Tyler Cowen's Blog, page 400
February 1, 2013
Observations on meeting Bill Gates
I am pleased to have been invited to a small group session in New York City to meet Gates and hear him present his new letter. My observations are these:
1. Gates has a command of data and analytics in development economics better than that of most development economists, or for that matter aid professionals. He also expects everyone at the meeting to know everything about what he is talking about, or at least is willing to proceed on that basis. That said, when it comes to answering questions he sometimes assumes a stupider version of the question than what is actually being asked.
2. He is smart enough, and health-savvy enough, not to waste time with handshakes at the beginning of meetings. People as productive as Gates should not be required to shake hands, and the same can be said for people less productive than Gates.
3. He does not go on and on. His opening remarks were about two minutes long, with no notes, and all of his answers were to the point.
4. We were served water, at exactly the right cool temperature, yet without ice cubes. No cookies.
5. Unlike Gates, I am not convinced that “health” is the key breakthrough area for economic development, but there is enough low-hanging fruit out there that it doesn’t have to be. That said, when questioned on this his answers were closer to tautology than they needed to be. Much of their emphasis on measurement seemed to me to track absolute movement toward goals, rather than relative efficacies of different project investments.
6. Gates suggested that if he had been more careful tracking and organizing his AP credits, he might have been able to receive his undergraduate degree. That is one sense, in his words, in which he is barely a college drop out. In another sense, it makes him a very extreme college drop out.
7. He mentioned that he is an extremely eager consumer (and not just funder) of on-line education and The Teaching Company. And this is a man who could receive free (or paid) lectures from almost anyone he wants.
8. Empellon Tacqueria, in the West Village, has an excellent mackerel ceviche and I recommend also the quail eggs.
9. I have now run into Reihan Salam twice in the last two years, in random public places in Manhattan, without any reason for expecting to see him there. This should cause me to revise my prior on something or other, but I am not sure what. When changing/surfing the channels, which I do occasionally to “keep in touch,” I also run into him on TV a lot.
10. Gates understands the very high returns from better governance, but also sees it is not trivial to reap them.
11. In the context of U.S. education, he does not worry that teacher cheating will bias test results very much at the macro level.
12. He is more optimistic about charter schools than I am (though I favor them), and more optimistic about the results from giving teachers feedback about their performance. In my view, bad teachers don’t very much want to improve and it is not so much a matter of knowledge. Undergraduate college teachers are evaluated all the time, and it does help, but it hardly brings the rotten apples up to par and I don’t see it as the key to moving the system forward at lower levels.
Here is Jason Kottke’s account. Here is Dana Goldstein’s account.
Gates’s annual letter, which was released earlier this week, is here.
January 31, 2013
Department of Uh-Oh
Labor unions enthusiastically backed the Obama administration’s health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour.
Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26.
To offset that, the nation’s largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance.
…Contacted for this article, Obama administration officials said the issue is subject to regulations still being written…
Top officers at the International Brotherhood of Teamsters, the AFL-CIO and other large labor groups plan to keep pressing the Obama administration to expand the federal subsidies to these jointly run plans, warning that unionized employers may otherwise drop coverage. A handful of unions say they already have examined whether it makes sense to shift workers off their current plans and onto private coverage subsidized by the government. But dropping insurance altogether would undermine a central point of joining a union, labor leaders say.
…The Teamsters’ Mr. Hall said his union has no plans to eliminate workers’ insurance. Instead, he worries employers will have an incentive to drop coverage in collective bargaining if they can’t tap the subsidies.
All of a sudden, people are figuring this out. The article is here, and for the pointer I thank Craig Garthwaite.
*The Great Deformation*
The author is David A. Stockman and the subtitle is How Crony Capitalism Corrupts Markets and Democracy.
I am a big fan of The Triumph of Politics, for its understanding of American government, but in this book I disagree with too many of the key points. The author likes “sound money” and dislikes “easy money” yet this position is never really argued for. Fiat money is responsible for a very large number of ills but of course financial crises and bubbles are hardly new. Consistently, the author knows to vilify Milton Friedman. He is an explicit liquidationist of the kind you thought Brad DeLong was simply imagining.
On money and macro, I am more persuaded by Friedman, Irving Fisher, early Keynes, David Hume, and Scott Sumner, among others. If you are not, you will find this a very energetic economic history, including the New Deal, from a passionately argued point of view. There is an odd mix of historical detail and theoretical lacunae. I am still wondering what we are supposed to do when the deflationary shock arrives. The Stockman of The Triumph of Politics, I think, would have seen that our current institutions are not up to supporting such volatility.
What is the deadweight loss from museum art collections?
Steven Kopit, a loyal MR commentator, asks:
Tyler -
Let’s have more on the economics of museums. That’s actually an interesting topic.
Only a very small portion of the collections of the Louvre other major museums is on display at any given time. I think it would make a great deal of sense to provide additional venues for shows–including in China. In the end, holdings of art (like income, per SS) only matter is someone actually consumes them, ie, gets to see them.
I say the deadweight loss here is not so large. Most art exhibitions are not self-financing from the side of the viewers, which suggests that the demand to see the pictures is not higher than the costs of mounting the exhibit. Arguably you can throw in philanthropic support as another part of “market demand,” but I consider that a separate valuation issue. Maybe our current artistic institutions are under-providing marketing opportunities for businesses and foundations, but that still won’t get you a major pent-up demand to view the pictures, again not relative to cost. The very popular pictures, such as the good works by the Impressionists and post-Impressionists, are shown quite frequently, including in traveling exhibitions.
Context matters a great deal in this setting. Currently most of the Louvre is not being viewed at any point in time, as the crowds tend to cluster in a few very well-known areas. Many people would want to go see anything they are told they ought to go see. What is underfunded is some kind of “demand for participation in a public event,” not the viewing of art per se. If only they could create more hullaballoo around the more obscure Flemish painters.
Almost all museums have large stretches of empty walls. I would put up many more pictures there, as indeed I do in my own home. That museums do not do this I find striking and indicative. Nor do I see viewers and visitors demanding this, if anything the unspoken feeling might be to wish for a bit less on the walls, so that one may have the feeling of having seen everything without exhaustion.
The costs of storing art are high. Perhaps the Louvre should sell some of its lower-tier works to private collectors. But the general public just doesn’t want so much more art to see, not if they have to pay for it and maybe even if they don’t.
Economics Music Video Contest
The Hackley Endowment for the Study of Capitalism and Free Enterprise at Fayetteville State University is sponsoring an Economics Video Contest on the subject “Economic Value Is Subjective.” Entries are due Wednesday, May 15, 2013. First prize is $2,500, more info and rules here. The first entry, “big books” was pretty good once it got into the rap. Also, one of the big books looked familiar.
Taxis and the shortest route home (from my email)
I used to drive a taxi. I made a lot of money doing it. I learned very early on to never drive someone to their destination if it was a route they drove themselves, say to their home from the airport, or from their home to work or vice versa. Everyone prides themselves on driving the shortest route but they rarely do. Often people develop a route that is based on need -say going by the day care, or avoiding an intersection where they once had an accident or to avoid driving by an ex’s house or skirting road construction long since resolved- but as they become habituated to it, they fail to reorganize their strategy when their needs change. When I first started driving a cab, I drove the shortest route -always, I’m ethical- but people would accuse me of taking the long way because it wasn’t the way they drove. So, I learned to go their way ending up with a lot less grief and a lot more money. If you’ve ever wondered why a seeming professional cab driver will ask you how to get to your destination, this is why. Going your way means they’ll make more money and they won’t be accused of ripping you off. Not to say that in the beginning, I wasn’t stupid. I’d try to show the customer the route on a map but they’d usually be offended that I was contradicting them. It was to their house, if I’d never been there, how could I possibly know better than they did? In the end, experts they consider themselves to be, people are a tangle of unexamined emotional impulses and illogical responses.
You can read more about quite different topics here. And here is another point:
Oh, and here’s a tip I hope you never need: if your car is ever stolen, your first calls should be to every cab company in the city. You offer a $50 reward to the driver who finds it AND a $50 reward to the dispatcher on duty when the car is found. The latter is to encourage dispatchers on shift to continually remind drivers of your stolen car. Of course you should call the police too but first things first. There are a lot more cabs than cops so cabbies will find it first -and they’re more frequently going in places cops typically don’t go, like apartment and motel complex parking lots, back alleys etc. Lastly, once the car is found, a swarm of cabs will descend and surround it because cabbies, like anyone else, love excitement and want to catch bad guys. Cabbies know a lot of stuff*. I found a traveling shoplifting ring in Phoenix once. Professional shoplifters always take cabs. So do strippers going to work but that’s another story.
January 30, 2013
Gates, Thiel, Summers, and Thrun on on-line education
The video is here, Thomas Friedman moderates, and for the pointer I thank MG. I have yet to view it (starting right now), but it is fair to call it self-recommending.
The Browser Book of Quotations
You will find it here (pdf). There are numerous good bits, here is one of them:
To admire an artist for his own sake, although certainly a compliment, can also be a way of suggesting that he has no place in the larger scheme of things
Jed Perl
They chose a quotation from me:
Effective political ideas are those that can still do good in half-baked form
Tyler Cowen
I enjoyed every page, recommended. Here is an iPad link, here is a Kindle link.
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