Chokepoints: American Power in the Age of Economic Warfare

Chokepoints: American Power in the Age of Economic Warfare by Edward Fishman

Economic warfare seems like a option - until it doesn't work. The book explores some types of economic warfare that have had various degrees of success. Iran worked out pretty well at first, but then there started to be some confusion as to what the goals were. It perhaps lasted a little bit too long. The US dollar is a unit of global trade, so the United States has power to flex its muscle to get others to agree to demands. Alas, this works best with smaller entities. Russia and China are big enough to look for alternatives (thereby diminishing America's power.) They also have natural resources that America needs. Sanctions against Huawei had a some success, though the company is still doing well. Russian sanctions have done little to impact the Ukraine War. Europe needs Russian fuel. Carving out the greatest export limits the power of sanctions. The United States is probably reaching its end period of economic hegemony.

New Deal Law and Order: How the War on Crime Built the Modern Liberal State

New Deal Law and Order: How the War on Crime Built the Modern Liberal State by Anthony Gregory

Crime was really bad in the United States before World War II. Kidnappings, shoot outs and other incidents were common. Part of the New Deal helped encourage law and order. Policies could be somewhat contradictory and reflected the interests of those in charge. Alcohol was legalized to reduce crime. Marijuana was criminalized to reduce crime. Kidnapping penalties were increased. White collar crime was also attacked. Crime fighting also had to deal with political coalitions. Blacks wanted lynching to stop, while white southerners wanted to continue to lynch. The FBI and national crime fighting grew in importance, while states still maintained their jurisdictions. The book covered a lot of crime fighting, but struggled to have a common thesis.

The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy

The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy by Scott Sumner

This book had interesting somewhat counter-intuitive views of the impacts of monetary policy. I didn't fully grasp all the details, but felt it could be a good way to look at things. "Easy" money is a key way that the government can help the economy. However, interest rates are often only a part of this. Often the anticipation of rates can be more critical than the actual rates set themselves. Common explanations we hear of for economic crashes are often side correlations. For instance, housing production had already stalled before the great recession. Some "fixes" may also make matters worse. (Encouraging unions and high wages at the start of the Great Depression likely stalled employment gains and production.) Macroeconomics uses the same terminology as microeconomics to describe something very different. Getting the right policies in place can help keep things humming along well, while the wrong policies can make things worse.

The author is very cautious about his beliefs. While he holds them strongly, he also feels that common culture is not likely to take them up until ready. He also notes that "liberal economics" will almost always "win", though the definition of "liberal economics" is always changing. Could we really keep the economy moving around nicely for a long term? Or would the thought of bubbles and crashes mean they must occur?

Shock Values: Prices and Inflation in American Democracy

Shock Values: Prices and Inflation in American Democracy by Carola Binder

The history of inflation and deflation is riddled with attempts at price controls. From the time of the revolutionary war, price controls were debated and sometimes put into place. Price controls had some impact on stabilization, but also created distortions in the market as well as made winners and losers. A national bank and monetary policy helps provide stability but exchange rates also caused distortions. (especially when values of silver and gold differed.) A strong, independent central bank can provide stability. However, it is difficult for politicians to resist tampering. FDR went to great extents to preserve his price controls. Policies to strengthen unions while controlling prices probably hurt the economy and employment (while benefiting those that kept jobs) Price controls stopped after the end of the war, but were tried again later without much success. People don't like it when things look more expensive and they always try to blame profit taking. Companies will look for an excuse to raise prices. They might be accused of short term high profits even if they don't make up for previous loses. Keeping inflation under control takes work, but does make people happy.

The Wage Standard: What's Wrong in the Labor Market and How to Fix It

The Wage Standard: What's Wrong in the Labor Market and How to Fix It by Arindrajit Dube

I kept thinking "yes, but..." in response to the arguments in this book. He argues the minimum wage should be risen in part because many people spend a long time in minimum wage jobs. However, he focuses too much on looking at the wages and not at the jobs. Why are people stuck in these jobs? He dances around a few concerns, but misses some of the biggies. We require people to have health insurance, yet policies available publically are horrible compared to those you can get from companies. Work flexibility also comes into play.

The arguments with unions are also similar. With more heavily unionized and regulated job markets, employees that have jobs are better off, but it is harder for new employees to find jobs. It also limits new job creation. Longshoreman make huge amounts of money as blue collar workers. However, getting a job is extremely difficult for those not in the family. Tech jobs are high paying and much more open, but also more volatile. Big companies tend to be more lucrative, better places to work.  However, all these big companies started out small. It is extremely difficult to compete in the industry with big companies. New companies must typically start somewhere else. Tech companies opened their new markets and went from small to big. Tesla is still seen as a tech company, even as it competes with automakers. Unions typically succeed in companies that have grown and become fossilized. They help provide greater stability and predictability at the expense of dynamism. They also introduce friction and costs. 

The author complains about companies "subcontracting" out workers. Alas, that is driven by some of the same policies advocated. Companies have core competencies and labor relations. Hiring others to do non-core items is the wise choice. Especially with regulations, it can be difficult to keep track of everything in their own field, let alone many others.

There are many things wrong with the labor market. When people work as true independent contractors, they are free to set what they charge and find somebody willing to pay. Alas, the regulatory market forces people into "for-hire" schemes of employee and employer. People a century ago would cringe at this. Why are we making policies to further force people into this situation?

The Technology Trap: Capital, Labor, and Power in the Age of Automation

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

What is the impact of technology on society? The answer is tricky. In the short term, current occupations are destroyed. Those that spent much time developing skills find those skills irrelevant. The skilled artisans must fight for new positions once their past jobs are eliminated. In the long run, society is usually better off. People have access to more lower priced goods. Those who lost their livelihood eventually find new work (or leave the workforce.)  New career opportunities appear.

The book details many cases of technology change through history. The response has differed depending on implementation. Workers were not thrilled when skilled jobs were replaced by unskilled children. When workers have been able to benefit from increased technology they are happier with the changes. Social safety nets also increase the willingness of people to adopt the changes.

The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy

The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy edited by Ryan A. Bourne

Prices are an indication of the marginal value that buyer and seller place on an exchange. They don't explicitly represent the value that went into creating something or even the worth of the object. Water is required to live, but is cheap. Prices help allocate resources to those who are willing to pay for them.

Prices of individual items go up and down to match the desires of buyers and sellers. Inflation is typically caused by changes in money supply and velocity. Price controls may cause mismatches in supply and demand and may not alter inflation. Consumers will respond to artificially low prices by consuming more. Producers will respond by producing less or reducing quality. This can lead to shortages and lead to everyone being worse off. (Though it could possibly lead to alternatives.) Artificial prices may often substitute one cost with anther. Instead of paying in money for something, people may need to pay in time by waiting in a long line or hunting for a hard to find item.

The negative impacts of price controls can be far reaching. During World War II, the US implemented wage controls. To get around these, workers offered fringe benefits, such as health insurance. This became the de facto way that health care is obtained in the US and results in a complicated system that exists today and is very difficult to disentangle.

People also are not stupid. Is there a "pink" tax requiring women to pay more than men for the same products? If it were truly so, women would just buy the men's version. However, the female products are often different in ways that females value more. The "gender wage gap" is also explained by forces. (After all, what company wouldn't want to employ as many people as possible for a fraction of the cost?) Early career men and women in the same profession tend to earn the same. However, women tend to gravitate to less risky and less remunerated careers. They are also more likely to take time off for childbirth and child rearing. They are more likely to value flexible work schedules. (Increasing maternity leave for women can make this even worse, by encouraging them to take more time off, thus limiting experience. Perhaps more paternity leave is the answer?) 

The book looks at many other examples. The general theme is that meddling with prices will impact the economy and will often have unforeseen consequences. People are quick to adapt to find new loopholes in a regulatory environment. The more more friction there is in pricing, the slower the economy will adapt. It reminds me of an interesting analysis of the German industry. Labor has a seat at the board and influences actions of the company. This makes it very friendly to existing workers. However, this also makes it difficult for pivots to electric cars and other significant changes. Will they have much of a role in the future industry?

What is the best way to regulate a market? Is allowing uber-wealthy a necessary cost of doing business? How do we appropriately set markets for externalities (like emissions, deforestation, etc.)? The current regime of regulating the response to regulations doesn't help.

Late Admissions: Confessions of a Black Conservative

Late Admissions: Confessions of a Black Conservative by Glenn Loury

This book has a lot to unpack. It includes "Black Conservative" in the subtitle. However, he is far from the typical conservative. His most cited economic paper advocates redistributing money from the rich to the poor. (The societal benefits of the poor having a few extra dollars were found to be much greater than the losses experienced by the wealthy.) However, he also published papers against affirmative action. (A lower standard for certain groups would allow them to get through the door with less skill which would end up setting them back as they are not prepared to achieve.) At times he was embraced by the right. At times he was loved by the left. He didn't blindly adopt the beliefs of either side. Instead, he focussed on what he believed in. His beliefs were also not necessarily reflected in his actions.

He dropped out of school only to come back later. (Hence one possible positive meaning of "late admissions".) He received a PhD from MIT and later served as a tenured professor at multiple Ivy League schools. He advocated for black families to stick together, yet he he was not involved in his first son's life. He was in long term marriages, yet was also a serial philanderer. He is comfortable having erudite academic discussions as he is going to the ghetto and pursuing crack and prostitutes. (The "late admissions" could be all the confessing he does in this book about his bad behaviors and the people he has hurt.) He had been arrested on drug charges and spent time in rehab. He was nowhere near perfect and did not expect other people to be perfect. However, he does want to see people putting forth the effort to improve themselves. The book is an interesting story of the challenges in a life you cannot pigeonhole together with an interesting evolution of economic thought. 

Surviving Rome: The Economic Lives of the Ninety Percent

Surviving Rome: The Economic Lives of the Ninety Percent by Kim Bowes

How did the typical person live in Rome? It is amazing the quantity of data that they are about the piece together from a time a few millennia ago. Pompeii has provided a great source as things were suddenly stopped and frozen in time. Other archaeology work has been used to find details of the life, while written records provide some clue to wages and work. Analysis is influenced by those doing the work. What was needed to subsist? It appears that most of the family would work. Children would do work when they could. Farmers often had small plots that they would farm to live on and to trade with others. It was not a life of abundance, but did seem to be survivable.

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson

Nations succeed when they adopt inclusive government. They fail when the leaders adopt extractive policies. The rest of this book provides examples to prove this thesis and poke holes at other theories of prosperity. Leaders can enrich themselves by extracting all they can for themselves. (One example had Mugabe even winning the lottery in Zimbabwe.) The extraction comes at the expense of general prosperity of a country. Strong institutions can help prevent rulers from extracting too much for themselves. However, they must be strong enough to prevent leaders from changing them even when a leader has popular support. Spanish colonization was built on extraction. Colonies that are built on extraction (such as Spanish or slave colonies) often continue this mindset well after the colonizers have left. Inclusive governments are often democracies, but all democracies are not fully inclusive. There are plenty of democratically elected rules that seek to extract value for themselves. (Is the United States moving more towards that direction?) China has been able to pivot to prosperity by opening up enough while still maintaining communist control. Many poor countries receive huge amounts of aid, yet fail to achieve prosperity. Much of the aid is consumed in overhead and waste, with much of the remaining aid used to enrich the ruling party (either directly or indirectly). Moving to inclusion is the key to maintaining prosperity, but it is hard to do.

A Brief History of Equality

A Brief History of Equality by Thomas Piketty, translated by Steven Rendall

Piketty sees the world as moving towards a state of more equality, using the definition he gives. The argument is filled with contradictions and redefinitions. There are various ideas that make sense, but are not carried out well. Including negative externalities in calculation of wealth seems like a smart move, but it becomes challenging in practice. Equality across different groups seems like a noble goal, but how far do you go in defining groups. Is equality a good thing? There is conflict between equality and freedom. People are richer with more material possessions, but are they happier? If what matters is relative difference, wouldn't equality just make everyone feel "blah"? The author is an advocate of reparations. Would these benefit the people paying or the people receiving? He gives the example of "reversing" the suffering of Haiti by returning payments made to France. Would you also make Russia pay back payments made by Finland? What about Germany's payments after World War I? Making payments can encourage thrift and hard work. Receiving payments can end up causing harm and hurting the economy. (Even in rich economies, natural resource abundance can have negative impacts. Would loads of cash in previously disadvantaged groups result in short term boost of "others" and along term negative for the community impacted? You don't often hear of dynasties started with lottery winnings.) 

The author also criticizes the conservatism and slow change of current institutions. A drastic change would be a preferred way to launch communism. Alas, the track record of this has not been good. If we enable more dramatic changes, what is to say it would happen to the left? Trump is an example of taking power to change in the opposite direction.

Cause and effect are also uncertain. Does equality lead to economic growth? Or does growth provide the ability to provide more societal benefits for all? What is the end goal for growth and equality? 

The Affluent Society

The Affluent Society by john Kenneth Galbraith

After World War II, America became rich. It was setting records producing and accumulating wealth. What should the US do? He advocates for a more attention to the government and personal sectors. Build up people. This aligns much more with modern liberal thought than classical liberalism.

The Myth of the Entrepreneurial State

The Myth of the Entrepreneurial State by Deirdre N. McCloskey and Alberto Mingardi

This book has good ideas, but is not well written. It was written as a refutation of Mazzucato's Entrepreneurial State. It tries too hard to refute points and often comes across as pedant bickering. The style is also very loose and casual. It is a book, but barely.

Despite the poor writing, the argument is sound. The state is just not good at entrepreneurship. It is very bad at picking winners. It is even bad at picking areas to invest. The lack of signals can cause it to spend way too much time investing in the wrong things. It is much more inclined to protect the status quo. After all, the state is beholden to voters who tend to like their current jobs and have difficulty seeing what could happen in the future. Central planning has been a huge failure nearly everywhere it is tried. Touted benefits of government regulation are often "fixes" to excesses that previous regulation encouraged.

The government can take credit for encouraging some innovations. It has played a huge role in the economy and thus some would be hits. However, to achieve these hits, it was required to take money out of the economy. Could there have been even greater innovations elsewhere? The Concorde was the result of huge amounts of government outlays to provide supersonic travel. It does not fly anymore. Was that money well spent? Would it have been better to allocate it elsewhere?

In the end, the state is made up of people. In a democracy, these people are selected by voters. It may be nice to envision a technocratic elite that have thoroughly studied in the area and can provide the guidance of what would be best for the country in the long term future. Alas, what we typically get is politicians with their own beliefs and cronies. Democrats are not too happy with Trump being empowered to redirect science funding. However, in empowering the state, you are beholden to people to act in whatever way they see fit. 

Causal Inference: The Mixtape

Causal Inference: The Mixtape by Scott Cunningham

This is primarily an econometrics textbook. There are dense sets of equations and programs (in Stata and R) for performing Causal inference. I skipped over a lot of that and focussed on the narrative. The book primarily deals with teasing out the cause from complex data. Natural Experiments often play a key role. Two things that are almost the same with a slight difference can often provide insight into a policy based on that difference. However, you must also be careful to control for other factors. A lot of the math in this involves doing that. Often graphic visualizations can help to tease out these bits of interest. Much of the results are "freakonomics" style. These results are often well debated. Often some other factors can be found that swing the results in another direction. (Though sometimes the study is just bad.) Having an openness to accept a different result when the data shows otherwise is important for the process. I would prefer a book that is heavier on the stories and less on the mechanics, but I could not expect more from a textbook. The author also pulls in song titles for the chapter headings (thus a "mixtape").

Time to Think Small: How Nimble Environmental Technologies Can Solve the Planet's Biggest Problems

Time to Think Small: How Nimble Environmental Technologies Can Solve the Planet's Biggest Problems by Todd Myers

Libertarianism and environmentalism can go together well. Small scale, bottom-up improvements can exceed top-down mandates. Some general principles are remarkably simple. Energy costs money. People like to save money. Making it easy to reduce energy saves them money and encourages more savings. Mandates can backfire. I have a house that was built at a time when GU24 sockets were mandated. This was a hard mandate to encourage more efficient lights. However, this used CFLs which are expensive and hard to dispose of. Shortly thereafter, LED bulbs with standard sockets became popular. These are cheaper, use less energy and are easier to dispose of. The top-down failed by mandating something, while the bottom up got something better. The author alludes to similar cases of energy markets. The west coast had heavy regulation which limited innovation possible. Even west-coast startups were first to launch out east.

The book describes many technologies and companies that have done small things to improve the environment. Many have succeeded despite the difficulty of battling against entrenched interests and regulation. Microgrids can provide enhanced resiliency and greater efficiency (since electricity does not have to travel as far.) However, they do not fit in well with the large scale regulated utilities. Providing better knowledge about electricity usage can help users cut back on waste. Small scale clean up innovations can help reduce oceanic garbage. There are many other examples. Small improvements that spread can have a much bigger impact than large mandates that people are reluctant to use. Nobody came down and said: "we will require everyone to use a vehicle that ways 10 times as much as them to get around". However, people gradually started to use cars. Government came in to "improve" some of the problems with cars by creating highways to reduce congestion, safety standards, fuel economy standards, parking requirements, etc. These were attempts to improve issues, but they have also created additional issues and entrenched the poor environmental policy. The small solutions are the ways to move away from this, but that may require breaking away from the existing government challenges.

Lombard Street: A Description of the Money Market

Lombard Street: A Description of the Money Market by Walter Bagehot

This century-plus old description of the success of British bankers and fractional reserve banking still feels fresh today. Britain became the banker of the world and was able to provide financing for many large projects as well as the continued involvement in trade. Rather than a centralized banking authority, Britain had a various banks competing with each other. Even the bank of last resort, the Bank of England, was a private entity with a special "too good to fail" mandate. The author compares British banking to that of France that is controlled by the mandate of the government. France was not able to move as quickly or provide the same benefit as British banking.

As part of the discussion the author discusses some of the political issues of the day that related to banking. I suppose that would have been at the top of mind at the time, but today that is the one part that did not seem relevant. 

No One Makes You Shop at Wal-Mart: The Surprising Deceptions of Individual Choice

No One Makes You Shop at Wal-Mart: The Surprising Deceptions of Individual Choice by Tom Slee

Economics is based on individual choice. People "vote by their feet". If everyone chooses something, that will win. However, it is not so simple. The large corporations have power that make it difficult for others to compete. There is an amalgamation of benefits and costs with an imbalanced relationship. Game theory comes into play. People may prefer to have a vibrant local downtown. However, they also want the lower prices that walmart offer on some things. Alas, by getting those low prices, they decimate the downtown. The book has some interesting cases of how decisions are made for us by the big entities, leaving us with little opportunity. Big movie studios and big businesses make things their way, leaving an illusion of free choice, but providing little of it. The book has interesting thoughts, though does get a bit disorganized.

Reflections on the Revolution in France/Rights of Man (Giants of Political Thought)

Reflections on the Revolution in France/Rights of Man (Giants of Political Thought) by Wendy McElroy and George H Smith, discussing works by Edmund Burke and Thomas Paine (Contributor)

This is a quick audio introduction to two famous works from over two centuries ago. The audiobook includes various voice actors to discuss the essays and their authors. There was some controversy with Burke as he seemed to take on different views. This short audiobook provides good background, but is not a source of the original works. 

The Communist Manifesto [fake]

The Communist Manifesto [fake], not really by Karl Marx

I'm not sure what this was, but it wasn't the Communist Manifesto. There was some introductory material on Marx and the background of communism. The last part contained a catalog of available publications from some 100-year old British Socialist Society. This is the epitome of false advertising. Don't claim this is the "Communist Manifesto" by Marx when there is almost nothing that he wrote.

Let Colleges Fail: The Power of Creative Destruction in Higher Education

Let Colleges Fail: The Power of Creative Destruction in Higher Education by Richard K. Vedder

Colleges tend to expose liberal ideologies, but institutionally they are extremely conservative. The organizational structure and institutions are very slow to change. Huge amounts of money flow through colleges with little validation of the value returned. Perhaps the only significant crack down has been on for-profit players. These players realized there was money to be made by making some small improvements. However, there is much more that needs to be done. The government provides fast subsidies through various routes. This may be justified for educating the populace and preparing people for careers. However, much of college is an early adulthood social experience. If government subsidizes this, should it also subsidize cruises and other social experiences for different populations? For education, the government has little validation of the value of a degree. The government may spend much more subsidizing a liberal arts degree at a low-tier private college than an engineering degree at a public university, despite the engineering degree enabling much greater career prospects. Schools are incentivized to invest more in "experience" rather than job prospects. College attendance costs have increased at a rate much greater than inflation. Colleges have significant facilities, much of which are highly underutilized. A dose of the free market may be best for colleges. The smaller schools could fail. Loans and other funding can be based on value returned. Innovation can be encouraged rather than letting accreditation bodies focus on sameness. (Why do all degrees take 4 years?) Universities are essentially government entities without regular elections. There are competing goals and missions. Improvements can be made, but will require some gradual approach.