Saturday, June 10, 2023

Did the PGA just admit their merger eliminates competition?

 From the WSJ:

When LIV launched a year ago, it brought unprecedented money into professional golf. The $25 million of prize money it offered at its regular-season tournaments was a record high. And to further induce top talent such as Phil Mickelson and Dustin Johnson to sign on, LIV offered enormous appearance fees, some of which reportedly exceeded $100 million.
Monahan bluntly stated last year that “if this is an arms race, and if the only weapons here are dollar bills, the PGA Tour can’t compete.” But as LIV continued to pick off top golfers—it announced Brooks Koepka as an addition during the same press conference last June when Monahan uttered those words—the Tour participated in that financial arms race anyway.

Thursday, June 8, 2023

Is private school worth it?

Economist:  "Should you send your kids to private school?
The benefits are probably bigger in America than they are in Britain, at least for pupils sitting in the swankiest private classrooms. That is because their alumni continue to enjoy access to the best universities at rates which would cause a furore in the old country. That might surprise anyone who assumes that American society is less ridden by class than British society. ...
By the time they turn 25 Britons with private education earn 17% more than other workers from similar homes, according to a study from 2015. The pay premium widens by the age of 42, according to earlier research, to around 21% for women and 35% for men. In part this is because privately schooled people are more likely to enter high-earning professions, such as finance. Alumni networks may help in this, but peer pressure and parental expectations probably play a big role, too.
[In US]...on average about 34% of their new undergraduates were educated in private high schools (see chart). That is astonishing given that the private sector educates just 8.5% of American high-schoolers. Pupils from “independent” schools do brilliantly. The most recently published data suggest they made up about one-third of new undergraduates at Dartmouth and more than a quarter at Princeton. “Legacy” preference, whereby the relatives of alumni get a leg-up in admissions, may explain some of this. Nothing so brazenly unfair happens at British universities.
EXERCISE:  Give two causal explanations for the correlation between private schooling and success in the US.  

Is the China Real Estate Bubble popping?

Barron's via Instapundit:

So much for the Chinese economic boom. Last year China ended a disastrous zero-Covid policy that had crippled its economy. A rush of growth was widely expected to follow. Instead of booming, five months after the ending of its Covid restrictions, the Chinese economic recovery is sputtering. That is due in no small measure to the bursting of its outsized housing and credit market bubbles.   ...
A bundle of recent disappointing Chinese economic data, including retail sales, factory orders, and imports, all suggest that the Chinese government will have trouble meeting its 5% economic growth target. So too do indications that a number of major Chinese local governments are struggling to meet their debt obligations and that Chinese youth unemployment has risen to a worrying record 20.4%.

Tuesday, June 6, 2023

Will bad real estate loans cause more problems for banks?

 Two potential problems:

Interest-only loans:  Nearly $1.5 trillion in commercial mortgages are coming due over the next three years, according to data provider Trepp. Many of the commercial landlords on the hook for the loans are vulnerable to default in part because of the way their loans are structured.

Reduced demand for office space:  After the spate of bank closures that included Silvergate, Signature NY, Silicon Valley Bank (SVB) and Credit Suisse, there is now talk of a major crisis—not just in the banking sector, but in other sectors, especially in commercial real estate.

There is an oversupply of office space in big cities like Los Angeles, San Francisco and New York that has been complicated by the work-from-home and quiet quitting trends.

Tuesday, May 30, 2023

US and Singapore know how to grow

 From Jon Hartley's tribute to Bob Lucas in NATIONAL REVIEW:

In the 1980s, Lucas stopped doing work on business cycles (the subject that had originally made him famous in his work on rational expectations) once he realized that the concerns of broad-based economic growth and long-term economic trends far outweighed the importance of business-cycle fluctuations. In other words, a recession that may cause the U.S. — per capita — to lose 5 percent of GDP (like during the Great Recession) pales in comparison to the fact that U.S. GDP per capita has grown 300 percent in real terms from the end of World War II to 2023, or the fact that the GDP per capita of the U.S. remains 550 percent greater than the GDP per capita of China or 3,100 percent greater than the GDP per capita of India.


Lucas famously wrote, in what would become his most cited paper, “On The Mechanics of Economic Development,” that “the consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else.”

Saturday, May 27, 2023

How will AI change Education and Computer Science?

Bryan Caplan as an answer:

  • What will change for students is workload and evaluation. Professors are used to assigning homework, papers, and projects. Using AI to cheat on such work will soon be child’s play. Sufficiently harsh punishments for cheating might preserve the status quo, but modern schools give cheaters a slap on the wrist, and that won’t change. Unmonitored schoolwork will become optional, or a farce. The only thing that will really matter will be exams. And unless the exams are in-person, they’ll be a farce, too. I’m known for giving tough tests of deep understanding - yet GPT-4 already gets A’s on them. 
  • AI could drastically reduce employment in CS over the next two decades. Humans will specialize in whatever AI does worst.
  • What about we humble professors? ... Except for cutting-edge empiricists, however, AI will make research even more of a scam than it already is. If Sokal or Boghossian-Lindsey-Pluckrose can successfully “punk” humanities journals, AI will be able to do the same on an industrial scale. If you want a picture of the future, imagine a bot writing a thousand turgid pages a second about “neoliberalism,” “patriarchy,” and “anti-racism” — forever. Outside of the most empirical subjects, the only rationing tools left to determine academic status will be uniquely human: networking and sheer charisma. My fellow scholars, now is a great time to reread Dale Carnegie’s How to Win Friends and Influence People.

Tuesday, May 9, 2023

Hone your BS antennae to detect confirmation bias

ChatGPT makes what Steven Pinker calls "motivated reasoning" (e.g., confirmation bias) really easy.  In what follows, pay attention to the general nature of argument.  That is one indicator of BS.  If you want to make this letter more persuasive, use examples specific to your experience.

Write a message to my boss justifying the purchase of [URL of product or service] for [department or company]. 
Write a message to my Dean justifying the purchase of a new laptop for a professor at the Business school at Vanderbilt University. 
Dear Dean [Name], 

I am writing to request your approval for the purchase of a new laptop for one of our esteemed professors at the Business School here at Vanderbilt University. As you know, technology is a vital component of modern-day education, and laptops are an essential tool for professors to effectively deliver their lectures and engage with students. Unfortunately, the current laptop of our professor has begun to show signs of wear and tear, and its performance has become suboptimal. 

Furthermore, given the nature of our business school curriculum, our professor needs a laptop that can handle the demands of data analysis and statistical modeling software, which are essential for effective teaching and research. It is imperative that our professors have access to the latest technology and software to ensure that we continue to provide the highest quality education to our students. 

I understand that purchasing a new laptop is a significant expense, but I assure you that it is a worthwhile investment that will benefit both the professor and the students. It will ensure that the professor can continue to deliver exceptional lectures and research work, and it will also enhance the student's learning experience. 

Thank you for considering my request. We appreciate your continued support in providing the necessary resources to maintain the highest standards of education at the Vanderbilt Business School. 

Best regards, [Your Name]