Universal basic income WILL solve poverty

http://www.vox.com/2016/5/31/11819024/universal-basic-income-works

Commentary: Universal Basic Income May Sound Attractive But, If It Occurred, Would Likelier Increase Poverty Than Reduce It [feedly]

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Commentary: Universal Basic Income May Sound Attractive But, If It Occurred, Would Likelier Increase Poverty Than Reduce It
// Center on Budget: Comprehensive News Feed

At first blush, universal basic income (UBI) seems a very attractive idea, especially to a progressive.  Yet it suffers from two serious problems.

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Adult Colouring Books Remind us that Innovation lies outside economics [feedly]

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Adult Colouring Books Remind us that Innovation lies outside economics
// Digitopoly

We don't speak of it very often but economists face a fundamental challenge with respect to innovation: if innovation is something no one has anticipated, then the (Savage) axoims upon which we base our rational choice decision-making cannot apply.

Let me explain. Decision-making is all about actions and their consequences. Leonard Savage created the framework by which economics deals with this by assuming that all agents 'look before they leap.' That is, an agent would choose amongst actions available taking into account all possible states of the world and the consequences in each state. This requires agents to have complete knowledge of the state-action space.

Savage himself thought this assumption was heroic and basically could not be justified by anything he had seen regarding human capabilities. Instead, he saw that people would more likely pursue a 'cross that bridge when you come to it' rule to examine what happens over a smaller set of states and then plan things out. Savage, however, did not know how to do it. He wrote:

I am unable to formulate criteria for selecting these small worlds and indeed believe that their selection may be a matter of judgment and experience about which it is impossible to enanciate complete and sharply defined general principles. Savage, The Foundations of Statistics, 1972, p.16)

Indeed, in a paper I published in 1996, I argued that Savage couldn't do this because it was, in fact, impossible.

Savage was emphasizing computational complexity and essentially making a point that rationality is bounded. But when it comes to innovation — which could be conceived of as coming up with an entirely new state of the world — it is fundamentally impossible to plan everything out. Everyone is forced to cross that bridge when they come to it.

In this situation, we can be surprised when something like the iPhone comes out or CRISPR or what have you. We change our outlook for the future. We recalibrate and that is it. To be sure, many would like to have planned out for the possibility earlier but the world seems to move on. These things represent the system working with epochal pockets to break up the monotony.

But the very same issue — that not all states can be conceived of and planned for — necessarily means that sometimes innovations come to the market at times that seem random. We can trace the set of innovations that needed to proceed the iPhone and rationalise why 2007 was its time. But there are other innovations for which it seems surprising they happened when they did. Why now and not years earlier.

And so we arrive at the adult colouring book. In 2015, three of the best selling books of the year were adult colouring books. In Canada it was 5 of the top 10 including the top 2. These sell for around $10.00 and have complex designs that would be challenging for a kid to colour between the lines. They are highly rated and sometimes seen as challenging and sometimes as relaxing.

Near as I can tell (and I'll admit my research methodology is weak on effort), the idea for adult colouring books came from an illustrator, Johanna Basford. She convinced a British publisher to commission her idea — a book called Secret Garden — and since then it has sold over 2 million copies. There were others that launched around the same time in different countries. It appears to be a situation following the theory of multiples where a few people have the same idea at the same time. That suggests a common cause but it is hard to identify it. The New Yorker speculated it was about adults returning to their youth. But again: why now?

A natural theory is that it may have been an accident. Ask any economist who heard about the adult colouring book idea before it was done and they would likely have said that it wouldn't work because it would be imitated and the art wouldn't be worth much. Basford has proven that incorrect and seems to be doing just fine. The same is true for initial pioneers but their run may be for a few years but that would be enough to justify any initial investment.

The idea of colouring books for adults was around earlier. Apparently, there were some subversively themed ones in the 1960s (when else). But these ones seem to be a sort of art phase. They are relaxing, easy to learn and can be done while doing other things. To be sure, they had to be designed which is why people weren't using children's colouring books for these things. But once they were, there was a compelling market. An immediate "I could use that" notion for some people.

And as with such things, they also become "X could use that" and they are a safe gift. They are marketed at adults, look pretty and for that reason are a very safe gift. They won't offend anyone and no one will be hurt if they come by a year later and see an uncoloured book on the shelf. In some sense, this is the 'Pet Rock' of our era except that they can be tailored, branded and customised to taste.

Finally, and I would be remiss as an economist not to mention this, as a physical book category they are likely to be robust to the two big challenges of that industry: second hand sales and digitization. Once coloured, they can't be resold. And we are yet at a point where an iPad version (and you should know they exist) is going to substitute for either the use-value or the gift-value of these things.

My point is this: the fact that prior to 2011, no one saw this business opportunity and after that point it was completely obvious, is basically the same innovation event as occurred with the iPhone. It could have happened a decade, two decades or more earlier. It did not simply because no one thought about it who had the confidence to design it and take it to market. And that tells us, as economists, that there can be $100 bills or $10 million dollar bills casually lying on the sidewalk in a state we have not conceived.

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Can Democrats Avoid the Circular Firing Squad? [feedly]

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Can Democrats Avoid the Circular Firing Squad?
// Robert Kuttner

A couple of months ago, it appeared that the Republican presidential field was a fragmented fratricidal mess, with party disarray and deadlock on display all the way to the Cleveland Convention. The Democrats, meanwhile, were on track to an early nomination and party unity.

Things didn't quite work out that way. Hillary Clinton could still lock up the nomination by the last primaries on June 14, but not without relying on super-delegates. Here are the numbers:

Clinton has 1,769 pledged delegates won in caucuses and primaries, out of 2,310 delegates required for nomination. There are 913 yet to be awarded in the last round of primaries. To go over the top before the convention, not counting super-delegates, Clinton needs to win 541 more delegates, or well over half. But with Sanders surging nearly everywhere, that seems extremely unlikely.

So the state of play after the six states vote June 7 (DC votes June 14, but has only 20 delegates) is likely to show Clinton with 50 to 100 votes short, Sanders with momentum, and the Sanders campaign mounting a last ditch effort to persuade most of the 712 super-delegates (541 of whom have already declared for Clinton) to reconsider, on the premise that Sanders has the better shot at beating Trump.

Changing that many minds seems vanishingly unlikely. However, the Sanders campaign is increasingly in a go-for-broke mood.

Many Sanders supporters are far more militant than Sanders himself, and some are openly expressing the hope that Clinton will be indicted for some aspect of the email dust up.

That also seems highly improbable.

However, Clinton has been unable to catch a break. The theme of her campaign has been experience and competence, but her improper use of a private email server suggested neither. It gives Trump a huge opening to challenge her honesty and probably signals a further decline in voter trust in Clinton.

For the past couple of weeks, many progressives who sympathize with Sanders on the issues have urged him to recognize that he will not be nominated and to think about how else to exercise his substantial influence to to push both Clinton and the Democratic Party to the left in the coming political era. There is also the small matter of not inviting a Trump presidency.

Robert Reich, a fervent Sanders supporter, urged the Clinton camp to stop requesting Sanders to exit the race -- but called on Sanders and his backers to support Clinton for the greater good once she wins the nomination.

Some of you say even if Hillary is better than Trump, you're tired of choosing the "lesser of two evils," and you're going to vote your conscience by either writing Bernie's name in, or voting for the Green Party candidate, or not voting at all.

I can't criticize anyone for voting their conscience, of course. But your conscience should know that a decision not to vote for Hillary, should she become the Democratic nominee, is a de facto decision to help Donald Trump.

Harold Meyerson, vice-chair of Democratic Socialists of America, executive editor of The American Prospect, and one of the most astute analysts of the Sanders phenomenon, called on Sanders and his supporters to look beyond the election to build a movement, and warned against the self-indulgence of the self-righteous:

What is arguably the most successful left campaign in the nation's history stands in danger of being undone by an infantile fraction of its own supporters. The threats of violence, the shouting down of such lifelong liberals as Barbara Boxer, and the growing desire of some in the campaign, both on its periphery and at its core, to walk away from the real prospect of building left power by refusing to work with allies and potential allies in the Democratic Party -- all these now threaten the campaign's potential to bring lasting change to American politics.

I write this as a strong Sanders supporter (albeit one who never thought he could win the nomination), as a lifelong democratic socialist (indeed, for some years, Bernie and I were probably the two most out-of-the-closet socialists in D.C.) who's been astounded and thrilled by Sanders's success so far in pushing the national and Democratic discourse to the left. I write this with the hope that the Sanders legions can come out of this election year with the networks and organizations that can reshape the American economic and political order -- bolstering workers' power, altering corporate governance, diminishing the scope of finance. But to do that effectively, they'll have to make common cause with progressives who've backed Hillary Clinton.

Peter Dreier, another savvy Sanders supporter, spelled out a five-point plan for Sanders and his followers to build a durable left in America, something that has eluded progressives since FDR.

Many progressive politicians have promised to transform their electoral campaigns into ongoing movement operations, but few have had the patience or resources to do so. Many of Jessie Jackson's supporters hoped that his presidential efforts in 1984 and 1988 would evolve into a permanent Rainbow Coalition of progressive activists, but it didn't happen. After Obama won his brilliantly-executed 2008 campaign -- built by an army of seasoned political and community organizers who trained hundreds of thousands of volunteers in the art of activism -- he created the nonprofit now known as Organizing for Action (OFA). OFA has not lived up to its early promise, in large part because Obama made it an arm of the DNC in a bid to build support for his legislative agenda.

I find these arguments very persuasive. But first, Democrats need to avoid the ritual of the circular firing squad during the period between the last primaries and the July convention.

The challenge is that Sanders has built one of American history's most potent mass movements for progressive change, reflecting deep frustrations on the part of young and working class people, and they are not about to quietly step aside and let Clinton have the prize. Nor are they in any mood to listen to elders still repenting their youthful votes for Eldridge Cleaver rather than Hubert Humphrey in the fraught 1968 election, opening the way for Richard Nixon. Each generation gets to define its own politics and make its own judgments and mistakes.

If Clinton had some momentum, if she were not the victim of her own missteps, if she had found a plausible voice to puncture Trump's pretentions, then she would have a much stronger case that Sanders and his people should get on board. But it's Sanders with the momentum, Clinton who keeps stumbling, and even her own strongest supporters are dismayed that her campaign seems mechanical and joyless.

Last Tuesday, Senator Elizabeth Warren delivered the keynote speech to the gala of the Center for Popular Democracy. It was one of the most effective demolitions of Donald Trump ever. She said, referring to the fact that Trump bragged about betting on a housing collapse in 2006:

What kind of a man roots for people to get thrown out of their houses? What kind of a man roots for people to get thrown out of their jobs? To root for people to lose their pensions? I'll tell you exactly what kind of a man does that. It is a man who cares about no one but himself. A small, insecure, money-grubber who doesn't care who gets hurt, so long as he makes a profit off it.

Clinton makes similar arguments, but it is Warren who does it with verve, wit and devastating effect, and Clinton who manages to sound mechanical.

The period between the last primaries and the convention is shaping up as a time of maximum risk for Democrats. Political logic dictates that Democrats should unite behind Clinton because of the greater threat of Trump. But she is such a flawed candidate that political passions in many quarters dictate otherwise.

Sanders evidently believes that not only that he should be the Democrats' nominee but that if events break right, he still can. Assuming Hillary Clinton is nominated, it will take rare statesmanship and leadership for Sanders to urge his followers to support Clinton while he keeps on building a movement.

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Robert Kuttner is co-editor of The American Prospect and professor at Brandeis University's Heller School. His latest book is Debtors' Prison: The Politics of Austerity Versus Possibility.

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The Global Refugee Crisis: Past, Present, and Future [feedly]

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The Global Refugee Crisis: Past, Present, and Future
// Global Policy Journal

Aramide Odutayo argues that history matters when studying the present migration crisis.Does history matter when studying international migration? This commentary will compare the global response to th...Read more
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Oil supply and demand trends

http://econbrowser.com/archives/2016/05/trends-in-oil-supply-and-demand

The Great P Value Controversy [feedly]

The Great P Value Controversy
http://econospeak.blogspot.com/2016/05/the-great-p-value-controversy.html

This quarter I have been part of the teaching team for Research Design and Quantitative Methods, a core class in Evergreen's Masters of Environmental Studies.  Naturally, I had to include a discussion of the debate that has been swirling around the use of P values as a "significance" filter and the role of null hypothesis statistical testing in general.  Because the students have very limited backgrounds in statistics and the course ventures only a little bit beyond the introductory level, I have to simplify the material as much as possible, but this might be useful for those of you reading this who aren't very statsy, or who have to teach others who aren't.

As background reading for this topic, students were assigned the recent statement by the American Statistical Association, along with "P Values and Statistical Practice" by Andrew Gelman, whose blog ought to be on your regular itinerary if you care about these questions.  Here are the slides that accompanied my lecture.

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