The thing with Canada...there has been a massive influx of people into it. Greater immigration then ever, 1 million new Canadians over the past two years, a 2.5% increase to the population from immigration alone. That's a good thing.
But that's a lot of people added to the denominator whose contribution to the economy is probably still low. Does that skew the stats? Would we expect GDP per capita to fall with such an influx even if there's nothing to panic about? Is there a lag?
Of course, our disastrous housing policies might mean that these people never get to become a productive part of the economy like my parents did, but that's a whole other issue and would not be in the stats yet.
That's a very good point. I think asylum seekers may tend to be costly to a country's economy at first, but will eventually be very value added. I live in NYC, and that's how I feel about the asylum seekers here. They are putting pressure on our budget now, but will add over time to the city's economic and cultural life.
The increase in the number of non-permanent residents is a major part of the story.
Incomes and the GDP from permanent residents is experiencing regular but not stellar growth, but there is a strong composition effects element in that the proportion of the population that is a non-resident has gone up quite a bit. The students and TFWs that make up the bulk of the non-PR population have very low incomes, so skew the per capita numbers downward
That's part why there's a very different story in the healthy-ish median incomes and wages than there is for GDP per capita.
Another big story that Noah touched in on but didn't know enough to get into is the sector effects. The Canadian oil industry isn't just strange because its an oil industry, its a strange oil industry where output increases are based on heavy capital investment. Up until 2014 this sector got heavy foreign investment due to the search for long term oil production, but this went away after 2014 as the new market assessment was that future oil demand would soon peak and there wasn't going to be a good return on projects that operate for decades. This change tanked investment in the oil sands sector, which was large enough to skew the country wide averages. Meanwhile the non-oil aspects of the Canadian economy experience productivity growth in line with the non-oil American productivity growth over the past decade.
Of course non-PR students have low income. They are students. But they are spending massive amounts of their parent's wealth in Canada (tuition/room/board) and are clearly a net positive for economic growth.
Measuring GDP on a per capita basis when their numbers as a whole rapidly increased due to Provincial government decisions that they would avoid spending more on education or raising tuition caps by allowing more foreign students paying full freight? They're going to bring the number down.
Canada mostly takes highly skilled people, but I gather they're now having a huge asylum influx like America's. (I just had a conversation a few minutes ago with an Afghan who's thinking about going to Canada via Brazil, as his cousin apparently just did.)
That was true until about 2018ish - since then a parallel and lightly regulated international student (primarily to occupational community colleges) and temporary worker streams have become entrenched , and have total numbers that on recent years have exceeded the traditonal points based perma resident stream.
The liberal government is belatedly reacting and attempting to reign some of this in with international students, but the jury is still out. They have presided over the most radical change in immigration policy in 50 years with barely any debate or planning.
That the student side of the ledger is entirely the Provinces' (particularly Ontario) fault, but its difficult to get people to sit down long enough to explain that.
That they got involved at all was a major change to the status quo. The Federal government literally has no post-secondary bureaucracy to pick and choose which students are worthy of admission or which institutions are trustworthy and just handing out the visas was supposed to be the extent of their involvement.
Its a lot like the NIMBYism discussion as well, the Feds are concocting Rube Goldberg mechanisms to get cities reform permitting, which the Provinces can simply do by fiat, but the Feds are inappropriately the ones getting heat for the issue so they're the ones trying to fix it.
If GDP per hour worked is low, then that is a productivity issue. If GDP per worker is doing ok, then that implies a demographic issue--fewer workers relative to the population.
GDP per hour worked seems to be stable from what I can see, labor force participation is falling consistently. To me this implies we are bringing in immigrants but not integrating them into the work force well.
Canada took in 1.2 and 1.5M people in 2022 and 2023 respectively, across all legal avenues. From a population base of 38.5M, that's quite a significant rise. For perspective, the US takes in about 1M legal immigrants per year on a population of 338M.
In the early 1980s, Canada took in far fewer immigrants, but it used to take immigrants on average just 2 years to become net contributors. Now it takes 15 years, and the number is rising almost 1 year per year. Essentially, Canada's importing too much labour supply.
Among other issues, Canada only builds enough housing to take in a small fraction of that population, driving up the cost of living.
I’d argue that this factor can’t be missed in the discussion. As you said, major add to the denominator without a large improvement to the numerator. Has a G7 country seen immigration of this scale in recent times? Can we compare the impact to other occurrences to see if there’s something really different about Canadas influx?
No G7 nation has seen this kind of fluctuation as long as there has been a G7 (50 years). Ignoring post-war relocation throughout Europe, which was an order of magnitude larger, you have to go back to the 1910s to see this kind of immigration rate, which occurred in the US - and Canada.
I'm not opposed to Americans having "no opinion" when pollsters ask them how they feel about Poland or Vietnam. In most cases that's the appropriate response given how much they know about those countries.
After dumb ass Trump said NATO is more important to the Europeans than America, it is nice to see regular Americans are still smarter than that asshole.
In a world where powerful enemies want to overturn the world’s rules based order that America leads it is nice to have friends. China Russia, Iran Brazil and likely a dozen more want to end the dominance of the dollar as the world’s reserve currency. That would be a be a very bad for our interest rates when our debt costs are choking up. China is a bully with it Belt and Road initiative...with its trade. It has Europe scared to death it may block their goods which are a major source of income. The flip side of course is Europe buys a lot of goods from China. Russia is still a gas station with nuclear weapons. The problem is Putin just loves causing divisions and ultimately would love to control Europe. China wants to extend its hegemony harming our position as world leader. Pax Americana is a threat.
Of course the biggest problems America faces are from within. Trump and his nationalist, nativist, isolationist idiots that dote on every thumbless utterance of foreign policy have no interest in defending the rules base world order or Pax Americana. This absurd vision makes America weaker, inviting more wars. It is hard to reconcile such stupidity.
Whatever China thinks of the US dollar, they certainly don't want their own renminbi to replace it as the world's reserve currency, because a country possessing the world's reserve currency cannot engage in the kind of predatory mercantilism that has proven indispensable to China's rulers.
Whatever they say, I doubt Brazil or even Iran care much about the reserve status of the US dollar per se. And neither should we. That most of the world's commerce is transacted in US dollars, yes and with US financial institutions the most important players, yes.
Except that now they are choosing not too. They want to grow their little revolution. China not paying dollars. Russia is not. Brazil made a deal with them. Iran is now flush with oil money. They’ve joined the group. NOKO likely. I wouldn’t pretend that it’s not a challenge to the US dollar as the world’s reserve currency. We get a little extra bump down on interest rates because we are. You should always be watchful. America has financial enemies. You should know this.
I'll bet Brazil is getting a better deal for it's exports by this semi-barter arrangement with Russia and Iran. I'm making two distinctions: a) Whether Brazil has any non-monetary reasons for avoiding transacting in USD b) Whether the "reserve status" of the USD is of much vaulue to the US.
Re Canada, the denominator effect is probably very significant - the Liberal government has presided over the largest expansion of immigration flows since the Gilded Age, to levels which in the American context would be akin to like 8-10 million ppl arriving annually over the past few years. Separately, Canada has very serious problems with business investment, R&D and oligopolistic concentration. Some have argued the surge of new permanent residents, temporary workers and international students (who are allowed to work) has helped disincentivize businesses from investing and encouraged them to avail themselves of cheap labour. Finally, in addition to Noah's comments re the oil and manufacturing sectors, Canada arguably has seen one of the largest real estate bubbles in history with massive capital misallocation to this unproductive sector on the part of its oligopolistic banks (who have over the past decade reduced their relative business lending), with the corresponding highly indebted households - the risk of a balance sheet style recession for Canadian consumers is very very high. Not a great situation!
I like your points here, Colin. I think that there should be more time spent on the increase in interest rates and the effect that it’s had on the Canadian consumer. The majority of Canadian mortgages are quite short in durations (under 5y) and they’ve been rolling off and getting refinanced at much higher interest rates than when they were originated from 2019-2021. Canadian mortgages are also full recourse loans, which mean in order to be absolved of the debt you need to declare personal bankruptcy (unlike the US where the bank takes your house). This means Canadians will hold on to their houses, pay higher mortgage rates and reduce consumption elsewhere. The housing shortage compounds this problem because if you sell your house to reduce your debt burden you still need to pay astronomical rent.
Right this is the biggest point as to why the interest rate cooling effect is hitting Canada harder than the states. The biggest area where most consumers experience interest rates is on their mortgage, and with the US long term fixed low rates, they are experiencing that significantly less than most Canadians who are now paying 5+ % on their mortgage interest.
You seem superhumanly knowledgable on such a wide variety of topics - can you do a short explainer essay on how you manage to stay on top of everything? Maybe a "day in the life of Noah's media consumption" story or a list of recommendations for knowledge resources like you did for science fiction.
Does being an economist give you a mental framework to synthesize general purpose info about the world into an understandable way or are you just like a 190 IQ weirdo who only feels comfortable around research papers and rabbits?
Use of acronyms. Not all readers are economists. Not all of us know automatically what DARPA, ATBR, GINI, HCR, or PPP$ mean. You explained MMRP, thanks. Could you do that for other acronyms that are not quite so widely used as: R&D, LNG, NATO, GDP or CPI?
What metric do you apply to conclude that America is a medium sized country?
The average population of countries is around 40 000 000, making the USA a large country. The media is roughly 9 million..
So, I find it hard to accept that the US is a medium size country when it is number 3 out of 200.
Is there a way to objectively say that the US is a medium sized country? Or should I consider it more of a thought provoking statement on how truly big India and China are?
There are, I suppose two ways of measuring this. One is the position in the list. The US is in the top 1.5% of countries by population. The other is absolutely - more than a billion is big, hundreds of millions is middle, a few millions is small. Although it should be more graduated than that - the US would be an upper middle population.
Both have their uses.
For instance in islands Greenland is far bigger than other islands. New Guinea, the second largest, is 3 times smaller. Britain is ten times smaller. Yet Britain is easily within the top 0.1% of islands, as there are tens of thousands of recorded islands. Despite that Britain is rarely called a large island and often is even called small.
However, In an exchange a few years ago the Russians denigrated Britain as a small island, and the then PM retorted that it was a small island with a big heart and history.
I’m in Tokyo now staying on the 49th floor of a hotel in midtown and we had an earthquake and I’m impressed by the fact that before I felt it, my Apple Watch alerted me before I felt the building shake by way of the excellent NERV app which gives early warning. The Bluetooth speaker in the hotel also alerted me before the tremor and also indicated that the severity was low enough not to be of concern (in both Japanese and English). The sensor network is also used to stop the Shinkansen when the shaking is strong enough. Why doesn’t California have a similar system?Infrastructure in Japan, at least in urban areas is much better, maybe they consider public safety more in terms of natural disasters than mean tweets that may “undermine democracy”.
On the other hand there was an article about the president of an import company who was detained and questioned daily for hours without a lawyer for 330 days on suspicion of importing industrial dryers that could possibly be used in biological weapons, but without any proof. The police dropped charges (one of the 1% of cases in which they do, and the prosecutor said they would do the same thing again if a similar case came up. Sadly, the suspect was also not given medical treatment in jail and died of stomach cancer.
So have fun in Japan, Noah, and be sure to check out the new Azubadai Hills complex which just opened and has an amazing market, but be very careful not to get arrested.
Just a correction. The off-quoted statistic you're referring to ("one of the 1% of cases in which they do") is not about dropping charges but instead about unsuccessful prosecution at trial of charges that are NOT dropped. One reason the prosecution's success rate at trial is so high is that many, many charges are dropped before going to trial.
Also it may be too early for hanami in Tokyo, it’s still cold here and I’ve seen only plum and apricot blossoms, no Sakura yet. I’ll be in Nagasaki next week, and they aren’t blooming down there yet either.
On DARPA (I worked there as a fellow for three months last year):
There's a lot of people who have tried to copy the DARPA model, and they've largely not succeeded. Deriving the essence of the DARPA model is a huge undertaking. (Ben Reinhardt has a good attempt here: https://benjaminreinhardt.com/wddw) To me, mostly it comes down to a mix of
A) Hand-selected individuals with vision and drive, supplied with resources and political top-cover;
B) A constant commitment to "wild and crazy," with an acceptance that 90% of the projects are not going to succeed.
The Japanese ATBR program might goose corporate R&D a bit and let them take on a few incremental improvements on the margin that would otherwise be economically infeasible, but I wouldn't expect any breakthrough discoveries a la DARPA.
I think the other important 2 keys are freedom from burdensome regulation/oversight and the political will to keep funding long shot ideas even if it fails. DARPA is sort of outside the regular pentagon bureaucratic hurdles, and Congress seems to understand that failure in DARPA is ok as it chases technological breakthroughs and thus its funding is never seriously in danger.
I’ve always wondered what other government functions would look like if they were given DARPA-esque leeway; imagining something similar for the NIH or NASA is fun
One thing I immediately noticed that's wrong about the Canada part of the article is the idea that both Canada and the US are running major deficits to provide stimulus. Canadian Federal deficit is 1.4% of GDP, which is pretty typical, the kind an advanced economy can usually run indefinitely without issue.
The American Federal deficit in the same year was 6.3%. The US is still doing heavy stimulus post-pandemic.
This is an important that gets overlooked in most conversations about the Canadian economy. Conservatives lament deficit spending but also want the Canadian economy to perform like our neighbors to the south. Sure it isn't a straight correlation but 4-5 times more government spending on a per GDP basis does have a serious impact on economic performance.
That the two G7 states experiencing good per capita growth are the US and Italy, both of which are deficit spending at over 5% of GDP right now is something that feels related even if I have no idea if it actually is.
Falling fertility rates cut dependency ratios for several decades contributing greatly to economic takeoff. To get workers/capita add dependency ratio to 100. Divide 100/that total. Clearly if labor is a factor of production, demographic transitions provide a huge boost to production/capita.
Ages < 15 plus >64 per 100 working-age population.
I am quite worried about the US reaction to China. While it is reasonable, indeed optimal not to be dependent on China for strategic inputs, the Way that the US is going about reducing that dependence, by subsidizing domestic production of stuff is doubly problematic. Maximining security of inputs would mean domestic production AND imports from non-China interdictable places. A) Domestic only production will be more costly (more growth inhibiting) and less secure. B) Domestic only productions open itself to “everything bagel” syndrome, to seek not only secure supplies but “good jobs,” workers benefits, promotion of small business, etc. And I think the benign toleration of this in the name of “industrial policy” is part of the problem.
We need to use the geo-political rivalry with China to refocus on promoting rapid growth in the US: low deficits, high high-skilled immigration, investment in R&D, not protectionism and isolationism.
Work-from-home broke the back of the already brittle Canadian economy. Fracking caused an economic decline, and Canada has a long history of weak reinvestment rates, but it was work-from-home. This generalized Vancouver and Toronto’s housing crises as people suddenly started to demand more space.
Ex-Treasury Secretary Summers questions Fed's rush to cut.
Here’s a question: Why does anyone listen to Larry Summers, the worst applied economist of his generation who hasn’t had an original thought in 50 years?
The thing with Canada...there has been a massive influx of people into it. Greater immigration then ever, 1 million new Canadians over the past two years, a 2.5% increase to the population from immigration alone. That's a good thing.
But that's a lot of people added to the denominator whose contribution to the economy is probably still low. Does that skew the stats? Would we expect GDP per capita to fall with such an influx even if there's nothing to panic about? Is there a lag?
Of course, our disastrous housing policies might mean that these people never get to become a productive part of the economy like my parents did, but that's a whole other issue and would not be in the stats yet.
That's a very good point. I think asylum seekers may tend to be costly to a country's economy at first, but will eventually be very value added. I live in NYC, and that's how I feel about the asylum seekers here. They are putting pressure on our budget now, but will add over time to the city's economic and cultural life.
The increase in the number of non-permanent residents is a major part of the story.
Incomes and the GDP from permanent residents is experiencing regular but not stellar growth, but there is a strong composition effects element in that the proportion of the population that is a non-resident has gone up quite a bit. The students and TFWs that make up the bulk of the non-PR population have very low incomes, so skew the per capita numbers downward
That's part why there's a very different story in the healthy-ish median incomes and wages than there is for GDP per capita.
Another big story that Noah touched in on but didn't know enough to get into is the sector effects. The Canadian oil industry isn't just strange because its an oil industry, its a strange oil industry where output increases are based on heavy capital investment. Up until 2014 this sector got heavy foreign investment due to the search for long term oil production, but this went away after 2014 as the new market assessment was that future oil demand would soon peak and there wasn't going to be a good return on projects that operate for decades. This change tanked investment in the oil sands sector, which was large enough to skew the country wide averages. Meanwhile the non-oil aspects of the Canadian economy experience productivity growth in line with the non-oil American productivity growth over the past decade.
Of course non-PR students have low income. They are students. But they are spending massive amounts of their parent's wealth in Canada (tuition/room/board) and are clearly a net positive for economic growth.
Long term, sure.
Measuring GDP on a per capita basis when their numbers as a whole rapidly increased due to Provincial government decisions that they would avoid spending more on education or raising tuition caps by allowing more foreign students paying full freight? They're going to bring the number down.
Canada mostly takes highly skilled people, but I gather they're now having a huge asylum influx like America's. (I just had a conversation a few minutes ago with an Afghan who's thinking about going to Canada via Brazil, as his cousin apparently just did.)
That was true until about 2018ish - since then a parallel and lightly regulated international student (primarily to occupational community colleges) and temporary worker streams have become entrenched , and have total numbers that on recent years have exceeded the traditonal points based perma resident stream.
The liberal government is belatedly reacting and attempting to reign some of this in with international students, but the jury is still out. They have presided over the most radical change in immigration policy in 50 years with barely any debate or planning.
Rashly imperilling long-standing pro-immigration sentiment.
That the student side of the ledger is entirely the Provinces' (particularly Ontario) fault, but its difficult to get people to sit down long enough to explain that.
The permits are a federal responsibility and some credit to them for moving to limit them https://www.reuters.com/world/americas/why-is-canada-capping-foreign-students-who-will-be-impacted-2024-01-22/
That they got involved at all was a major change to the status quo. The Federal government literally has no post-secondary bureaucracy to pick and choose which students are worthy of admission or which institutions are trustworthy and just handing out the visas was supposed to be the extent of their involvement.
Its a lot like the NIMBYism discussion as well, the Feds are concocting Rube Goldberg mechanisms to get cities reform permitting, which the Provinces can simply do by fiat, but the Feds are inappropriately the ones getting heat for the issue so they're the ones trying to fix it.
Yes. In my experience, some deputy ministers and ADMs have been warning of this for years, but the Cabinet and PMO have been deaf to this advice.
People who wouldn't take advice, who thought they knew best, slaughtered the golden goose and can't even see the result, much less admit it.
If GDP per hour worked is low, then that is a productivity issue. If GDP per worker is doing ok, then that implies a demographic issue--fewer workers relative to the population.
GDP per hour worked seems to be stable from what I can see, labor force participation is falling consistently. To me this implies we are bringing in immigrants but not integrating them into the work force well.
Canada took in 1.2 and 1.5M people in 2022 and 2023 respectively, across all legal avenues. From a population base of 38.5M, that's quite a significant rise. For perspective, the US takes in about 1M legal immigrants per year on a population of 338M.
In the early 1980s, Canada took in far fewer immigrants, but it used to take immigrants on average just 2 years to become net contributors. Now it takes 15 years, and the number is rising almost 1 year per year. Essentially, Canada's importing too much labour supply.
Among other issues, Canada only builds enough housing to take in a small fraction of that population, driving up the cost of living.
I’d argue that this factor can’t be missed in the discussion. As you said, major add to the denominator without a large improvement to the numerator. Has a G7 country seen immigration of this scale in recent times? Can we compare the impact to other occurrences to see if there’s something really different about Canadas influx?
No G7 nation has seen this kind of fluctuation as long as there has been a G7 (50 years). Ignoring post-war relocation throughout Europe, which was an order of magnitude larger, you have to go back to the 1910s to see this kind of immigration rate, which occurred in the US - and Canada.
I'm not opposed to Americans having "no opinion" when pollsters ask them how they feel about Poland or Vietnam. In most cases that's the appropriate response given how much they know about those countries.
After dumb ass Trump said NATO is more important to the Europeans than America, it is nice to see regular Americans are still smarter than that asshole.
In a world where powerful enemies want to overturn the world’s rules based order that America leads it is nice to have friends. China Russia, Iran Brazil and likely a dozen more want to end the dominance of the dollar as the world’s reserve currency. That would be a be a very bad for our interest rates when our debt costs are choking up. China is a bully with it Belt and Road initiative...with its trade. It has Europe scared to death it may block their goods which are a major source of income. The flip side of course is Europe buys a lot of goods from China. Russia is still a gas station with nuclear weapons. The problem is Putin just loves causing divisions and ultimately would love to control Europe. China wants to extend its hegemony harming our position as world leader. Pax Americana is a threat.
Of course the biggest problems America faces are from within. Trump and his nationalist, nativist, isolationist idiots that dote on every thumbless utterance of foreign policy have no interest in defending the rules base world order or Pax Americana. This absurd vision makes America weaker, inviting more wars. It is hard to reconcile such stupidity.
Whatever China thinks of the US dollar, they certainly don't want their own renminbi to replace it as the world's reserve currency, because a country possessing the world's reserve currency cannot engage in the kind of predatory mercantilism that has proven indispensable to China's rulers.
So, what so you think about Trump?
Rules based order. Do people really believe this stuff?
Yes WTO, GATT, NAPA, NATO, I could go on but I’m not in the mood form someone, let’s say, up to speed. Have a great day
I am up to speed. The US breaks international law all the time, trade agreements notwithstanding.
Americans (like everyone else) break their **own** laws all the time. What's the point you're trying to make here?
So you are saying that the “rules based international order” is whatever America wants to do.
Yawn
Whatever they say, I doubt Brazil or even Iran care much about the reserve status of the US dollar per se. And neither should we. That most of the world's commerce is transacted in US dollars, yes and with US financial institutions the most important players, yes.
Except that now they are choosing not too. They want to grow their little revolution. China not paying dollars. Russia is not. Brazil made a deal with them. Iran is now flush with oil money. They’ve joined the group. NOKO likely. I wouldn’t pretend that it’s not a challenge to the US dollar as the world’s reserve currency. We get a little extra bump down on interest rates because we are. You should always be watchful. America has financial enemies. You should know this.
I'll bet Brazil is getting a better deal for it's exports by this semi-barter arrangement with Russia and Iran. I'm making two distinctions: a) Whether Brazil has any non-monetary reasons for avoiding transacting in USD b) Whether the "reserve status" of the USD is of much vaulue to the US.
I mention aften that all you pointed out are after the dollar as the worlds reserve currency. Usually people poo poo it. They shouldn’t.
Re Canada, the denominator effect is probably very significant - the Liberal government has presided over the largest expansion of immigration flows since the Gilded Age, to levels which in the American context would be akin to like 8-10 million ppl arriving annually over the past few years. Separately, Canada has very serious problems with business investment, R&D and oligopolistic concentration. Some have argued the surge of new permanent residents, temporary workers and international students (who are allowed to work) has helped disincentivize businesses from investing and encouraged them to avail themselves of cheap labour. Finally, in addition to Noah's comments re the oil and manufacturing sectors, Canada arguably has seen one of the largest real estate bubbles in history with massive capital misallocation to this unproductive sector on the part of its oligopolistic banks (who have over the past decade reduced their relative business lending), with the corresponding highly indebted households - the risk of a balance sheet style recession for Canadian consumers is very very high. Not a great situation!
I like your points here, Colin. I think that there should be more time spent on the increase in interest rates and the effect that it’s had on the Canadian consumer. The majority of Canadian mortgages are quite short in durations (under 5y) and they’ve been rolling off and getting refinanced at much higher interest rates than when they were originated from 2019-2021. Canadian mortgages are also full recourse loans, which mean in order to be absolved of the debt you need to declare personal bankruptcy (unlike the US where the bank takes your house). This means Canadians will hold on to their houses, pay higher mortgage rates and reduce consumption elsewhere. The housing shortage compounds this problem because if you sell your house to reduce your debt burden you still need to pay astronomical rent.
Right this is the biggest point as to why the interest rate cooling effect is hitting Canada harder than the states. The biggest area where most consumers experience interest rates is on their mortgage, and with the US long term fixed low rates, they are experiencing that significantly less than most Canadians who are now paying 5+ % on their mortgage interest.
I'd like for Noah to undertake a "deep-dive" on the Canadian economy.
Noah,
You seem superhumanly knowledgable on such a wide variety of topics - can you do a short explainer essay on how you manage to stay on top of everything? Maybe a "day in the life of Noah's media consumption" story or a list of recommendations for knowledge resources like you did for science fiction.
Does being an economist give you a mental framework to synthesize general purpose info about the world into an understandable way or are you just like a 190 IQ weirdo who only feels comfortable around research papers and rabbits?
Use of acronyms. Not all readers are economists. Not all of us know automatically what DARPA, ATBR, GINI, HCR, or PPP$ mean. You explained MMRP, thanks. Could you do that for other acronyms that are not quite so widely used as: R&D, LNG, NATO, GDP or CPI?
What metric do you apply to conclude that America is a medium sized country?
The average population of countries is around 40 000 000, making the USA a large country. The media is roughly 9 million..
So, I find it hard to accept that the US is a medium size country when it is number 3 out of 200.
Is there a way to objectively say that the US is a medium sized country? Or should I consider it more of a thought provoking statement on how truly big India and China are?
There are, I suppose two ways of measuring this. One is the position in the list. The US is in the top 1.5% of countries by population. The other is absolutely - more than a billion is big, hundreds of millions is middle, a few millions is small. Although it should be more graduated than that - the US would be an upper middle population.
Both have their uses.
For instance in islands Greenland is far bigger than other islands. New Guinea, the second largest, is 3 times smaller. Britain is ten times smaller. Yet Britain is easily within the top 0.1% of islands, as there are tens of thousands of recorded islands. Despite that Britain is rarely called a large island and often is even called small.
I would say that Britain is a pretty large island 😅
I suppose it is equivalent to saying that Berkshire Hathaway, TSMC and Tesla are medium sized companies 🙂
You are right.
However, In an exchange a few years ago the Russians denigrated Britain as a small island, and the then PM retorted that it was a small island with a big heart and history.
The BBC had to correct this in a column.
https://www.bbc.com/news/magazine-24083162.amp
I think people may be confusing the relative country size with the island size.
I love it when people wrestle such "small" issues to the ground.
I’m in Tokyo now staying on the 49th floor of a hotel in midtown and we had an earthquake and I’m impressed by the fact that before I felt it, my Apple Watch alerted me before I felt the building shake by way of the excellent NERV app which gives early warning. The Bluetooth speaker in the hotel also alerted me before the tremor and also indicated that the severity was low enough not to be of concern (in both Japanese and English). The sensor network is also used to stop the Shinkansen when the shaking is strong enough. Why doesn’t California have a similar system?Infrastructure in Japan, at least in urban areas is much better, maybe they consider public safety more in terms of natural disasters than mean tweets that may “undermine democracy”.
On the other hand there was an article about the president of an import company who was detained and questioned daily for hours without a lawyer for 330 days on suspicion of importing industrial dryers that could possibly be used in biological weapons, but without any proof. The police dropped charges (one of the 1% of cases in which they do, and the prosecutor said they would do the same thing again if a similar case came up. Sadly, the suspect was also not given medical treatment in jail and died of stomach cancer.
So have fun in Japan, Noah, and be sure to check out the new Azubadai Hills complex which just opened and has an amazing market, but be very careful not to get arrested.
Just a correction. The off-quoted statistic you're referring to ("one of the 1% of cases in which they do") is not about dropping charges but instead about unsuccessful prosecution at trial of charges that are NOT dropped. One reason the prosecution's success rate at trial is so high is that many, many charges are dropped before going to trial.
Also it may be too early for hanami in Tokyo, it’s still cold here and I’ve seen only plum and apricot blossoms, no Sakura yet. I’ll be in Nagasaki next week, and they aren’t blooming down there yet either.
On DARPA (I worked there as a fellow for three months last year):
There's a lot of people who have tried to copy the DARPA model, and they've largely not succeeded. Deriving the essence of the DARPA model is a huge undertaking. (Ben Reinhardt has a good attempt here: https://benjaminreinhardt.com/wddw) To me, mostly it comes down to a mix of
A) Hand-selected individuals with vision and drive, supplied with resources and political top-cover;
B) A constant commitment to "wild and crazy," with an acceptance that 90% of the projects are not going to succeed.
The Japanese ATBR program might goose corporate R&D a bit and let them take on a few incremental improvements on the margin that would otherwise be economically infeasible, but I wouldn't expect any breakthrough discoveries a la DARPA.
I think the other important 2 keys are freedom from burdensome regulation/oversight and the political will to keep funding long shot ideas even if it fails. DARPA is sort of outside the regular pentagon bureaucratic hurdles, and Congress seems to understand that failure in DARPA is ok as it chases technological breakthroughs and thus its funding is never seriously in danger.
I’ve always wondered what other government functions would look like if they were given DARPA-esque leeway; imagining something similar for the NIH or NASA is fun
DARPA funds *quite* a bit of research with commercial performers, in some sectors.
One thing I immediately noticed that's wrong about the Canada part of the article is the idea that both Canada and the US are running major deficits to provide stimulus. Canadian Federal deficit is 1.4% of GDP, which is pretty typical, the kind an advanced economy can usually run indefinitely without issue.
The American Federal deficit in the same year was 6.3%. The US is still doing heavy stimulus post-pandemic.
This is an important that gets overlooked in most conversations about the Canadian economy. Conservatives lament deficit spending but also want the Canadian economy to perform like our neighbors to the south. Sure it isn't a straight correlation but 4-5 times more government spending on a per GDP basis does have a serious impact on economic performance.
That the two G7 states experiencing good per capita growth are the US and Italy, both of which are deficit spending at over 5% of GDP right now is something that feels related even if I have no idea if it actually is.
Falling fertility rates cut dependency ratios for several decades contributing greatly to economic takeoff. To get workers/capita add dependency ratio to 100. Divide 100/that total. Clearly if labor is a factor of production, demographic transitions provide a huge boost to production/capita.
Ages < 15 plus >64 per 100 working-age population.
Country Name 19601980 20002020 2022
Nigeria 80 89 87 87 85
Japan 55 48 47 71 71
Germany 48 52 47 56 57
China 80 68 46 44 45
Korea, Rep. 83 61 39 39 41
World 75 71 60 55 55
United States 67 51 51 53 54
India 78 77 65 49 47
India TFR 5.9 4.8 3.4 2.1
I am quite worried about the US reaction to China. While it is reasonable, indeed optimal not to be dependent on China for strategic inputs, the Way that the US is going about reducing that dependence, by subsidizing domestic production of stuff is doubly problematic. Maximining security of inputs would mean domestic production AND imports from non-China interdictable places. A) Domestic only production will be more costly (more growth inhibiting) and less secure. B) Domestic only productions open itself to “everything bagel” syndrome, to seek not only secure supplies but “good jobs,” workers benefits, promotion of small business, etc. And I think the benign toleration of this in the name of “industrial policy” is part of the problem.
We need to use the geo-political rivalry with China to refocus on promoting rapid growth in the US: low deficits, high high-skilled immigration, investment in R&D, not protectionism and isolationism.
Work-from-home broke the back of the already brittle Canadian economy. Fracking caused an economic decline, and Canada has a long history of weak reinvestment rates, but it was work-from-home. This generalized Vancouver and Toronto’s housing crises as people suddenly started to demand more space.
Ex-Treasury Secretary Summers questions Fed's rush to cut.
Here’s a question: Why does anyone listen to Larry Summers, the worst applied economist of his generation who hasn’t had an original thought in 50 years?