Category: Political Science
What is Newsworthy? Theory and Evidence
We study newsworthiness in theory and practice. We focus on situations in which a news outlet observes the realization of a state of the world and must decide whether to report the realization to a consumer who pays an opportunity cost to consume the report. The consumer-optimal reporting probability is monotone in a proper scoring rule, a statistical measure of the amount of “news” in the realization relative to the consumer’s prior. We show that a particular scoring rule drawn from the statistics literature parsimoniously captures key patterns in reporting probabilities across several domains of US television news. We argue that the scoring rule can serve as a useful control variable in settings where a researcher wishes to test for bias in news reporting. Controlling for the score greatly lessens the appearance of bias in our applications.
That is a new paper from Luis Armona, Matthew Gentzkow, Emir Kamenica, and Jesse M. Shapiro. I take this to mean the actual bias is more toward surprising news than negative news per se? Via Paul Novosad.
My Conversation with Velina Tchakarova
Here is the audio, video, and transcript. Here is the episode summary:
Founder of the consultancy FACE, Velina is a geopolitical strategist guiding businesses and organizations to anticipate the outcomes of global conflicts, shifting alliances, and bleeding edge technologies on the world stage.
In a globe-trotting conversation, Tyler and Velina start in the Balkans and then head to Russia, China, North Korea, and finally circle back to Putin’s interest in the Baltics. She gives her take on whether the Balkan Wars still matter today, the future of Bulgarian nationalism, what predicts which Eastern European countries will remain closer to Russia, why China will not attack Taiwan, Putin’s next move after Ukraine, where a nuclear weapon is most likely to be used next, how she sources intel, her unique approach to scenario-planning, and more.
Here is one excerpt on a matter of great importance:
COWEN: Maybe we’ll come back to Bulgaria, but let me try some questions about the broader world. Why is it you think China will not attack Taiwan? They claim it as theirs, and arguably, in five to ten years, they’ll be able to neutralize our submarine advantage from the US with underwater drones and surveillance of our submarine presence. At that point, why don’t they just move on Taiwan and try to take it?
TCHAKAROVA: Well, I do understand that there is a lot of analysis coming out right now, especially on behalf of the military experts, not only in the United States but also in other parts of the world, pointing to this realistic scenario that we may see a military attack by China on Taiwan not later than 2027. And why 2027? Because it is being anticipated as the year when China will be able to catch up militarily with the United States.
I do not share this assessment. I just don’t see why China will have to take such a big risk in achieving something that it can achieve in a much smarter and more efficient way. What do I mean by that? I call this approach “death by a thousand cuts.” That would mean that China could spend a little bit longer in a slow but steady political, social, economic, and societal penetration of Taiwan. We could argue it’s the old Soviet playbook. It could be done in a more subtle way, using plausible deniability.
Taiwan is still the most successful democracy in the Indo-Pacific. That means, also, it is vulnerable to this kind of penetration, where you can practically use agents provocateurs on the ground. You can buy up a lot of institutional or individual players. You can start doing all this subversion process in a longer timeframe, but it could bring about bigger success than actually risking military intervention, which is not giving you, I would say, even a 50–50 chance of success.
The terrain of Taiwan, if we compare it with the most sophisticated war that’s going on right now, is much more difficult. You have a very, very limited window to attack. In the case of Taiwan, this window of opportunity is probably limited only to two periods in the whole year, which, of course, is also known by everyone in the region. That particularly means the defense of Taiwan. You have a window of opportunity in April and then in October, so you cannot attack at any time in the year.
It is a sophisticated military attack that cannot be conducted on the whole of the island. Even though China is catching up militarily right now, I think that the mindset of this Chinese leadership — the way the Chinese leadership is actually conducting strategy — does contradict such risky endeavor, again because time is on China’s side. China only needs to really prepare this sum of minor actions in a longer period of time. At least, this is what I would actually do as a strategist, which would promise a much better percentage of success than, like I said, an adventurous military attack.
Now, we may argue that under unanticipated circumstances for the political leadership — think of a situation where the political stability in China is shaken, where the Chinese leader, Xi Jinping, is somehow put into a corner to take a very, let’s say, ad hoc decision on the matter because of certain circles of the hawks, of the military hawks. Of course, we have this possibility as well. It could be a black swan event, something that has happened in China, and this makes him take this decision in order to draw the attention away from internal problems.
Foreign policy adventures are always gathering public support. It’s not 100 percent to be excluded, but in my scenario, I would actually point to, as I explained, this death-by-a-thousand-cuts approach rather than a military attack on Taiwan.
COWEN: Are we now in a world where the laws of war are basically obsolete?
It is worth repeating that issues of foreign policy are very much the most important issues. And here is Velina on Twitter.
Does visiting South Africa make you more right-wing or more left-wing?
Perhaps “both” is the correct answer?
The right-wing tendencies are easiest to explain. South Africa is obviously much wealthier than the rest of sub-Saharan Africa, and of course Westerners play a larger role in its history and also in its present. You can put different glosses on that, but a variety of those paths lead to right-wing conclusions. The left-wing lessons are more novel to ponder, here are a few:
1. Following the removal of apartheid, a black middle class and upper class arose fairly quickly. That testifies to the importance of environment, opportunity, and circumstance. Of course most of the blacks in South Africa still lack adequate opportunity, most of all because of poor education and also sometimes because of poor location within the country, a legacy from segregated apartheid times. Overall, visiting the country causes one to upgrade the importance of opportunity, and to recognize that bad circumstances for talented people can continue for a very long time.
2. Post-apartheid economic performance has been disappointing, and economic inequalities have risen not declined. That suggests more capitalism can exacerbate economic inequality, even as political inequalities are eased.
3. Apartheid was enforced with a remarkably small number of police, per capita much less than most Western countries at the time. That might suggest a kind of Marxian and Foucauldian view that oppressive systems take on a force of their own, through norms and expectations, and are harder to dismantle than an analysis of simple coercion might indicate. The disappointments of post-apartheid South Africa hardly refute that suggestion, as those earlier norms and expectations are by no means entirely gone.
4. In the new, non-apartheid South Africa, sometimes class appears to be far more important than race per se. A certain number of blacks have been slotted into the upper classes, through their business successes, but the all-important role of class continues very much as before. Tthat point appears more Marxian than contemporary leftist, but Marx still is on the left.
5. You can see how much of South African history has been shaped by the roles of gold and diamonds in their economy. That again points in Marxian directions, more than today’s left. In South Africa, the means of production really mattered.
6. What is the ideal of color-blindedness supposed to mean there, after so many centuries of color mattering so much and in so many formal ways? They even still call one group “Coloureds.” Would it be so wrong to suspect SA color-blindedness advocates of somehow missing the point, and asking for something that is both illusory and unobtainable?
I am not sure how much I agree with all of these, only that they are ways I can imagine visiting South Africa and coming away more rather than less left-wing.
What else?
Are Older People Aware of Their Cognitive Decline? Misperception and Financial Decision-Making
We investigate whether older people correctly perceive their cognitive decline and the potential financial consequences of misperception. First, we show that older people tend to underestimate their cognitive decline. We then show that those experiencing a severe decline but unaware of it are more likely to suffer wealth losses. These losses largely reflect decreases in financial wealth and are mainly experienced by wealthier people who were previously active on the stock market. Our findings support the view that financial losses among older people unaware of their cognitive decline are the result of bad financial decisions, not of rational disinvestment strategies.
That is from a newly published JPE paper by Fabrizio Mazzonna and Franco Peracchi. Here are some less gated versions of the paper.
The partisanship of American inventors
Using panel data on 251,511 patent inventors matched with voter registration records containing partisan affiliation, we provide the first large-scale look into the partisanship of American inventors. We document that the modal inventor is Republican and that the partisan composition of inventors has changed in ways that are not reflective of partisan affiliation trends amongst the broader population. We then show that the partisan affiliation of inventors is associated with technological invention related to guns and climate change, two issue areas associated with partisan divide. These findings suggest that inventor partisanship may have implications for the direction of inventive activity.
Here is the full piece by Daniel Fehder, Florenta Teodoridis, Joseph Raffee, and Jino Lu. Via Kris Gulati.
Neuroticism and the political Left
From Greg Lukianoff and Andrea Lan:
Liberal students have worse mental health than moderate and conservative students
At the extremes, 57% of very liberal students in our study reported feelings of poor mental health at least half the time, compared to just 34% of very conservative students. Let that sink in. 34% is really quite bad, but 57% is approaching a figure of 2 out of every 3 very liberal students.
The graph above shows that as students move further to the left, they are more likely to have poor mental health — suggesting that it’s not just liberal ideology that impacts mental health, but also the extremity of their beliefs. Analysis of variance (ANOVA) tests show ideology is a statistically significant predictor of mental health. Post-hoc tests demonstrate it predicts in the direction as shown: more liberal, worse mental health. So far, the data is consistent with the findings of others (Zach Goldberg and Jon Haidt using Pew Research’s data, and Gimbrone et al.), and supportive of the hypothesis that “social justice fundamentalism” can be contributing negatively to the mental health of those who adopt it.
Via the excellent Arnold Kling. I’ve been on this bandwagon for a while, it is one of the more important truths for understanding current American political discourse. I would, however, insist that in this context the word “liberal” is especially misplaced.
Nationalism in Online Games During War
We investigate how international conflicts impact the behavior of hostile nationals in online games. Utilizing data from the largest online chess platform, where players can see their opponents’ country flags, we observed behavioral responses based on the opponents’ nationality. Specifically, there is a notable decrease in the share of games played against hostile nationals, indicating a reluctance to engage. Additionally, players show different strategic adjustments: they opt for safer opening moves and exhibit higher persistence in games, evidenced by longer game durations and fewer resignations. This study provides unique insights into the impact of geopolitical conflicts on strategic interactions in an online setting, offering contributions to further understanding human behavior during international conflicts.
That is from a new paper by Eren Bilen, Nino Doghonadze, Robizon Khubulashvili, and David Smerdon. Imagine if there is some addition Sino-Indian conflict right before the Ding vs. Gukesh WCC match…
For the pointer I thank various MR readers.
The who and how of campaign spending on Meta
Trump targets horse riding, Biden targets football, and RFK Jr. targets comedy.
Trump also can claim Ted Nugent fans, here is the full story. Via A.
A theory of information, by Noah Smith
So here you go: a theory of how totalitarianism might naturally triumph. The basic idea is that when information is costly, liberal democracy wins because it gathers more and better information than closed societies, but when information is cheap, negative-sum information tournaments sap an increasingly large portion of a liberal society’s resources. Remember that I don’t believe this theory; I’m merely trying to formulate it.
Here is the full blog post, gated after some point.
The Sea Change on Crypto-Regulation
In the last few weeks there has been a sea change in crypto regulation:
1. Bitcoin spot ETFs were approved–reluctantly, after a 3-judge Federal Appeals court ruled unanimously that the SEC had acted arbitrarily and capriciously–but nevertheless opening Bitcoin holdings to institutional investors. Case in point, The State of Wisconsin bought Bitcoin ETFs for its pension fund.
2. In a very unusual move, SAB 121, was overturned by the House and then, even more surprisingly, overturned by the Senate including the votes of many Democrats. < href=”https://www.sec.gov/oca/staff-accounting-bulletin-121″>SAB 121 is an SEC staff accounting bulletin (not law but guidance) that said to banks if you hold crypto for your customers, i.e. a custody service, you must account for it on your balance sheet. This guidance does not apply to custody of any other asset. Essentially, SAB 121 made it prohibitive for banks to offer custody services for crypto because that service would then impact all kinds of risk and asset regulations on the bank. Aside from singling out crypto, the SEC is not a regulator of banks so this seemed like a regulatory overreach.
President Biden said he will veto but that is no longer certain. It wasn’t just crypto lobbying against SAB 121 but traditional banks. The banks point to the approval of Bitcoin ETFs saying, quite logically, why can’t we custody these ETFs the way we do every other ETF? Senate Majority leader Chuck Schumer, D-N.Y., sometimes called Wall Street’s man in Washington, voted in favor of nullifying SAB 121. Schumer can read the room.
3. The House voted to ban the Fed from establishing a Central Bank Digital Currency (CBDC).
4. The House approved a wide-ranging bill to (finally!) establish regulations for digital assets markets. The vote was 279-136 in favor with many Democrats crossing party lines to support it.
5. After saying nothing for months, usually a bad sign, the SEC approved Ethereum spot ETFs. On the surface, this might have seemed logically inevitable given the approval of Bitcoin spot ETFs but many people thought the SEC would do everything it could to find daylight between Bitcoin and ETH. Instead, it tacitly acknowledged that ETH is a commodity and not a security.
Why is this happening? I see three main factors at play. First, crypto is becoming integrated with traditional finance. As the big banks get involved, the politics around crypto are shifting. Second, crypto is becoming normalized. Ironically, the prosecution of Sam Bankman-Fried, Changpeng Zhao and manipulators like Avraham Eisenberg may have convinced some U.S. regulators that crypto doesn’t have to be destroyed, it can be tamed. Nakamoto might not be pleased but realistically this was the only option to move forward. Eventually, everyone wants to pay their mortgage. Third, Trump’s strong endorsement of crypto has alarmed the Biden administration. Most political issues are firmly divided along party lines, but crypto remains an open issue. With millions of crypto owners in the United States, a significant number are highly motivated to vote their wallets. Biden doesn’t want to give the crypto issue to Trump.
None of this means we are entering crypto Nirvana but as far as regulation is concerned a lot has changed in just a matter of weeks.
Full Disclosure: I am an advisor to several firms in the crypto space including MultiversX, Bluechip and 0L.
*Unit X*
The subtitle of this new and excellent book is How the Pentagon and Silicon Valley are Transforming the Art of War. It is written not by journalists but two insiders to the process, namely Raj M. Shah and Christopher Kirchoff. Here you can read about Eric Schmidt, Brendan McCord, Anduril, Palantir, and much more.
I am not yet finished with the book, in the meantime here is one short excerpt, one that sets the stage for much of what follows:
It turned out that before Silicon Valley tech could be used on the battlefield, we had to go to war to buy it. We had to hack the Pentagon itself — its archaic acquisition procedures, which prevent moving money at Silicon Valley speed. In Silicon Valley, deals are done in days. The eighteen- to twenty-four month process for finalizing contracts used by most of the Pentagon was a nonstarter. No startup CEO trying to book revenue can wait for the earth to circle the sun twice. We needed a new way.
And this bit:
Ukraine avoided power interruptions in part because its over-engineered power grid boasts twice the capacity that the country needs — ironically, the system was originally designed by the Soviets to withstand a NATO attack.
The authors understand both the worlds of tech and bureaucracy very well, kudos to them. Due out in July.
The Generalist interviews me
I was happy with how this turned out, here is one excerpt:
I think we’re overestimating the risks to American democracy. The intellectual class is way too pessimistic. They’re not used to it being rough and tumble, but it’s been that way for most of the country’s history. It’s correct to think that’s unpleasant. But by being polarized and shouting at each other, we actually resolve things and eventually move forward. Not always the right way. I don’t always like the decisions it makes. But I think American democracy is going to be fine.
Polarization has its benefits. In most cases, you say what you think, and sooner or later, someone wins. Abortion is very polarized, for example. I’m not saying which side you should think is correct, but states are re-examining it. Kansas recently voted to allow abortion, and Arizona is in the midst of a debate. Over time, it will be settled—one way or another. Slugging things out is underrated.
Meanwhile, being reasonable with your constituents is overrated. Look at Germany, which has non-ideological, non-polarized politics. They’ve gotten every decision wrong. Their whole strategy of buying cheap energy from Russia to sell to China was a huge blunder. They bet most of their economy on it, and neither of those two things will work out. They also have no military whatsoever. It’s not like, “Ok, they don’t spend enough.” They literally had troops that didn’t have rifles to train with and were forced to use broomsticks.
Germany is truly screwed and won’t face up to it. But when you listen to their politicians speak – and I do understand German – they always sound intelligent and reasonable. They could use a dose of polarization, but they’re afraid because of their history, which I get. But the more you look at their politics, the more you end up liking ours, I would say.
I would note that Germany’s various “centrist” or “coalition of the middle” regimes have brought us AfD, which is polarizing in the worst way and considered to be an extremist party worthy of being spied upon.
And this:
What craft are you spending a lifetime honing?
Shooting a basketball. I’ve done that for the longest, outside of eating and breathing. I’m just not very good at it.
I started doing it when I was about eight. We moved close to a house with a hoop, and all the other kids would gather there and play. It was a social thing, and I started doing it. I kept it going in all the different places I’ve lived. The only country I couldn’t keep the habit going was Germany. But when I was living in New Zealand, I made a special point of it. It’s good exercise, it’s relaxing, you get to be outside. It’s a little cold today, but I did it yesterday, and I’ll do it tomorrow.
It’s important to repeatedly do something you’re not that good at. Most successful people are good at what they do, but if that’s all they do, they lose humility. They find it harder to understand a big chunk of the world that doesn’t have their talent or is simply mediocre. It helps you keep things in perspective.
I’m not terrible at it. I have gotten better, even recently. But no one would say I’m really good.
Interesting throughout, as they like to say.
My excellent Conversation with Benjamin Moser
Here is the audio, video, and transcript. Here is the episode summary:
Benjamin Moser is a Pulitzer Prize-winning writer celebrated for his in-depth studies of literary and cultural figures such as Susan Sontag and Clarice Lispector. His latest book, which details a twenty-year love affair with the Dutch masters, is one of Tyler’s favorite books on art criticism ever.
Benjamin joined Tyler to discuss why Vermeer was almost forgotten, how Rembrandt was so productive, what auctions of the old masters reveals about current approaches to painting, why Dutch art hangs best in houses, what makes the Kunstmuseum in the Hague so special, why Dutch students won’t read older books, Benjamin’s favorite Dutch movie, the tensions within Dutch social tolerance, the joys of living in Utrecht, why Latin Americans make for harder interview subjects, whether Brasilia works as a city, why modernism persisted in Brazil, how to appreciate Clarice Lispector, Susan Sontag’s (waning) influence, V.S. Naipaul’s mentorship, Houston’s intellectual culture, what he’s learning next, and more.
Excerpt:
COWEN: You once wrote about Susan Sontag, and I quote, “So much of Sontag’s best work concerns the ways we try, and fail, to see.” Please explain.
MOSER: This is what On Photography is about. This is what Against Interpretation is about in Sontag’s work. Of course, in my new book, The Upside-Down World, I talk about how I’m not really great at seeing, particularly. I’m not that visual. I’m a reader. I’m a bookworm. Often, when I’ve looked at paintings, I’ve realized how little I actually see. Sometimes I do feel embarrassed by it. You’ll read the label and it’ll be three sentences, and it’ll say like, A Man with a Dog. You’re like, “Oh, I didn’t even see the dog.” You know what I mean?
On these very basic levels, I just think, “Oh, if someone doesn’t point it out to me, I really don’t see.” I think that that was one of the fascinating things about Sontag, that she was not really able to see. She was actually quite terrible at seeing, and this was especially true in her relationships. She was very bad at seeing what other people were thinking and feeling.
I think because she was aware of that, she tried very hard to remedy it, but it’s just not something you can force. You can’t force yourself to like certain music or to like certain tastes that you might not actually like.
COWEN: What was Sontag most right about or most insightful about?
MOSER: I think this question of images — what images do — and photography and how representations, metaphors can pervert things. She had a very deep repulsion to photography. She really hated photography, and this is why a lot of photographers hated her because they felt this, even though she didn’t really say it. She really didn’t trust it. She really thought it was wicked. At the same time, for somebody who had a deficit, I guess you could say, in seeing, she really relied on it to understand the world.
I think that tension is very instructive for us, because now, she already says 50 years ago, “There are all these images. We don’t know what to do with them. We don’t know how to process them.” Forget AI, forget Russian trolls on Twitter. She uses this word I really like, hygiene, a lot. She talks about mental hygiene and how you can clean the rusty pipes in your brain. That’s why I think reading her helped me at least to understand a lot of what I’m seeing in the world.
COWEN: Do you think she will simply end up forgotten?
Again, I am happy to recommend Benjamin’s latest book The Upside-Down World: Meetings with Dutch Masters.
Free Trade with Free Nations
Alec Stapp points out that Canada is the only NATO country that has a free trade agreement with the United States. That’s quite remarkable if you think about it. NATO allies are bound by mutual defense commitments, support for military cooperation, and a dedication to democratic principles. Despite these shared commitments, the U.S. still enforces tariffs and quotas on our NATO allies including France, Germany, the UK, Denmark, Portugal, and Spain. This is like getting married and not having a joint checking account. If they are good enough partners to commit to their defense then surely NATO allies are good enough partners to commit to free trade?
Free trade enhances the economic strength of countries, thus free trade should be a strategic asset in self-defense. Let’s be rich and safe together.
There are many reasons to have free trade agreements with countries that we don’t have a defense pact with but free trade with free nations should be a minimum standard. It’s not just the United States, of course, NATO allies don’t all have free trade agreements with fellow NATO members. So how about a North-Atlantic Trade Organization? You could call it NATO for short.
What should I ask Velina Tchakarova?
Yes, I will be doing a Conversation with her. She runs a geopolitics firm, hails from Bulgaria, is in my view broadly classical liberal, focuses on conflict in Eastern Europe and Ukraine, and is very active on Twitter.
Here is Velina on LinkedIn. She does not seem crazy.
So what should I ask her?