Tag: economics

evil Homeowner subsidies

this is really dumb economic policy, and is the cause for the inefficient over-investment in housing:

Less developed countries have consistently higher levels of homeownership, while more advanced nations combine higher levels of economic development with substantially lower levels of homeownership. The US spends $46b on affordable housing, but $195b-$600b in subsidies to wealthy and middle class homeowners via tax deductions for mortgage interest or the non-taxation of imputed rent

the absurd housing fetish continues

I’m not sure I understand the proposal, but here is what the NYT says: The Senate voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15k, a provision championed by Republicans as addressing a root cause of the recession. Like Arnold Kling, I wish to shift the economy out of housing, not into it again. I also believe that the supply of homes is relatively elastic right now. The tax credit will subsidize the new buyers without propping up the price of homes. Demand will go up, supply will go up, price will stay more or less on the same trajectory, and banks won’t be any healthier. The subsidy goes to new home buyers and why should we be helping them above all others?

Hidden Effects of Cheap Oil

Nowhere are the second-order consequences of cratering oil prices more varied, important, and unpredictable than in the Middle East. “ISIS is not as flush as it once was. It has cut spending on fuel and bread subsidies, while increasingly shaking down locals for cash. Fighters themselves may be feeling the squeeze, too.” The militant group’s revenue from selling oil had dropped to $300k per day, down from $2m a day in 2014. “I don’t think [the oil-revenue decline] will lead to [the Islamic State’s] collapse. … But it might accelerate their implosion”. Iran, meanwhile, has entered into negotiations with world powers over its nuclear program for a variety of reasons. But the fact that Iran is one of the world’s hardest-hit oil producers is surely one of them.

The first market state

It was at this moment that the East India Company ceased to be a conventional corporation, trading and silks and spices, and became something much more unusual. Within a few years, 250 company clerks backed by the military force of 20K locally recruited Indian soldiers had become the effective rulers of Bengal. An international corporation was transforming itself into an aggressive colonial power.

Peak code?

The simulation suggests that “technological progress can be immiserating” and that even talented software programmers may face tough times in an ever more automated economy. The reason lies in the durability and reusability of software. Code is not used up; it accumulates. As the cost of deploying software for productive work (ie, the cost of automation) goes down, demand for new code spikes, bringing lots of new programmers into the labor market. The generous compensation provided to the programmers leads at first to higher savings and capital formation, fueling the boom. But “over time,” the model reveals, “as the stock of legacy code grows, the demand for new code, and thus for high-tech workers, falls.”

The history of the pallet

pallets are to trade what packet switching is to the internet.

The magic of these pallets is the magic of abstraction. Take any object you like, pile it onto a pallet, and it becomes, simply, a “unit load”—standardized, cubical, and ideally suited to being scooped up by the tines of a forklift. This allows your Cheerios and your oysters to be whisked through the supply chain with great efficiency; the gains are so impressive, in fact, that many experts consider the pallet to be the most important materials-handling innovation of the twentieth century. Studies have estimated that pallets consume 12-15% of all lumber produced in the US, more than any other industry except home construction

Attacking medical waste

$210b are wasted per year on unnecessary treatments in the us alone. time for less paranoia, and more science.

NNT describes how many people would need to take a drug for one person to benefit. The NNT for antibiotics in a case of acute bronchitis is infinity, because the medicine is no better at curing the illness than a placebo. If your kid is throwing up and you take her to the hospital, she might get a drug called Zofran. The NNT for that is 5. You’re pushing 50. You’re healthy, but your doctor suggests you start taking a baby aspirin. That NNT is 2000. Not especially helpful. It’s unfortunate that the NNT is not a statistic that’s routinely conveyed to either doctors or patients. But you can look it up on a site that you’ve probably never heard of: TheNNT.com