Plane reading, Oct 7 2015

Expert takes worth reading on economics, technology, and other interesting topics from the last week.  Plus recent news on Uber and on-demand/autonomous vehicles:


Economics and business in emerging markets

1. Chris Dillow, on the global trade slowdown
2. TechCrunch, on Hoffman-backed Segovia - enterprise software for aid programs and NGOs.

Economics and Inequality

1. Gale, Kearney, and Orzag at Brookings, on the Gini coefficient limits of a 50% tax rate's ability to alter income inequality particularly among the bottom quintile.  And John Quiggan with a partial rebuttal
2. Mark Thoma, arguing that welfare states help (not hinder) economic growth.  Tim Taylor with more detail, including mythbusting about perceptions that the US has low and lagging transfer payments relative to global peers
3. Reddy and Lahoti, on the unreliability (overestimation) of the World Bank's efforts to assessing global poverty
4. Noah Smith, covering new research out of the Fed Reserve in St Louis showing that price inflation for things poor people purchase has gone up by much less than things rich people purchase.  Suggesting that real income increases have been higher than reported for the lowest income groups, and higher than reported for the highest income groups
5. NBER, on US infant mortality higher than European peers due to higher mortality in low-SES families in US
6. WashPost, on recent research on the inequality of deaths in auto accidents
7. Tyler Cowen, on Noah Smith's chart showing Japanese women overtaking US in labor force participation percentage
8. Mark Thoma, on "the argument that part of the reason for the inequality problem is distortions in the distribution of income driven by market imperfections such as monopoly power that allows prices to exceed marginal costs."

Economics and Global Warming

1. VoxEU, on the need for global-standard carbon pricing rather than country-specific
2. NYTimes, on European automakers asking for a 70% increase in allowable NOx emissions once real testing is implemented.  Rest of non-US world should step up now

Economics and Politics (aka public policy)

1. John Tierney, on his 2006 op-ed arguing that recycling was inefficient and wasteful. Update: still is
2. Robert Litan, on the politics behind Elizabeth Warren's attempts to smear his Brookings report on the cost-benefit analysis of proposed rules for investment advice
3. Paul Romer, on distinguishing between Human Capital and Knowledge when studying economic growth.  As he and others have noted, it's the 25th anniversary of his paper on rivalry and excludability in "Endogenous Technical Change"
4. NYTimes, on the likely negative impact to efforts to control heathcare costs of Hillary Clinton's proposal to reverse "Cadillac tax" on health care plans as a favor to unions
5. Stephen Williamson, on structural limitations on employment growth in the U.S.  Civilian labor force participation appears to have peaked during 90's around 68% and has steadily fallen since - first men, more recently men and women
6. ThinkProgress, on a Union of Concerned Scientists survey of 7,000 researchers at CDC, FDA, FWS, and NOAA studying scientific integrity, interoffice communication, and agency effectiveness.  TL;DR, political influence is undermining science
7. Chang and Li (Federal Reserve, DC) on attempting to replicate ~60 studies published across major journals.  Only 33% were replicable independently; 49% once they contacted the original authors for assistance
8. John Cochrane, on behavioral "nudges" from government amounting to spam.  The low effectiveness/reach of existing programs is interesting, as are attempts to frame increases: "They make for great case studies in statistics classes on the danger of selling an increase from 0.09% to 0.11% as a big 22% increase"
9. VoxEU, on "Stability is destabilizing"

Economics and business

1. Money and Banking, entering the growing discussion on whether higher interest rates are good or bad for banks.  "As a general principle, surely not."
2. Julian Noizet, on the same topic: "...above a certain threshold the nominal level of interest rates is irrelevant"
3. BIS working paper here.  "The influence of monetary policy on bank profitability"
4. NYBookReview, Cass Sunstein review of Akerlof/Shiller "Phishing for Phools"
5. Alphaville, on the petrodollar implications of high oil prices forcing US to invest in eliminating energy dependence
6. YahooFinance, reporting on a Cornell study purporting to show that linking CEO pay to share performance is ineffective but other performance-based fees may work.  Noted is that Cornell partnered with PearlMeyer, an executive pay consulting firm
7. Alphaville, on drawbacks to companies being listed on multiple exchanges (Glencore spike)
8. Robert Waldmann, attacking the WashPo's weak examples of expert pundit failures while reviewing Phil Tetlock's (Wharton) new book Superforecasting.
9. VoxEU, on quantitative evaluation of Akerlof/Yellen idea that simple errors can cause poor macroeconomic decisions, since perfect decision-making is often costly
10. Gary Leff, on the economics of denying boarding.  Through the lens of United denying boarding to Robert Shiller (2013 Nobel Prize, Econ)
11. Alex Tabarrok, on the use of prediction markets in corporate settings
12. NYTimes, on the theory behind reputation maintenance and forgiveness of CryptoWall in executing ransoms

Bitcoin, blockchain, and FinTech.  Aka Kaminska doesn't like FinTech

1. John Quiggan, on why BitCoin cannot ever provide a stable store of value: the non-speculative part of BitCoin value represents the waste of electricity used for "performance of a complex calculation that has no value except to show that it has been done."
2. MIT Tech Review, on BitPay's troubles highlighting why BitCoin isn't a good payment mechanism
3. Alphaville, on the economics of cybercrime (and how it relates to FinTech startups attempting to sidestep legacy bank cost structures)
4. Alphaville, on why FinTech is a marketing story.  Interesting discussion about the role of banks as "optimally opaque" and the implications of efficient capital allocation and hidden profiling.
5. Alphaville, on why FinTech is a jobs story.  Includes recent McKinsey research on banking revenue under threat by FinTech disruption
6. Alphaville, on negative rates as a precursor to bank death: "what the economy needs is fewer bankers; not the substitution of many institutional bankers for an even greater number of ‘independent’, ‘lean’, ‘nimble’ and ‘small’ entrepreneurial fintech banker developers."
7. DealBreaker, on fast-growing Netherlands-based payment startup Adyen potential to disrupt KKR's planned refloat of FirstData

Business and Technology

1. TechCrunch, on Amazon competitor Jet dropping the $50 membership fee amid faster-than-expected growth ($10m rev in August, $20m in September).
2. TechCrunch, reporting AWS is now a $7b business, with newly launched sensor data fusion Kinesis Firehose and QuickSight BI
3. TechCrunch, on maker-funding site Patreon being hacked.  Proprietary code theft ensued
4. Randy Rayess, on whether CIO is the next "VP of Electricity."  I didn't know that was once a thing
5. Priceonomics, on port automation (Long Beach vs Rotterdam)
6. John Evans, a Seussian rant against app-ification
7. TechCrunch, on Amazon's re-order buttons being integrated directly into products such as washing machines, dishwashers, etc
8. Wired, on DerbyCon presentation of Craig Smith - showing that auto dealerships could be used as "brothels" to spread malware among cars
9. Wired, on the learnings from "The epic failure of Google FluTrends."  TL;DR measuring something changes it.  Learn to use big data correctly and responsibly

Other

1. NYTimes, on emerging trend of grandparents explicitly paying for naming rights
2. IdleWords, on the org dynamics of how the cause/cure of scurvy was lost and rediscovered
3. NYTimes, on former UN President and Chinese Billionaire accused of graft
4. McSweeney's, a dialogue of during/after sex using state mottos
5. Telegraph, on studies demonstrating a gram of wimp muscle being more powerful than a gram of bodybuilder muscle.  Just that the bodybuilder has net more, and may look more attractive too
6. NYTimes, on the woman responsible for ensuring NASA doesn't contaminate Mars with biologics
7. BrainPickings, on the art of discovery as a process of rearranging existing information to create new insight
8. Mark Suster, on how to make best use of a conference from a biz dev perspective
9. Corey Robin, on "A clusterfuck of corruption at NYT book review."  Tyler Cowen with a more balanced view.

Uber, on-demand rides, ridesharing, parking, vehicle autonomy etc.

1. CityLab, on China rolling out the first autonomous bus
2. WSJ, on Japan rolling out the first autonomous cab
3. Guardian, on Switzerland testing drone postal delivery
4. Mark Suster, on why he's investing in a new rental car company
5. Columbus Dispatch, on Uber's plans to add 3,000 drivers to their existing 2,500... at least one of which is thinking about exiting after Uber's price cuts have left him clearing less money than before
6. TechCrunch, on Postmates Pop delivering lunch in SF for $2 in 15 minutes or less
7. TechCrunch, on Hailo turning in its private hire vehicle license and returning to black-cab only in London
8. TechCrunch, on Rio banning Uber with Sao Paolo not far behind, amidst violence against Uber drivers by taxicab drivers
9. TechCrunch, reporting Lyft is opening a second engineering office in Seattle (where Uber also has an engineering office)
10. Wired, on BlaBla Car's European popularity (and $300m fundraising for long-distance ridesharing)