I feel like this is almost deliberately missing the point. My median expectation is that AI boosts the economy enormously, so shorting things would be a terrible idea. But non-trivial tail risk is that it kills everyone. So shorting things would be pointless.

That is from Tom Chivers.  It is easy enough to say buy seriously out of the money puts, and be long with the rest of your portfolio.  But few (if any) of the worriers are doing that.  I should note also that many (most? almost all?) of the bad scenarios have intermediate points of great worry and catastrophe where you can cash in on your puts well before everyone dies.  No leverage required, just spend 5k or 10k a year on this, and if you are wrong consider it a mistaken insurance policy.  If you do not know much about finance, the AGI will guide you in this endeavor.

Or some are saying “Markets are bad at pricing long-term idiosyncratic risk.”  If so, all the more reason to spend on those puts.

You will find many, many mistakes in financial theory when people try to rebut the presumption that, given their views, they should in some way or another be short the market.  And do not just tell me which long positions you hold, those are easy bets, as you can be totally wrong and the long positions still will offer normal, risk-adjusted rates of return.  It is your shorts, whether explicit or implicit, that reveal your true soul.  You may recall that Victor Niederhoffer thought an investor should never go net short on an asset.  I am reluctant to use the word “never,” but my own view is not so different.

Is it really so hard to say (and do): “Thank you, Tyler, I just went out and bought those puts!”?

Apparently so.  And perhaps that is because, deep down, your own intuitions realize that, while some significant costs from AI will appear, it really won’t be that bad after all.

Words to live by.

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• Have you actually read the truly bad x-risk scenarios? Half of ... by Danny the Swift

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2. Denmark fact of the day: “…half of Denmark’s growth has been due to essentially one company”

3. “Foreign travel now makes up 1.4% of the US consumer spending budget. By contrast, imported Chinese goods make up about 3% of US domestic expenditures.”

4. Noah is right.

5. “For decades, men have been increasing their share of housework and child care. But the number of babies just keeps falling.”

6. Christopher Phelan confirmed as new CEA chair.

The post Wednesday assorted links appeared first on Marginal REVOLUTION.

       

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• In reply to Dismalist. Now make the case against Debt-to-GDP ... by RAD
• In reply to rayward. “Would the government let this house ... by rsm
• In reply to Mal. All else equal, as household members become ... by Grizzled Econ 101 Prof
• In reply to Silvanus. It will be stolen by 007's arch-nemesis ... by mkt42
• In reply to Peter. My Lego avatar does look somewhat stocky. ... by Pshrnk
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The post Fast Company covers New Aesthetics appeared first on Marginal REVOLUTION.

       

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• Legendary architects and designers have married form and ... by Form, function, aesthetics?
• If aesthetics begin with one's personal appearance and attire, ... by rayward
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Measuring politically sensitive attitudes in authoritarian settings is difficult because expressions of political support may reflect repression and social pressure as much as genuine belief. We propose a complementary approach: using responses to questions that are not themselves politically sensitive to provide indirect evidence about politically sensitive attitudes. Using subjective well-being (SWB), we ask whether within-person changes in life satisfaction, after accounting for changes in material and personal circumstances, can provide evidence of incorporation into a wartime national project. Drawing on more than a decade of panel data from the Russian Longitudinal Monitoring Survey (2013–2024), we find that life satisfaction rises significantly following Russia’s 2022 invasion of Ukraine. Gains are initially larger among ethnic Russians and smaller in Moscow and St. Petersburg, consistently larger in military-industrial regions, and sharply lower among those nearest the front. This theoretically patterned heterogeneity is difficult to reconcile with generalized social-desirability bias and is consistent with differentiated wartime incorporation. By 2024, rising non-response and attenuating subgroup differences suggest that the informational value of SWB may deteriorate over time.

That is from recent research by Sinikka Parviainen and William Pyle.  Via Pippa Norris.

The post What makes people happy? appeared first on Marginal REVOLUTION.

       

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• In reply to mkt42. It seems like in the provinces in 16th and ... by SJ
• In reply to yo. I would like to know about the life ... by Pshrnk
• In reply to Anti-Gnostic. The Democrats literally censored ... by Harun
• In reply to Anti-Gnostic. Is my impression correct that the ... by Dismalist
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In this paper, we characterize trends in the earnings assimilation of immigrant workers from 1981 to 2021. We use administrative longitudinal data that contain the earnings of workers beginning in their first year of residence in the United States and in each year thereafter, allowing us to identify immigrants who eventually leave the United States (referred to here as return migrants). We use those data to produce the first examination of trends in earnings assimilation over a 41-year period and to estimate earnings assimilation separately for return migrants versus those who stay in the United States. We document several new facts about immigrants who arrived between 1981 to 2010. First, roughly one-fifth to one-third of immigrants return migrate from the United States within 10 years after arrival. Second, return migrants have entry earnings similar to those of permanent migrants but experience slower rates of earnings growth. Third, earnings assimilation occurs relatively quickly for cohorts arriving since the mid-1990s: The earnings of permanent immigrants converge, or come close to converging, with those of native-born people within 10 years after arrival. Migrants from earlier arrival cohorts experience significant earnings growth but generally do not converge to that of the native born. We discuss how changes in the labor market quality of immigrant cohorts (measured by their relative earnings upon entry) and selective return migration play an important role in determining whether repeated cross-sectional data over- or underestimate earnings assimilation.

That is from a new NBER working paper by Randall Akee, Jimmy Chin & Daniel L. Crown.  I know full well the common distinction between high-skilled and low-skilled immigrants, and “desirable” vs. “undesirable” immigrants, the latter distinction being somewhat more subjective.  One thing we are learning during this administration is that it is very difficult to just turn off the tap on “the immigrants you do not want.”  An open borders policy untenable, but immigration policy should be fairly liberal more generally.  It is good for us too.

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• In reply to TylerW. > The paper attempts to use science and ... by Alamo
• In reply to Wayfaring Stranger. I don't claim to be a ... by Wayfaring Stranger
• In reply to Wayfaring Stranger. Welllll… even if that were ... by Don B
• In reply to Don B. Typically the reason a city spills for a ... by Wayfaring Stranger
• In reply to Neurotic. But then we could cut back on Federally ... by Wayfaring Stranger
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On this topic, I am seeing so many mistakes in financial economics across social media, but I will not go through them all.  It suffices to note that very smart people have their minds turn to mush when this topic comes up, especially the “sell short” side of the matter.

There is also the “beware isolated demands for rigor” response.  I should not have to demand anything.  If you are pretty worried about AI, you should be dying (yes pun intended) to provide that rigor, whether or not it is provided elsewhere.

How about a new policy?: “All AI safety expressions of despair, grief, panic, anger, or insinuations thereof, with or without gifs, shall be accompanied by an estimated percentage of gdp footnote.”  Would inject some real sanity into the discussion and drain out some of the all too rampant emotions.

The post How much will cybersecurity costs rise? appeared first on Marginal REVOLUTION.

       

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• Forget estimates of cybersecurity costs: The question is ... by Bob
• In reply to Ryan Baker. Put another way, if I short any ... by Ryan Baker
• “I just want to see exact numbers, and presented as a share ... by Ryan Baker
• I don't really disagree with Tyler much on the specifics, but ... by luzh
• In reply to JFA. Yeah, I noticed that as well. Pretty ... by A guy
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2. Long Mark Zuckerberg/Meta piece on the future of AI.

3. “According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +29% jump in quarterly earnings for Q2 compared to the previous year.”

4. Conor Sen Substack on viewing the economy through a housing lens.

5. Southwood on Samuel Hughes on architecture.

The post Tuesday assorted links appeared first on Marginal REVOLUTION.

       

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• In reply to Sure. @Sure, I believe I speak for most MR ... by Karl Chungus
• On #1: I think when it comes down to it, a large fraction of ... by JSK
• 1. The statistic is misleading. The link states how only 29% of ... by Sh
• In reply to Sidd. Baby Fever would like a word. by anon
• In reply to kwazii. It is both. The numbers just don't pencil ... by Sure
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NME: Harry Potter fans have succeeded in moving a construction project that would have originally gone through the “grave” of the character Dobby.

The 125-mile Greenlink power connector, which costs £430million, is intended to link power between the UK’s National Grid and Ireland, running between County Wexford and Freshwater West in Pembrokeshire.

However, the latter site is known to Potter fans as the site of house elf Dobby’s grave in the film Harry Potter And The Deathly Hallows, and contains a pile of stones with the words “here lies Dobby” that many flock to…

All I can say is that Voldemort would never have put up with this shit.

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• In reply to MikeP. So the “controversy” was manufactured ... by Sometorontoguy
• In reply to mkt42. Don't blame the screenwriters. Most of ... by Antiplanner
• In reply to M. The beach in question was also noted as the ... by Kaleberg
• In reply to Heedless. Never ask for directions in Wales. ... by MikeP
• In reply to dearieme. Here are some more vowels. by Heedless
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Claude and I planted 100 known errors into 10 open-access psychology papers and then ran them through frontier models and two commercial AI review tools. In brief:

• The best single system caught 71 of 100 errors, while the worst caught 30.
• Pooling every system’s output caught 93 of 100. Models are only partly correlated in the errors they find, making ensembling a big lever for finding issues in papers. Check your papers against multiple models!
• Seven errors could not be caught by any system. All were omissions — information deleted from a paper rather than mistakes inserted into it.
• Refine.ink contributes more unique catches than any other single system, though it’s expensive.
• I didn’t measure false positives and I don’t know how this error distribution compares to the distribution of errors in real papers.
• I’ve made the papers, errors, model outputs, and the full experiment log public. I hope people can build on this work to create a comprehensive eval benchmark across disciplines.

That is from Paul Litvak, here is more.  Note that is not even using the very latest generation of models.

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• Not measuring FP's is absurd. If the model knew this, it could ... by Roger Zimmerman
• In reply to Wayfaring Stranger. AI notices a lot of things ... by Kaz Stanczak
• In reply to Student. ” the relevant comparison is…AI peer ... by Wayfaring Stranger
• In reply to Kaz Stanczak. 🙂 True but I'm sure it's doing ... by Wayfaring Stranger
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We trace the family origins of Members of Congress (MC) born between 1830 and 1950, linking each MC, their parents, and their brothers to the complete-count censuses. Future MCs have always been economic outliers. By 1940, close to 60 percent of MCs aged 18–40 held a college degree, against under 5 percent of comparable young men outside Congress. In the 19th-century censuses, MCs as adults held roughly three times the wealth of demographically matched controls. They also come from economically elite families: their fathers earn more, attain more education, and hold more wealth. The brothers of future MCs sit between the population and the MCs themselves. Across the socioeconomic measures we compare, we calculate that roughly half of an MC’s adult premium is shared with his brother and the other half is his own. Even as the American economy and political system have changed, the family background gap has widened over the last century and a half. Wealth, household servants, and four separate occupation-based scores all show the gap holding or growing across cohorts. We study four Progressive-Era reforms in a triple-difference design—women’s suffrage, the secret ballot, direct primaries, and the direct election of senators—and none produce detectable shifts in who reaches Congress. Our results document a Congress drawn from the most fortunate families in American society in every cohort we observe.

That is from a new NBER working paper by James J. Feigenbaum, Andrew B. Hall, Daniel M. Thompson & Jesse Yoder.

The post Who enters Congress? appeared first on Marginal REVOLUTION.

       

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• In reply to BC. I get your critique. But your position and ... by myth of democracy
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I am automating investigative journalism at http://Effort.News

We’re breaking five stories today based on verifiable financial data which everyone missed for years.

Here is the entire thread, which also describes the five stories.

The post Brian Chau at work appeared first on Marginal REVOLUTION.

       

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• In reply to Scott H. Now adjust for obesity and see if the ... by Now
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2. “Our findings suggest that equality-oriented governments adopt an approach that insures the middle, buffers the poor, but spares the rich. The result is a rhetorical commitment to equality that eschews its most redistributive instrument(s).”

3. Francesco Cabella conversation with (an older) Victor Niederhoffer.

4. New homes in Tatu City, Kenya.

5. Bill Goichberg, RIP (NYT).  America’s greatest chess organizer, he was always very nice and encouraging to me.

6. John Crowley, RIP.

7. Data on literacy and reading.

The post Monday assorted links appeared first on Marginal REVOLUTION.

       

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• #4: But then you're living in Kenya. by Sparky
• In reply to Naveen_K. Assuming that the entire property tax ... by john
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• In reply to dzhaughn. I really liked “Great Work of ... by M
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We study whether Democratic college professors make their students more liberal. We link voter data to salary records from 33 state flagships and show that faculty skew Democratic, especially in the humanities and social sciences. We then use student transcripts from one flagship to estimate causal effects. Students become more liberal during college regardless of major and sort toward ideologically similar instructors. Exploiting plausibly random variation in when instructors teach courses, we find no effect of faculty partisanship on student partisanship. Text analysis shows exposure to liberal topics reflects student demand rather than instructor supply, leaving little room for indoctrination.

That is from a new paper by Micah Baum, Joaquín Endara, and Annaliese Paulson. Via Jay Fan Bavel.

The post Do Faculty Affect Student Partisanship? appeared first on Marginal REVOLUTION.

       

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• C'mon. Who am I supposed to believe? My lying eyes or a paper ... by Mark B
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So I have a simple request.  If you are worried, and wish to persuade the doubters, try the methods of science.  I would like to see the following:

1. Your outline of how, say two or three years from now, we might estimate the additional cybersecurity costs from the AI break-ins.  I am convinced that number is not zero, but give me your method please.  If it helps, here is an estimate of past cybersecurity costs, done by top economists.

2. Your current numerical estimate of what those costs might end up being, of course to be tested against what actually happens over time.  Obviously, you can do this for a few different regulatory/safety scenarios.  This is one simple way to prove yourself largely correct, albeit with a lag.  (NB: you do not have to take this as a substitute for your preferred safety measurres.  But please try to be specific in your predictions.)

3. A list of what stocks or other assets you have shorted, now.  Obviously if your answer to #2 is sufficiently low, you could answer here zero, as I would do.  I expect costs, but not so high that we cannot muddle through and have expected positive stock returns.

This would all help to make the discourse more scientific and less like an extended exercise in personal anxiety management.

If it is all so important, surely this exercise is worth the effort?

The post Act like it is science appeared first on Marginal REVOLUTION.

       

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• The sound was steadily growing, a howl that made all ... by Mitchell Porter
• In reply to anon. appropriate demand for rigor is — always. ... by &
• In reply to Anonymous. Thank you, strongly agree. And most ... by David Manheim
• In reply to AI Doomer. They should be massively leveraged in ... by murmur
• In reply to Kyle M. Then you should be massively leveraged. ... by murmur
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2. Modernist Gothic in Copenhagen.

3. AI-generated Odyssey in Vietnam.

4. Questions from Seb Krier.

5. Time magazine has a special version that only the AIs can read.

6. Tymofiy Mylovanov has a good summary of my greatest fear.

The post Sunday assorted links appeared first on Marginal REVOLUTION.

       

Comments

• In reply to rayward. I don't think anyone questions whether ... by Sidd
• 6. Seems like the naval blockade is having a pretty strong ... by stormy
• 6. As for fears about drones and Hormuz. There's really nothing ... by Steven Kopits
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