June 6, 2020

Moving lighthouses, the future, jobs, backfiring solidarity

A note for the reader: Before this newsletter moved to Substack it was an email thread between friends. I’m posting the previous emails here for completeness, and so that if I invoke a previous comment readers can refer to them.

Hi all,

I hope you’re staying well. Please drink lots of water and make sure you’re sleeping enough.

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1 From the Redwood Forest, to the Gulf Stream Waters: Caroline and I took a short trip the other weekend and saw the Cape Hatteras Lighthouse, whose managed retreat I consider one of the great engineering marvels of our country (on par with the reversal of the Chicago River). As it turns out, poignantly, other lighthouses are following its lead.

2 The Manhattan Project of Everything: As COVID wracks the nation and Americans take flight aboard the first US-government-commissioned private spacecraft, one is led to ask if we are focusing on the Big questions, the Big projects, the Big research. The market has no place for a theory of everything, or a colonization scheme. What role should we expect governments to play as we keep our eyes to the future, and who should decide what is valuable?

3 Shameless plug: I’ve got a lot of thoughts about the most recent jobs report and how we think about recessions more broadly. In short, temporary layoffs have driven the numbers due to COVID, but they mask a more important metric of non-temporary layoffs. Ought to type something longer up about it soon.

4 Groundhog Day: Many didn’t learn the lesson of the rMBS market’s collapse in 2008: there is no such thing as outsized returns with reduced risk.

5 Historical lens: A PM of Turkey lived in Winston-Salem in his youth on a journalism fellowship. His observations of the city at the time are poignant and timely. I’d say more, but really you just need to read it. (S/o Ata Baltacı for this one)

6 Historical issues: There are swastikas on gravestones in US military cemeteries. Removing them poses a tricky question about what is due to enemy combatants whose national ideologies are opposed to modern sentiments.

7 Backfiring: The #BlackOutTuesday incensed many leaders in the Black Lives Matter movement. While it sheds a light on the difficulty many seem to have of acting appropriately in this moment, it more directly, in my opinion, highlights a central tension that has emerged from the depths of navel-gazing purgatory: Social media in inherently performative, so how can anyone be authentic?

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Your weekly recommendation: I’ve been engaging with courses from DataCamp and EdX for professional development and personal interest, respectively. You should try one or both.

I’ve enjoyed both so far and the experiences have made me reconsider my views on the value of MOOCs and how they might be seen after COVID. It seems to me increasingly that any issues with the legitimacy of virtual education will be moot, and so the question of their value will rest solely upon their ability to provide any sense of signaling of competence.

Harvard, for example, does not have to release my transcript because it spent a costly signal to pass me through a stringent admissions filter. For many people, that costly signal (which relies on a small admit rate) was enough. It shouldn’t be, and I find it highly disturbing that this is the equilibrium we’ve achieved, but here we are.

The question is whether MOOCs can create a similar pseudo-filter that is widely trusted. Perhaps by releasing course scores, perhaps by ranking students in terms of their “class rank”. Perhaps by restricting degree certificates to hyper-stringent standards of performance. At the end of the day, their greatest asset, openness, is their greatest risk to adoption, if they can’t effectively signal their students’ value.

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Charts of the week:

1 WSJ: Further issues underlying the headline unemployment numbers: massive heterogeneity in who is being impacted. Not pictured here: teenagers have their worst job market ever

2. Economist: This is an interesting and somewhat weird trend all things considered. The world definitely saves more than it probably “should” from a macroeconomic standpoint, but the distribution of savings are skewed such that most Americans severely undersave, and over-rely on Social Security (the greatest social program of all time; but that’s another story). We’ll see if this saving is real or just delaying consumption. If we are just moving consumption around temporally on a short time frame, it probably doesn’t matter much.

3. NYT: This is perhaps my favorite data visualization I have seen in a really long time. It conveys four pieces of information: (1) The impact of race on income, (2) the impact of income on health outcomes, and (3) how the two cause an impact on race and health incomes, incredibly cleanly. Then, to top it all off it, one can see (4) how segregated we are geographically due to the lack of middling colors.

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Letters to the editor (LOL):

A response from last week’s newsletter contended that Alesina’s most important paper was this one, on how racism has prevented America from embracing redistribution. Read both and decide for yourself!

Have a great week, happy June!

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Harrison Satcher