Friday assorted links
2. Interview on Cape Verdean culture. And here is Mayra Andrade.
3. John Luttig on closed vs. open source AI.
4. New phone apps turn books into 15-minute versions (New Yorker).
5. Is the number of academic jobs for economists falling in the U.S.?
6. “The observations suggest some of earliest “monster” black holes grew from massive cosmic seeds.”
7. “MK’s platform is a mix of Zuma’s sense of personal victimhood, Zulu nationalism, opposition to constitutional rule, nationalising strategic industries, ending South Africa’s green energy policies, the creation of a new upper house for indigenous kings and queens (a decolonial House of Lords), as well as the expropriation of all land without compensation by the state and for it to be under the custody of traditional leaders.” Link here.
The Sea Change on Crypto-Regulation
In the last few weeks there has been a sea change in crypto regulation:
1. Bitcoin spot ETFs were approved–reluctantly, after a 3-judge Federal Appeals court ruled unanimously that the SEC had acted arbitrarily and capriciously–but nevertheless opening Bitcoin holdings to institutional investors. Case in point, The State of Wisconsin bought Bitcoin ETFs for its pension fund.
2. In a very unusual move, SAB 121, was overturned by the House and then, even more surprisingly, overturned by the Senate including the votes of many Democrats. SAB 121 is an SEC staff accounting bulletin (not law but guidance) that said to banks if you hold crypto for your customers, i.e. a custody service, you must account for it on your balance sheet. This guidance does not apply to custody of any other asset. Essentially, SAB 121 made it prohibitive for banks to offer custody services for crypto because that service would then impact all kinds of risk and asset regulations on the bank. Aside from singling out crypto, the SEC is not a regulator of banks so this seemed like a regulatory overreach.
President Biden said he will veto but that is no longer certain. It wasn’t just crypto lobbying against SAB 121 but traditional banks. The banks point to the approval of Bitcoin ETFs saying, quite logically, why can’t we custody these ETFs the way we do every other ETF? Senate Majority leader Chuck Schumer, D-N.Y., sometimes called Wall Street’s man in Washington, voted in favor of nullifying SAB 121. Schumer can read the room.
3. The House voted to ban the Fed from establishing a Central Bank Digital Currency (CBDC).
4. The House approved a wide-ranging bill to (finally!) establish regulations for digital assets markets. The vote was 279-136 in favor with many Democrats crossing party lines to support it.
5. After saying nothing for months, usually a bad sign, the SEC approved Ethereum spot ETFs. On the surface, this might have seemed logically inevitable given the approval of Bitcoin spot ETFs but many people thought the SEC would do everything it could to find daylight between Bitcoin and ETH. Instead, it tacitly acknowledged that ETH is a commodity and not a security.
Why is this happening? I see three main factors at play. First, crypto is becoming integrated with traditional finance. As the big banks get involved, the politics around crypto are shifting. Second, crypto is becoming normalized. Ironically, the prosecution of Sam Bankman-Fried, Changpeng Zhao and manipulators like Avraham Eisenberg may have convinced some U.S. regulators that crypto doesn’t have to be destroyed, it can be tamed. Nakamoto might not be pleased but realistically this was the only option to move forward. Eventually, everyone wants to pay their mortgage. Third, Trump’s strong endorsement of crypto has alarmed the Biden administration. Most political issues are firmly divided along party lines, but crypto remains an open issue. With millions of crypto owners in the United States, a significant number are highly motivated to vote their wallets. Biden doesn’t want to give the crypto issue to Trump.
None of this means we are entering crypto Nirvana but as far as regulation is concerned a lot has changed in just a matter of weeks.
Full Disclosure: I am an advisor to several firms in the crypto space including MultiversX, Bluechip and 0L.
Can they reconstitute Philosphy & Public Affairs?
Here is a recent announcement of note:
We are unanimously resigning from our editorial roles at Philosophy & Public Affairs, published by Wiley, and launching a new diamond open-access journal published by Open Library of Humanities (OLH). All of us will play the same editorial roles in the new journal and will retain the aim of publishing the best philosophical work touching on matters of public importance.
Do read the whole text, but you can imagine how the arguments run. Lots of big names are behind this, including Sen, Scheffler, Srinivasan, Waldron, and others. I am rooting for them, but can this succeed?
How sticky are reputations anyway? Nine months from now, what percentage of people on a university-wide tenure committee will know about this change? Three years from now?
Or consider the new journal itself. Without the long history of famous articles behind it, might it, with the same set of editors, have a lower reputation? Talk about mood affiliation!
Or might the existence of a “naming squabble” itself lower the reputations of both the old journal and the new venture? “Well, if they can’t get along, both outlets will have trouble managing their future reputations…”
Or might some of the highly prestigious editors, over time, be more willing to leave than would have been the case under the old moniker? Perhaps the newly reconstituted board will not be able to get along with itself, not without the final backstop of “the company” (Wiley) to enforce a core on all the bargaining.
If I am in the second year of my tenure clock in a philosophy department, and I have a great paper, do I send it to the new journal? In its old manifestation it was a top top outlet, but is it still? What risks am I running? Or do I send it to the thing still named Philosophy & Public Affairs, which presumably still has some very good new editors.
I will be watching.
Has Argentina given up on dollarization?
That is the topic of my latest Bloomberg column. Here is the opening bit:
The good news is that President Javier Milei seems to be backing away from plans to dollarize the Argentine economy. That is also the bad news.
Don’t get me wrong: Dollarization would be great — if the country had a spare $30 billion to back each peso with dollars. But Argentina doesn’t have that extra money ready at hand, and so the Milei regime is looking for some form of dollarization that can both work and be worthy of the name.
In a recent speech, Milei seemed to suggest that formal dollarization — as seen in El Salvador, Panama and Ecuador — isn’t going to happen. His remarks are somewhat confused, so it might be helpful to review different types of dollarization and what they mean.
And the main argument:
A third path is currency competition, a concept Milei mentions early in his remarks. In this scenario, which seems to be Milei’s primary new plan, the dollar and the peso would circulate side by side and compete with each other. As the economy grew, the use of the dollar would increase, while the peso would fade away.
This plan satisfies Milei’s desire for a broadly libertarian solution, but it doesn’t stabilize the value of the peso. It is already the case that both currencies, plus a lot of crypto, circulate in Argentina. And dollars have been subject to a lot of regulations and non-market, fixed exchange rates in the past. It might be good to remove many of those restrictions, as Milei has, but such deregulation will not itself lower the rate of inflation. In fact, if the peso is going to fade away, it will lose all the more value upfront, as markets come to expect its eventual euthanasia.
In reality, this scenario resembles the Zimbabwe path too closely for comfort. Until Argentina’s fiscal problems are solved, peso inflation must continue, if only to service the national debt. In fact, to the extent currency holders can shift into dollar holdings more easily, inflation may even accelerate. The base of peso holdings to be taxed by inflationary seigniorage would grow ever narrower, necessitating an ever-higher inflation tax to keep the government in business.
In sum:
There is no way around it: If a government has fiscal difficulties, a stable currency — whether it be the peso or the dollar — costs a lot of money. As tempted as he might be, Milei cannot afford to ignore this fact.
Recommended.
That was then, this is now, NBA edition
Then, from summer of 2023: “The Boston Celtics just set an NBA record by agreeing to a five-year, $304 million contract with two-time All-Star Jaylen Brown…the odds are the deal will be seen as a good one — maybe even a bargain. The economics of the National Basketball Association have been shifting toward more and more money.”
That was by me, for Bloomberg, and at the time that claim received a lot of pushback.
Now: “With a potential $7B annual media rights deal looming, NBA players could make up to $95M a year on supermax contracts in the future.”
Here is a further look at those numbers. Did I mention that the Celtics are in the Eastern Finals and are the current favorite to win the title?
*GOAT* is now a free audiobook
Here is the link to consuming various forms of GOAT, including the free audiobook, available through several forms of download. The voice is excellent, can you guess how it was done? My wife and sister thought it was me.
To access it and sample, the YouTube link perhaps is easiest:
I heartily thank OpenAI for their assistance in this matter.
Don’t bother learning about this one, unless you already know what I am talking about
You know, the job market, the tweets, and the RCT, here is a complaint from Christopher Phelan. Here is the paper. I’ll just make a few points in hit and run fashion:
1. I am not convinced IRBs should have a say in this kind of matter, one way or the other. (I do think they should stop professors from injecting patients with syphilis.) In that sense I am not upset that this proceeded.
2. Given current standards (I would prefer much weaker IRBs), I don’t think this experiment should have been approved. It corrupts a process of evaluation.
3. Consider my behavior at MR. As you may know, every job market season I blog quite a few job market papers, and usually I will say or at least imply something positive about the candidate and the work. (As an aside, I suppose I now think this helps them, and I was not sure before.) I take this process very seriously, and try to look at as many job candidate web sites and papers as possible. Toward this end, I also will look at schools of management and public policy schools, as well as large numbers of schools outside the top ten. I wouldn’t randomize this process for the purposes of conducting an experiment. I feel that would be unfair to the candidates, unfair to MR readers, and somehow ever so slightly corrupting the integrity of the economics job market. I know my tastes are weird! But they are my true tastes, and I want my readers to know that. I would not have participated in this experiment. In fact, I feel the experiment is ever so slightly impugning the integrity of which papers I choose to cover, because some readers might think I too am a randomizer in the fashion of this experiment.
I don’t think “learning something about the job market” suffices to make up for these problems.
4. As a practical matter, the experiment shows us that you can do relatively well looking for talent in some new or unusual places. I agree, and Daniel Gross and I pushed that theme in our book on talent.
5. If you have read this far, I hope you heeded the title of this post.
The death of the AI safety movement?
That is the topic of my latest Bloomberg column, and here is one part:
The safety movement probably peaked in March 2023 with a petition for a six-month pause in AI development, signed by many luminaries, including specialists in the AI field. As I argued at the time, it was a bad idea, and got nowhere.
Fast forward to the present. Senate Majority Leader Chuck Schumer and his working group on AI have issued a guidance document for federal policy. The plans involve a lot of federal support for the research and development of AI, and a consistent recognition of the national-security importance of the US maintaining its lead in AI. Lawmakers seem to understand that they would rather face the risks of US-based AI systems than have to contend with Chinese developments without a US counterweight. The early history of Covid, when the Chinese government behaved recklessly and nontransparently, has driven this realization home.
No less important is the behavior of the major tech companies themselves. OpenAI, Anthropic, Google and Meta all released major service upgrades this spring. Their new services are smarter, faster, more flexible and more capable. Competition has heated up, and that will spur further innovation.
Do note this:
The biggest current obstacles to AI development are the hundreds of pending AI regulatory bills in scores of US states. Many of those bills would, intentionally or not, significantly restrict AI development, as for instance one in California that would require pre-approval for advanced systems. In the past, this kind state-level rush has typically led to federal consolidation, so that overall regulation is coordinated and not too onerous. Whether a good final bill results from that process is uncertain, but Schumer’s project suggests that the federal government is more interested in accelerating AI than hindering it.
Safety work of course will continue under many guises, both private and governmental, but “AI safetyism,” as an intellectual movement, has peaked.
This piece was drafted before some of the recent controversies at OpenAI, and the argument does not rely on any particular interpretation of those events, one way or the other.
Arnaud Schenk has some useful clarifications, especially for those who cannot read the full column.
Here is a version of the column, adapted for Don Mclean’s song “American Pie.”
How important is “the scientific method”?
From a recently published paper by Alexander Krauss:
Using data on all major discoveries across science including all Nobel Prize and major non-Nobel Prize discoveries, we can address the question of the extent to which “the scientific method” is actually applied in making science’s groundbreaking research and whether we need to expand this central concept of science. This study reveals that 25% of all discoveries since 1900 did not apply the common scientific method (all three features)—with 6% of discoveries using no observation, 23% using no experimentation, and 17% not testing a hypothesis. Empirical evidence thus challenges the common view of the scientific method.
File under “In favor of methodological pluralism.” Via Zhengdong Wang.
Wednesday assorted links
1. Model this, cross-state variation in teen suicide rates.
2. What Swedes think about driverless car algorithms and their moral weights.
3. Median voter theorem: “A year-long joint investigation by The Washington Post, Lighthouse Reports and a consortium of international media outlets shows how the European Union and individual European nations are supporting and financing aggressive operations by governments in North Africa to detain tens of thousands of migrants each year and dump them in remote areas, often barren deserts.”
4. MIE: “the train station has a mystery vending machine where you can buy whatever is in the unclaimed packages from delivery lockers”
5. Bryan Caplan, technological pessimist (though I would put aside faster than light travel).
6. Kroszner on AI risk and financial prudence and supervision. And the AI bill SB 1047 has at least passed the California Senate, with an uncertain future.
The Left on FDA Peer Approval
Robert Kuttner discovered an excellent treatment for colds while vacationing in France and is rightly outraged that it’s not available in the United States:
Toward the end of our stay, my wife and I both got bad coughs (happily, not COVID). We went to our wonderful local pharmacist in search of something like Mucinex or Robitussin, which are not great but better than nothing.
“We have something much better,” said he. And he did. It’s called ambroxol. It works on an entirely different chemical principle, to thin sputum, facilitate productive coughing, and also operates as a pain reliever and gentle decongestant with no rebound effect.
We experienced it as a kind of miracle drug for coughs and colds. A box cost eight euros.
Ambroxol is available nearly everywhere in the world as a generic. It has been in wide use since 1979.
But not in the U.S.
…You can’t get ambroxol in the U.S. because of the failure of the Food and Drug Administration to grant reciprocal recognition to generic medications approved by its European counterpart, the European Medicines Agency, when they have long been proven safe and effective. To get FDA approval for the sale of ambroxol in the U.S., a drug company would need to sponsor extensive and costly clinical trials. Since it is a generic, as cheap as aspirin, no drug company would bother.
…I’ve petitioned the FDA, asking them to create a fast-track procedure, whereby generic drugs approved in Europe, and well established as safe and effective, could get reciprocal approval in the U.S.
This would produce approval of ambroxol as over-the-counter medication for coughs and colds without unnecessary new clinical trials. And should ambroxol turn out to have real benefits for Parkinson’s as well, it would already be well established in the U.S. as an inexpensive generic.
Influenced by my work on FDA reciprocity aka peer approval, Ted Cruz introduced a bill, the Result Act to fast-track approval in the United States for drugs and devices already approved in other developed countries. Similarly, AOC has noted that the FDA is far behind the world in approving advanced sunscreens. Perhaps there is an opportunity here for bipartisan support.
Hat tip: the excellent Scott Lincicome.
What are your favorite non-violent movies?
From Jonathan Birch on Twitter:
What are your favourite nonviolent movies? I don’t mean romcoms, I mean movies that in some way exemplify or explore the idea of nonviolence.
Sorry, but Gandhi doesn’t do it for me. What actually comes to mind is that old Bruce Dern movie Silent Running. Or how about Babette’s Feast? The LLMs in general cough up politically sanctimonious movies. Is it crazy to suggest Vincent Ward’s Map of the Human Heart, admittedly a tragic work too? Terence Malick’s Tree of Life is a natural pick, but somehow it has never registered with me. Bergman’s Smiles of a Summer Night surely is in contention.
What I’ve been reading
1. Alexander C.R. Hammond, Heroes of Progress: 65 people who changed the world, with a forward by Steven Pinker. Starts with Gutenberg, of course Norman Borlaug is included, don’t forget Cobden, Bentham, Frederick Douglass, and many others. An Auto-Icon to those who spurred progress! Who knew that Virginia Apgar was born in Westfield, N.J.? Well done.
2. Cixin Liu, Supernova Era. An A+ plot premise (I won’t spoil it), the story goes downhill somewhat but still worth reading.
3. Martin Plaut and Sarah Vaughan, Understanding Ethiopia’s Tigray War. Clear and to the point, the best book I know on this topic. It is also especially clear on the roles of Eritrea and Somalia.
4. Kunal Purohit, H-Pop: The Secretive World of Hindutva Pop Stars. If you are an outsider and looking for a good “micro-study” to understand India, this is a good place to start. Trying to better understand a country typically should consist of both macro overviews and micro-studies, of course.
5. Asimov Press, Origins. Their first publication, this volume is a series of essays on biotechnology. The key mission is learning how to conduct science better, and you can get updates here on synthetic biology, transgenic ants, macrophages, and other topics of recent (and earlier) note.
Anastasia Berg and Rachel Wiseman, What Are Children For?: On Ambivalence and Choice is not a book for me right now (thus I haven’t read it), but the authors are very smart and thus it is worthy of mention.
In return for a referee report, I requested Chen-Pang Yeang, Transforming Noise: A History of Science and Technology from Disturbing Sounds to Informational Errors, 1900-1955. This book is good background for understanding late Fischer Black, as ideas derived from Brownian motion lie behind both options pricing theory and Black’s essay “Noise.“
What exactly is the national security argument here?
Janet Yellen, the US treasury secretary, has urged the EU to intervene urgently to dampen the growing export levels of Chinese cut-price green technology including solar panels and wind turbines, pushing European leaders to move to a full-scale trade war.
Here is the full story. And from the FT two days ago: “A number of major European power companies have scaled back or are reviewing their targets to develop renewable energy because of high costs…” Where again is the net national security argument? The biggest risk is that China will stop sending future wind turbines to Germany? Which is somewhat in China’s lap in any case? And according to GPT-4o those turbines have an average life of 20-25 years? C’mon people, we are not stupid…
Tuesday assorted links
1. Anthony Edwards jersey for sale at Sotheby’s at 20k.
2. On the disbanding of AI safety operations.
3. On the heritability of fertility, more from Robin Hanson. And Cremiaux differs.
4. It seems the House Republicans’ crypto bill will proceed. Maybe that is why ether was up 23% yesterday?
5. The growing importance of desalination.
7. Again, a generative AI directory of EV winners, by Nabeel.
8. TNSSjobs, or is this manufacturing?:
