Noted for Your Lunchtime Procrastination for October 24, 2014
Must- and Shall-Reads:
- The bottom 90 percent are poorer today than they were in 1987 – The Washington Post
- Will the big banks ever clean up their act?
- Calling the consolidation efficiency bluff
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Copyright and Creativity: Evidence from Italian Operas: “This paper exploits variation in the adoption of copyright laws within Italy – as a result of Napoleon’s military campaign – to examine the effects of copyrights on creativity. To measure variation in the quantity and quality of creative output, we have collected detailed data on 2,598 operas that premiered across eight states within Italy between 1770 and 1900. These data indicate that the adoption of copyrights led to a significant increase in the number of new operas premiered per state and year. Moreover, we find that the number of high-quality operas also increased – measured both by their contemporary popularity and by the longevity of operas. By comparison, evidence for a significant effect of copyright extensions is substantially more limited. Data on composers’ places of birth indicate that the adoption of copyrights triggered a shift in patterns of composers’ migration, and helped attract a large number of new composers to states that offered copyrights…”
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Low Down Payments Are Coming Back: “On Monday, Federal Housing Finance Agency Director Mel Watt announced that mortgage-finance companies Fannie Mae and Freddie Mac would start backing loans with down payments as low as 3%. And on Tuesday, three federal agencies approved a loosened set of mortgage-lending rules, removing a requirement for a 20% down payment for a class of high-quality loan known as a ‘qualified residential mortgage’…. In addition, veterans can apply for 100% financing on loans insured by the Veterans Administration, and the U.S. Department of Agriculture has several loan programs…. Borrowers with low down payments do default in higher numbers than similar borrowers with higher down payments, said Mark Zandi…. However, Mr. Zandi still believes that low-down-payment lending can be done in a responsible way, by making sure borrowers have solid credit, have low ratios of debt compared with their income and are taking on standard loans…”
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< China’s Slowdown Is Secular, Not Cyclical: Is China bouncing back from a weak patch of growth, or is it headed for a prolonged slowdown lasting many years?… Both are probably true. Cyclical fluctuations are occurring around a clearly slowing long-term trend…. Until 2011, mainstream economic forecasters… believed that the trend growth rate in China would remain in the 9-10 per cent region for as far ahead as the eye could see. Now almost no one thinks that…. The Conference Board forecast this week that trend growth after 2020 would be only 4 per cent a year…”
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Jeff Weintraub: China’s Man in Hong Kong Explains the Problem with Democracy–It’s a Threat to Capitalism: “The argument that democracy is dangerous because it means mob rule by the ignorant unwashed masses–or rule by unscrupulous and even tyrannical demagogues who can manipulate those masses–is a very old one…. [The] more specific version… that political democracy… threatens the basic requirements of a capitalist market economy, was made quite often throughout the 19th and into the early 20th century…. For better or worse, history seems to have demonstrated that such claims about the fundamental incompatibility… were exaggerated…. [The] inherent tensions… [are] a good thing…. Some pro-plutocratic and market-fundamentalist ideologues still share that 19th-century fear of the perils of democracy, and occasionally some billionaire will blurt this out in an unguarded interview. But in most western societies, people who hold these views can’t state them… openly and straightforwardly… [but] euphemistically… with various circumlocutions. In some other parts of the world, however, those anti-democratic arguments can still be made publicly with refreshing honesty.”
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How will the long fall in China’s growth impact risks and opportunities for business?: “Is the China slowdown over? Many analysts think China has had a ‘soft landing’ that will yield about 8 percent annual growth for the next decade. We disagree. Absent reforms that resolve China’s productivity and debt challenges, we expect a ‘soft fall’ to growth of about 4 percent by 2020, including negative growth for certain sectors and regions. While there is tremendous potential for reform, political economy challenges make bold action difficult. Our research provides guidance for companies looking to optimize investment and sustain growth.” -
Chair Yellen Is Right: Income and Wealth Inequality Hurts Economic Mobility | Economic Policy Institute: “Janet Yellen gave a speech this week… no mincing of words as to what has happened: ‘It is no secret that the past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.’ I appreciate both the straightforward description of the rise of both income and wealth inequality, and the explicit connection between these growing inequalities and the threat this poses to future generations’ upward mobility and opportunity…. Conservatives seem to only be concerned with facilitating opportunity or social mobility, and consider income inequality itself not a worthy focus…. Various reporters have noted the Obama administration backing away from making ’income inequality’ a key issue and shifting to a focus on opportunity or mobility. Is this tenable, deciding to focus on the upward mobility of today’s poor children without any focus on the incomes and wealth of their parents and the circumstances of their lives—where they live, in what housing, with what safety, and so on?”
Should Be Aware of:
- The Intelligent Life of the City Raccoon
- How to become an equity fund manager
- NOAA Climate: ENSO Blog
- Ebola Vaccine, Ready for Test, Sat on the Shelf
- “Here’s corporations’ basic message to women: Just ‘lean in.’ And if leaning in leaves no time for marriage or kids, here’s a free freezer for your eggs…”
- Journalists need a point of view if they want to stay relevant
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The ECB as lender of last resort?: “As part of the move to a banking union, the largest banks in the Eurozone will soon be supervised by the ECB. This column argues that supervision and the lender of last resort function should be seen as a joint product. After the introduction of the euro, the national central banks continued to act as lenders of last resort because bank supervision remained at the national level. Now that supervision is moving to the ECB, so should the lender of last resort function for the larger, cross-border, banks.”
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On David Brooks on Edmund Burke: “Burke is… often held up as the source of conservatism, [but] I get the feeling he’s not often read… quotations inevitably have a whiff of cliché about them—little platoons and so on—emitting that stale blast of familiarity you sense when you listen to someone go on about a text he may or may not have read during one week in college…”
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Helicopter Money: “The original Friedman thought experiment involved the central bank distributing money by helicopter… by the central bank printing money, rather than the government issuing debt…. Helicopter money is… QE coupled with a tax cut. Another way of thinking about it: instead of using money to buy assets (QE alone), the central bank gives it away to people…. It could be that advocates of helicopter money really want higher inflation targets, but do not want to be explicit about this, just as they may not want to call helicopter money a fiscal stimulus. The problem with this is that central bankers do understand the macroeconomics…. As Willem Buiter says, ‘there always exists a combined monetary and fiscal policy action that boosts private demand’.”
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Plutocrats Against Democracy: “The very success of the conservative agenda only intensifies this fear. Many on the right–and I’m not just talking about people listening to Rush Limbaugh; I’m talking about members of the political elite–live, at least part of the time, in an alternative universe in which America has spent the past few decades marching rapidly down the road to serfdom. Never mind the new Gilded Age that tax cuts and financial deregulation have created; they’re reading books with titles like [Nick Eberstadt’s] A Nation of Takers: America’s Entitlement Epidemic, asserting that the big problem we have is runaway redistribution. This is a fantasy…. If you worry that low-income voters will run wild, that they’ll greedily grab everything and tax job creators into oblivion, history says that you’re wrong. All advanced nations have had substantial welfare states since the 1940s–welfare states that, inevitably, have stronger support among their poorer citizens. But you don’t, in fact, see countries descending into tax-and-spend death spirals–and no, that’s not what ails Europe…. The obvious answer is Mr. Leung’s: Don’t let the bottom half, or maybe even the bottom 90 percent, vote. And now you understand why there’s so much furor on the right over the alleged but actually almost nonexistent problem of voter fraud, and so much support for voter ID laws that make it hard for the poor and even the working class to cast ballots. American politicians don’t dare say outright that only the wealthy should have political rights–at least not yet. But if you follow the currents of thought now prevalent on the political right to their logical conclusion, that’s where you end up. The truth is that a lot of what’s going on in American politics is, at root, a fight between democracy and plutocracy. And it’s by no means clear which side will win.”
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The real villain of the Clinton impeachment: “The Republicans who set up a crooked Republican lawman to go after Clinton. Ken Starr crooked? A Freedom of Information Act search reveals that, yes, during the probe into Clinton’s relationship with an intern, he used agents who bullied and ‘mistreated’ the key witness, Monica Lewinsky, threatening her and her family if she didn’t provide them with grounds to remove the Democratic president. ‘The report also lays out the encounter in detail, suggesting that it quickly spun out of control as a shocked and hysterical Lewinsky asked to consult a lawyer or a parent–even as prosecutors grew increasingly determined to persuade her to agree on the spot to cooperate against the president…’ Keep this in mind: the actions taken were the result of Republican demands. The actions were political and illegal. The report on the matter was kept under wraps for years and only now has emerged as a result of a FOIA demand…”
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Interactive map: World population by latitude and longitude: “André Christoffer Andersen created this nifty interactive map that estimates world population at any coordinate. Andersen was inspired by Bill Rankin’s data visualizations. According this this map, the most populous coordinate is in the Punjab region. Some of the data seems shifted a bit, so the spike for Mexico City is a little too far east, but it’s a cool proof of concept!”