krugman

The Stimulus Success
Bill McBride

Is there a use for Real Business Cycle Models?
Chris House

The Stimulus Anniversary
Paul Krugman

Technological Progress Isn't Deflation
Matthew Yglesias

Are negative interest rates really the solution?
David Andolfatto

2008
David Andolfatto

Capitalism for the Masses – Part I
Jonathan Wight

23 February 2014

Winner-take-all and the long-tail: in response to Robert Frank

Robert Frank, in an interesting column in the NYT on the implications of technological change, argues that the winner-take-all scenario is likely to prevail over the long-tail scenario. I think it's important to distinguish between homogenous and heterogenous goods and services. For example, one of Professor Frank's examples is piano manufacture in the nineteenth century.

Piano manufacturing was once widely dispersed, for example, simply because pianos were so costly to transport. But with each extension of canal, rail and road systems, shipping costs fell sharply, and at each step production became more concentrated. Worldwide, only a handful of piano makers remain, as producers with even a slight edge have ultimately captured most of the industry’s income.

This is the textbook winner-take-all scenario. Those with the greatest comparative advantage, even if that advantage is small, drive their lessers from the market, and capture all gains to production.

Professor Frank compares the piano makers with the sellers of digital music downloads, citing research that indicates that "Digital song titles selling more than one million copies, for example, accounted for 15 percent of sales in 2011, up from 7 percent in 2007." This, according to Professor Frank, goes against the long-tail theory, which proposes that, as delivery systems become cheaper (iTunes, Amazon, etc versus big record labels and major retail stores), more market share will be captured by smaller artists.

I think there are two forces at play here. First, regarding the long-tail of digital music: Modern delivery systems likely do not nudge buyers toward top-sellers, at least no more so than archaic delivery systems. Sure, Amazon shows shoppers the top-sellers more than the niche items, but Amazon also knows something about users' preferences. I'm not sure that Amazon has ever shown me a Britney Spears or a Justin Bieber song to buy. That's probably because I don't buy that sort of stuff. I'm much more likely to see Wilco and Grant Green, because that's the sort of stuff I buy. In Olden-Times, Tower Records showed me tons of Madonna and Garth Brooks albums, probably because it had no mechanism to distinguish me from every other yahoo that wandered through the door. Thus, the modern delivery system encourages the purchase of niche titles, at least more so than the old system did.

As I said above, it's likely important to distinguish between homogenous and heterogenous goods and services. In the digital music marketplace, there are both homogenous services and heterogenous goods being sold. When I am shopping for music, I have many artists to choose from. No single one is objectively any "better" than any other; this is personal preference. As I argued in the last paragraph, niche (lower popularity) artists have a greater opportunity to be heard because barriers to entry are so low. On the other hand, Amazon provides a (more or less) homogenous service. Shoppers patronize Amazon because they are a good (easy, cheap, reliable) way to browse and buy music (and rare art, among other things). Amazon has captured much of the market because it is objectively better at providing the service it provides, than, say, whoever is selling music in brick and mortar shops in 2014. The same technology that allows the long-tail theory to hold for independent artists allows Amazon to vacuum up much of the market share in the provision marketplace.

It's not inconceivable that the winner-take-all hypothesis holds in situations where providers of goods and services can be roughly ranked from best to worst. On the other hand, if personal tastes and preferences are significantly material, there is no reason that the long-tail hypothesis cannot also be true.

22 February 2014

Links of the Week - 21 February 2014

A weekly collection of links from the Conscience Warrior Newsfeed

Krugman the moderate
Noah Smith

How Economics PhDs Took Over the Federal Reserve
Justin Fox

A Well-Known Liberal Bias
Chris House

Do the economic facts have a conservative bias?
Noah Smith

Not All Forms of Wealth Are Equally Pernicious
Karl Smith

Big Ideas in Macroeconomics: A Review
David Glasner

Reverse Notch Blogging
Paul Krugman

The One Percent
Robert Solow

How the New Classicals drank the Austrians' milkshake
Noah Smith

Who benefits from benefits?
Chris Dillow

Eight things ‘Downton Abbey’ can teach us about the modern economy
Steven Mufson

Does cutting government make it more efficient?
Noah Smith

Why Do You Care How Much Other People Work?
Paul Krugman

Inequality and Indignity
Paul Krugman

Yellen and the Labor Market
Paul Krugman

The HFT arms race
Noah Smith

New Realities
Alicublog

Market Failure and Political Failure
Jeffrey Frankel

Economist Jason Furman is the wonkiest wonk in the White House
Zachary A. Goldfarb

19 February 2014

"Franchise Tag," or "Really Good Kicker Tag?"

A perennial NFL story line at this time of year is the speculation about which players will be tagged as "Franchise" players, and the attendant kerfuffle over the designation of certain players by position. Most recently, it was Baltimore defender Terrell Suggs, nominally a linebacker, who felt he was due the higher salary associated with defensive ends. This year, it is (will be?) New Orleans player Jimmy Graham, nominally a tight end, who may file a grievance to receive the higher salary associated with wide receivers. The crux of both players' arguments is that they spend a greater proportion of their playing time lined up on the field in a manner more closely associated with the higher-salaried positions. The designated salary for Franchise players each year is determined by the top-end of the salaries at the tagged player's position.

Since the spirit of the Franchise designation is to avoid the loss of players regarded as essential to the franchise (team), it seems rather ridiculous that the salary of such a player should be dependent on his position. On most teams, the most essential player is the quarterback, a running back, or maybe a key defender. Regardless, if a player is deemed to be essential to the health of the team, it shouldn't matter what his position is. Because of this weird quirk in the structure of the rule, recent years have seen kickers, punters, guards, backup quarterbacks, and countless forgettable players of all positions designated as their team's "Franchise" player. The most absurd instance of this phenomenon came in 2012, when six punters or kickers were tagged. Is it possible that a specialist was the best player on six different teams?

If this is the spirit of the designation, then the best solution to these fights over a player's position is to restructure the Franchise designation to pay the designated player an average of the top salaries in the league, regardless of position. I'm not certain the number of top salaries to include, but 32 is not a bad place to start the discussion, as there are 32 teams in the league. A smaller number would make the salary higher, obviously, and may be better. That is a detail that can be worked out; getting the concept right is the important part.

15 February 2014

Links of the Week - 14 February 2014

A weekly collection of links from the Conscience Warrior Newsfeed

Janet Yellen Should Ignore the Unemployment Rate
Matthew Yglesias

Bill Gates: ‘Capitalism did not eradicate smallpox’
Interview with Ezra Klein

Everything New Is Old Again
Paul Krugman

Senator McConnell Announces Intention to Fold Losing Hand Again
Bill McBride

President Obama Does Many Things Well but Being a Socialist is Not One of Them
Jared Bernstein

Stop Listening to Rich People
Matthew Yglesias

Soup Kitchens Caused the Great Depression, AFF Edition
Paul Krugman

The Realities of Class Begin To Sink In
Paul Krugman

Profits Up, Wages Down: What Economics Has to Say
Jared Bernstein

Money and Class
Paul Krugman

Economics Research and the State of the Union
Equitablog

Roundup: Economics of the Minimum Wage
Washington Center for Equitable Growth

Ben Bernanke's Legacy
Stephen Williamson

What if preferences are unstable?
Noah Smith

One percenter paranoia reveals dangers of inequality
Ryan Cooper

The Wisdom of Laureates
Chris House

Would You Feel Differently About Snowden, Greenwald, and Assange If You Knew What They Really Thought?
Sean Wilentz

How to Spot a Paranoid Libertarian
Cass Sunstein

PCE inflation rate lowest since 2009 - key to future Fed policy
Sober Look

The Moral Hazard of the All-Volunteer Army
Uwe Reinhardt

08 February 2014

Links of the Week - 7 February 2014

A weekly collection of links from the Conscience Warrior Newsfeed

The most damning critique of DSGE
Noah Smith

The Raleigh Experiment
Paul Krugman

Capital in the long run
The London Economist

Is There One Economic Model to Rule Them All?
Mark Thoma

Noah Smith’s not-so-damning critique of DSGE models
Chris House

Tribal Reality and Extant Reality
Noah Smith

The Vicious Circle of Income Inequality
Robert Frank

The Anti-Scientific Revolution in Macroeconomics
Paul Krugman

Congress is a millionaires' club. Why that matters, and what we can do about it.
Kathleen Geier

Alternately, I suppose all those ex-coal miners in kentucky could just become new-media entrepreneurs
No More Mister Nice Blog

What liberals get wrong about single payer
Ezra Klein

How will conservatives save the poor?
Noah Smith

5 reasons why your pay isn't rising as fast as it should
Mark Thoma

A Quiet Win for Banks on Borrowing
Matthew Yglesias

Rational Expectations and Reality
Chris House

Is the U.S. too corrupt for single-payer health care?
Ezra Klein

Why stopping the next financial crash is an impossible dream
John Aziz

The equation at the core of modern macro
Noah Smith

Paul Krugman & The Nature Of Economics
Chris Dillow

The Moral Indignity of Social Democracy
via Brad DeLong