The Wealth of Nations

Who’s wealthier, a Maasai elder or your average American?

A few years ago, my wife and I enjoyed a marvelous hike through the bush of Tanzania while on safari. After camping in the village of Nainokanoka, we set off early with Moloton, our Maasai guide, and we walked amongst the buffalo, gazelles, wildebeest, and zebra on our way to a campsite at Empakaai, a gorgeous crater lake that legions of flamingos call home.


It was positively Edenic … I still can’t believe my wife did it while pregnant …

Anyway, as we walked through some of the villages, I noticed an abundance of domesticated animals grazing around the boma— cattle, goats, sheep, chickens.

Since this was a long hike, I had lots of time to get lost in thought. And I kept pondering the question at the top of this page. (more…)

Intangible Assets

I’ve been digging through some historical tax receipts data (#NerdAlert) to determine whether investment income — defined as net income from taxable interest, dividends, capital gains, and rent — has been rising as a share of gross income. To my surprise, it has been fairly flat at around 10% in recent years (see Exhibit 1). (more…)

Favorite Podcast Episodes (2017)

In The Inevitable, Kevin Kelly says that at least 27 new podcasts launch each day. That’s nearly 10,000 per year! And I bet that number has grown since his book was published.

I haven’t looked very hard for a solution, but one of my biggest headaches with podcasts is discovery: finding a new voice / perspective to which I want to listen. Since most podcasts target a niche, then by definition, to each listener, most podcasts are shit. (more…)

The Death of Graduate School?

The Republican tax plan is an odious hand-out to large corporations and a big 🖕 to most citizens and small businesses. Until I read this summary of the House Bill, I generally thought people who called Republicans corporatist bootlickers were being unfair. But here we are.

Anyway, two of the House Bill’s provisions are raising concerns about the future of postgraduate education: (more…)

Technological Acceleration and the Wet Noodle of Monetary Policy

The American boy of 1854 stood nearer the year 1 than to the year 1900. The education he had received bore little relation to the education he needed.  Speaking as an American of 1900, he had as yet no education at all.  He knew not even where or how to begin.1

If science were to go on doubling or quadrupling its complexities every ten years, even mathematics would soon succumb.  An average mind had succumbed already in 1850; it could no longer understand the problem in 1900 … At the rate of progress since 1800, every American who lived to the year 2000 would know how to control unlimited power.  He would think in complexities unimaginable to an earlier mind.  He would deal with problems altogether beyond the range of earlier society … The movement from unity into multiplicity, between 1200 and 1900, was unbroken in sequence, and rapid in acceleration.  Prolonged one generation longer, it would require a new social mind.  As though thought were common salt in indefinite solution it must enter a new phase subject to new laws.  Thus far, since five or ten thousand years, the mind had successfully reacted, and nothing yet proved that it would fail to react—but it would need to jump.2

The Internet is the most deflationary invention of all time.3

A few weeks ago, the Fed determined that the world was not yet ready for a 25 basis point increase in U.S. interest rates.  They’re smart and monetary policy is their day job, so I’m sure they know better than I about these things.  But still, I find it all a bit befuddling.

Illustrative example.

Lately I’ve been pondering whether monetary policy has been largely ineffective at generating inflation4 because the drivers of deflation aren’t monetary in nature, but rather technological.  In 1904, Henry Adams developed a theory (“A Law of Acceleration”) on the exponential rate of technological change; and he posited that around the time we’re living in now, the rate of progress might exceed our ability to deal with it (see chart). (more…)

QE & Inequality

I believe that the policies we have undertaken have been meant to generate a robust recovery.1

Effective demand is dead in the water.2

Quantitative easing…is that, like, making math easier?3

Well, goodbye to all that.  Until the next time, Quantitative Easing.

For normal people with more interesting lives, I imagine articles headlined with the words “quantitative easing” prompt a mild degree of nausea and / or disinterest.  As for me, for the last six years4 I’ve found it hard to avoid reading pieces on the unparalleled series of unconventional monetary policies: QE 1, QE 2, Operation Twist, QE 3.  So much juicing of the financial markets, so much time I will never have back, so many unintended consequences nobody can foresee. (more…)