Monday, November 28, 2022

California homeless math

From WSJ 

California Gov. Gavin Newsom ....recently put a temporary freeze on $1 billion of state grants for city and county homelessness programs....the measures would have reduced homelessness statewide by 2% between 2020 and 2024

[California has] more than 116,000 residents sleeping on the street on any given night.

California has dedicated some $15 billion toward the issue since the start of the pandemic.

$15 billion / 116,000 =  $129,310.34

2% x 116,000 = 2,320. $1 billion / 2,320 = $431,034.48

Thursday, November 10, 2022

The second great experiment update

 Our great experiment in monetary economics continues. 

The news of the moment is that inflation might--might--be peaking. I just present the CPI to make the point, but there seems to be a lot of news suggesting that inflation is easing off. Jason Furman's twitter is a great source of up to the minute detailed data and analysis suggesting this view. 

Of course this could also be a blip like August. And new shocks could come along. But let's explore what peaking might mean. 

Friday, November 4, 2022

Academic Freedom Conference Opening Statement

Opening remarks, Conference on Academic Freedom

John H. Cochrane

Nov 4 2022

Welcome to the Academic Freedom Conference. I’m John Cochrane, one of the co-organizers of this conference.

First, let us offer thanks. Most of all, we thank the Stanford GSB and its dean Jon Levin for sponsoring this conference, and sticking with us through some turbulence. We also thank the institutions listed here for sponsorship, and several generous donors. We thank the organizing committee, which helped to identify and recruit speakers and consulted extensively. We thank all our speakers, and all of you, especially those who have traveled to be here. Most of all, Ivan Marinovic did all the hard work of putting the conference together. Thank you Ivan! 

I am, of course, not going to tell you what to say and not say. But any conversation is more productive if we focus it and try to keep to the point. 

We gather as a group that believes academic freedom is important and under threat. But we don’t fully understand the problem or what to do about it. So, we are here to share experiences in different universities, fields, and from a diversity of viewpoints, to understand and define the problem, and to find practical solutions. 

We are not here to have a philosophical discussion whether academic freedom is important, and whether it is threatened. We here start from the premise that the core mission of the scholarly community is to uncover new knowledge, to debate and refine knowledge, to pass on knowledge to the next generation, and more importantly to pass on the habits and norms of critical inquiry and scholarly debate that produce true knowledge. We here start from the premise that we are losing academic freedom, and that threatens this core scholarly mission. If those of you listening on zoom or the critics of this conference wish to debate these issues, go ahead and run a different conference. Every biology conference does not start with an evolution vs. creationism debate. Time is short, and focus will make us more productive. 

This is a conference on academic freedom, with a lesser emphasis on free speech of political opinions. Cancellation, ostracism, and disciplinary action for political opinions, and canceling outside popular speakers are in the news. But our core question is limitations on the scholarly enterprise of research, teaching, publication, fact-finding, logical analysis, and criticism. This enterprise is damaged when scholars are canceled for political opinions, or opinions on matters like university hiring and admissions. But our focus goes beyond this to emphasize less visible but perhaps more insidious restrictions on academic activity, including direct institutional actions, by self-censorship in fear, or by good people being driven out of the academic enterprise. 

This is a conference on academic freedom, and not free speech and censorship in the media, on twitter, and in the general society. That is an important political problem in our democracy, but it’s not the focus of our conference.  

This is a conference on academic freedom, and not centrally on the substance of contentious issues. We have some noted speakers who have been criticized for their views. But we’re here primarily to learn from their experience of censorship, not to debate the merits of the particular views and research findings that got them in trouble.

Academic freedom is a problem of institutions. Twitter-mob students are visible. But the key restrictions on academic freedom lie with university leaders, university bureaucracies, hiring and promotion procedures; and beyond universities to funding agencies, professional organizations, and journals. I hope we can discuss and remedy dysfunction in all these institutions. 

The nexus between politics and academic freedom is a deep and troublesome question.

We designed this conference to be non-partisan. Truth knows no politics, we thought; it is likely to unsettle verities on all sides, and we know many self-identified leftists as well as rightists and libertarians who are concerned. We don’t know and didn’t ask what your politics are. We did however, make a special effort to invite people who self-identify as politically left or progressive and concerned with academic freedom. We also made a special effort to reach out to many of the people who have criticized some of our speakers; among others Stanford faculty who publicly denounced Jay Bhattacharya and Scott Atlas. 

The non-response and refusals from this group was astounding, and surprising to us. If this group does not seem “balanced” to you it is by refusal to participate, not by lack of invitation. 

One prominent Stanford professor, active in university academic freedom issues, spoke for many, telling us “I can’t be seen on the program with right-wing nutjobs like.…” and named a few of our speakers. At an academic freedom conference. There’s half the problem in a nutshell.

There are now faculty protest letters and demands in the faculty senate that Stanford distance itself from this conference. Critics involved the media. They complain that we are “closed,” for restricting attendance when the room got full, and for restricting media to preserve space for participants, though these are routine for academic conferences. [The Stanford global energy forum of the last two days is explicitly “invitation only” without complaint, and without Bjorn Lomborg or Steve Koonin.] They complain about some of our speakers’s deplorable, to them, views. People with such views should, apparently, never allowed to speak on anything. They cherry pick one or two hated speakers, to declare us “unbalanced.” But have any of them looked up the other 35 speakers on the program?  The Chronicle of Higher Education declared this conference a “threat to democracy.” Even the Hoover Institution declined to support or co-host this conference, deeming it “too political.” 

The attempt failed. Stanford’s leaders have supported us, for which we are grateful, so we are still here. But young untenured faculty figured out they should not be seen here. Several more deregistered from the conference after we decided to stream the proceedings, citing fear of repercussions. 

The irony of trying to censor the free speech conference has not occurred to them. The hypocrisy of labeling this and only this conference “political,” and demanding that this and only this conference include “wider voices,” not the long list of highly one-sided political events at Stanford, [for example, the “Gender Equity and Justice Summit”] likewise escapes them. Well, I guess "logic" is not politically fashionable, but do we have to be so obvious about it?  

We were naive. Just in setting up a conference to talk about academic freedom, we got to experience part of the problem. 

I think we cannot avoid the elephant in the room. The threat to academic freedom is political, as it has always been. Free scholarship undermines narratives that sustain or are used to claim political power.  Though in the past this threat has come from both left and right, and though there are some dumb and illiberal restrictions coming from Republican state legislatures, the main threats to academic freedom inside the university, professional societies, and government agencies predominantly come from a particular far-left authoritarian political ideology, and most of the forbidden subjects today threaten their narrative.  

Well, I think so. Maybe I’m wrong. My point is, we should talk about this too.

Some organizational notes: 

You can say what you want, but you can’t talk as long as you want. Please abide by the time limits. Moderators, please be ruthless in enforcing time limits. Please leave ample time for questions and comments from the floor. That discussion is much of the point of this event. I anticipate there will be far more comments than we can accommodate, so I encourage moderators to take a group of 5 or so comments at a time. Panelists, please keep responses short. 

Each session will start on time, and end on time. At breaks, please return to the room promptly without being nagged, so we can keep to the schedule and everyone gets a chance to be heard.

Be aware that this conference is streamed, and video will be available later as well. We  originally preferred no recording and Chatham house rules. But various pressures make that impossible, and we realized there is no way to ensure privacy. So, we accepted the loss of spontaneity that a record imposes, in return for the transparency that it provides. It proves what is not said here as much as it records what is said. 

Covid still runs among us, and in a group this size there is a good probability that someone is infectious. Let this be a super-spreader event of ideas, but not of disease. If you are not feeling well, please do us all a favor and watch the live stream from out of the room. If you have any doubts, please take a test. (There are a bunch at the sign in desk.) In this tolerant free-speech group, let us respect people’s individual choices to wear a mask.

OK. Tell us what’s going on in your field, your university, your department, your curriculum committee, your classroom, your professional society, your journals, your funding agency, and tell us how we can work together to fix it.

Thursday, November 3, 2022

Academic Freedom Conference

On Friday and Saturday Nov. 4/5, the Stanford GSB Classical Liberalism Initiative will host a two day conference on Academic Freedom. Conference website here, and I copy and paste the schedule below.  The room is beyond full, so we can't issue more in-person invitations. Because of that and the threat of protests (yes, a loud group at Stanford wants to silence the academic freedom / free speech conference),  we will not be able to accommodate walk-ins. 

But the event will be live-streamed. If you want to watch, register here and we'll send you a link. 

This is a separate effort from the academic freedom declaration I blogged  yesterday, though many of the same organizers are involved. 

Academic Freedom Conference

Academic freedom, open inquiry, and freedom of speech are under threat as they have not been for decades. Visibly, academics are “canceled,” fired, or subject to lengthy disciplinary proceedings in response to academic writing or public engagement. Less visibly, funding agencies, university bureaucracies, hiring procedures, promotion committees, professional organizations, and journals censor some kinds of research or demand adherence to political causes. Many parts of universities have become politicized or have turned into ideological monocultures, excluding people, ideas, or kinds of work that challenge their orthodoxy. Younger researchers are afraid to speak and write and don’t investigate promising ideas that they fear will endanger their careers. 

The two-day Academic Freedom Conference, arranged by the organizing committee, aims to identify ways to restore academic freedom, open inquiry, and freedom of speech and expression on campus and in the larger culture and restore the open debate required for new knowledge to flourish. The conference will focus on the organizational structures leading to censorship and stifling debate and how to repair them. 


Wednesday, November 2, 2022

Academic Freedom Letter

Some colleagues and I created an open letter on Academic Freedom. If you share our views, you are invited to sign. 

The bottom line: we call for universities and professional associations to adopt and implement the  Chicago Principles of free speech, the Kalven Report requirement for institutional neutrality on political and social matters, and the Shils report making academic contribution the sole basis for hiring and promotion.  

We include professional societies. That means you, American Economic Association and American Finance Association: With all your committees on improving the profession, you need one big one to defend the most important and imperiled part of the scholarly enterprise, academic freedom. 

The letter, below, is not as comprehensive and detailed as you might like, but we worked to keep it short. 

The official letter and list of signatories lives here. If you would like to sign, you can do so by filling out this form. It's moderated so may take a day or two for your signature to show. 

We are up to 626 signatures (11/3). When the number stabilizes we'll try to make a public fuss about the letter. 

Update: A special plea. I have several responses from left/liberal/democrat colleagues who say they would sign, but don't want to have their names on a letter that doesn't have enough other left/liberal/democrat names on it and does have well known deplorables. (How you know 626 people's politics is beyond me, but ok.) That reaction tells us a big part of the problem.  All along we have tried very hard to reach out to self-described left/liberal/democrat colleagues, who privately bemoan what's going on but are too afraid to be seen in public. But why not fix it: if some of you sign perhaps that will give courage for more of you to sign. Take it over, get together with your friends, add lots of signatures, make this your cause, prove that we can stand together for freedom! 

Restoring Academic Freedom

The mission of the university is the pursuit of truth and the advancement and dissemination of knowledge. A robust culture of free speech and academic freedom is essential to that mission: Intellectual progress often threatens the status quo and is resisted. Bad ideas are only weeded out by unfettered critical analysis. 

Unfortunately, academic freedom and freedom of speech are rapidly declining in academic institutions, including universities, professional societies, journals, and funding agencies. Researchers whose findings challenge dominant narratives find it increasingly hard to get published, funded, hired, or promoted. They, and teachers who question current orthodoxies, are harassed in person and online, ostracized, subjected to opaque university disciplinary procedures, fired, or canceled by other means. Employment, promotion, and funding are increasingly subject to implicit or explicit political litmus tests, including approval from bureaucrats seeking to impose a social agenda such as specific views of social justice or DEI principles. Activism is replacing inquiry and debate.  An increasing number of simple facts and ideas cannot even be mentioned without risk of retribution.

We're all supply siders now -- Summers and Poilievre

Larry Summers wrote an interesting oped at the Washington Post. Mostly, he still is of the adaptive-expectations ISLM view that interest rates must exceed current inflation before inflation will decline. (The issue here (blogpost) and here (paper).) But listen to this:

Questions of macroeconomic policy are not about values but judgments about the ultimate effects of various actions. As Fed chair during the early 1980s, Paul Volcker famously tamed out-of-control inflation at the cost of a severe recession. But he did so not because he cared less about unemployment or worker incomes than his predecessors did but because he rightly recognized that delay in containing inflation would only mean more pain down the road.

Would we all recognize common goals, but differences on cause and effect to get there.  

That’s why it’s vital that the Federal Reserve not waver. Chair Jerome H. Powell has vowed to impose sufficiently restrictive monetary policy to return inflation to within range of the Fed’s 2 percent target. The more confident that workers, businesses and markets are that the Fed will follow through on that, the less painful the process will be.

Within the conventional monetary policy community, praise for Volcker and the view, basically, that the Fed should focus on inflation and the labor market will take care of itself is sensible, but remarkably Reaganish. 

The tidbit that I found most interesting

Finally, the crisis of inflation should not be wasted. A bright spot in the dismal inflation period of the 1970s was the collaboration of Stephen G. Breyer (then counsel to the Senate Judiciary Committee), Sen. Edward M. Kennedy (D-Mass.) and the Carter administration on airline deregulation. In this era, high inflation should be a spur to regulatory changes — from addressing Jones Act increases in shipping costs, to strategic tariffs, to rules that force oil and gas to be transported via truck rather than pipeline, to punitive zoning restrictions — that will both reduce prices and make the economy work better.

As you know I've been preaching that "supply side" growth is the central problem and also the key to reducing inflation. Larry hasn't quite gotten to the latter, but this is the economist most identified with "secular stagnation," "hysteresis" and the view that all we need to do is borrow or print more money and hand it out to create growth. Now deregulation and the supply side is the key to growth. 

Larry is starting to sound like a Reagan Republican!  I'm sure he would say circumstances have changed -- that was ZLB (zero lower bound on interest rates), this is inflation. That's a consistent view. But inflation should wake us all up as it has Larry: All the old verities are over, there is only supply now, and that comes mostly from getting out of the way, as Larry recommends, not new "investments" of more borrowed money thrown down ratholes. 


Pierre Poilievre, the leader of Canada's Conservative party, wrote a great Oped in the National Post. Now that Liz Truss has imploded, perhaps Poilievre will become the international hope for a successful free market libertarian politician. 

Finance Minister Chrystia Freeland wants us to believe she has had an epiphany. After years of ignoring my warnings that Liberal deficit spending would cause inflation to balloon, followed by interest rates, she now claims to agree with me in a leaked letter to fellow ministers. Even her boss, Prime Minister Justin Trudeau, is uttering words unthinkable to him not long ago: “fiscal responsibility.”

The cost of government is driving up the cost of living. A half-trillion dollars of inflationary deficits have sent more dollars chasing fewer goods, which always leads to higher prices. 

We're all FTPLers (fiscal theory of the price level) now, some sooner than others. A clear explanation of how central banks create money and buy treasury debt follows. Then

 the Bank of Canada must pay interest — at the going rate. Because rates are now rising, the central bank is now losing money and will need a bailout from the federal government for the first time in history — something I predicted would happen two years ago. 

Fiscal constraints on monetary policy. Nice. 

Liberals like to say that all this inflation is the result of the Russian invasion of Ukraine. But less than 0.3 per cent of Canada’s trade is with those two countries, and the things that they produce are things we already have — food and energy. In fact, the higher commodity prices should have helped our resource-heavy economy, but for the fact that the Trudeau government has hit farmers with fertilizer tariffs and carbon taxes and blocked or bungled every single pipeline or LNG export terminal proposed in seven years.

Beside my thread, but an important point. His bottom line 

Instead of creating more cash, we need our economy to produce more of what cash buys: more food, energy and homes. That means removing gatekeepers that have made Canada the second slowest country in all the OECD to get a building permit. As prime minister I would challenge all three levels of government to work together to offer the fastest building permits in the OECD. This would mean going from 250 days to 28 days to beat the now first-placed South Korea....We would remove taxes and tariffs on farmers’ fuel and fertilizer....Finally, we would reform our taxes to reward work, savings, and investment so our workers and businesses can produce more of the goods we need. 

Simply put, we would stop creating cash and start creating more of what cash buys: food, homes, energy, manufactured goods and more. That is the only path to bigger buying power for paycheques and savings.

FTPL and deregulation-focused supply side growth. Well, us free market libertarians are like Chicago Cubs fans, there's always hope!

Ip on FTPL

Greg Ip gives nice coverage of fiscal theory of the price level in the Wall Street Journal.. 

I'm sad he left out Eric Leeper's defining work, which really even more than Sargent and Wallace started modern FTPL. Eric described monetary policy with interest rates, not money supplies, and integrated FTPL with the now dominant new-Keyensian tradition. 

Naturally I'm a bit rankled by 

But FTPL is frustratingly difficult to apply to real life. 


A theory that doesn’t predict inflation but explains it only after the fact by invoking hard-to-measure attitudes isn’t that satisfying, and certainly no better than mainstream macroeconomic models.

Well, that also means no worse than mainstream models. And I was publicly warning of inflation in April 2021, though I'm too much of an academic to make much of one data point. The FTPL analysis of the ZLB is, I think more convincing. 

Yes it would be nice if FTPL could tell you just when too much debt is too much. It would also be nice if the theory of finance could tell you just what a stock should be worth. And it would be nice if any theory, or the Fed itself, did a good job of predicting inflation. 

A nice nugget, 

 fiscal stimulus had some role in pushing inflation up, and as the Fed raises interest rates to combat that inflation, it will worsen deficits. Britain had to abandon deficit-financed tax cuts over fears they would drive inflation and interest rates higher. French Finance Minister Bruno Le Maire recently warned: “Central banks’ restrictive policies are ineffective if public finances continue to expand.”

It seems we're all FTPLers now. 

But I'm whining. For the length it's excellent. This is a hard topic and most journalists get things wrong.  And I am grateful for the publicity.