Jack

Oceanix

• The United Nations just unveiled a concept for a floating city that can hold around 10,000 residents.
• The city is built to withstand natural disasters like floods, tsunamis, and hurricanes.
• The design comes from architect Bjarke Ingels and floating city builder Oceanix.
• At a roundtable on Wednesday, the UN said floating cities could help protect people from sea-level rise while addressing the lack of affordable housing in major cities. 

What once seemed like the moonshot vision of tech billionaires and idealistic architects could soon become a concrete solution to several of the world's most pressing challenges.

At a United Nations roundtable on Wednesday, a group of builders, engineers, and architects debuted a concept for an affordable floating city.

Unlike instances in the past when these futuristic designs have been met with skepticism, the executive director of the United Nations Human Settlement Programme (UN-Habitat), Maimunah Mohd Sharif, said the UN would support and shepherd this project to fruition.

"Everybody on the team actually wants to get this built," said Marc Collins, the CEO of Oceanix, a company that builds floating structures. "We're not just theorizing."

The company believes a floating city project would address both dire housing shortages and threats from rising sea levels. The structures themselves would be designed to withstand all sorts of natural disasters, including floods, tsunamis, and Category 5 hurricanes. 

Read more: Silicon Valley's largest city wants to house the homeless in floating apartments

The concept, known as Oceanix City, was designed by renowned architect Bjarke Ingels in collaboration with Oceanix. Though it still needs funding, it's essentially a toolkit for investors brave enough to take on the project. 

Here's what the city might look like if it comes to life. 

The city would essentially be a collection of hexagonal platforms that can each hold around 300 residents.

Oceanix

Hexagons are widely considered one of the most efficient architectural shapes. (Think of the orderly inside of a beehive.) By designing each platform as a hexagon, the builders hope to minimize their use of materials. 

 

 

The designers consider a group of six platforms to be a "village." The entire city would contain six villages, for a total of around 10,000 residents.

Oceanix

Ingels said 10,000 is the ideal number of residents, since it would allow the island to achieve "full autonomy" by producing its own power, fresh water, and heat.

Ingels is best known for individual projects like the Superkilen public park in Copenhagen or a pair of twisting towers in New York City. But he told Business Insider that designing an entire city gives him room to expand his vision.  

"At the city scale you can achieve more," Ingels said.

The villages wouldn't allow any high-emitting cars or trucks.

Oceanix

The city would not contain any garbage trucks. Instead, pneumatic trash tubes would transport garbage to a sorting station, where it could be identified and repurposed.

"This doesn't look like Manhattan," Collins told the UN. "There are no cars."

The design might allow for driverless vehicles, however, and the city could experiment with new technologies such as drone deliveries. 

See the rest of the story at Business Insider

See Also:

• 7 American cities that could disappear by 2100
• 35 architectural masterpieces everyone should see in their lifetime
• 9 cities and towns where you can get a home for free — or buy one at a massive discount

SEE ALSO: Floating homes that can withstand Category 4 hurricanes will soon become a reality

Jeff Vespa/WireImage

• The gender pay gap is just as present in Hollywood as it is in less glamorous careers.
• According to Forbes, the top 10 highest-paid actresses earn less than 30 cents for ever dollar earned by their male counterparts.
• Here are 11 specific examples that highlight the disparity.
• Visit INSIDER's homepage for more.

While many actors certainly lead glamorous lives, TV and movie sets face many of the same challenges as other workplaces, including bias and inequality.

Hollywood's problem with pay disparity, for example, has received more and more attention over the last few years. The gender pay gap is a systemic, worldwide injustice, and Hollywood is no exception.

According to Forbes, the top 10 highest-paid actresses in 2018 earned less than 30 cents for ever dollar earned by their male counterparts. These actresses brought in a combined salary of $186 million, while the 10 highest-paid men earned $748.5 million.

Here are 11 specific examples of this disparity.

2018's highest-paid actress, Scarlett Johansson, made $198.5 million less than the highest-paid actor, George Clooney.

Matt Winkelmeyer/Frederick M. Brown/Getty Images

According to Forbes, Scarlett Johansson was the highest-earning actress of 2018, having brought in $40.5 million, largely thanks to her role in the MCU.

George Clooney, on the other hand, topped Forbes' list of highest-earning actors with a $239 million year.

Johansson, whose income was topped only by six male actors, was the only actress who earned as much as the men in the top 10.

Michelle Williams was paid eight times less than Mark Wahlberg for "All the Money in the World" — and 1,500 times less for reshoots.

Sony

Mark Wahlberg's salary for "All the Money in the World" was reportedly $5 million. Michelle Williams' was $625,000, though the co-stars essentially had equal screen time.

A media firestorm also ignited when it was revealed that Wahlberg demanded $1.5 million for reshoots in the wake of the Kevin Spacey scandal, while Williams was reportedly paid less than $1,000.

After backlash, Wahlberg donated his earnings from the reshoots to the Time's Up campaign.

Read more: Michelle Williams says she was 'paralyzed' after finding out co-star Mark Wahlberg made $1.5 million while she earned $1,000

Diane Keaton didn't receive back-end pay for "Something's Gotta Give," while Jack Nicholson did.

Columbia Pictures

In her 2011 memoir "Then Again," Diane Keaton revealed that she didn't get any back-end pay for "Something's Gotta Give," meaning she wasn't paid any percentage of the movie's profits after receiving her initial salary.

Her co-star, Jack Nicholson, did — and he had a smaller role in the 2003 comedy. 

See the rest of the story at Business Insider

See Also:

• Kit Harington's brother finished his best man speech by sneaking in an iconic 'Game of Thrones' line that the actor hates
• 5 great movies to watch on Netflix this weekend
• 10 big changes the new 'Pet Sematary' movie makes from the book

(Matthew Putney/AP)

• Sen. Bernie Sanders pledged in late February to release his tax returns and has still not done so. 
• As Sanders faced questions on when he'll release his tax returns in an interview on Sunday, the senator said he'll "absolutely" make them public and pressured Trump to do the same. But he didn't say when they'll be released.
• Sanders has been ranked among the poorer members of the Senate, but has reportedly boosted his wealth in recent years via book royalties.
• Visit Business Insider's homepage for more stories.

It's been over a month since Sen. Bernie Sanders pledged to release his tax returns and there's no updated timeline on when they'll see the light of day. 

Sanders has offered vague answers on when he'll release the returns, even as he pressures President Donald Trump to do the same. See the rest of the story at Business Insider

NOW WATCH: Alexandria Ocasio-Cortez is being praised for her line of questioning at Michael Cohen's hearing — watch it here

See Also:

• Beto O'Rourke formally kicks off his 2020 presidential campaign miles from embattled El Paso, Texas border
• Joe Biden's 'awkward' interactions with women resurface following allegations of inappropriate touching
• Stacey Abrams could be a kingmaker in 2020 if she decides not to run for president

• The UK Post Office has ranked 20 of the most popular European coastal resorts by price.
• It measured the costs of all the tourist essentials, including suncream, a glass of wine, and dinner out for two.
• In 14 out of the 20 locations, prices are cheaper than last year.
• Visit INSIDER's homepage for more.

If you fancy a European seaside break this further but don't have endless cash to splash, look no further.

The cheapest beach resorts in Europe for 2019 have been revealed in Britain's Post Office Travel Money Holiday Costs Barometer.

The Post Office surveyed 20 of the most popular European coastal locations, which were then ranked in order of affordability.

The prices of nine tourist essentials were taken into consideration: a cup of coffee, a bottle of beer or lager, a bottle or can of Coca-Cola, a glass of wine, a 1.5 liter bottle of still mineral water from a supermarket, SPF15 suncream, insect repellent, a three-course evening meal for two including a bottle of house wine, and a two-course lunch for two people without drinks.

Read more: RANKED: The 12 cheapest holiday destinations in Europe right now

Overall, it's good news for tourists: competitive pricing in restaurants, bars, and shops has generally led to lower resort prices — in fact, 14 of the resorts are cheaper this year than the same time in 2018.

The cheapest beach resort on the list came in at an impressive $50.61 (£38.86) for everything in the research, and at the other end of the spectrum, buying everything in the most expensive location would set you back $186.17 (£142.94).

The data was collected in collaboration with national and regional tourists boards, and prices were all converted to Great British Pounds using the correct exchange rate at 11:30 A.M. on April 2 2019.

Scroll down to see the 20 European beach locations, ranked from most to least expensive.

20. Sorrento, Italy

Solarisys/Shutterstock

A three-course evening meal for two with wine would set you back a sizable $105.07 (£80.67) in Sorrento. Despite that, prices have actually dropped by 4.7% compared to 2018.

19. Ibiza, Spain

Shutterstock

Prices in Ibiza are down 2.1% on last year, but a two-course lunch for two (without drinks) would still cost you $41.12 (£31.57).

18. Lisbon Coast, Portugal

TTstudio/Shutterstock

Prices are actually up 0.1% in Lisbon, where a glass of wine in a café or bar will cost on average $5.70 (£4.38).

See the rest of the story at Business Insider

See Also:

• You can now get a 'consent condom' that requires four hands to be opened
• A bad diet could cause more deaths than smoking, according to a major new study
• Prince Harry took part in a children's ballet class, and the video is adorable

David Brooks does a good job explaining why many people--myself included--find Pete Buttigieg the most compelling figure in the race for president right now. Mayor Pete's views are to the left of mine, but at some point, competence is more important than ideology.

Can Theresa May balance the interests of five warring factions?

By Ian Fortey  Published: March 31st, 2019 

Courtesy of Natasha Sarin and Larry Summers. One of the best of Larry's recent op-eds.

The process of leaving the E.U. has been so fraught because so many different people wanted to divorce Europe for so many different reasons.

The post Avenatti and Geragos surface in Seagram heiress’s racketeering conspiracy case appeared first on Hot Air.

The attorney general offered his “principal conclusions” to the Mueller report, but it leaves some big questions abut the special counsel’s investigation unresolved.

Special counsel Robert Mueller did not find that the Trump campaign “conspired or coordinated” with the Russian government to meddle in the 2016 elections, according to Attorney General William Barr’s summary to Congress delivered Sunday.

Barr’s four-page letter outlines the “principal conclusions” of the nearly two-year special counsel probe, reiterating that the Russian government sought to interfere in US politics but that the investigation did not establish that Trump associates aided them in their efforts.

His summary also took up the other major element of Mueller’s investigation: whether President Donald Trump obstructed justice. Here, Barr cites language from Mueller’s report, noting that the special counsel’s office did not draw a definite conclusion as to whether the president committed a crime, but also that the report “did not exonerate him.”

Barr adds that since Mueller did not make a determination, both he and Deputy Attorney General Rod Rosenstein have, concluding that the evidence is not “sufficient to establish the President committed an obstruction-of-justice offense.”

The White House has seized on these conclusions as “total exoneration” — “No Collusion, No Obstruction,” Trump tweeted. It may not quite be that, though on the whole, Barr’s summary is favorable to the president and his associates.

But Barr’s preliminary summary letter is not the full Mueller report, which for now remains confidential. Barr’s outline of the special counsel’s findings doesn’t elaborate on why or how investigators came to their conclusions (or lack thereof). Notably, it is also Barr’s reading — with the input of Rosenstein, and likely other DOJ officials — of Mueller’s conclusions, and, with few exceptions, not Mueller’s own words.

That ambiguity means Barr’s letter leaves a few questions still unresolved. Vox’s Andrew Prokop has an explainer on what we learned from Barr’s letter. But here’s we can’t figure out from Barr’s summary.

1) How long is Mueller’s report — and how detailed is it?

Okay, this is kind of an obvious one since Barr’s letter is, by default, a summary of the report’s “principal conclusions.”

Barr’s letter spans four pages, but the attorney general notes that Mueller “issued more than 2,800 subpoenas, executed nearly 500 search warrants, obtained more than 230 orders for communication records, issued almost 50 orders authorizing the use of pen registers, made 13 requests to foreign governments for evidence, and interviewed approximately 500 witnesses.”

That indicates a very comprehensive probe that spanned continents. Some, maybe a lot, of that information might never be released because it’s classified for national security reasons or relies on grand jury information.

But how Mueller incorporated this evidence into a report, whether he explained where these investigative threads led and ended, will certainly offer a fuller picture of exactly what Barr means when he says that Mueller did not find that “the Trump Campaign or anyone associated with it conspired or coordinated Russia in its efforts to influence the 2016 presidential election.”

2) What about the June 2016 Trump Tower meeting?

Barr’s summary says the special counsel “did not find that the Trump campaign, or anything associated with it, conspired or coordinated with the Russian government” in its efforts to interfere in the 2016 campaign, though it makes clear that Russia did meddle, and points to Mueller’s indictments against the Russian troll farm and Russian military intelligence hackers that targeted Democrats’ emails. (The special counsel defined coordination as “an agreement — tacit or expressed — between the Trump campaign and the Russian government on election interference.”)

But Barr also says Mueller did not establish coordination or conspiracy, “despite multiple offers from Russian-affiliated individuals to assist the Trump campaign.”

The “multiple offers” from “Russian-affiliated” individuals certainly sounds a lot like the infamous June 2016 Trump Tower meeting. It appears that Mueller found that this or other alleged contacts between Trump associates and Russian officials did not rise to the level of criminality, or at least did not meet the definition of “coordination” as the special counsel defined it. But the question is certainly going to be why.

3) What did Mueller find in the obstruction case?

Barr notes that Mueller examined possible obstruction of justice offenses, much “of which has been the subject of public reporting.”

So it’s not clear if Mueller uncovered anything beyond of what was already known — from firing FBI Director James Comey to harassing then-Attorney General Jeff Sessions for recusing himself from the investigation.

But on the obstruction matter, Mueller didn’t draw a definite conclusion “one way or the other — as to whether the examined conduct constituted obstruction,” Barr says in his summary.

Barr continues, in a critical paragraph:

Instead, for each of the relevant actions investigated, the report sets out evidence on both sides of the question and leaves unresolved what the Special Counsel views as “difficult issues” of law and fact concerning whether the President’s actions and intent could be viewed as obstruction. The Special Counsel’s report states that “while this report does not conclude that the President committed a crime, it also does not exonerate him.”

Mueller’s decision to note that the “report does not exonerate” him is pretty compelling, and is likely a tidbit Democrats will seize upon.

Justice Department guidelines say that a sitting president can’t be indicted, and Mueller was likely to be bound by these regulations. That means wrongdoing on the part of the president is inherently a political question, not a legal one — and that might be why Mueller did not draw definitive answers on this question. Or it might be that the situation truly is murky and Mueller could not prove conduct one way or another.

4) How much of Barr’s opinion guided the obstruction summary?

Mueller didn’t make conclusions, but Barr did.

Barr, in his letter, says that after much consultation, “Deputy Attorney General Rod Rosenstein and I have concluded that the evidence developed during the Special Counsel’s investigation is not sufficient to establish that the President committed an obstruction-of-justice offense.”

Barr states that Mueller’s findings did not appear to establish beyond a reasonable doubt that the president committed an obstruction of justice defense. Barr assesses those standards on three pillars, as Vox’s Dara Lind noted:

1. There was “obstructive conduct;

2. The conduct was related to a prosecution or investigation;

3. The conduct was “done with corrupt intent.”

Barr and Rosenstein apparently agreed that Trump’s actions didn’t meet those standards, at least enough to warrant obstruction of justice charges. But they don’t offer too many details on how they arrived at this decision.

The attorney general does note that since Mueller’s evidence does not establish that Trump was part of an underlying crime, the “absence of such evidence bears upon the President’s intent” when it comes to obstruction of justice — which basically means that without collusion, there can be no obstruction.

Barr says this is not determinative — meaning it doesn’t say obstruction offenses can’t happen — but it clearly factored into their reasoning. But beyond that, he doesn’t explain their thought process in detail. And without Mueller’s underlying findings, it’s hard to gauge how strong and compelling Barr’s “no obstruction” conclusion is.

5) Is this “total exoneration”?

No, but it’s pretty good for the president and his associates — particularly on the “collusion” question.

Yet it also seems likely that Mueller’s confidential report is a very carefully written document. The rare segments Barr quotes in his summary use very precise language. For example:

As the report states: “[T]he investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.”

“Did not establish” doesn’t eliminate the possibility that evidence existed of coordination or cooperation — but it does indicate there wasn’t enough evidence to bring prosecutions against certain individuals or a draw larger case.

The Justice Department typically doesn’t release damaging information about people if they’re not charged with any specific crimes, or explain why a matter doesn’t rise to criminal prosecution. And while it does happen, it’s done rarely and often under extraordinary circumstances.

All of which means the public probably won’t know the full spate of Mueller’s findings — which means some questions might never be answered fully.

6) When, if ever, will the public see the full Mueller report?

Who knows? Maybe never. Barr said his “goal and intent is to release as much of the Special Counsel’s report as I can consistent with applicable law, regulations, and Departmental policies.”

The applicable law, regulations, and departmental policies will be the tricky part. As mentioned above, the DOJ doesn’t typically release information about people who are not charged with crimes. Mueller also relied on confidential grand jury information, and Barr says he will need to work with Mueller to determine what information needs to be withheld.

Mueller also referred some cases to other federal prosecutors, which means some of his evidence in the final report is used in ongoing investigations and can’t be released to the public just yet.

All of this will likely prevent a full, unedited report from being made public in the immediate future. But Democratic lawmakers are almost certain to battle to get as much of it released as possible.

The post The winners and losers of the Mueller revelations appeared first on Marginal REVOLUTION.

On the most recent episode of Last Week Tonight, an HBO show that often sounds as if The Daily Show and The Rachel Maddow Show had combined their writers’ rooms, John Oliver dedicated his monologue to public shaming.

After a brief survey of excesses culled from local television-news reports, the host said, “You may be expecting me to say that all public shaming is bad, but I don’t actually think that.” In his estimation, “misdirected internet pile-ons can completely destroy people’s lives.” But if public shaming is “well directed,” then “a lot of good can come out of it. If someone is caught doing something racist or a powerful person is behaving badly, it can increase accountability.”

The balance of the segment did not substantiate his thesis.

As an example of the phenomenon’s ostensible upside, he alighted on Tucker Carlson, shamed most recently for resurfaced remarks that he made while talking to a shock jock. “He publicly called Iraqis ‘semiliterate, primitive monkeys,’ compared women to dogs, and basically said that Warren Jeffs, who is serving a life sentence for the sexual assault of his underage brides, wasn’t that bad,” Oliver observed. “Tucker refused to apologize, and all week long there have been trending hashtags like #BoycottTuckerCarlson.”

The case is “a good example of an internet pile-on being merited,” Oliver continued, setting forth these standards: “He’s a public figure, he made his comments publicly, they are appalling, and he’s standing by them.” Those are relevant, defensible metrics. (My own assessments of Carlson are here, here, here, and here.)

But it does not follow that public shaming achieves “a lot of good” or “accountability.”

In The Stranger, Katie Herzog argued that Carlson’s public shaming “may have made the public shamers feel good,” but that it “accomplished precisely nothing.” He did not apologize. He’s still on the air. His ratings aren’t lower.

What was accomplished?

It’s possible that the shaming’s overall societal effects were negative. Offensive remarks that would’ve been lost to memory were resurfaced in a way that perhaps upset some Iraqis, women, or victims of statutory rape, among others. The fact that Carlson declined to apologize while suffering no consequences perhaps undermined anti-bigotry taboos and surely did not strengthen them.

Oliver next turned to the parents caught bribing their kids’ way into college. “I’ve got no problem making fun of the parents doing that or the guy who ran that service,” he said. I don’t have a problem with such jokes either—though some of the parents weren’t public figures and it isn’t clear if they’re standing by their actions, so the aforementioned standards weren’t all met.

“Where it gets more complicated is with the kids,” the host continued. “How much is it fair to make fun of them? Well, I would argue one of them, Olivia Jade, is a public figure. She has nearly one and a half million followers on Instagram and has worked with all these companies. She has actively made money off her brand as a fun, relatable college student.”

He proceeded to show a video in which Jade talks about her lack of interest in attending classes. “Even before what we learned this week, that was a little tone-deaf,” he said. “Though not quite as tone-deaf as this sponsored post that she made for Amazon, in which she’s decorated her dorm room at USC with the letters OJ. And if you don’t see the connection between the letters OJ and USC,” he concluded, “maybe it should cost half a million dollars to get you in there.”

OJ are her initials, and O. J. Simpson attended USC.

It isn’t clear that Jade knew about her parents’ objectionable actions or that she would stand by them. Oliver nonetheless thinks she’s a justifiable target, because she’s a “public figure,” based on Instagram followers, and because she’s “tone-deaf,” having put her initials in a USC dorm room without recognizing a second meaning to those letters, connected to an event that occurred years prior to her birth.

I’m not taking a position on whether Oliver’s jokes were out of bounds, only observing that he didn’t actually apply a consistent “shame-worthy” test. Calling a teenager dumb isn’t doing any good or adding any accountability to the world.

“Now, I’m comfortable making those jokes. Am I comfortable with the whole internet piling on her? Honestly, that kind of depends on how and for how long,” Oliver said. “If it’s death threats and vile comments, then of course not.”

But aren’t vile online comments, at the very least, inevitable when an HBO host marshals his writers’ room to heap scorn and contempt on a teenager for laughs?

“If it defines her forever, that seems unfair,” he said. “The window for making fun of her is probably closing.” But isn’t being mocked by a major television show a determinant of how long a scandal defines a person?

In any event, Oliver snuck in another shaming standard: a window for mockery that closes relatively quickly.

“That is the difficult thing here,” he continued. “When joining in a pile-on, there’s a lot to take into account. When millions of people all feel the need to weigh in and do it potentially for years, the punishment can be vastly disproportionate to the offense. And perhaps the best example of this is Monica Lewinsky.”

The host admitted that he participated in Lewinsky jokes that he now regrets. Then he resurfaced a series of old Jay Leno jokes about the sex scandal.

“Those jokes have not dated well in any sense of the word,” Oliver said. “And they’re pretty rough, especially coming from a guy who just this week complained about late-night TV, saying he’d ‘like to see a bit of civility come back.’”

At that point, the segment took a turn.

In the middle of a monologue acknowledging that he had engaged in unjustified shaming in the past and arguing that we all ought to do better now, Oliver proceeded to shame Jay Leno for hypocrisy.

“You know, like that time he did a bit with a fake book about Lewinsky titled The Slut in the Hat,” Oliver said, suddenly righteously indignant. “And if that’s what he means by civility, may I offer my new book, Oh the Places You Can Go Fuck Yourself, Jay Leno?! Look! Look how civil I’m being! Look how civil this is.”

One could argue that Oliver was holding Leno “accountable” for jokes he told in the 1990s that now seem cruel and unfunny. But Oliver could’ve criticized the old jokes while still treating Leno as he treats himself: as an imperfect but not malign comic who told jokes that are regrettable in hindsight.

Surely Leno ranks low on any list of evil forces in American society. He doesn’t warrant a “Go fuck yourself,” delivered here for the supposed hypocrisy of making uncivil jokes on a subject and then, a quarter century later, in a polarized moment, yearning for more civility.

And whether one feels love, disdain, or indifference toward The Tonight Show under Leno, it was arguably more civil on average than Last Week Tonight.

Indeed, Oliver regularly goes the “Go fuck yourself” route, and it isn’t because profane shaming does “a lot of good” for society—it’s because it’s popular. The conflict-hungry internet ate up the segment; it circulated with a telling headline that is often attached to viral Oliver clips: “John Oliver Destroys Jay Leno’s ‘Civility’ Plea With Clips of His Disgusting Monica Lewinsky Jokes.” Last Week Tonight depends on a formula that includes a villain, a punching bag, someone to “destroy,” so that audience members can feel that they’re part of a morally and cognitively superior in-group, perennially exasperated by malign idiots in the out-group. (The formula’s genius: Virtue-signal charmingly with mistake theory, then go viral with conflict theory.)

The show excels when a subject warrants anomalous opprobrium. But the show sometimes tries to shoehorn dubious material into the template of righteous, indignant, maximalist contempt.

Giving Leno the indignant treatment is no unforgivable sin. Comedians have thick skin, and maybe they’re owed some of what they dish out. But Last Week Tonight does an awful lot of segments that begin as a nuanced look at a complex matter, only to devolve into finger-pointing. The show indulges the fantasy that what ails us would be fixed … if only we could take that malign, hypocritical idiot and “destroy” him.

The same self-serving fantasy causes millions to dramatically overestimate the amount of good that public shaming can do.

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The NYT has an interesting article showing how Brexit has split British society right down the middle, as people lose their best friends and stop speaking to family members:

“It’s definitely visceral, it’s definitely nasty, and there are certainly people who won’t accept the core of the other person’s position,” added Mr. Fraser, who thinks that his support for Brexit in London, which generally voted the other way, cost him friends.

At one level this is kind of surprising, as Brexit is not a very important issue in substantive terms. I believe it will lower Britain’s RGDP a couple percent and Brexit supporters think it will raise GDP by a few percent. But lots of other issues also impact the economy without stirring this sort of passion. Yes, Brexit might affect immigration, but I doubt it. The UK already has the ability to control immigration from non-EU countries and nonetheless decided on a high immigration policy. The next government will likely be Labour, and they certainly won’t sharply restrict immigration.

As far as cultural change, the only immigrants affected are from other EU countries, whereas it is immigrants from South Asia and the Caribbean that have the bigger impact on British culture.

While I opposed Brexit, it’s just not that important. For God’s sake, even Norway and Switzerland are not EU members!

Just as it’s a mistake to look for American explanations for Trumpism, it’s a mistake to look for British explanations of the Brexit civil war. The NYT story would apply just as well to the governorship of Scott Walker in Wisconsin, which split apart the good people of that formerly “nice” state. A few months ago I did a post on Poland, which noted a similar phenomenon. There are dozens of other examples.

Earlier in American history, the issues were far more important but people did not take them so personally. You might object that Vietnam and civil rights tore the country apart during the 1960s. Not really. At a certain level, the political right knew that the left were the good guys (albeit a bit too idealistic). The right might not have wanted blacks moving into their neighborhood and they might not have wanted a defeat in Vietnam, but they understood that protestors had a point. Everyone knew that blacks had been treated shamefully and the Vietnam War was a misguided adventure. Lots of Republicans participated in forcing Nixon from office. Things were nowhere near as polarized as today. (The old TV show “All in the Family” accurately captured the mood.)

Unlike in the 1960s, the right is no longer ashamed of its views, and is willing to state them publicly. They are in a mood to fight back against the smug condescension of elite liberal opinion. After the Vietnam War, things quickly got back to normal in America. Today’s splits (which are occurring in countries all over the world) will take much longer to heal. Social media has helped to create two tribes.

When I used to be a professor, there was a joke about faculty senate debates being so vicious because they involved such trivial issues. In the modern world, the political debates aren’t about consequential issues like workers’ rights, civil rights, war and peace, etc. No one seriously expects Trump to do anything about illegal immigration, trade deficits, etc. Today’s debates are about symbolic issues. It’s as if half the population decided to pick a fight with the other half, just as an aggrieved spouse that had built up years of resentment suddenly lashed out at their partner over some trivial issue—forgetting to do the dishes.

While Brexit itself has only a trivial effect on the UK in utilitarian terms, the Brexit debate might be the biggest blow to the UK’s aggregate utility since WWII. It is reducing happiness on both sides.

The real issue is the issue itself, not what the issue is about.

PS. Here’s something else that’s lurking the background. For the first time in human history, most voters are older (above 50 in the case of Brexit). And they are increasingly getting their way, all over the world, to the dismay of the young.

Last week the FDA approved esketamine for treatment-resistant depression.

Let’s review how the pharmaceutical industry works: a company discovers and patents a potentially exciting new drug. They spend tens of millions of dollars proving safety and efficacy to the FDA. The FDA rewards them with a 10ish year monopoly on the drug, during which they can charge whatever ridiculous price they want. This isn’t a great system, but at least we get new medicines sometimes.

Occasionally people discover that an existing chemical treats an illness, without the chemical having been discovered and patented by a pharmaceutical company. In this case, whoever spends tens of millions of dollars proving it works to the FDA may not get a monopoly on the drug and the right to sell it for ridiculous prices. So nobody spends tens of millions of dollars proving it works to the FDA, and so it risks never getting approved.

The usual solution is for some pharma company to make some tiny irrelevant change to the existing chemical, and patent this new chemical as an “exciting discovery” they just made. Everyone goes along with the ruse, the company spends tens of millions of dollars pushing it through FDA trials, it gets approved, and they charge ridiculous prices for ten years. I wouldn’t quite call this “the system works”, but again, at least we get new medicines.

Twenty years ago, people noticed that ketamine treated depression. Alas, ketamine already existed – it’s an anaesthetic and a popular recreational drug – so pharma companies couldn’t patent it and fund FDA trials, so it couldn’t get approved by the FDA for depression. A few renegade doctors started setting up ketamine clinics, where they used the existing approval of ketamine for anaesthesia as an excuse to give it to depressed people. But because this indication was not FDA-approved, insurance companies didn’t have to cover it. This created a really embarrassing situation for the medical system: everyone secretly knows ketamine is one of the most effective antidepressants, but officially it’s not an antidepressant at all, and mainstream providers won’t give it to you.

The pharmaceutical industry has lobbyists in Heaven. Does this surprise you? Of course they do. A Power bribed here, a Principality flattered there, and eventually their petitions reach the ears of God Himself. This is the only possible explanation for stereochemistry, a quirk of nature where many organic chemicals come in “left-handed” and “right-handed” versions. The details don’t matter, beyond that if you have a chemical that you can’t patent, you can take the left-handed (or right-handed) version, and legally pretend that now it is a different chemical which you can patent. And so we got “esketamine”.

Am I saying that esketamine is just a sinister ploy by pharma to patent and make money off ketamine? Yup. In fact “esketamine” is just a cutesy way of writing the chemical name s-ketamine, which literally stands for “sinister ketamine” (sinister is the Latin word for “left-handed”; the modern use derives from the old superstition that left-handers were evil). The sinister ploy to patent sinister ketamine worked, and the latest news says it will cost between $590 to $885 per dose.

(regular old ketamine still costs about $10 per dose, less if you buy it from a heavily-tattooed man on your local street corner)

I’ve said it before: I don’t blame the pharma companies for this. Big Government, in its infinite wisdom, has decided that drugs should have to undergo tens of millions of dollars worth of FDA trials before they get approved. No government agencies or altruistic billionaires have stepped up to fund these trials themselves, so they won’t happen unless some pharma company does it. And pharma companies aren’t going to do it unless they can make their money back. And it’s not like they’re overcharging; their return to investment on R&D may already be less than zero. This is a crappy system – but again, it’s one that occasionally gets us new medicines. So it’s hard to complain.

But in this case, there are two additional issues that make it even worse than the usual serving of crappiness.

First, esketamine might not work.

Johnson & Johnson, the pharma company sponsoring its FDA application, did four official efficacy studies. You can find the summary starting on page 17 of this document. Two of the trials were technically negative, although analysts have noticed nontechnical ways they look encouraging. Two of the trials were technically positive, but one of them was a withdrawal trial that was not really designed to prove efficacy.

The FDA usually demands two positive studies before they approve a drug, and doesn’t usually count withdrawal trials. This time around, in a minor deviation from their usual rules, they decided to count the positive withdrawal trial as one of the two required positives, and approve esketamine. I suspect this was a political move based on how embarrassing it was to have everyone know ketamine was a good antidepressant, but not have it officially FDA-approved.

But if ketamine is such a good antidepressant, how come it couldn’t pass the normal bar for approval? Like, people keep saying that ketamine is a real antidepressant, that works perfectly, and changes everything, unlike those bad old SSRIs which are basically just placebo. But esketamine’s results are at least as bad as any SSRI’s. If you look at Table 9 in the FDA report, ketamine did notably worse than most of the other antidepressants the FDA has approved recently – including vortioxetine, an SSRI-like medication.

One possibility is that ketamine was studied for treatment-resistant depression, so it was only given to the toughest cases. But Table 9 shows olanzapine + fluoxetine doing significantly better than esketamine even for treatment-resistant depression.

Another possibility is that clinical trials are just really tough on antidepressants for some reason. I’ve mentioned this before in the context of SSRIs. Patients love them. Doctors love them. Clinical trials say they barely have any effect. Well, now patients love ketamine. Doctors love ketamine. And now there’s a clinical trial showing barely any effect. This isn’t really a solution to esketamine’s misery, but at least it has company.

Another possibility is that everyone made a huge mistake in using left-handed ketamine, and it’s right-handed ketamine that holds the magic. Most previous research was done on a racemic mixture (an equal mix of left-handed and right-handed molecules), and at least one study suggests it was the right-handed ketamine that was driving the results. Pharma decided to pursue left-handed ketamine because it was known to have a stronger effect on NMDA receptors, but – surprise! – ketamine probably doesn’t work through NMDA after all. So there’s a chance that this is just the wrong kind of ketamine – though usually I expect big pharma to be smarter than that, and I would be surprised if this turned out to be it. I don’t know if anybody has a right-handed ketamine patent yet.

And another possibility is that it’s the wrong route of administration. Almost all previous studies on ketamine have examined it given IV. The FDA approved esketamine as a nasal spray – which is a lot more convenient for patients, but again, not a lot of studies showing it works. At least some studies seem to show that it doesn’t. Again, usually I expect big pharma not to screw up the delivery method, but who knows?

Second in our litany of disappointments, esketamine is going to be maximally inconvenient to get.

The big problem with regular ketamine, other than not being FDA-approved, was that you had to get it IV. That meant going to a ketamine clinic that had nurses and anesthesiologists for IV access, then sitting there for a couple of hours hallucinating while they infused it into you. This was a huge drawback compared to eg Prozac, where you can just bring home a pill bottle and take one pill per day in the comfort of your own bathroom. It’s also expensive – clinics, nurses, and anesthesiologists don’t come cheap.

The great appeal of a ketamine nasal spray was that it was going to prevent all that. Sure, it might not work. Sure, it would be overpriced. But at least it would be convenient!

The FDA, in its approval for esketamine, specified that it could only be delivered at specialty clinics by doctors who are specially trained in ketamine administration, that patients will have to sit at the clinic for at least two hours, and realistically there will have to be a bunch of nurses on site. My boss has already said our (nice, well-funded) clinic isn’t going to be able to jump through the necessary hoops; most other outpatient psychiatric clinics will probably say the same.

This removes most of the advantages of having it be intranasal, so why are they doing this? They give two reasons. First, they want to make sure no patient can ever bring ketamine home, because they might get addicted to it. Okay, I agree addiction is bad. But patients bring prescriptions of OxyContin and Xanax home every day. Come on, FDA. We already have a system for drugs you’re worried someone will get addicted to, it’s called the Controlled Substances Act. Ketamine is less addictive than lots of chemicals that are less stringently regulated than it is. This just seems stupid and mean-spirited.

The other reason the drugs have to be given in a specially monitored clinic is because ketamine can have side effects, including hallucinations and dissociative sensations. I agree these are bad, and I urge patients only to take hallucinogens/dissociatives in an appropriate setting, such as a rave. Like, yeah, ketamine can be seriously creepy, but now patients are going to have to drive to some overpriced ketamine clinic a couple of times a week and sit there for two hours per dose just because you think they’re too frail to handle a dissociative drug at home?

I wanted to finally be able to prescribe ketamine to my patients who needed it. Instead, I’m going to have to recommend they find a ketamine clinic near them (some of my patients live hours from civilization), drive to it several times a week (some of my patients don’t have cars) and pay through the nose, all so that some guy with a postgraduate degree in Watching People Dissociate can do crossword puzzles while they sit and feel kind of weird in a waiting room. And then those same patients will go home and use Ecstasy. Thanks a lot, FDA.

And the cherry on the crap sundae is that this sets a precedent. If the FDA approves psilocybin for depression (and it’s currently in Phase 2 trials, so watch this space!) you can bet you’re going to have to go to a special psilocybin clinic if you want to get it. Psychedelic medicine is potentially the future of psychiatry, and there’s every indication that it will be as inconvenient and red-tape-filled a future as possible. If you thought it was tough getting your Adderall prescription refilled every month, just wait.

So far, I am continuing to recommend that my patients who want ketamine seek intravenous racemic ketamine at an existing ketamine clinic, since this has a stronger evidence base. Once insurance starts covering esketamine, I may change my mind if money becomes an issue. But I’m annoyed that it’s come to this.

AP Photo/Jerry Lai

• In 2008, a jury acquitted R. Kelly on 14 counts of child pornography, after concluding they couldn't verify the female in a sex video with the singer was underage.
• Now, his defense lawyer for the case told the Chicago Sun-Times that Kelly was "guilty as hell."
• Ed Genson said he's speaking out now that he has terminal bile duct cancer and "it would be nice to get it down so somebody knows."
• Genson also told the paper he doesn't think Kelly is guilty of the current charges against him: 10 counts of criminal sexual abuse against four different women.

Ed Genson — the high-profile Chicago criminal defense attorney who defended R. Kelly during his 2008 child pornography trial — told the Chicago Sun-Times that Kelly was guilty in that case, but may not be in his current one.

"He was guilty as hell!" Genson told the paper in a story published Friday. "I don't think he's done anything inappropriate for years."See the rest of the story at Business Insider

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• The Queen just wrote her first Instagram post and people are freaking out

The post Fusion startup designing smaller reactor using new, superconducting magnets appeared first on Hot Air.

[With apologies to Putnam, Pope, and all of you]

Two children are reading a text written by an AI:

The hobbits splashed water in each other’s faces until they were both sopping wet

One child says to the other “Wow! After reading some text, the AI understands what water is!”

The second child says “It doesn’t really understand.”

The first child says “Sure it does! It understands that water is the sort of substance that splashes. It understands that people who are splashed with water get wet. What else is left to understand?”

The second child says “All it understands is relationships between words. None of the words connect to reality. It doesn’t have any internal concept of what water looks like or how it feels to be wet. Only that the letters W-A-T-E-R, when appearing near the letters S-P-L-A-S-H bear a certain statistical relationship to the letters W-E-T.”

The first child starts to cry.

---

Two chemists are watching the children argue with each other. The first chemist says “Wow! After seeing an AI, these kids can debate the nature of water!”

The second chemist says “Ironic, isn’t it? After all, the children themselves don’t understand what water is! Water is two hydrogen atoms plus one oxygen atom, and neither of them know!”

The first chemist answers “Come on. The child knows enough about water to say she understands it. She knows what it looks like. She knows what it tastes like. That’s pretty much the basics of water.”

The second chemist answers “Those are just relationships between pieces of sense-data. The child knows that (visual perception of clear shiny thing) = (tactile perception of cold wetness) = (gustatory perception of refreshingness). And she can predict statistical relationships, like that if she sees someone throw a bucket of (visual perception of clear shiny thing) at her, she will soon feel (tactile perception of cold miserable sopping wetness). She uses the word “water” as a concept-hook that links all of these relationships together and makes predicting the world much easier. But no matter how well she masters these facts, she can never connect them to H2O or any other real chemical facts about the world beyond mere sense-data.”

The first chemist says “Maybe she knows things like that water makes iron rust. That’s a chemical fact.”

The second chemist says “No, she knows that (clear shiny appearance + wetness + refreshment) makes (dull metallic appearance + hardness) get (patchy redness). She doesn’t know that H2O + Fe = iron oxides. She knows many statistical relationships between sense-data, but none of them ever connect to the deeper chemical reality.”

The first chemist says “Then on what level can we be said to understand water ourselves? After all, no doubt there are deeper things going on than chemical reactions – quantum fields, superstrings, levels even deeper than those. All we know are some statistical relationships that must hold true, despite whatever those things may be.”

---

Two angels are watching the chemists argue with each other. The first angel says “Wow! After seeing the relationship between the sensory and atomic-scale worlds, these chemists have realized that there are levels of understanding humans are incapable of accessing.”

The second angel says “They haven’t truly realized it. They’re just abstracting over levels of relationship between the physical world and their internal thought-forms in a mechanical way. They have no concept of or . You can’t even express it in their language!”

The first angel says “Yes, but when they use placeholder words like ‘levels even deeper than those’, those placeholders will have the same statistical relationship with the connection between models and reality as .”

“Yes, which is the difference between being able to respond to ‘Marco!’ by shouting ‘Polo!” vs. a deep historical understanding of Europe-Orient trade relations in the Middle Ages. If all you know is that some statistical models are isomorphic to other models and to Asiyah itself, you still won’t have the slightest idea what the s of any of them are.”

“I’m not claiming humans really know what anything means,” said the first angel. “Just that it’s impressive you can get that far by manipulating a purely symbolic mental language made of sense-data-derived thought-forms with no connection to real at all.”

“I guess that is kind of impressive,” said the second angel. “For humans.”

---

God sits in the highest heaven, alone.

“Wow!” He thinks to Himself, “that cellular automaton sure is producing some pretty patterns today. I wonder what it will do next!”

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The media continues to obsess over the so-called “wage decoupling” issue, the gap between the growth rate of median wages and the growth rate of GDP. Let’s start by asking why people are even interested in comparing these two growth rates. What are they supposed to show? Why not compare wages to average global temperature or the average score in an NBA game?

I suppose people must have in mind some sort of concept that GDP is like a pie, and workers are not getting their fair share. But if that’s your concern then why not compare wages to total per capita income? After all, GDP includes things like depreciation, which nobody is “getting”.  Income is the “pie”, not GDP.

Because depreciation grows faster than GDP it turns out that there is a “decoupling” between total income and total GDP. Total combined income earned by workers and capital rises more slowly than GDP.  That’s not a scandal.

Scott Alexander valiantly tries to make sense out of this mess, but ends up being sort of overwhelmed by too much information, too many claims. Tyler Cowen makes this observation:

On Scott’s broader points (not discussed in my excerpt), I think he is underemphasizing the possibility that productivity may be measuring better than it really performed, and thus there is not so much decoupling at all.

In a perfect world, the mis-measurement of productivity would have absolutely no impact on estimates of “decoupling”.  Indeed, let’s take a step back and consider the absurdity of the various measures of decoupling that people use, which all seem to rely on comparisons of real GDP and real wages.  Obviously the variables that ought to be used are nominal wages and nominal national income per capita.  And any gap between nominal wages and nominal national income per capita would be completely unaffected by the mis-measurement of productivity.

Of course that’s how things would be done in a non-idiotic world, where people don’t use different price indices to deflate national income and wage income.  We don’t live in that world, and thus Tyler’s point may have some validity.  These comparisons typically deflate wages by the CPI, which rises faster than the GDP deflator.  But why?

It would be better if Tyler simply referred to the idiocy of using two different price indices rather than the mis-measurement of productivity, which isn’t really the issue at all.

Scott Winship has the best explanation of this mess, and he shows that there is almost no long run decoupling between average wages and national income, at least in the way people think of the term. (I.e. more of the pie going to greedy corporations.  He excludes owner-occupied rent, which most people don’t even think of as income.)  On the other hand, there is a big decoupling between median wages and average wages, reflecting greater inequality of wage income.

If growing wage inequality is what people are concerned about, then that’s what they should talk about.  Any time you see an article in the NYT discussing the gap between GDP and wages, just stop reading.  You will only make yourself dumber by reading to the end.

PS.  I’d like to direct your attention to a new book that just came out, called “The ABCs of Austrian Business Cycle Theory“.  A better title might have been “The ABCs of Business Cycle Theory”, as you can tell from the product description:

The theories of the so-called “Austrian school” are brought into dialogue with those of John Maynard Keynes, Milton Friedman, as well as modern-day thinkers who are synthesizing the best ideas into a more nuanced but still partial understanding of the business cycle.Part 1: Robert Wenzel, AustrianPart 2: Brad DeLong, NeW KeynesianPart 3: Scott Sumner, Market MonetaristKey terms are also explained in simplified “A-B-C” form, to dispel the jargon that often obscures the relatively simple underlying problem of monetary disequilibrium that is implicated in each analysis.

(11 COMMENTS)

[Epistemic status: I am basing this on widely-accepted published research, but I can’t guarantee I’ve understood the research right or managed to emphasize/believe the right people. Some light editing to bring in important points people raised in the comments.]

You all know this graph:

Median wages tracked productivity until 1973, then stopped. Productivity kept growing, but wages remained stagnant.

This is called “wage decoupling”. Sometimes people talk about wages decoupling from GDP, or from GDP per capita, but it all works out pretty much the same way. Increasing growth no longer produces increasing wages for ordinary workers.

Is this true? If so, why?

1. What Does The Story Look Like Across Other Countries And Time Periods?

Here’s a broader look, from 1800 on:

It no longer seems like a law of nature that productivity and wages are coupled before 1973. They seem to uncouple and recouple several times, with all the previous graphs’ starting point in 1950 being a period of unusual coupledness. Still, the modern uncoupling seems much bigger than anything that’s happened before.

What about other countries? This graph is for the UK (you can tell because it spells “labor” as “labour”)

It looks similar, except that the decoupling starts around 1990 instead of around 1973.

And here’s Europe:

This is only from 1999 on, so it’s not that helpful. But it does show that even in this short period, France remains coupled, Germany is decoupled, Spain is…doing whatever Spain is doing, and Italy is so pathetic that the problem never even comes up. Overall not sure what to think about these.

2. Could Apparent Wage Decoupling Be Because Of Health Insurance?

Along with wages, workers are compensated in benefits like health insurance. Since health insurance has skyrocketed in price, this means total worker compensation has gone up much more than wages have. This could mean workers are really getting compensated much more, even though they’re being paid the same amount of money. This view has sometimes been associated with economist Glenn Hubbard.

There are a few lines of argument that suggest it’s not true.

First, wage growth has been worst for the lowest-paid workers. But the lowest-paid workers don’t usually get insurance at all.

Second, the numbers don’t really add up. Median household income in 1973 was about $48,000 in today’s dollars. Since then, productivity has increased by between 70% and 140% (EVERYBODY DISAGREES ON THIS NUMBER), so if median income had kept pace with productivity it should be between $82,000 and $115,000. Instead, it is $59,000. So there are between $23,000 and $67,000 of missing income to explain.

The average health insurance policy costs about $7000 per individual or $20000 per family, of which employers pay $6000 and $14000 respectively. But as mentioned above, many people do not have employer-paid insurance at all, so the average per person cost is less than that. Usually only one member of a household will pay for family insurance, even if both members work; sometimes only one member of a household will buy insurance at all. So the average cost of insurance to a company per employee is well below the $6000 to $14000 number. If we round it off to $6000 per person, that only explains a quarter of the lowest estimate of the productivity gap, and less than a tenth of the highest estimate. So it’s unlikely that this is the main cause.

Third, some people have tried measuring productivity vs. total compensation, with broadly similar results:

The first graph is from the left-wing Economic Policy Institute, whose bias is towards proving that wage stagnation is real and important. The second graph is from the right-wing Heritage Foundation, whose bias is towards proving that wage stagnation is fake and irrelevant. The third graph is from the US Federal Reserve, a perfectly benevolent view-from-nowhere institution whose only concern is the good of the American people. All three agree that going from earnings to total compensation alone closes only a small part of the gap. The EPI also mentions that most of the difference between earnings and compensation opened up in the 1960s and stayed stable thereafter (why? haven’t health insurance costs gone up more since then), which further defeats this as an explanation for post-1973 trends.

We shouldn’t dismiss this as irrelevant, because many things that close only a small part of the gap may, when added together, close a large part of the gap. But this doesn’t do much on its own.

3. Could Apparent Wage Decoupling Be An Artifact Of Changing Demographics?

The demographics of the workforce have changed a lot since 1973; for example, more workers are women and minorities. If women and minorities get paid less, then as more of them enter the workforce, the lower “average” wages will go (without any individual getting paid less). If they gradually enter the workforce at the same rate that wages are increasing, this could look like wages being stagnant.

But if we disaggregate statistics by race and gender, we don’t see this. Here’s average male wage over the relevant time period:

And here’s average income disaggregated by race:

The patterns for whites and men are the same as the general pattern.

There is one unusual thing in this area. Here’s the pattern for women:

Women’s income is rising at almost the same rate as productivity! This is pretty interesting, but as far as I can tell it’s just because women’s career prospects have been improving over time because of shifting cultural attitudes, affirmative action, and the increasing dominance of female-friendly service and education-heavy jobs. I’m not sure this has any greater significance.

Did increased female participation in the workforce increase the supply of labor and so drive the price of labor down? There’s a tiny bit of evidence for that in the data, which show female workforce participation started rising much faster around 1973, with a corresponding increase in total workforce. But this spurt trailed off relatively quickly, and female participation has been declining since about 2000, and the wage stagnation trend continues. I don’t want to rule out the possibility that this was part of what made 1973 in particular such a strong inflection point, but even if it was, it’s long since been overwhelmed by other factors.

4. Could Apparent Wage Decoupling Be An Artifact Of How We Measure Inflation?

Martin Feldstein is a Harvard economics professor, former head of the National Bureau of Economic Researchers, former head of the President’s Council of Economic Advisors, etc. He believes that apparent wage stagnation is an artifact of mismeasurement.

His argument is pretty hard for me to understand, but as best I can tell, it goes like this. In order to calculate wage growth since 1973, we take the nominal difference in wages, then adjust for inflation. We calculate wage inflation with something called the Consumer Price Index, which is the average price of lots of different goods and services.

But in order to calculate productivity growth since 1973, we use a different index, the “nonfarm business sector output price index”, which is based on how much money companies get for their products.

These should be similar if consumers are buying the same products that companies are making. But there can be some differences. For example, if you’re looking at US statistics only, then some businesses may be selling to foreign markets with different inflation rates, and some consumers may be buying imported goods from countries with different inflation rates. Also (and I’m not sure I understand this right), if people own houses, CPI pretends they are paying market rent to avoid ignoring housing costs, but PPI doesn’t do this. Also, PPI is not as good at including services as CPI. So consumer and producer price indexes differ.

In fact, consumer inflation has been larger than producer inflation since 1973. So when we adjust wages for consumer inflation, they go way down, but when we adjust productivity for producer-inflation, it only goes down a little. This means that these different inflation indices make it look like productivity has risen much faster than wages, but actually they’ve risen the same amount.

As per Feldstein:

The level of productivity doubled in the U.S. nonfarm business sectorbetween 1970 and 2006. Wages, or more accurately total compensation per hour, increased at approximately the same annual rate during that period if nominal compensation is adjusted for inflation in the same way as the nominal output measure that is used to calculate productivity.

More specifically, the doubling of productivity represented a 1.9 percent annual rate of increase. Real compensation per hour rose at 1.7 percent per year when nominal compensation is deflated using the same nonfarm business sector output price index. In the period since 2000, productivity rose much more rapidly (2.9 percent ayear) and compensation per hour rose nearly as fast (2.5 percent a year).

Why is the CPI increasing so much faster than business-centered inflation indices?

The Federal Reserve blames tech. The services-centered CPI has comparatively little technology. The goods-heavy PPI (a business-centered index of inflation) has a lot of it. Tech is going down in price (how much did a digital camera cost in 1990? How about now?) so the PPI stays very low while the CPI keeps growing.

How much does this matter?

The left-leaning Economic Policy Institute says it explains 34% of wage decoupling:

The right-leaning Heritage Foundation says it explains more:

If we estimate the size of the gap as 70 pp (between total compensation CPI and productivity), switching to the top IPD measure closes 67% of the gap; switching to the PCE measure explains 37% of the gap. I’m confused because the EPI is supposedly based on Mishel and Gee, who say they have used the GDP deflator, which is the same thing as the IPD which the Heritage Foundation says they use. I think the difference is that Mishel and Gee haven’t already applied the change from wages to total compensation when they estimate percent of the gap closed? But I’m not sure.

One other group has tried to calculate this: Pessoa and Van Reenan: Decoupling Of Wage Growth And Productivity Growth? Myth And Reality. According to a summary I read, they believe 40% of wage decoupling is because of these inflation related concerns, but I have trouble finding that number in the paper itself.

And the CBO looks into the same issue. They’re not talking about it relative to productivity, but they say that technical inflation issues mean that the standard wage stagnation story is false, and wages have really grown 41% from 1979 – 2013. Since productivity increased somewhere between 70% and 100% during that time, this seems similar to some of the other estimates – inflation technicalities explain between 1/3 and 2/3 of the problem.

Everyone I read seems to agree this issue exists and is interesting, but I’m not sure I entirely understand the implications. Some people say that this completely debunks the idea of wage decoupling and it’s actually only half or a third what the raw numbers say. Other people seem to agree that a big part of wage decoupling is these inflation technicalities, but suggest that although they have important technical implications, if you want to know how the average worker on the street is doing the CPI is still the way to go.

Superstar economist Larry Summers (with Harvard student Anna Stansbury) comes the closest to having a real opinion on this here:

When investigating consumers’ experienced rise in living standards as in Bivens and Mishel (2015), a consumer price deflator is appropriate; however, as Feldstein (2008) argues, when investigating factor income shares a producer price deflator is more appropriate because it reflects the real cost to firms of employing workers.

I am a little confused by this. On the one hand, I do want to investigate consumers’ experienced rise (or lack thereof) in living standards. This is the whole point – the possibility that workers’ living standards haven’t risen since 1973. But most people nowadays work in services. If you deflate their wages with an index used mostly for goods, are you just being a moron and ensuring you will be inaccurate?

Summers and Stansbury continue:

Lawrence (2016) analyzes this divergence more recently, comparing average compensation to net productivity, which is a more accurate reflection of the increase in income available for distribution to factors of production. Since depreciation has accelerated over recent decades, using gross productivity creates a misleadingly large divergence between productivity and compensation. Lawrence finds that net labor productivity and average compensation grew together until 2001, when they started to diverge i.e. the labor share started to fall. Many other studies also find a decline in the US labor share of income since about 2000, though the timing and magnitude is disputed (see for example Grossman et al 2017, Karabarbounis and Neiman 2014, Lawrence 2015, Elsby Hobijn and Sahin 2013, Rognlie 2015, Pessoa and Van Reenen 2013).

If I intepret this correctly, it looks like it’s saying that the real decoupling happened in 2000, not in 1973. I see a lot of papers saying the same thing, and I don’t understand where they’re diverging from the people who say it happened in 1973. Maybe they’re using Feldstein’s method of calculating inflation? I think this must be true – if you look at the Heritage Foundation graph above, “total compensation measured with Feldstein’s method” and productivity are exactly equal to their 1973 level in 2000, but diverge shortly thereafter so that today compensation has only grown 77% compared to productivity’s 100%.

Nevertheless, Summers and Stansbury go on to give basically exactly the same “Why have wages been basically stagnant since 1973? Why are they decoupled from productivity?” narrative as everyone else, so it sure doesn’t look like they think any of this has disproven that. It looks like maybe they think Feldstein is right in some way that doesn’t matter? But I don’t know enough economics to figure out what that way would be. And it looks like Feldstein believes his rightness matters very much, and other economists like Scott Sumner seem to agree. And I cannot find anyone, anywhere, who wants to come out and say explicitly that Feldstein’s argument is wrong and we should definitely measure wage stagnation the way everyone does it.

My conclusions from this section, such as they are, go:

1. Arcane technical points about inflation might explain between 33% and 66% of the apparent wage stagnation/decoupling.
2. “Explain” may not mean the same as “explain away”, and it’s not completely clear how these points relate to anything we care about

5. Could Wage Decoupling Be Explained By Increasing Labor-Vs-Capital Inequality?

Economists divide inequality into two types. Wage inequality is about how much different wage-earners (or salary-earners, here the terms are used interchangeably) make relative to each other. Labor-vs-capital inequality is about how much wage earners earn vs. how much capitalists get in profits. These capitalists are usually investors/shareholders, but can also be small business owners (or, sometimes, large business owners). Since tycoons like Jeff Bezos and Mark Zuckerberg get most of their compensation from stocks, they count as “capitalists” even if they are paid some token salary for the work they do running their companies.

Here is the labor-vs-capital split for the US over the relevant time period; note the very truncated vertical axis:

This type of inequality was about the same in the early 1970s as in the early 2000s, and has no clear inflection point around 1973, so it probably didn’t start this trend off. But it did start seriously decreasing around 2000, the same time people who use the more careful inflation methodology say wages and productivity really decoupled. And obviously labor getting less money in general is the sort of thing that makes wages go down.

Why is labor-vs-capital inequality increasing? For the long story, read Piketty (my review, highlights, comments). But the short story includes:

Today’s wage inequality is tomorrow’s labor-vs-capital inequality. If some people get paid more than others, they can invest, their savings will compound, and they will have more capital. As wage inequality increases (see below), labor-vs-capital inequality does too.

The tech industry is more capital-intensive than labor-intensive. For example, Apple has 100,000 employees and makes $250 billion/year, compared to WalMart with 2 million employees and $500 billion/year – in other words, Apple makes $2.5 million per employee compared to Wal-Mart’s $250,000. Apple probably pays its employees more than Wal-Mart does, but not ten times more. So more of Apple’s revenue goes to capital compared to Wal-Mart’s. As tech becomes more important than traditional industries, capital’s share of the pie goes up. This is probably a big reason why capital has been doing so well since 2000 or so.

There’s an iconoclastic strain of thought that says most of the change in labor-vs-capital is just housing. Houses count as capital, so as housing costs rise, so does capital’s share of the economy. Read Matt Ronglie’s work (paper, summary, Voxsplainer) for more. Since houses are neither involved in corporate productivity nor in wages, I’m not sure how this affects wage-productivity decoupling if true.

Whatever the cause, the papers I read suggest that increasing labor-vs-capital inequality explains maybe 10-20% of of decoupling, almost all concentrated in the 2000 – present period.

6. Could Wage Decoupling Be Explained By Increasing Wage Inequality?

The other part of the two-pronged inequality picture above. This one seems more important.

One way economists look at this is in the difference between the median wage and the average wage:

Add in the other things we talked about – the health insurance, the inflation technicalities, the declining share of labor – and the “””average””” worker is doing almost as well as they were in 1973. In fact, this is almost tautologically true. If the entire pie is growing by X amount, and labor’s relative share of the pie is staying the same, then labor should be getting the same absolute amount, and (ignoring changes in the number of laborers) the average laborer should get the same amount.

So the decline in median wage is a mean vs. median issue. A few high-earners are taking a lot of the pie, keeping the mean constant but lowering the median. How high?

Remember, productivity has grown by 70-100% through this period. So even though the top 5% have seen their incomes grow by 69%, they’re still not growing as fast as productivity. The top 1% have grown a bit faster than productivity, although still not that much. The top 0.1% are doing really well.

This is generally considered the most important cause of wage stagnation and wage decoupling, other than among the iconoclasts who think the inflation issues are more important. Above, I referred to a few papers that tried to break down the importance of each cause. EPI thinks wage inequality explains 47% of the problem. Pessoa and Van Reenen think it explains more like 20% according to Mishel’s summary (my eyeballing of the paper suggests more like 33%, but I am pretty uncertain about this).

7. Is Wage Inequality Increasing Because Of Technology?

Here’s one story about why wage inequality is increasing.

In the old days, people worked in factories. A slightly smarter factory worker might be able to run the machinery a little better, or do something else useful, but in the end everyone is working on the same machines.

In the modern economy, factory workers are being replaced by robots. This creates very high demand for skilled roboticists, who get paid lots of money to run the robots in the most efficient way, and very low demand for factory workers, who need to be retrained to be fast food workers or something.

Or, in the general case, technology separates people into the winners (the people who are good with technology and who can use it to do jobs that would have taken dozens or hundreds of people before) and the losers (people who are not good with technology, and so their jobs have been automated away).

From an OECD paper:

Common explanations for increased wage inequality such as skill-biased technological change and globalisation cannot plausibly account for the disproportionate wage growth at the very top of the wage distribution. Skill-biased technological change and globalisation may both raise the relative demand for high-skilled workers, but this should be reflected in broadly rising relative wages of high-skilled workers rather than narrowly rising relative wagesof top-earners. Brynjolfsson and McAfee (2014) argue that digitalisation leads to “winner-takes-most” dynamics, with innovators reaping outsize rewards as digital innovations are replicable at very low cost and have a global scale. Recent studies provide evidence consistent with “winner-take-most” dynamics, in the sense that productivity of firms at the technology frontier has diverged from the remaining firms and that market shares of frontier firms have increased (Andrews et al., 2016). This type of technological change may allow firms at the technology frontier to raise the wages of its key employees to “superstar” levels.

It…sounds like they’re saying that technological change can’t be the answer, then giving arguments for why the answer is technological change.

I think this is just the authors’ poor writing skills, and that the real argument is less confusing. The Huffington Post is surprisingly helpful, describing it as:

What this means is that skilled professionals are not just winning out over working class stiffs, but the richest of the top 0.01 percent are winning out over the professional class as a whole.

That Larry Summers paper mentioned before becomes relevant here again. It argues that wages and productivity are not decoupled – which I know is a pretty explosive thing to say three thousand words in to an essay on wage decoupling, but let’s hear him out.

He argues that apparent decoupling between productivity and wages could result either from literal decoupling – that is, none of the gains of increasing productivity going to workers – or from unrelated trends – for example, increasing productivity giving workers an extra $1000 at the same time as something else causes workers to lose $1000. If a company made $1000 extra and the boss pocketed all of it and didn’t give workers any, that would be literal decoupling. If a company made $1000 extra, it gave workers $1000 extra, but globalization means there’s less demand for workers and so salaries would otherwise have dropped by $1000, so now they stay the same, that’s an unrelated trend.

Summers and Stansbury investigate this by seeing if wages increase more during the short periods between 1973 and today when productivity is unusually high, and if they stagnate more (or decline) during the short periods when it is unusually low. They find this is mostly true:

We find substantial evidence of linkage between productivity and compensation: Over 1973–2016, one percentage point higher productivity growth has been associated with 0.7 to 1 percentage points higher median and average compensation growth and with 0.4 to 0.7 percentage points higher production/nonsupervisory compensation growth.

S&S are very careful in this paper and have already adjusted for health insurance issues and inflation calculation issues. They find that once you adjust for this, productivity and wages are between 40% and 100% coupled, depending on what measure you use. (I don’t exactly understand the difference between the two measures they give; surely taking the median worker is already letting you consider inequality and you shouldn’t get so much of a difference by focusing on nonsupervisory workers?) As mentioned before, they finds the coupling is much less since 2000. They also find similar results in most other countries: whether or not those countries show apparent decoupling, they remain pretty coupled in terms of actual productivity growth:wage growth correlation.

They argue that if technology/automation were causing rising wage inequality or rising labor-capital inequality, then median wage should decouple from productivity fastest during the periods of highest productivity growth. After all, productivity growth represents the advance of labor-saving technology. So periods of high productivity growth are those where the most new technology and automation are being deployed, so if this is what’s driving wages down, wages should decrease fastest during this time.

They test this a couple of different ways, and find that it is false before the year 2000, but somewhat true afterwards, mostly through labor-capital inequality. They don’t really find that technology drives wage inequality at all.

I understand why technology would mean decoupling happens fastest during the highest productivity growth. But I’m not sure I understand what they mean when they say there is no decoupling and productivity growth translates into wage growth? Shouldn’t this disprove all posited causes of decoupling so far, including policy-based wage inequality? I’m not sure. S&S don’t seem to think so, but I’m not sure why. Overall I find this paper confusing, but I assume its authors know what they’re doing so I will accept its conclusions as presented.

So it sounds like, although technology probably explains some top-10% people doing moderately better than the rest, it doesn’t explain the stratospheric increase in the share of the 1%, which is where most of the story lies. I would be content to dismiss this as unimportant, except that…

…all the world’s leading economists disagree.

Maybe when they say “income inequality”, they’re talking about a more intuitive view of income inequality where some programmers make $150K and some factory workers make $30K and this is unequal and that’s important – even though it is not related to the larger problem of why everybody except the top 1% is making much less than predicted. I’m not sure.

I feel bad about dismissing so many things as “probably responsible for a few percent of the problem”. It seems like a cop-out when it’s hard to decide whether something is really important or not. But my best guess is still that this is probably responsible for a few percent of the problem.

8. Is Wage Inequality Increasing Because Of Policy Changes?

Hello! We are every think tank in the world! We hear you are wondering whether wage inequality is increasing because of policy changes! Can we offer you nine billion articles proving that it definitely is, and you should definitely be very angry? Please can we offer you articles? Pleeeeeeeeaaase?!

Presentations of this theory usually involve some combination of policies – decreasing union power, low minimum wages, greater acceptance of very high CEO salary – that concentrate all gains in the highest-paid workers, usually CEOs and executives.

I have trouble making the numbers add up. Vox has a cute thought experiment here where they imagine the CEO of Wal-Mart redistributing his entire salary to all Wal-Mart workers equally, possibly after having been visited by three spirits. Each Wal-Mart employee would make an extra $10. If the spirits visited all top Wal-Mart executives instead of just the CEO, the average employee would get $30. This is obviously not going to single-handedly bring them to the middle-class.

Vox uses such a limited definition of “top executive” that only five people are included. What about Wal-Mart’s 1%?

The Wal-Mart 1% will include 20,000 people. To reach the 1% in the US, you need to make $400,000 per year; I would expect Wal-Mart’s 1% to be lower, since Wal-Mart is famously a bad place to work that doesn’t pay people much. Let’s say $200,000. That means the Wal-Mart 1% makes a total of $4 billion. If their salary were distributed to all 2 million employees, those employees would make an extra $2,000 per year; maybe a 10% pay raise. And of course even in a perfectly functional economy, we couldn’t pay Wal-Mart management literally $0, so the real number would be less than this.

Maybe the problem is that Wal-Mart is just an unusually employee-heavy company. What about Apple? Their CEO makes $12 million per year. If that were distributed to their 132,000 employees, they would each make an extra $90.

How many total high-paid executives does Apple have? It looks like Apple hires up to 130 MBAs from top business schools per year; if we imagine they last 10 years each, they might have 1000 such people, making them a “top 1%”. If these people get paid $500,000 each, they could earn 500 million total. That’s enough to redistribute $4,000 to all Apple employees, which still isn’t satisfying given the extent of the problem.

Some commenters bring up the possibility that I’m missing stocks and stock options, which make up most of the compensation of top executives. I’m not sure whether this gets classified as income (in which case it could help explain income inequality) or as capital (in which case it would get filed under labor-vs-capital inequality). I’m also not sure whether Apple giving Tim Cook lots of stocks takes money out of the salary budget that could have gone to workers instead. For now let’s just accept that the difference between mean and median income shows that something has to be happening to drive up the top 1% or so of salaries.

What policies are most likely to have caused this concentration of salaries at the top?

Many people point to a decline in unions. This decline does not really line up with the relevant time period – it started in the early 1960s, when productivity and wages were still closely coupled. But it could be a possible contributor. Economics Policy Institute cites some work saying it may explain up to 10% of decoupling even for non-union members, since the deals struck by unions set norms that spread throughout their industries. A group of respected economists including David Card looks into the issue and finds similar results, saying that the decline of unions may explain about 14% or more of increasing wage inequality (remember that wage inequality is only about 40% of decoupling, so this would mean it only explains about 5% of decoupling). The conservative Heritage Foundation has many bad things to say about unions but grudgingly admits they may raise salaries by up to 10% among members (they don’t address non-members). Based on all this, it seems plausible that deunionization may explain about 5-10% of decoupling.

Another relevant policy that could be shaping this issue is the minimum wage. EPI notes that although the minimum wage never goes down in nominal terms, if it doesn’t go up then it’s effectively going down in real terms and relative to productivity. This certainly sounds like the sort of thing that could increase wage inequality.

But let’s look at that graph by percentiles again:

Wage stagnation is barely any better for the 90th percentile worker than it is for the people at the bottom. And the 90th percentile worker isn’t making minimum wage. This may be another one that adds a percentage point here and there, but it doesn’t seem too important.

I can’t find anything about it on EPI, but Thomas Piketty thinks that tax changes were an important driver of wage inequality. I’ll quote my previous review of his book:

He thinks that executive salaries have increased because – basically – corporate governance isn’t good enough to prevent executives from giving themselves very high salaries. Why didn’t executives give themselves such high salaries before? Because before the 1980s the US had a top tax rate of 80% to 90%. As theory predicts, people become less interested in making money when the government’s going to take 90% of it, so executives didn’t bother pulling the strings it would take to have stratospheric salaries. Once the top tax rate was decreased, it became worth executives’ time to figure out how to game the system, so they did. This is less common outside the Anglosphere because other countries have different forms of corporate governance and taxation that discourage this kind of thing.

Piketty does some work to show that increasing wage inequality in different countries is correlated with those countries’ corporate governance and taxation policies. I don’t know if anyone has checked how that affects wage decoupling.

9. Conclusions

1. Contrary to the usual story, wages have not stagnated since 1973. Measurement issues, including wages vs. benefits and different inflation measurements, have made things look worse than they are. Depending on how you prefer to think about inflation, median wages have probably risen about 40% – 50% since 1973, about half as much as productivity.

2. This leaves about a 50% real decoupling between median wages and productivity, which is still enough to be serious and scary. The most important factor here is probably increasing wage inequality. Increasing labor-capital inequality is a less important but still significant factor, and it has become more significant since 2000.

3. Increasing wage inequality probably has a lot to do with issues of taxation and corporate governance, and to some degree also with issues surrounding unionization. It probably has less to do with increasing technology and automation.

4. If you were to put a gun to my head and force me to break down the importance of various factors in contributing to wage decoupling, it would look something like (warning: very low confidence!) this:

– Inflation miscalculations: 35%
– Wages vs. total compensation: 10%
– Increasing labor vs. capital inequality: 15%
—- (Because of automation: 7.5%)
—- (Because of policy: 7.5%)
– Increasing wage inequality: 40%
—- (Because of deunionization: 10%)
—- (Because of policies permitting high executive salaries: 20%)
—- (Because of globalization and automation: 10%)

This surprises me, because the dramatic shift in 1973 made me expect to see a single cause (and multifactorial trends should be rare in general, maybe, I think). It looks like there are two reasons why 1973 seems more important than it is.

First, most graphs trying to present this data begin around 1950. If they had begun much earlier than 1950, they would have showed several historical decouplings and recouplings that make a decoupling in any one year seem less interesting.

Second, 1973 was the year of the 1973 Oil Crisis, the fall of Bretton Woods, and the end of the gold standard, causing a general discombobulation to the economy that lasted a couple of years. By the time the economy recombobulated itself again, a lot of trends had the chance to get going or switch direction. For example, here’s inflation:

5. Inflation issues and wage inequality were probably most important in the first half of the period being studied. Labor-vs-capital inequality was probably most important in the second half.

6. Continuing issues that confuse me:
– How much should we care about the difference between inflation indices? If we agree that using CPI to calculate this is dumb, should we cut our mental picture of the size of the problem in half?
– Why is there such a difference between the Heritage Foundation’s estimate of how much of the gap inconsistent deflators explain (67%) and the EPI’s (34%)? Who is right?
– Does the Summers & Stansbury paper argue against policy-based wage inequality as a cause of median wage stagnation, at least until 2000?
– Are there enough high-paid executives at companies that, if their money were redistributed to all employees, their compensation would have increased significantly more in step with productivity? If so, where are they hiding? If not, what does “increasing wage inequality explains X% of decoupling” mean?
– What caused past episodes of wage decoupling in the US? What ended them?
– How do we square the apparent multifactorial nature of wage decoupling with its sudden beginning in 1973 and with the general argument against multifactorial trends?

Tesla Inc. CEO Elon Musk ripped the Securities and Exchange Commission on Twitter hours after the agency asked a federal judge to hold him in contempt of court for violating terms of a settlement the parties agreed to last year.

"Something is broken with SEC oversight," Musk said in a tweet on Tuesday.

That was in response to a court filing Monday by the agency alleging that Musk has made no significant attempt to comply with a September agreement that requires pre-approval of his written communications about Tesla. That agreement followed what the regulator said were misleading tweets by Musk that he had obtained funding to take the electric car manufacturer private.

Musk has recently “published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with Internet access,” the SEC said in its filing with the U.S. District Court for the Southern District of New York.

The SEC focused on a Feb. 19 tweet from Musk about Tesla’s car production for the year, which was then corrected more than four hours later.

At first, Musk had said Tesla would make about 500,000 vehicles in 2019, but then said: "Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k."

That follow-up tweet contained important information about Tesla, and Musk admitted he didn't get pre-approval for it, the SEC said. “As a result, his failure to obtain pre-approval prior to publishing the tweet was a violation” of his deal with the SEC, the agency said. “Musk’s admission that he failed to seek or obtain pre-approval is clear and convincing evidence of the violation."

"The SEC respectfully requests that the Court enter an order to show cause why Defendant Elon Musk should not be held in contempt," the agency said.

In response to the filing, Musk said "the SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing."

In a Dec. 9 interview on CBS, the hard-charging executive acknowledged that he does not have his tweets vetted, saying that no one at Tesla reads them before they go out. He also took a shot at the regulator, saying, “I want to be clear. I do not respect the SEC.”

On Sept. 27, the SEC charged Musk with fraud for allegedly making “materially false and misleading” statements by tweeting that he had “funding secured” for a deal to take Tesla private. Investors who bought Tesla shares based on Musk’s tweet were hurt by the false information, the agency alleged.

About 48 hours later, Musk, Tesla and the SEC reached the settlement in a deal that required Musk to pay $20 million and step down as chairman, as well as to obtain pre-approval of any written communications containing information material to Tesla's shareholders. But the settlement allowed him to stay on as CEO.

Article originally published on POLITICO Magazine

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We keep reading pundits opine that neoliberalism is passé, and that we need a new model for the 21st century. So what is the new model being adopted in Ethiopia? Here’s the FT:

Ethiopia aims to complete a multibillion-dollar privatisation of its telecoms sector by the end of this year, followed by a sell-off of stakes in state energy, shipping and sugar companies, according to the new prime minister Abiy Ahmed.

The government also plans to launch a domestic stock exchange in 2020, part of a gradual but decisive shift towards economic liberalisation in the fast-growing east African country of 105m people.

“My economic model is capitalism,” Mr Abiy said in an interview with the Financial Times, conducted in his refurbished headquarters in Addis Ababa. “If you give me $100bn now, I can’t use it. There is not only money, there is talent and experience. That’s why we need the private sector.”

Don’t worry socialists, Marx assured us that capitalism is just an unfortunate phase that Ethiopia must pass through before they achieve the glories of North Korea, Cuba and Venezuela.

PS: Off topic, I have a new piece in The Hill defending my Fed accountability and transparency proposal.