Tweets for 16th February, 2019

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Links for 15th February, 2019

  1. “This sounds boring, you might conclude. It sounds like work, and it sounds like life. Perhaps we should get used to it again, and use it to our benefit. Perhaps in an incessant, up-the-ante world, we could do with a little less excitement.”
    And also…
    “In a much-read story in The Times, “The Relentlessness of Modern Parenting,” Claire Cain Miller cited a recent study that found that regardless of class, income or race, parents believed that “children who were bored after school should be enrolled in extracurricular activities, and that parents who were busy should stop their task and draw with their children if asked.”
    An article written in praise of boredom, and I couldn’t agree more. Every now and then, it makes sense to get a little (or plenty) bored.
  2. “Back in November, Instacart changed how it paid its delivery workers, saying that it would provide them with an “earnings estimate, and a minimum $10 payment for their work. The controversy arose when it became clear that part of that $10 minimum payment was coming from tips that customers left for their Shoppers, allowing the company to pay less towards that minimum payment. Faced with lower weekly earnings, Shoppers complained, and the company said that it would keep tips separate from that minimum payment.Amazon and DoorDash have similar policies, and despite that outcry at Instacart, they have indicated that they’re sticking with them.”
    Not only a PR disaster, which it is. But also a great way to work through your understanding of elasticities of supply and demand.
  3. “More to the point, having big aircraft puts downward pressure on ticket prices. Carriers typically like to fill up at least four-fifths of their seats to maximize the revenue on each flight. The bigger the aircraft, the more discounting and promotions sales teams need to do to hit this target — one reason that the trend elsewhere in the industry has been away from the A380 and Boeing 747.”
    And if the second link above whetted your appetite about using concepts of elasticity in the world outside – then this article about large airplanes, availability of alternatives and changing partnerships will be quite useful.
  4. “The economy of favours that he describes in long, carefully researched chapters on the genesis of the Genco Pura Olive Oil company was familiar, too, because that was how much of New Delhi and north India’s business clans worked and still work, stepping in to dispense justice, protection, retribution where the government either failed or was absent.”
    There is always a rule of law in society – that may well be a definition of society. That law need not always come from government – where governments are weak, other institutions will step in to form, change and enforce the law. That’s the Godfather, and that’s why it is such a great read.
  5. “A welfare state makes sense if it means the state providing education and health care for all. Alternatively, handouts are affordable in a lower-middle income economy if you divert money from the less deserving, or if the promised benefits are not open-ended so that you don’t get a runaway bill. Without any of these, the old question begs an answer: Should you give a man fish, or teach him how to fish? Lurking hidden in the new bout of welfarism seems to be an admission that the state can’t deliver for the poor anything other than cash.”
    The earlier part of the article points out statistics that show how much India has grown over the past decade and a half. But competitive politics and botched policies mean that we’re once again in dole-out season. The more things change…

Links for 14th February, 2019

  1. “The best guess is that the next downturn will similarly involve a mix of troubles, rather than one big thing. And over the past few months we’ve started to see how it could happen. It’s by no means certain that a recession is looming, but some of our fears are beginning to come true.”
    Looking into the future is pointless, but this blog post is a useful summary of the answer to the question “If a recession were to arrive, what might be the likely causes?”. Paul Krugman lays out the usual suspects: China, America, Europe, and the trade war.
  2. “The purchasing managers’ index for the single currency area — watched closely by European Central Bank policymakers as an early indication of what will happen to GDP — hit 50.7, down from 51.1 in December, according to a flash reading from data firm IHS Markit.The reading was the lowest for 66 months — though it remains above the crucial 50 mark which suggests activity is still expanding and the region is not yet in recession.”
    It’s not bad, but it’s not looking good for Europe is the best way to read this. By the way, if you aren’t already familiar with the PMI, you may want to start keeping a tab on it for various countries. The first link today contains this link, but I found it important enough to mention separately.
  3. “…it’s important to remember that these days the social media tail wags the mainstream media dog. If you want your story to be well placed and if you want to be professionally rewarded, you have to generate page views — you have to incite social media. The way to do that is to reinforce the prejudices of your readers.”
    This is much easier said than done, and I don’t claim to be good at it at all – but I think it is important to train yourself to not have an opinion be formed, or reinforced, by reading anything in the news. A classic example of how things can go awry.
  4. “Most reports now don’t even mention the tweet as an instrumental element in obtaining and confirming the news. And that’s the fundamentally new and interesting thing to me: Twitter has blended in with all of the other infrastructure of the web that we take for granted. It’s the Google search, Google Reader (RIP), and sometimes Wikipedia for journalists and other news addicts. We use tweets as jumping-off points just as we use URLs, following them as conduits en route to the story.”
    Given a choice, I’d consume most of my information (what you might call news) from RSS even today – Google Reader is something I miss dearly. But the role of Twitter is underrated as a place to acquire consistently interesting information. Culling people you no longer want to listen to is much easier on Twitter than anywhere else – and that, to me, is Twitter’s biggest strength.
  5. “Hummingbird behavior is also of interest because they have been shown to be excellent learners. Dr. Clark said there is speculation that because they live on the edge in terms of their energy budget, they may require a great memory for where the food sources are.”
    Being forced to be good at something because of constraints imposed on you ( by others and yourself) is something that could be quite useful for all of us.  There’s other interesting snippets of information throughout this article.

Links for 13th February, 2019

  1. “The trick in a busy trauma bay is to look at a patient, decide whether he or she is dying in front of you. The way you make that decision is basically trauma poker: You’re looking for the tells that their body, the remarkable machine of the human body, is compensating to keep them alive, or refusing: heart rate, respiratory rate, blood pressure, the color of the skin. The body, if you listen, will tell you what’s going on.”
    A harrowing read on life as a trauma surgeon in Chicago. Lessons on opportunity cost, development, conflict, retaliation, game theory and much more. Great read.
  2. “Bundled pricing is one reason why subscription models like Spotify should ultimately win out over Ă  la carte models like iTunes. Subscription commerce can also be thought of as a form of bundling.”
    Or put another way, in the age of the internet, why does Netflix exist? There are many textbooks that do a better job of explaining this, but for a good primer on bundling, this is a good place to start. Note that this was written in 2012!
  3. “Mature fiscal systems create checks-and-balances which reduce the extent to which debt or off-balance-sheet liabilities can surge. Perhaps less developed countries have weak institutions, and then the political leadership sees a different optimisation. Short bursts of GDP growth can then be achieved in many bad ways, such as a surge in debt, piling up off-balance-sheet liabilities, etc. But this is not sustained growth: We get a spurt of high growth, and then things go wrong.”
    What do I think of this year’s budget? is a question I often get in classes – every year. This blog post is a good way to think about budgets – every year, and irrespective of who is in power.
  4. “The data means that the five warmest years in recorded history have been the last five, and that 18 of the 19 warmest years have occurred since 2001.”
    I’ve said it before, I’ll say it again, and I’ll reiterate it repeatedly. We do not worry anywhere near enough about climate change.
  5. “What is more interesting, though, is the story of Windows’ decline in Redmond, culminating with last week’s reorganization that, for the first time since 1980, left the company without a division devoted to personal computer operating systems (Windows was split, with the core engineering group placed under Azure, and the rest of the organization effectively under Office 365; there will still be Windows releases, but it is no longer a standalone business).”
    Ben Thompson on something that I while growing up would have considered absolutely impossible – the end of Windows.

Links for 12th February, 2019

  1. “Each of these imbalances is important and needs to be rectified. One has to do with the differing levels of per-capita consumption of basic public goods and services. The other has to do with the differing levels of stock of infrastructure leading the differential growth accelerating potential development. These are two distinct  policy goals and following Tinbergen Principle warrants two distinct policy instruments. Eliminating the Planning Commission and replacing this with NITI Aayog merely as a think tank leaves us with only one instrument; namely Finance Commission. This approach if not reviewed can lead to a serious problem of increasing regional and sub-regional inequities.
    Who better than Dr. Vijay Kelkar to tell us more about Niti Aayog 2.0? You might want to look up the Tinbergen Principle if you do not know about it already. (Via Mostly Economics)
  2. “Last year, at the end of the summer melting season, the team drew lines on the stakes marking the height of the ice, as researchers have done here for decades. Now, looking at a stake nearly a year later, Nikolay Kasatkin, one of the institute researchers, and Dr. Shahgedanova saw that more of the wood was visible. With the end of melting still a couple of months off, parts of the Tuyuksu were already about three feet thinner.”
    The NYT does excellent work tracking climate change, and this article is only the latest in a long string of articles entirely worth reading. Best viewed on a desktop.
  3. “ICICI directors shouldn’t get a free pass from regulators. Otherwise, they’ll just show up at other boards, perpetuating a culture of CEO worship that’s at odds with their role as stewards of public shareholders. Indian investors deserve better.”
    Andy Mukherjee doesn’t mince words while talking about the lack of oversight at the board level in ICICI Bank. What might the situation be like at other banks in India?
  4. “It can be easy to think of a calendar as a scientific given, or a reflection of the laws of the universe. In fact, as these holidays remind us, there are as many ways to track time as there are cultures and languages. Each calendar reveals something about how the people who created it relate to the world around them while also preserving rich cultural identities and memories.”
    A nice read from the NYT about the way different cultures track time – as it turns out, there are many ways to measure it – the lunar and the solar calendars happen to be just two of them.
  5. “India’s first education policy was framed in 1968 based on the famed Kothari Commission report, the second in 1986 and the third—a revision of the 1986 policy—in 1992.The official cited above said it’s not as if the previous policies were implemented quickly. In fact, making eight years of education compulsory was part of the 1968 policy but it was implemented only in 2009 through the Right to Education Act.”
    A depressing read, particularly for me, but the state of India’s NEP today mirrors much of India’s inaction on this in the past.

Links for 11th February, 2019

  1. “We probably would not have planes, trains, or automobiles if we had insisted on today’s safety levels during the early days of those technologies’ development—likewise, we should have laxer safety standards for new emerging technologies.”
    Worth reading this for many reasons. Don’t miss the bit about the need to change ideological commitments on the basis of rationally-arrived-at conclusions, for example. But that excerpt above is a great way to understand the concept of, and the importance of, opportunity cost.
  2. “I want to make it clear that although enriched environment dominated the 20th century, IQ gains are not destined to persist like the law of gravity. Factors that were immediate triggers of IQ gains included more adults per child in the home, more and better schooling, more people at university, more cognitively demanding jobs, and better health and conditions of the aged. There are signs that these are beginning to show diminishing returns.”
    The Flynn effect is one of the more interesting things you can learn about – and having learnt about it, it might interest you to know that the Flynn Effect may now be reversing.
  3. “They’re having a fight about the wall except the wall is the English Channel: half of these people want to turn the English Channel into a wall to keep out their version of the Mexicans.”
    An interview with Anand Giridharadas about the perils of philanthropy. Worth reading, not necessarily to agree with everything he has to say, but to think about was in which he may be right.
  4. “So, for example, if people don’t take into account the macro consequences of their borrowing, then they could borrow collectively at the same time, which might be rational from an individual perspective but that collective borrowing leads to future problems such as a foreclosure problem that has spillovers for everyone in the economy. When people borrow individually, they may not take into account those spillovers. And so, again, from a macro perspective, people might over-borrow.For all of these reasons, a possible result conceptually is that if and when credit expands, it is possible for households to over-borrow, to overstretch from a macro kind of social perspective. And that over-borrowing, that overstretching during the boom phase of the credit cycle, can then come back to hurt on the downside and lead to a deeper recession than it would otherwise have been.”
    This much is straightforward for a student of macroeconomics – but the rest of the interview with Atif Mian is worth reading for how he teases out the mechanisms of thinking about the follow-up questions in the context of today’s economy. If you want to learn how to think like a macro-economist, this interview will help.

Video for 10th February, 2019

This continues to be one of my favourite videos on economics – recently crossed a million views (which is saying something for a video about economics!), and is, in my opinion, entirely worth your time.