Sunday, August 28, 2016

Beach reading roundup

Neal Stephenson, Seveneves. Stephenson's Snow Crash and The Diamond Age explode with energy, creativity, vivid characters, and dark humor. Both are great reads from beginning to end. Seveneves lacks every single redeeming feature of those books. It is derivative, tedious, humorless, and endless. I gave up long after I should have... several hundred pages into this deep pile of crap.

Elena Ferrante, My Brilliant Friend. Recommended by my colleague MK... along with everyone else. It is a fine novel: wonderful storytelling, psychologically astute... and the translation is exceptional.

John LeCarre, A Call for the Dead. His first, introducing George Smiley. I've read it a couple times, and though it was not my first Smiley novel (nor my favorite*), it would be the best place to start. It is a perfect suspense novel, and more.

Attica Locke, The Cutting Season. A whodunit featuring a charismatic single mom protagonist and an atmospheric mis-en-scène on a restored Louisiana sugar plantation. I picked it up from the hotel bookshelf for the flight home from Kauai. There are times when our hero Caren Gray makes decisions that are not as smart as she is, and the villains are a bit one-dimensional, but overall it is a fine escape with a deftly handled element of American racial history that doesn't insult your intelligence or standards.

* That would be Tinker Tailor Soldier Spy.


Yes, it is paradise. I have some photos below, but there's no way to capture the lush beauty of the place, especially the north shore. There are tourists, for sure—the GDP must be well over half tourism—but in spite of it Kauai has managed to maintain a rural, local vibe.

You don't usually have to drive far down a side road to encounter a little fruit stand offering a few mangos or avocados, often operating on the honor system. The day we arrived I swerved off the main road to buy a jar of homemade dill pickles from a young guy selling them from the back of his pickup truck, his sign painted on an old surfboard, of course. One or two scruffy, leathered old surfer dudes will inevitably be on the beach with you if there's a hint of a wave to catch. While fixing my latte, the young woman behind the counter at the gift shop/ cafe at Hanalei Colony Resort, where we stayed, told me about getting lost on the unmarked hunters' tracks she has hiked through the other-worldly thick jungle of the Alakai Swamp. A large percentage of the work force seems to be earning just enough in the tourist trade to support the island lifestyle. Could you thrive on a diet of ramen noodles and cheap beer, live in a buggy, rustic cottage, all in order to maximize the hours per week you could spend trekking in that crazy beautiful jungle, or snorkeling those abundant reefs, or riding those choppy breakers to a backdrop of Bali Hai? If you think the answer is obviously no, maybe you haven't been there.

The only mild down side for a nature-lover like me is contemplating the tenuous grip on survival that so many of Kauai's native species have. Several million years isolated by thousands of miles of open ocean have left the flora and fauna that evolved there unique, but vulnerable. The adventurous, industrious Polynesians, with their pigs, rats, and invasive though useful foreign plants, played a big part in the island's biological fall from grace. Western settlers brought more invasives, and even very recently some popular landscaping plants, such as the beautiful octopus tree (Schefflera actinophylla), are devastating Kauai's remaining native forests. Kauai's birds may also be suffering from mosquito-born diseases. Talk about the Fall: even the mosquitoes only came with the humans.

The Pihea Trail is the most direct way to the aforementioned Alakai Swamp. It starts down a ridge overlooking the spectacular Kalalau Valley... when, of course, the clouds part. Somewhere behind that fluffy white stuff. Did I mention 400 inches of rain annually?

A great place to learn about Kauai's native and introduced flora, and the uses to which the native Hawaiians put them, is the Limahuli Garden in Haena. It is spectacular.

Hibiscus is all over the place. Some varieties are endemic to the island. Not this one, I think...

The Pihea and Alakai Trails feature miles of old boardwalks, which keep your feet out of the mud... partly.

For a Californian coming off several years of drought, the amount of moisture on Kauai is... well... obscene? It clots the very air you breathe.

Friday, August 19, 2016

Wednesday, August 17, 2016

Game of Thrones betting market

The markets predict that insufferable dragon lady as the winner by a substantial margin. God I hope not. In the moral universe of television, one rule that should always be observed is that the winner is a halfway decent actor. If I were a betting man, I'd go with Cersei Lannister, not only because she is my favorite character, but also because she seems invincible. On the other hand, if Bran Stark triumphs, just shoot me... no worries, I will already have been bored to death...

Monday, August 15, 2016

The Golden Compass

I recently re-read the first installment of Philip Pullman's marvelous fantasy trilogy, mostly while I was shivering next to the campfire in Yosemite. It was almost as good as I remember it. Still, it really is fiction for young folks, not old cynics like me, and I perceived a few shortcomings that I might have missed the first time, when the breathless plot carried me right along. In particular, the narrative rushes toward the end, when a reader might prefer that Pullman take his time and reveal more about some of the main characters—not their back stories, but their character. And things are sometimes a little too easy for Lyra: her clever plans work out better than one could reasonably expect. This reflects the tension in the story between destiny and agency. My taste leans toward more agency, but I acknowledge that others may differ. One thing we can probably all agree on is that together, this girl and her daemon make a hero for all time.

Sunday, August 14, 2016


That's farmers' market-speak for mushy or broken tomatoes (etc.) sold at a steep discount. Today's were 75 cents a pound, just fine to eat sliced today. Mine are suffering a different fate...

Friday, August 12, 2016

Yosemite visit

The peak of summer tourist season is not the ideal time to visit Yosemite, but if you head to the "less popular" (that's a relative term) upper part of the park, manage to find a campsite, and then hit the trail... well... it's Yosemite! I lucked into the last open site in the rustic and secluded Porcupine Flat campground. Tioga Road (Rte 120) was a traffic jam at times. But what still astonishes me is that you need only hike for an hour from the road and not see another human soul.

Bad news first. The drive between Groveland and Crane Flat (many miles) was depressing. The pines that haven't been taken out by wildfires are succumbing to pine bark beetles in large numbers. Within a decade the lower Sierras will look more like chaparral than forest. But let's just ignore all that and head up to high country.

Hike #1 was the short chug up Lembert Dome in Tuolumne Meadows... a good way to get acclimated to the thinner air. Great views. If you haven't yet... just do it!

Next day, Hike #2: Gaylor and Granite Lakes, a trail that takes off from Tioga Pass at the east end of the park. One of my favorites—I have done it many times. Most people seem to stop at the first (Middle) Gaylor Lake. It's lovely, but the best lies beyond.

Bumblebees love ranger buttons (Sphenosciadium capitellum).

A mellow stroll from Middle Gaylor brings you to Upper Gaylor Lake. And from there, it's a short trudge uphill to the "Great Sierra Mine." The miners, in search of fortunes of silver, were unsuccessful, but they built a fine stone cabin at the crest with a southward view that rivals any I know of. Then again, pretty chilly winters up there!

Thanks to Jeffrey Schaffer I know that you can bushwhack past the mine to a scenic nearby pond and then over a ridge to the Granite Lakes. The view from atop the ridge is a classic:

Hike #4: Mono and Parker Passes. (I deal with Hike #3 below.) This is one of the top day hikes in Yosemite. 12 miles round trip in high-elevation air, so be prepared!

First, up to Mono Pass. Many good views, and an interesting set of pioneer cabins at the pass. Beautiful weathered logs...

Then head south to Parker Pass. The climb is gradual, and the open-country scenery is spectacular all the way.

Parker Pass, at 11,000 feet, is essentially the top of a long, broad, windswept meadow. It is a dramatic setting.

Just south of the pass is a moraine (I think), hiding chilly, sapphire Parker Pass Lake. I scrambled down to it for lunch.

The rocks here are the typical eastern Sierra metamorphic melange. The green stuff (serpentine?) seems to attract the hardy lichens in this inhospitable environment...

From Parker Pass Lake it's an easy cross-country stroll down crazy-beautiful meadows to shallow Spillway Lake. There I met a couple of friendly Park Service limnologists taking their lunch break after collecting and analyzing some water samples... well, they weren't really limnologists, but physical chemists, but I like the word limnologist.

Oh yeah... Hike #3? Short jaunt up Panum Crater, just south of Mono Lake. This is a rhyolitic lava dome of very recent vintage... 600-700 years old. The dome is a kind of fun-house of volcanic rock, including huge blobs of obsidian. At that age, it has to be considered active, and standing there you do wonder when it might get a hankering to blow again...

This rock exhibits what is known as breadcrust texture, caused by cooling and cracking of the lava.

Yosemite has critters too. Like Belding's ground squirrel. At Gaylor Lake, they have only a few short months to eat up and go to bed before the snows come again. Cute?

Whistle while you woyk

I suppose Samsung thinks they are selling phones in these commercials. What they're really selling is America's greatest musical genius. Maybe some kid begging Mom and Dad for a new phone with which to play Pokemon Go will wonder whose crazy voice that is... then she'll google him and hear him play trumpet. If I were a believing person I'd imagine he was smiling... and whistling... at this. And wishing he were still alive for the royalty payment.

Can Music Be Perfect? Vol. 72

American popular music offers such an abundance of riches... I'd never claim there was a golden era or genre. For me, the jazz-inflected popular song of the 1950s—Ella, Sarah, of course Frank—ranks mighty high, as does 70s soul and funk, classic Dixieland, 60s Blue Note jazz... I could go on. But 90s hip-hop is right up there... a nearly limitless trove. I thank Aidan, a true aficionado, for helping me appreciate how to listen, especially to the beats. Spotify's I Love My 90s Hip Hop channel is a mixed bag, but that's partly what's impressive... from Black Eyed Peas to Eminem to Lauryn Hill to Pharcyde to Wu Tang Clan... stylistically, the diversity is extraordinary. And then there's the lyrics. From psychedelia to trenchant social realism.

Speaking of social realism... This one is so hard, so sad, so poetic. Profane, for sure.

The government's cost of capital... or, a case for socialization

For the feds right now, borrowing money is cheap. If the federal government can borrow at 0%, should that be considered the relevant cost of funds for making decisions on public investment projects? For example, suppose a proposed highway improvement would cost $10 million, is expected to last 10 years, and could be financed with a bond at 0% interest. Would we want the government to undertake the project, so long as it was expected to yield at least $1 million in benefits annually? Or should we insist, as a private firm probably would, on a bigger stream of benefits, to cover the opportunity cost of not investing that $10 million in something with a higher rate of return? This is a debate about the appropriate discount rate for making social decisions.

Tyler Cowen makes the latter opportunity cost argument, noting that if private investors make investment decisions based on a marginal private rate of return on capital of 10% or more, as they appear to, the government should too. Thus our highway project should yield annual benefits closer to, say $1.1 million.

Brad DeLong disagrees, using an argument from "first principles" on what the social discount rate should be. If we treat the utility of future generations equally with our own, which seems like the ethical thing to do, then the (risk-free) real discount rate should only be positive to the extent that people in the future will be better off than we are, and the utility of a dollar is worth less to a (future) person who has more of them. Typically these considerations imply a real social discount rate of about 2% or less.

This is an old debate. The Cowen position has been referred to as the descriptive approach, because it rests on actual market valuation by private agents in the economy. The DeLong position has been referred to as prescriptive, because it is, well, prescriptive. This debate has played an important role in economic analyses of optimal climate change policy. Because most of the costs of climate change mitigation occur now, and most benefits far in the future, the discount rate can make a huge difference in benefit-cost calculations. Indeed, using Cowen's preferred discount rate, the optimal policy response to climate change would be rather minimal.

Like DeLong, I prefer the prescriptive approach on ethical grounds, but Cowen's argument needs to be thought through. From a utilitarian point of view, private returns are social returns.* So we face the question of why private agents are underinvesting relative to the social optimum. DeLong offers some speculations as to why. But more to the point... If the government can borrow at less than 2%, and earn private returns of 10%, society would benefit if the feds borrowed a huge amount of money and invested heavily in the private economy. I.e., socialization. Risk is a factor, but the government is big and can do a lot of diversifying. So why not?

* In the absence of externalities or other market failures, of course.

Sunday, August 7, 2016

Olympics report

Lots of swimming: Now that I am swimming regularly, I find it more impressive than I used to. Still not terribly exciting... way too many events.
Women's cycling road race: Earlier in the day I was agreeing with my sports fan neighbor that it is like watching paint dry. Why are they devoting so much air time to this? By the end of the race you could not have pried me away from the TV. Wow.
Men's tennis: Djoko and del Potro. Awesome.
So far, so good!

Saturday, August 6, 2016

Marcella's tomato sauce

Well, tomato and butter sauce, really. Every bit as delicious as they say. And as simple.

Lovely... never, never change...

Not in his best voice, but this is Tony Bennett at his most intimate and appealing. And the song. Fields and Kern. It only needs be sung. Which he does.

Skills beget skills

Why place a particular emphasis on early childhood education? There are two reasons. First, young kids' brains may be more plastic, in which case investments in education or good parenting would yield a higher return in terms of learning. Second, the ability to learn depends dynamically on the child's previously acquired capacity to learn. That is, skills beget skills. If so, early education earns a kind of "double dividend" by adding skills directly and facilitating later skill acquisition.

How important are these two effects? Not an easy question to answer, because we cannot directly observe or measure either investment in skills or the skills themselves. We do, however, have imperfect measures related to skills, such as test scores. These indicators may allow one to estimate the latent unobservables.

That's precisely the subject of this paper by Agostinelli and Wiswall, "Estimating the Technology of Children's Skill Formation." The dry title and dense methodology could be a little daunting, but the results are important. Here are my takeaways. First, identification of the latent variables and their effects is sensitive to modeling assumptions. Figuring out which assumptions are reasonable seems a high priority for future research. Second, under their preferred assumptions, they find the following, using data from the National Longitudinal Study of Youth (NLSY):
  • A child's skills are strongly affected by both investments and pre-existing skills.
  • Both effects are larger for younger kids. The results strongly favor early investment.
  • There is some evidence that early investments have a bigger effect—and thus presumably bigger bang for the buck—for less-skilled kids. This result differs from some past findings which had suggested a reinforcing effect between skills and investment.
  • Investment in skills is an increasing function of family income as well as the mother's cognitive and noncognitive skills—the latter having a particularly large impact. Noncognitive skills are measured using standard survey-based metrics conducted as part of the NLSY. 
  • Because investment is greater for children from advantaged backgrounds, "endogenous investment increases inequality in children’s skills." 
Finally, the authors use their results to estimate the benefits and costs of an income transfer of $1000 to a child's family in terms of its impact on childhood skill development. The only benefit accounted for is the impact of skills on the child's future income. The net benefits are substantial, as shown in the table below. 

It's tempting to read too much into this result, given the way it is presented. There is no attempt in the paper to show that the effect of income is causal. Rather, family income could be correlated with something else affecting investment in skills, such as neighborhood effects, or father's skills. So there is no evidence here that a simple money transfer would have these salutary effects. What they have demonstrated is that kids from disadvantaged backgrounds are at a very big disadvantage indeed in accumulating skills that affect life prospects in a big way. Given the dynamic of skill acquisition, figuring out how to level the playing field early in life is a compelling research and policy priority.

Friday, August 5, 2016

On Such a Full Sea

This near-future dystopia by Chang-Rae Lee is a fantastic read. It follows the adventures of a teenage girl, Fan, who leaves her home town of B-Mor in search of her one and only true love, Reg, gone missing under suspicious circumstances. The book envisions an essentially stateless America, which has been carved up into three kinds of communities: wealthy gated Charter villages; collective urban production settlements like B-Mor; and the lawless open counties everywhere else inbetween. Similarities to the world we now inhabit are hardly subtle—indeed, when the locus of action shifted to the Charter village, I had to cringe at the many resemblances to my own Palo Alto.

Lots of bad stuff happens to our Fan along her journey—both physical violence and the moral violence of betrayal—but comparisons to Cormac McCarthy and Kazuo Ishiguro by some reviewers are, in my view, inapt. On Such a Full Sea is far from McCarthy's misanthropic machismo or Ishiguro's quietly devastating sadness in Never Let Me Go. In its way, this is an exuberant book. Fan is irrepressible in her quest, and beauty and acts of kindness and sacrifice abound, amidst the moral decay and occasional brutality.

Plot-wise, there's not all that much new here, if you read this kind of book, although a couple of the set pieces are unexpectedly original and compelling, including a driving lesson, and the creation of an elaborate drawing on a bedroom wall. The glory of this novel is in the language. Lee has a voice all his own. In fact, the novel's voice is that of an unnamed resident of B-Mor, recounting Fan's story as legend. In typical modernist fashion, this narrator is self-conscious and not entirely reliable, by her/his own admission in places. How could she be, not being direct witness to any of the main action in Fan's story? Perhaps more reliable, but still subjective, is the parallel story arc of the ups and downs of B-Mor itself, as the missing Reg becomes something of a cause célèbre during hard times. The narrator is constantly engaged in conversation with the reader, with himself, with the absent Fan, with fellow B-Morians, and often turns didactic, asking questions—sometimes rhetorical, sometimes ironic or humorous.

I thought the book's final act dragged just a little, as Lee's interest in social criticism got the better of him in spots. But the writing is seldom less than brilliant. And the plot twist on the last page is utterly satisfying and right. Don't peak.

Thursday, August 4, 2016

Music for 18 Musicians

Performed by Eighth Blackbird. Plus ten guest artists, I reckon. Play loud.

Happy birthday, AB 32

California's landmark climate law at age 10. Let's keep the ball rolling.

What student debt crisis?

That is not the actual title of this VoxEU report by five economists at the President's Council of Economic Advisers, but the picture they paint is actually a good bit rosier than one often hears in the press. There are three main takeaways:
  • The return to a college education in terms of higher earnings swamps the amount of student debt held by most students (see figure below). Most students hold modest amounts of student debt and are successful at repaying. 
  • The students who fare the worst in terms of repayment and default tend to be those who don't complete college and/or attend for-profit, low-quality institutions. An interesting paradox is that default rates are quite high among those with relatively little student debt, because many of these folks never finished their degree and thus received a smaller income boost. 
  • Because the earnings premium from a college degree increases with age (up to a point), ability to repay increases over time, so deferred or "income driven" repayment schemes can be a big help.
Higher education is, among many other things, an investment in individual human capital, and a very good investment for most. Debt finance is a perfectly appropriate and rational means of paying for such an investment. The rhetoric of the student debt "crisis" has had the unfortunate side effect of implying that student debt is something to be avoided, rather than an opportunity if managed prudently. Public policy can potentially do a lot to facilitate sound debt finance of human capital accumulation: by improving student access to credit on good terms, by making repayment schemes more flexible and less painful, and by helping students make better decisions about where to go to school. Not surprisingly, the authors note various Obama administration initiatives along these lines. 

Lurking in the background, of course, are political debates about higher education policy. For example, there is the proposal to make public higher education tuition-free for lower- and middle-income students, an idea embraced this summer by Secretary Clinton to throw a bone to the Sanders wing of the party. It seems like a fine idea to me, but one without much prospect of enactment in the near future. Ongoing policy reforms that facilitate responsible and manageable student debt remain crucial.

Monday, August 1, 2016


Less than two months after I discovered and recommended it, KUSP has run out of money and shut down. It was good while it lasted. Sigh.

Billy Hart Quartet

My friend and neighbor Doug had a spare ticket to Billy Hart's concert at Stanford Jazz last night. It was a show that had caught my eye. Hart, 75, has played drums with many of the greats, and can be heard on some 500 albums, according to the program. He has a pretty ferocious, hard-driving sound, heavy on the cymbals. His band features pianist Ethan Iverson, of Bad Plus renown, saxophonist Mark Turner, and bassist Ben Street. I'm not a big fan of Bad Plus, the music being too precious for my taste, but Iverson is undoubtedly a fine player and a clever composer. I was interested to hear what would happen when he got together with a hard-bop master drummer who has some free jazz tendencies.

The music? Cerebral, brilliantly played, a bit chilly, and... boring. The compositions—several by Iverson—featured complex thematic introductions, modal harmonies, and stop-and-start rhythms. There was not much you could hum along to, Doug and I agreed afterward. That's OK with me. But even (especially?) the avant-garde benefits from some heart and soul to go with the brains, and soul was in short supply here.

Turner, standing straight and still, improvises on tenor with extended modal runs; you could almost see the circuits rapid-firing in his brain as he turned the lines inside out and upside down and made up crazy but logical chord transitions on the fly. His style reminds me of another great tenor man of the same generation, Chris Potter, whom I also heard at Stanford, and I had a somewhat similar, chilly, reaction. Iverson's playing, also impressive, was likewise technical and inward-focused. Ben Street's bass was the highlight for me, though he never got to take a solo. Rock solid, melodically interesting, he unified the group and warmed things up a bit.

As for the bandleader... Hart is undoubtedly inspired by playing with these younger dudes, but that didn't prevent a certain incongruity between his thrashing pulse and the more composed, angular, and precise rhythmic attack of the others. He gave the impression of a musical force hemmed in, flailing about, trying to break loose of the musical mind games his younger colleagues were playing. Break loose to do what exactly? Explode? Emote? Swing?