What we’re reading (1/14)
“It Won’t Be A Recession—It Will Just Feel Like One” (Wall Street Journal). “The good news is the probability of a recession is down sharply, according to The Wall Street Journal’s latest survey of economists. The bad news is that, for a lot of people, it is still going to feel like a recession.”
“Driven Out” (Modern Farmer). “Long-haul trucking used to be a secure and respected career. Today, it’s a job with high turnover and a lack of security. Many headlines today talk about the future of trucking, which includes the possibility of autonomous fleets replacing human-driven ones at some point down the line. But the predicament in which truckers find themselves now actually goes back in time by several decades.”
“Is The Mortgage Interest Deduction A Good Idea?” (Marginal Revolution). “I usually don’t like arguments like the one that follows, as purely short-run second best considerations tend to rub me the wrong way. Nonetheless I had never thought of it before, so I am happy to present it for our collective enlightenment: ‘Mortgage interest deductions and other homeownership subsidies are widely believed to be harmful because they redistribute resources from lower-income renters to higher-income homeowners. We argue that renters actually benefit from these policies in general equilibrium for two reasons. First, the rental supply curve is relatively inelastic, which means that rents fall when these policies reduce rental demand. Second, many renters spend most of their income on housing, and these renters gain substantially from rent decreases. We calibrate a quantitative model to match empirical evidence on these factors and show they are strong enough that subsidizing homeownership actually increases welfare.’”
“A Conspiracy Theory For Japan’s Lost Decade” (Capital Flows and Asset Markets). “[I]s there a political cycle that explains Japan’s malaise? Well yes, I think so. First of all, losing World War II was highly detrimental to Japanese growth. Prior to World War II the Japanese economy was rapidly catching depression era USA. In 1980, as Japanese economic growth surged, again Japan was becoming a threat to the USA. But in 1980s, the bureaucrats and CEOs of Japan Inc would have been men who would have distinct memories of the last outcome when Japan threatened to overtake the USA. For this reason I think Japan agreed to the Plaza accord, which saw the Yen appreciate significantly. With an export led economy, this yen appreciation should have been devastating for the Japanese economy.”
“US Cannabis Investing: An Overview” (Enterprising Investor). “The cannabis sector is slowly emerging from its long period of prohibition, and the investment opportunities are turning heads. Retail investors believe in the industry’s future and want to participate before regulations change. The institutions covering the sector are keeping a close eye on it even if most have yet to dip their toes in.”
