Barry Ritholtz: Is 3 & 30 the new 2 & 20?: "The hedge fund industry... are the latest group to succumb to 'Winner Take All' ethos.... In 2018 'the industry saw its biggest annual loss since 2011, declining 4.1 percent on an a fund-weighted basis'.... For all but the most elite... poor performance has led to pressure from clients. Look no further than the changing nature of those fees.... With a few notable exceptions, 2 & 20 is no more. About those exceptions: the winner takes all ethos applies as much to hedge fund managers as it does to the rest of us.... Bridgewater,... Pure Alpha vehicle generate[d] 14.6 percent in gains in 2018.... D.E. Shaw... is... moving back to a fee structure of 3 percent of assets and 30 percent of profits it used throughout the aughts. Its 14 billion Composite fund, gained 11.2 percent in 2018...

David Roberts: Barcelona, Spain, Urban Planning: A City’s Vision to Dig Out from Cars: "a four-square-block area, roughly 5,000 square meters, has been pedestrianized, reclaimed from cars and given over to people for a mix of uses. Only residents’ vehicles and delivery vehicles enter, and when they do, they are on the same level of pavement as pedestrians and must match their speed...

Nice to see that the very sharp Jared Bernstein of CBPP is recovering from his health misadventure, and is already saying very smart things again: Jared Bernstein: Ch-ch-ch-changes!: "GS fiscal analyst Alec Phillips... worth a close look.... One of the more important policy-driven determinants of near-term US growth is under debate right now: setting discretionary spending levels for 2020/21.... Even were Congress to agree to keep the levels of discretionary spending stable over the next few years, the impact will be a fading of fiscal stimulus on real GDP growth... When it comes to fiscal impulse, it’s not the level that matters. It’s the change. The last deal–the one that determined spending in 2018/19–went both well above the caps but, more important from an impulse perspective, went well above prior agreements.... That’s one reason to expect 2020 growth to be closer to 2 percent than 3 percent...

Noah Smith's plan for reviving rural and small-city America is to spend a fortune establishing research universities that will attract graduate students from abroad. A good many of them will then settle where they went to school. And they will then figure out how to use local factors of production to generates value in the world economy, and so revive the area. But that would require boosterish elites in the south, in the prairie, and in the midwest. And part of the social pathology of those regions is that they do not have boosterish elites:

Paul Krugman: Getting Real About Rural America: "Nobody knows how to reverse the heartland’s decline.... Rural lives matter—we’re all Americans, and deserve to share in the nation’s wealth.... But it’s also important to get real. There are powerful forces behind the relative and in some cases absolute economic decline of rural America—and the truth is that nobody knows how to reverse those forces. Put it this way: Many of the problems facing America have easy technical solutions; all we lack is the political will. Every other advanced country provides universal health care. Affordable child care is within easy reach. Rebuilding our fraying infrastructure would be expensive, but we can afford it—and it might well pay for itself. But reviving declining regions is really hard. Many countries have tried, but it’s difficult to find any convincing success stories... Southern Italy... the former East Germany.... Maybe we could do better, but history is not on our side...

Too little. And too late for 2010-2016. Hopefully not too late for the next business cycle: Joseph E. Gagnon and Christopher G. Collins: Changes Are Coming to the Fed's Monetary Policy Strategy | PIIE: "The most likely outcome of the review is that the Fed will commit itself to intentionally overshooting its inflation target after episodes at the zero bound in which it has undershot the target...

This may well be the most insightful thing I have read last year, at least as far as its definition of conservatism is concerned: Frank Wilhoit: The Travesty of Liberalism: "There is no such thing as liberalism—or progressivism, etc. There is only conservatism. No other political philosophy actually exists; by the political analogue of Gresham’s Law, conservatism has driven every other idea out of circulation. There might be, and should be, anti-conservatism; but it does not yet exist. What would it be? In order to answer that question, it is necessary and sufficient to characterize conservatism. Fortunately, this can be done very concisely. Conservatism consists of exactly one proposition, to wit: "There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect"...

• Note to Self: Now down to 187 snoozed emails! Progress!! Excelsior!!!...

• Comment of the Day: _"It's not just wrong, it's a fetish passing for scholarship.... The scenario Our Host describes was first laid out by Aristotle in the Politics. This ain't exactly cutting edge revisionism, folks...

1. Brandi Neal: Illustrator Tyler Feder's ‘Work-From-Home Fashions’ Cartoon Is Relatable AF: "I work from home and it's been about a month since I've done any laundry that's included pants with zippers. It's a relief to know I'm not the only one. Illustrator Tyler Feder gets it, and she created these work-from-home looks that are way too relatable...

2. David Anderson: Oklahoma Medicaid Expansion Is on the Ballot: "Oklahoma activists are going the same route as Utah, Idaho and Nebraska activists successfully used in the 2018 election cycle: They are trying to get enough signatures to get Medicaid expansion on the ballot...

3. Ron White (2010): You Can't Fix Stupid

4. Pavithra Mohan: Who is actually middle class?: "It might not feel that way, but you might actually be upper middle class...

5. Keith Whittington: Reckoning with the Mueller Report, Volume One: "That only one of Trump’s campaign managers found himself imprisoned in the aftermath of the election or that Donald Trump’s son-in-law thought it was a 'waste of time' when a meeting failed to deliver the promised incriminating Russian government files is no cause for celebration...

6. Ben Thompson: Uber Questions Follow-up, Luminary Launches, Luminary’s Broken Rung: "I do feel bad that yesterday’s Weekly Article, Uber Questions, was so late; in this case, the article itself got at why: I spent hours upon hours trying to craft a narrative around the numbers I could pull from Uber’s S-1, before finally realizing I was wasting my time. There was going to be no water from that stone. So that ended up being my point: there simply wasn’t anything in the S-1...

7. Wikipedia: 5 Nanometer: "In early 2018, TSMC announced production of a 5 nm node by 2020 on its new Fab 18. In October 2018, TSMC disclosed plans to start risk production of 5 nm devices by April 2019...

8. Wikipedia: Mississippi State Penitentiary: "Mississippi State Penitentiary (MSP), also known as Parchman Farm, is a prison farm, the oldest prison, and the only maximum security prison for men in the state of Mississippi...

9. Oliver Miller: 50 Quotes From The Movie Aliens, Ranked In Order Of Awesomeness

Henry Farrell and Bruce Schneier: Information Attacks on Democracies: "Democracies, in contrast, are vulnerable to information attacks that turn common political knowledge into contested political knowledge. If people disagree on the results of an election, or whether a census process is accurate, then democracy suffers. Similarly, if people lose any sense of what the other perspectives in society are, who is real and who is not real, then the debate and argument that democracy thrives on will be degraded. This is what seems to be Russia’s aims in their information campaigns against the U.S.: to weaken our collective trust in the institutions and systems that hold our country together. This is also the situation that writers like Adrien Chen and Peter Pomerantsev describe in today’s Russia, where no one knows which parties or voices are genuine, and which are puppets of the regime, creating general paranoia and despair...

Well worth your time chasing the links from this review of work Equitable Growth has published over the past several years on women's roles. At the root, I think, is that a great many of our economic and societal practices reflect gender reality as it stood 50, 100, or 150 years ago—and both biological and even more societal reality as it stood then was hardly conducive to the empowerment of women. Recall that two centuries ago an overwhelming proportion of women became mothers, that the typical mother stood a one-in-seven chance of dying in childbed, and that the typical mother (if she survived) would spend twenty years eating for two—pregnant or nursing—in a world in which childcare-by-non-relatives was a thing for only the upper class. Legacy institutions from that time are unlikely to serve today's women—or men—well: Equitable Growth: Equitable Growth’s History of Focusing on Women’s Role in the Economy: A Review: "How women are reshaping the American economy.... Gender wage inequality.... Paid family and medical leave.... Women... [and] family economic security.... The gender gap in economics.... The link between bodily autonomy and economic opportunity.... The wages of care.... Motherhood penalties...

Note to Self: Now down to 187 snoozed emails! Progress!! Excelsior!!!

This is absolutely brilliantly done, and striking in the size of the effect found!: Forced exile and migration producing a durable human-capital culture among ethnic Poles: Sascha O. Becker, Irena Grosfeld, Pauline Grosjean, Nico Voigtländer, Ekaterina Zhuravskaya: Forced Migration and Human Capital: Evidence from Post-WWII Population Transfers: "World War II, the Polish borders were redrawn... migration... from the Kresy territories in the East (taken over by the USSR) and were resettled mostly to the newly acquired Western Territories, from which Germans were expelled.... Poles with a family history of forced migration are significantly more educated today. Descendants of forced migrants have on average one extra year of schooling, driven by a higher propensity to finish secondary or higher education.... Since Kresy migrants were of the same ethnicity and religion as other Poles, we bypass confounding factors of other cases of forced migration.... Survey evidence suggests that forced migration led to a shift in preferences, away from material possessions and towards investment in a mobile asset–human capital. The effects persist over three generations...

It is interesting to note that Adam Smith's one explicit use of the phrase "Invisible Hand" in his Wealth of Nations is not a situation in which the competitive market equilibrium is Pareto-optimal. It is of a situation with two market failures—a home bias psychological failure among the merchants of Amsterdam, and agglomeration economies for mercantile activity in Amsterdam. And the two offset each other: if merchants were rational, the free-market equilibrium would ternate an inefficient sacrifice the agglomeration economies. If the agglomeration economies were absent, psychological home bias would lead to an inefficient concentration of activity:

Glory Liu: How the Chicago School Changed the Meaning of Adam Smith’s ‘Invisible Hand’: "For Friedman and Stigler, economics’ scientific power came from its ability to predict outcomes based on two central insights... in The Wealth of Nations... self-interest... [and,] of course, the invisible hand.... Few economists were as successful as Friedman in spreading this interpretation of Smith’s ideas to the public... populariz[ing] this interpretation of Smith’s invisible hand for an overtly conservative political agenda.... What makes the Smith of Milton Friedman and George Stigler so... problematic... is that they 'economized' Smith in a way that obscured if not precluded the relevance of his moral philosophy and political theory.... Whether his political value stems from the idea that he is an economist or moral philosopher or something else, however, is something that we—Smith’s readers—get to decide...

Sally Albright: @SallyAlbright: "I called it. Bernie ran the exact same scam that lost Jim Wright his Speakership and cost Newt Gingrich $400k in fines, but from campaign donations, not from lobbyists. And sadly, it's legal. Unethical af, but legal: 'Bernie spent $444k of campaign dollars on his own books in 2015...

Carole Cadwalladr: @carolecadwalla: "Oh wow. This is what happened after my talk at #TED2019. This bit is not in the video. @TEDchris invited @facebook to respond. ‘We will make time for you,’ he said. Instead, they made an official complaint about what I said. And then: silence...

Comment of the Day: Eric Lund: "It's not just wrong, it's a fetish passing for scholarship, and there's far too much of it out there. While I am by no means a classicist, it seems to me that a casual eye on the new books carousel at your university library would rescue from any temptation to indulge this kind of nonsense. Nino Luraghi's Ancient Messenians: Constructions of Ethnicity and Memory (2008) will lead to Hodkinson and Powell, eds. Sparta: New Perspectives, which, even if you are as lazy as a certain blog commentator and content yourself with the Bryn Mawr review up on JSTOR, you would be quickly led to a pdf posted by H. W. Singor https://delong.typepad.com/files/5_041_036.pdf... and to the chastening realisation that the scenario Our Host describes was first laid out by Aristotle in the Politics. This ain't exactly cutting edge revisionism, folks...

Michael Nielsen: Six Rules for Rewriting: "Write freely, and then... rewrite.... Six rules that help me recognize the bad bits in my own writing.... Every sentence should grab the reader and propel them forward.... Every paragraph should contain a striking idea.... The most significant ideas should be distilled into the most potent sentences possible.... Use the strongest appropriate verb.... Beware of nominalization: A common way we weaken verbs is by turning them into nouns, and then combining them with weaker verbs.... None of the above rules should be consciously applied while drafting.... Only once you are done should you... rewrite...

Randall Munroe: Physicists:

As I understand it, the big difference between Auten and Splinter's inequality estimates and those of other researchers are that Auten and Splinter (a) have not harmonized their estimates with the components of the System of National Accounts, (b) assume low-income business owners evade a greater share of the taxes they owe than do high-income business owners, (c) do not assign undistributed pension earnings to their ultimate owners, (d) assume that the corporate tax is largely borne by low-income current retirees, and (e) define the top 1% by summing the incomes of all earners in the family but calculate their earning by dividing income by the number of adults in the family (see PSZ: "Distributional National Accounts: Methods and Estimates for the United States Data Appendix").

I do not, given the random audit studies, understand why they do (b). And I think that (e) is simply wrong. (e) has a big effect on inequality trends because of increasing female paid employment and decreasing marriage rates among the non-rich. Thus at the moment at least I find myself strongly on the side of Piketty, Saez, and Zucman in this disagreement—and not just because two of those three work down the hall from me.

But I do strongly share Auten and Splinter's dissatisfaction with the concept being measured here by the standard estimates. I want to see inequality defined as the lifetime distribution fo economic and social power, and I would very much want to see Piketty, Saez, and Zucman—and others—try to lay out how they think of getting from the income estimates they report to an assessment of the inequality concept we really want to see: Austen Clemens: Progress Toward Consensus on Measuring U.S. Income Inequality: "The Organisation for Economic Co-operation and Development... the team from the U.S. Bureau of Economic Analysis... Gerald Auten... and David Splinter at the congressional Joint Committee on Taxation... Thomas Piketty... Emmanuel Saez and Gabriel Zucman.... All... attempt to quantify changes in income inequality after taxes and transfers...

Mohamed A. El-Erian: Economy: The Missing Elements for a Market 'Melt Up': "Stronger global fundamentals need to underpin elevated asset prices, and the Fed must maintain a tricky policy balance as the U.S. continues to outperform advanced countries.... The argument for a melt up (involving a pile on by investors who don't want to be left on the sidelines during a market rise regardless of any change in market fundamentals) essentially extrapolates forward the impact of central bank liquidity support in the context of the notion of investment portfolio underexposure to stocks and the continued proliferation of index products. This is also known as the FOMO, or fear-of-missing-out, effect...

• Across the Wide Missouri: Is tonight the Game of Thrones episode when Tony Stark shows up? Asking for a friend...

1. Jeffrey Adam Sachs: The “Campus Free Speech Crisis” Ended Last Year: "The evidence for a chilling effect... is sketchy at best. By contrast, the evidence for a heating effect is quite robust. Many students explain that the only reason they choose to invite controversial speakers to campus is to challenge or provoke their classmates.... Turning Point USA and Young America’s Foundation proudly tout the ability of their speakers to 'trigger' liberal students. In fact, generating student outrage, even to the point of being deplatformed, has become such a badge of honor that some speakers are fabricating deplatforming incidents where none exist...

2. Wikipedia: Evolution of Nervous Systems

3. Wikipedia: Apple A12

4. Joanna Stern: This Was Supposed to Be a Samsung Galaxy Fold Video Review: "Whatever You Do, Don't Peel The Screen.... WSJ's Joanna Stern had big plans to review Samsung's first foldable phone. Then other Samsung phone screens started breaking and she accidentally began to peel off the screen protector that's not really a screen protector. Here's her non-review...

5. Dietrich Vollrath: Fully Grown: Why a Stagnant Economy Is a Sign of Success https://books.google.com/books?isbn=022666600X

Scott Sumner: What Lessons Do Conservatives Need to Learn?: "If the conservative movement were serious about learning from their mistakes in the early 2010s, they’d be looking at the group that provided the most accurate description of what was likely to happen, especially given that this group has a number of people with right-of-center views on economic policy issues.  They’d be embracing market monetarism and encouraging Trump to nominate David Beckworth to the Fed, not Herman Cain and Steve Moore.  Don’t hold your breath, as this not about getting to the truth...

Some of us may be intellectually quicker than others. Some of us may have a greater breadth or depth of real or virtual experience than others. But intellectual quickness, depth or breadth of experience, and depth or breadth of virtual experience—none of those make us smart, or wise. Being stupid is a choice. We can all train ourselves not to make that choice:

Morgan Housel: Different Kinds of Stupid: "Smart is the ability to solve hard problems, which can be done many ways. Stupid is a tendency to not comprehend easy problems. It’s also is a diversified trait. A few kinds of stupid.... 1. Intelligence creep: Not knowing the boundaries of what you’re good at.... 2. Underestimating the complexity of how past successes were gained in a way that makes you overestimate their repeatability.... 3. Discounting the views of people who aren’t as credentialed as you are.... 4. Not understanding that in the... real world it’s you vs. coworkers, employees, customers, regulators, etc., all of whom need to be persuaded by more than having the right answer.... 5. Closed-system thinking: Underestimating the external consequences of your decisions in a hyperconnected world, or dismissing how quickly those consequences can backfire on you...

Richard Baldwin has a new book and has coined the ugliest word I have ever seen to promote it. It is very interesting, and I think it is largely right. But I think it does have a big problem with the word "globotics": "globalization" and "robots", even robot-enabled globalization and globalization-enabled robots, are two very different processes with very different implications. Squashing them into one makes his argument less coherent than it might have been: Richard Baldwin: The Globotics Upheaval: Globalization, Robotics, and the Future of Work: "A new form of globalization will combine with software robots to disrupt service-sector and professional jobs in the same way automation and trade disrupted manufacturing jobs.... Software robots... pervasive translation that open[s] new opportunities for outsourcing to tele-migrants.... Future jobs will be more human and involve more face-to-face contact since software robots and tele-migrants will do everything else...

Building up the data base we need to understand inequality on a global scale: Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman: World Inequality Report 2018: "The World Inequality Report 2018 relies on a cutting-edge methodology to measure income and wealth inequality in a systematic and transparent manner. By developing this report, the World Inequality Lab seeks to fill a democratic gap and to equip various actors of society with the necessary facts to engage in informed public debates on inequality...

Is tonight the Game of Thrones episode when Tony Stark shows up? Asking for a friend...