friday | 19 april 2013

IMMIGRATION

THE STRANGE CALCULUS OF LOW SKILL IMMIGRATION RESTRICTIONS

Matthew Yglesias | Moneybox | Slate

But stipulating that Borjas is correct, what he says is that immigration of Mexican workers is great for Mexican workers. Borjas also says that immigration of Mexican workers raises average wages of American workers. But it lowers the wages of the ~12 percent of American adults who don’t have a high school degree. The idea, apparently, is that we need to give strict priority to the interests of this minority of the American population. But why? It seems to me that in most contexts people in general—and conservatives in particular—tend to reject proposals to assist the underclass by immiserating the majority of Americans. To decide that the appropriate time to ask the median American to make this sacrifice is when doing so will also immiserate Mexican-born would-be immigrants is exceptionally odd. It seems to involve putting zero—or perhaps negative—weight on the interests of Mexican-born persons. But it’s even worse than that, since the population of American workers includes many people who were born in Mexico and Mexico-born Americans are disproportionately likely to fall into the low-skill category!

Indeed, according to Heidi Sheirholz Mexican immigration raises the wages of the typical US-born high school dropout. So we’re immiserating native-born Americans and potential immigrants from Mexico in order to give strict priority to the economic interests of foreign-born workers who’ve already immigrated to the United States. That strikes me as a rather contorted calculus.

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MORALS | INTERVIEW

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THE LIVES OF MORAL SAINTS

An Interview with Larissa MacFarquhar
David V. Johnson | Boston Review

DJ: So are you writing a defense of moral saints?

LM: More or less, yes. And part of the book will be a history of a kind of counter-morality that opposes what I’m calling saintliness. (Obviously that term has religious connotations, but I don’t intend those; I mean extreme morality.) I find the people I’m writing about extremely admirable, and I’m puzzled by the suspicion they attract. When I started working on this project I was simply interested in what a life lived according to certain kinds of moral strictures looked like. But when I wrote about people who had donated one of their kidneys to a stranger, I was astonished and fascinated to hear about how much hostility they had encountered, and I wanted to think about what was behind that.

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ECONOMICS

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FORGET EXCEL, HERE’S REINHART AND ROGOFF’S BIGGEST MISTAKE

Matthew O’Brien | The Atlantic

It’s the same pattern: a few caveats, and then a semi-speculative overselling of their results. But their biggest overselling didn’t come in the media. It came behind closed doors — in Congress. Tim Fernholz of Quartz flagged the following passage from Senator Tom Coburn’s recent book about the time R-R briefed members of Congress in April 2011, a few months before the debt ceiling debacle:

Johnny Isakson, a Republican from Georgia and always a gentleman, stood up to ask his question: “Do we need to act this year? Is it better to act quickly?”

“Absolutely,” Rogoff said. “Not acting moves the risk closer,” he explained, because every year of not acting adds another year of debt accumulation. “You have very few levers at this point,” he warned us.

Reinhart echoed Conrad’s point and explained that countries rarely pass the 90 percent debt-to-GDP tipping point precisely because it is dangerous to let that much debt accumulate. She said, “If it is not risky to hit the 90 percent threshold, we would expect a higher incidence.”

R-R whisper “correlation” to other economists, but say “causation” to everyone else. Now, they don’t always say it outright — at least not at first. Rather, they say “this isn’t definitely causation … but come on, what else could it be?” That’s been more than enough for the austerians who have been desperate for any kind of justification to forget about unemployment and worry about debt instead.

REINHART/ROGOFF AND GROWTH IN THE TIME BEFORE DEBT

Arindrajit Dube | RortyBomb

In their response, RR state that they were careful to distinguish between association and causality in their original research. Of course, we would only really care about this association if it likely reflects causality flowing from debt to growth (i.e. higher debt leading to lower growth, the lesson many take from RR’s paper).

While it is difficult to ascertain causality from plots like this, we can leverage the time pattern of changes to gain some insight. Here is a simple question: does a high debt-to-GDP ratio better predict future growth rates, or past ones? If the former is true, it would be consistent with the argument that higher debt levels cause growth to fall. On the other hand, if higher debt “predicts” past growth, that is a signature of reverse causality.

Below I have created similar plots by regressing current year’s GDP on (1) the next 3 years’ average GDP growth, and (2) last three years’ average GDP growth. (My .do file is available here so anyone can make these graphs. After all, if I made an error, I’d rather know about it now.)

Figure 2: Future and Past Growth Rates and Current Debt-to-GDP Ratio
dube_rr_2_v2

As is evident, current period debt-to-GDP is a pretty poor predictor of future GDP growth at debt-to-GDP ratios of 30 or greater—the range where one might expect to find a tipping point dynamic. But it does a great job predicting past growth.

This pattern is a telltale sign of reverse causality. Why would this happen? Why would a fall in growth increase the debt-to-GDP ratio? One reason is just algebraic. The ratio has a numerator (debt) and denominator (GDP): any fall in GDP will mechanically boost the ratio. Even if GDP growth doesn’t become negative, continuous growth in debt coupled with a GDP growth slowdown will also lead to a rise in the debt-to-GDP ratio. Besides, there is also a less mechanical story. A recession leads to increased spending through automatic stabilizers such as unemployment insurance. And governments usually finance these using greater borrowing, as undergraduate macro-economics textbooks tell us governments should do. This is what happened in the U.S. during the past recession. For all of these reasons, we should expect reverse causality to be a problem here, and these bivariate plots are consistent with such a story.

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URBANISM | DESIGN

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THE TINY TRANSFORMING APARTMENT: 8 ROOMS IN 420 SQUARE FEET

Dan Colman | Open Culture

Welcome to the New York city apartment of Graham Hill, a Canadian-born architect committed to bringing sustainability into the mainstream. His apartment does more with less. It has a footprint of only 420 square feet. Yet it’s elegantly-designed and completely functional. What initially looks like a simple studio unfolds into much more, a Soho apartment that features no less than eight rooms – a bedroom, guest room, kitchen, office and the rest. We’ll let Graham, the founder of treehugger.com, take you on the grand tour . . .

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FOOD

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POLLAN COOKS!

Mark Bittman | The New York Times

cookedBut Pollan isn’t about to become a cookbook writer, at least not yet. In “Cooked: A Natural History of Transformation,” out Tuesday, he offers four detailed recipes, used as examples to explore how food is transformed: for Bolognese, pork shoulder, sauerkraut and bread, each an illustration, he says, of the fundamental principles of cooking.

The recipes, while not exactly afterthoughts, are less important than his insistence that cooking itself is transformative. Almost as soon as we sit down in my living room, he says: “Cooking is probably the most important thing you can do to improve your diet. What matters most is not any particular nutrient, or even any particular food: it’s the act of cooking itself. People who cook eat a healthier diet without giving it a thought. It’s the collapse of home cooking that led directly to the obesity epidemic.”

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EVOLUTIONARY BIOLOGY

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WHY MENOPAUSE?

Carl Zimmer | Phenomena | National Geographic

And then hominins took an unusual evolutionary course. They evolved big brains and acquired new capacities–for making more versatile tools, for example, and for communicating with language. These factors may have allowed hominins to live longer. As a result, more females lived beyond their reproductive years.

Now the benefits of life after menopause could emerge. Any genes that enabled women to live longer would be favored by natural selection, because older women could raise the odds of their descendants surviving. Over many generations, women evolved a life in which they spent a dramatically larger part of it not having children.

In this new hypothesis, human menopause becomes at once special and yet not unique. In many species, females have the capacity to live beyond reproduction, but they rarely do, depriving evolution of the opportunity to expand that stage of life. But if other animals get that chance–for whatever reason–they may evolve to be menopausal too. Even insects can benefit from menopause. In species known as the Japanese gall aphid, females stop reproducing midway through their lives. Now that their abdomens are no longer dedicated to growing eggs, they can use that space to manufacture a sticky chemical. When a predator attacks the aphid colony, the menopausal females rush forward and glue themselves to its body. The predator is swamped by the heroic females, which die in the process. The evolutionary forces behind menopause may differ between humans and aphids, but the outcome is the same.

THE MOST DANGEROUS WORD IN GENETICS

David Dobbs | Neuron Culture | Wired

“The most dangerous words in genetics,” says geneticist Steve Jones, “are ‘the gene for.’

It’s just one pithy and wise insight in a talk stuffed with them — an essential warning against hubris, an appeal to humility, and a very funny 20-minute romp through smart genetic thinking.

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URBANISM

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VIRTUAL RETAIL STORES REPURPOSE UNUSED URBAN SPACES

Web Urbanist

Photos of products with codes that can be scanned by smart phones transform cramped spaces like the walls of subway stations into virtual retail stores, saving space and potentially adding function to disused city spots. PayPal is among the main companies pioneering quick and easy virtual shopping with QR codes plastered on billboards and ad spaces. Online grocery service Peapod already has virtual shelves on subway and commuter train platforms in Philadelphia.

Virtual-Retail-Stores-1
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WAR AND PEACE

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DAILY CHART: MILITARY MIGHT

Graphic Detail | The Economist | via The Big Picture

GLOBAL defence spending fell by 0.5% to $1.75 trillion last year. This is the first annual decline since 1998, according to new data from the Stockholm International Peace Research Institute, a think-tank. Although America still spends the biggest chunk of the world total, and 69% more in real terms than it did in 2001, its share has fallen below 40% for the first time since 1991. Indeed, since the recession in 2008, spending has fallen by 10% in 20 of the 37 countries in western and central Europe. By contrast Russia increased spending by 16% in 2012 and further rises are planned to 2015. Russia and America each spent the equivalent of 4.4% of GDP, considerably higher than the global average of 2.5%, but much lower than that of Saudia Arabia, at 8.9%. Over the past decade China’s military budget has risen by 175%, the largest increase of any of the countries shown in the chart, though this still represents only around 2% of GDP.

military-spending

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THE MUSIC INDUSTRY

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UP IN SMOKE: RECORD RE-RELEASES IN THE VIRTUAL ERA

Ben Greenman | The New Yorker | amazon

“What Love Has…Joined Together” is a standout among the otherwise undistinguished Miracles albums of the period. But it’s important for another reason. It’s the Halley’s Comet of Smokey Robinson albums: after the original LP was released, in 1970, and the record got a CD release, in 1992, it has been unavailable. As other Miracles and Robinson solo albums reappeared on CD, sometimes with annoying regularity and opportunistic repackaging, “What Love Has…Joined Together” remained out of print. And over that time, the value of the CD climbed steadily. I remember seeing it in a record store a decade ago for fifty dollars, and thinking how preposterous that was—fifty dollars for a single CD. But the value only increased, and a few years back copies were selling for more than a hundred dollars. I had to beg an older guy I knew to make me a cassette copy, and even then I had to settle for him cutting off “You’ve Made Me So Very Happy” about thirty seconds too early. The exceedingly valuable CD is pictured in this YouTube user video of the title song.

Today, Motown rereleases “What Love Has…Joined Together.” Or does it? Motown’s rerelease is virtual—the company has made an MP3 version of the record available on Amazon, iTunes, and other digital retailers. There are no plans for a physical product. The question of rerelease, again, is answered without quite being answered. More people can now hear the music, which is an unqualified good: more people need to hear it. But does this mean that more people possess the record?


SmokeyRobinson-album-290

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