100 Comments

Another great set of five. Thank you.

I was relieved to read your first interesting thing about college attitudes toward the protests for many reasons including the probable minor effect on the 2024 election.

On immigration, I agree with you and the papers you cite 100%. The problem, however, is that for much of the working class, the talking point of "immigrants take your jobs and depress your wages" hits home. It's an effective albeit false talking point. That worries me.

Expand full comment

I've read the papers and it takes time for them to integrate, it doesn't happen instantly and we have had such a huge influx it is having an impact. Another major problem which Noah ignores is housing, we don't have housing for those already here, much less two-three million new people a year. That's not a temporary problem and is a major contributor to inflation.

Expand full comment

Pretty sure Smith would agree with you, but instead of stopping immigration we could instead build more housing to match or even exceed population growth.

Expand full comment

he agrees with me about the need for housing but when I told him it was an issue with immigration he dismisses it. Just build it.

Agree but we have been saying that for forty years now and it has only gotten worse. This last year housing starts dropped big time.

Expand full comment

Housing is super expensive to build in the US. Even if the land is plentiful, clean water and infrastructure are not, and they are also expensive. Most Americans don't have an extra $500 for an emergency. How much housing can they build for South and Central Americans poring in?

Expand full comment

Except lack of labor for construction is a real issue (not the only or biggest but significant)that immigration helps with. We should IMO be giving work visas to immigrants willing to work in construction. Plus better zoning and building codes and we’re in business.

Expand full comment

yes agree, I was a farmer in Ca and totally depended on illegal immigrants for labor. What you have suggested is a specific group for a specific reason under some kind of reasonable management. What Biden is doing is totally out of control, come one come all while people who can legally come are waiting 2-3 years to get in. It's the utter lack of reasonable management and fairness that bothers me.

What I find is that people who are pro immigration like Noah think that if you have any objections at all you are a racist, and end of discussion, and the problems never get dealt with.

Expand full comment

Building ships in Japan seems like such an absurd kludge in the face of "just repeal the Jones Act". Like, sure, ideally we'd do both, but it's really troubling as a society that we can't fix the long-term problems, we only ever come up with the next kludge.

Expand full comment

Immigration does have economic consequences, and more social spending is needed. However, I can tell you that some school districts are suffering. Already, our public schools are failing to educate youth, and we are doing worse and worse on standardized tests. Adding non-English speaking children who will no doubt need assistance will strain school resources. More kids needing more help takes away total education. This impact on school budgets which are already strained is an economic consideration. At a local food bank I volunteered with, they went from serving 7,000 people to over 30,000 in one year.

I have zero issues with Japan building destroyers and frigates, and neither should the Pentagon. We are in a battle in the Arctic with the USSR. We have two; the Russians have 30. This battle, which is unknown to the public, is over resources. Russia is claiming much of the North Pole as an economic zone. We have a missile gap, a ship gap, and a military-industrial production gap. The object of deterrence is to give your opponent concern regarding a kinetic engagement. That they might lose.

If China gets to the point where it believes that we cannot and will not defend Taiwan, that is when they will go.

Losing deterrence practically invites war. Do you believe if Russia thought they might be in a war of attrition and lose all the equipment and soldiers, they would have gone into Ukraine? Now, however, it is a national pride problem for Putin...hence the lengths he is going to to win.

Expand full comment
May 10·edited May 10

I came in here to write this. I think on the macro level it's almost assuredly true that more immigration = better economic health.

But on the micro level, I've worked in school districts that are absolutely groaning under the strain of trying to educate populations where half the kids in each class don't understand English and do not have home lives conducive to academic success. And yes, there is a cultural element here. In the western part of the district I work in, there are a lot of south Asian immigrants, and they practically teach themselves. However, to be perfectly blunt, there is a lot more of a selection effect for those who have to get here from the other side of the earth, and in my personal experience the majority of those coming up from Latin America simply do not have a cultural emphasis on or expectation of academic excellence.

That would be fine, the world will always need people willing to work hard and most jobs don't require a lot of academic rigor to be successful in. But when schools are held to high standards that are essentially impossible to meet, they just...lie and cheat. You have no idea how much we fudge grades to make sure 1/3 of the kids aren't failing all the time. It's depressing and demoralizing, but there is no alternative - we've been given a mandate to produce outcome x using inputs y, and no one is allowed to even broach the subject of whether or not inputs y care about outcome x. And yet if we fail to produce outcome x, it's obviously entirely our fault for being terrible teachers.

Expand full comment

Where there is a lack of a culture of education in the household, students generally will produce poor results.

At one point the LA School System had over 200 languages spoken in it. My wife had a Ukrainian student go without a translator for the first half of the year. That translator had to juggle 5 schools.

Expand full comment

Yeah, Noah has a real blind spot on immigration. He prefers academic papers to common sense and actual experience. There's a reason every other country in the world chooses their emigrants instead of allowing the emigrants to choose the country.

Expand full comment

Seems to me we have enough poor and huddled masses. it’s odd in the modern age we don’t have some policies. Everybody would squawk were racists while they bar immigrants. We certainly could offer our PHD and MD graduates a green card.

Expand full comment

Well, not really: Argentina is, surprisingly, the country with the most open policy to immigration, in which the obligation to the Federal Government to foster immigration is written in its Constitution:

"Section 25.- The Federal Government shall foster European immigration; and may

not restrict, limit or burden with any tax whatsoever, the entry into the Argentine territory

of foreigners who arrive for the purpose of tilling the soil, improving industries, and

introducing and teaching arts and sciences."

And you could actually get the permanent residency (or "green card" as in America) after living in Argentina for 2 years though, no matter what types of visa you have!

Expand full comment

Notice that language:

"European immigration" = immigration approval by race

"soil, industries, teaching arts & sciences" = immigration by profession

That's "choosing your emigrants" instead of allowing them to choose you. This is EXACTLY what Canada and almost every other country in the world does. The only people who have open borders are countries so impoverished and with such bad governance that no one wants to come. (And many of those countries actually have closed borders the other direction -- to keep people from getting out.)

Expand full comment
RemovedMay 10
Comment removed
Expand full comment

Immigration has long been the obvious solution for our doctor shortage. It’s already a big part of it, given how many people immigrate for medical school.

Expand full comment

To follow up, we in America are going to be short 30,000 family practice doctors. The pay is crappy as they do not do procedures which is what most other doctors do.

Quite a bit of health care is already government-paid, not government-run. Only the VA has doctors. So our health care is still private, but we have problems. Not as bad as the NIH in Britain. Those poor people are actually dying. I love the comparison to Sweden and the like. Sweden has a mostly homogenous population of about 10.5 million people. We have 340 million or more. Our biggest issues is about five chronic diseases. COPD, Diabetes, Obesity, CAD, Cancer. Cure those and we lower our health bill by probably 80%

Expand full comment

"COPD, Diabetes, Obesity, CAD, Cancer."

Diabetes and Obesity is redundant. Also, much of the COPD and CAD. No medical cure is needed. We have become a nation of fat asses. We have a lifestyle problem, not a medical problem.

Expand full comment

There is a glaring inconsistency between you being a smart highly numerate economist and you thinking we can solve the solar intermittancy problem with batteries.

Look at the price of lithium ion batteries, especially the price trajectory over the past few years.

It is at least 100 time cheaper to use gas powered generators for backup.

Batteries will always be useful at the margins, but if we want to replace fossil fuels we need something else, especially in high latitude countries. There is nothing on the horizon that fits the bill.

Expand full comment
May 10·edited May 10

LCOE of solar plus storage is $0.09/kWh, with batteries making up about $0.04/kWh

https://www.nrel.gov/news/video/lcoss-text.html

LCOE of natural gas is $0.04/kWh

https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf

If you only run your natural gas plant intermittently during peak load, the cost will be much higher.

So they are about the same cost. Which is probably why people are installing batteries in the real world. Where is your "100 times cheaper" coming from?

Expand full comment

And PV plus batteries are both on a cost trajectory downwards, with many technological improvements yet unexploited. It's not clear how we could ever get a further 90% decrease in natural gas prices, but it's not out of the question for batteries.

Expand full comment

I was comparing costs of storing energy as NG versus as batteries (see link below)

Thanks for the video. The assumptions made reveal that the estimate is deeply misleading.

(1) They cost for 4 hours of battery storage. That is absurdly low given that there is no sunlight at all for 12 hours a day on average. At least 20 hours of storage would be required to meet the evening peak and cope with winter nights. You would still be vulnerable in winter after a cloudy days.

(2) The costing assumed all sorts of subsidies for clean energy and so is not like for like.

(3) The assumed battery degradation rate (<2% pa) is absurdly low. A more realistic assumption is 10-15%

(4) For high latitude regions the very low capacity factor in winter would mean vast overinstallation of solar.

https://www.gridbrief.com/p/guest-oped-battery-storage-141-times-expensive-liquefied-natural-gas-storage?utm_source=www.gridbrief.com&utm_medium=newsletter&utm_campaign=guest-op-ed-battery-storage-is-141-times-more-expensive-than-liquefied-natural-gas-storage

Expand full comment

Batteries have a limited lifetime because of degradation, much shorter than a gas turbine. Also a gas plant can run continuously, while from the chart you can see that batteries are drained after a few hours.

Expand full comment
May 10·edited May 10

LCOE accounts for degradation and usable lifetime. And gas peaker plants are also often run for only a few hours.

Expand full comment

The assumptions used for battery lifetime/degradation (<2% decrease pa) were unrealistic.

The notion that the costs of lithium ion batteries will continue to decrease rapidly is flawed. Over 70% of the cost of manufacturing these batteries represents of cost of material components, like Lithium. There is little room for further cost savings from manufacturing improvement. It is unlikely that material costs will decline rapidly given (1) the massive increase in demand and (2) the time it takes to scale up mines/refineries etc. There is strong resistance to opening new mines based on environmental objections.

Expand full comment

Not only the price, but the lifespan of batteries is being ignored. A typical lithium ion battery degrades after a few hundred charge/discharge cycles and if they are used daily then they will be degraded in a few years and need to be replaced.

Expand full comment
RemovedMay 10·edited May 10
Comment removed
Expand full comment

The simple cheap solution is to be rational about how we regulate nuclear energy.

Most people do not know that our regulations value as life lost to radioactivity from nuclear power and nuclear waste 100-2500 more than a life lost to air pollution (e.g. from PM2.5 particles).

Despite radioactivity limits have a vastly bigger safety margin, we take them far more seriously than air pollution limits.

For example we do not require barbecues and wood burning stoves to be designed so that air pollution limits will never be exceeded for any human that uses them or might be exposed to them. Nor do we require entire regions to be permanently evacuated when these air pollution limits are exceeded. Nor do we require flammable material to be stored in way that it could never catch fire and produce air pollution.

My timid suggestion is that we treat regulator limits on radioactivity the same practical way that we treat limits on air pollution: as advisory and something to aim for.

This would still mean we treat radioactivity 100-2500 times more cautiously than other pollutants.

But it would allow us to build simple cheap nuclear reactors such as the ones which have proved so safe.

Electricity could be too cheap to meter, driving the electrification of everything.

Expand full comment

Regarding a decentralized military industrial complex, it seems so surprising to me that the members of the Global North and US security alliance have been so resilient and united in the face of so many global challenges, military or otherwise including a pandemic. Outside of Trump, there has been hardly a crack. That the US could feel secure in releasing some of its highest military tech to its allies for production given the pacing challenge says volumes about its confidence in its allies. This is definitely an historical anomaly.

Expand full comment

Authoritarians are also united against liberal democracy, and the 21st century is a Cold War of liberal democracy (the machine) and all flavors of autocracy (the rage against).

See Anne Applebaum's book "Autocracy Inc." to see how this is playing out. Russia, China and Iran, for instance, have nothing in common culturally or historically. They have a common enemy -- other wealthy powers like the US, UK and EU. Rather than a competing ideology, Autocracy Inc. posits a transactional relationship among autocrats, elite patrons of autocrats doing business among themselves, and relying on their nations' criminal underworlds and terrorist factions to conduct off-the-books warfare.

Expand full comment

I suppose the point I am trying to make is that the likelihood of a group of republics taking a long view to the world is extremely unusual. The Global North is moving in lock-and-step to all challenges, not just military. In the days of WW1 and 2, the Allies only came together during times of war. In this era, these countries are looking at a wider picture and facing and anticipating opposing countries on a wider scope. First we oppose economically, then politically, and finally if necessary, militarily. This is the anomaly that I refer to. Democracies, by definition, are centered around the desires of the public. But we are not seeing this here. The leaders are acting with not so obvious goals. Hence, we observe public distrust.

Expand full comment

"The easiest solution here is just to build more solar to compensate for the weaker winter light...."

Or find something countercyclical. Is it windier in the winter, or does it just feel that way?

Expand full comment

For seasonal storage you can probably use heat batteries. Convert electricity into heat energy and store it into an insulated pile of sand. Energy loss from the battery would be less than 5-10% for months. The heat can be used in district heating systems and/or low to medium temperature industrial heating systems. Or the energy can be converted to electricity using steam turbines. The electricity conversion would have a poor round trip efficiency but much cheaper than electric battery storage or fucking hydrogen.

Expand full comment

Do you have any references on this? It's an interesting idea, but I have a hard time believing that heat loss would be only 5-10% over many months.

I've always thought water storage batteries (2 nearby reservoirs of different heights) made sense too, but the geography that can accommodate them is rare.

Expand full comment

https://youtu.be/B3JlTVt0jLw

https://youtu.be/KVqHYNE2QwE. You can also look up papers on heat storage on Google scholar. It doesn't make sense for day to day electricity storage. Batteries will win there. But it can work well for seasonal stuff. Finland is working on using stored heat for winter months.

Expand full comment

OK. That is really cool. Utterly basic. Even a Luddite like me can love it.

Expand full comment

Regarding immigration, this basically says immigration is working at current levels. It does not say it will continue being beneficial if we greatly expand immigration as some want to do.

Look at UK and Canada. They have had enormous immigration recently and their Gdp per capital has stagnated, and young people are screwed over with higher housing costs

We should keep immigration as it is and not expand as what we've got works, and what Europe/Canada have doesn't.

Expand full comment

High housing costs are because of NIMBY, not immigrants.

Expand full comment
founding

You can cherry pick polls to find what you want at this point. This one says 80% oppose Israel’s actions in Gaza and three times as many students are pro-Palestine as pro-Israeli.

https://www.newsweek.com/how-anti-israel-are-us-college-students-what-poll-shows-gaza-1897921

“NNearly two-thirds of college students say they are at least somewhat supportive of pro-Palestinian protests on their campuses”

https://www.insidehighered.com/news/quick-takes/2024/05/08/survey-shows-college-students-largely-support-pro-palestinian-protests

8% is a huge number in fact. It’s as large as the percentage who participated in the anti-war protests against Vietnam in 1969.

There is a large and growing generational gap. It’s far too early for the pro-Israel crowd to be doing victory laps, especially with the Rafah campaign just beginning. Students are being activated by a natural reaction to the horrors they are seeing, not due to anti-Americanism.

Expand full comment
founding

Americans in general are far more sympathetic to the pro-Palestine protests than they were to the Vietnam protestors. Only 10% blames the National Guard for the killings at Kent State, memorialized by Neil Young in Four Dead in Ohio.

Apologies for the firewalled article here:

https://www.washingtonpost.com/politics/2024/04/24/polling-student-protests-vietnam/

“Another Harris Poll, conducted in October 1970, evaluated why Americans thought there was so much discord on college campuses. Most respondents said the war was a major reason, with three-quarters saying it was at least a minor cause of the protests. It was more common for respondents to blame student radicals, troublemakers, and college administrators and faculty than to blame the war itself.”

This is similar to what we are seeing in the overwhelmingly pro-war comments here.

Expand full comment

#2 Too much of this discussion is defensive. Good Progressives (=Neoliberals :)) should be making increased legal immigration, especially of skilled immigrants but in general, a major part of our pro-growth with equity agenda. Of course properly processing (i.e. rejection after a fair consideration) asylum claims is important, but the big gains are in increasing legal immigration.

Expand full comment

This is a fascinating chart showing type of electric generation use by hour. California use of solar and batteries looks great. And compares well to Texas.

Giant Batteries Are Transforming the Way the U.S. Uses Electricity

https://www.nytimes.com/interactive/2024/05/07/climate/battery-electricity-solar-california-texas.html

Expand full comment

Regarding: 3. Battery storage is for real

A possible way forward?

-Utility scale renewable installations utilize onsite/nearby storage installations (battery arrays, or hydrogen to address seasonal intermittence).

-These storage installations discharge to urban centers at night, when the transmission grid is underutilized.

-DER compliant urban grids store the energy in garage batteries, electric vehicles, electric appliances, etc.

-During the day, urban demand is met by DER discharges and incoming renewable energy transmissions on the grid.

Possibly this could reduce the need for transmission grid expansion, which is lagging at the moment.

Expand full comment

"Lab-grown" meat is a manufactroversy. It's not a real problem, no one is thinking about it, but forces us into a moral panic into a conversation we don't need.

Why it's fake: Cultured meat is scientifically possible, but the research and development costs make it so outrageously expensive that you'd need to be a bitcoin bro or a space tourist to even sample it. It will take decades before it would scale to the point where it could be sold for retail.

The founder of Impossible did the closest thing by doing a chemistry experiment to see what does give beef its beefy flavor. It's heme. Impossible breeds a yeast that ferments and develops a meat-like flavor to mimic animal heme and mixes it with soy and peas to give it the texture of ground beef.

Cultured meat would be along this line, except that there must be a figurative or literal sacrificial lamb to use its flesh to synthesize the cellular production of meat the way nature has done it.

If "lab grown meat" sounds disgusting, think about it like using the plant-based meat process to manufacture meat something along the lines of sourdough bread, where there is starter material from an animal, instead of the slaughter of an animal.

Expand full comment

Cultured meat is the kind of scientific breakthrough we need to pursue, because it might actually be economically and ecologically beneficial.

Economically, this means that we would need less resources to produce meat. We could produce much more meat by skipping the middleman (animal slaughter in this case), or devote fewer resources to fatten and feed an animal in terms of land, feed and water. Cultured meat would also produce much less waste product: no bones, blood, fat, viscera or inedible connective tissue to repurpose or dispose of.

Ecologically, it also means we'd be contributing less to climate change since it would reduce the greenhouse gases from both the living animal (farts and burps) and the remnants of the carcass, which when decomposing release methane. A cultured meat manufacturing plant would also be placed closer to the point of consumption, reducing transportation costs and even relying less on imported food.

There's also a health benefit. Cultured meat could be fortified with nutrients, in a process we do now with breads and breakfast cereals. Cultured meat could be produced cholesterol-free; cholesterol is not an essential nutrient, the body makes all the cholesterol it needs and it's a key contributor to heart disease.

Expand full comment

Protests: It may be a small fraction of Zoomers, but that militant percentage is having a disproportionate effect, possibly because it is disproportionately represented among elites. As Rob Henderson would say: Palestine has become a luxury belief. The best evidence of this is that the authorities are far more interested in outing the counterprotestors that attacked the UCLA encampment than prosecuting the encampment organizers who were blatantly violating Jewish students' civil rights for days on end. Clearly, those angry college protestors have friends in high places.

You're starting to soften me up on battery storage, Noah. I still think most solar is a boondoggle (especially mandatory residential rooftop like here in CA) but it looks like you were right about battery technology catching up with the hype for a change. Now the question is, if we build enough solar panels, how long will it be before the eco-warriors start worrying about global cooling from the conversion of all that solar heat into electricity?

On Japan, I wonder what you think of this: https://www.theamericanconservative.com/japans-subordination-to-washington-is-a-disgrace/ I'm not qualified to evaluate it, but I'm hoping someone here might be. It's a perspective I've never heard.

On technology: So the Right wants to ban technological innovation while the Left wants to destroy civilization. What an electoral choice we have!

Expand full comment

Yes, batteries! But not just the tiny ones I use in my garden tools or the suitcase-sized one in my Chevy Bolt or the wall-mounted TV-sized one fed by my solar array. Most people think of those when you mention batteries. But industrial scale batteries (from the size of boxcars to warehouses) are different. For these, size matters less, new technologies are key. https://www.utilitydive.com/news/energy-storage-long-duration-hydrogen-iron-air-zinc-gravity/698158/

Noah's right. These are key to decarbonizing the grid.

Expand full comment

I think by 2050 wall batteries will be as ubiquitous as toilets around the world. They stabilize the grid and reduce the cost of electricity.

Expand full comment

That is a really great article. Thanks. My favorite is the guys trying to make a battery out of raising and lowering really heavy blocks.

Expand full comment

Noah - Have you seen much new, useful analysis lately on the harms of immigration specifically via housing mechanisms?

Saw a piece on Bloomberg about global/European side of this last week. Thinking of how much net migrations is exacerbating housing issues in our perpetual state of deep underbuilding. Obviously on many levels this would be a housing policy issue that gets worse with immigration, but if we aren’t having a rapid YIMBY renaissance it’s a real concern. Thanks for all you do on this!

Expand full comment

Immigration is seen as a key contributor to housing costs and shortages in the UK right now. It may not be accurate, but particularly in Ireland, my understanding is it's becoming a serious political issue. Of course, considering the hate speech laws over there and how they're enforced, I doubt anyone would answer a poll honestly, so you won't really know until the election.

Expand full comment

Immigration is one factor of many among soaring housing prices. Understand though that the housing crisis is global because of real estate appreciating as an asset class.

What the world is seeing is the tension between real estate as shelter and real estate as investment, and the goals are at odds. The price appreciation of real estate has risen faster than wage growth to pay for it all.

The Strong Towns movement is publishing a book about what it's labeled the "housing trap" -- the inherent contradiction of housing being both affordable and an appreciating asset. The problem is that building housing won't help affordability without a shearing of real estate prices. You know, another Great Recession, either a rapid wave of boom-bust cycles or a crash so great that real estate no longer looks good as an investment.

Expand full comment

Tax law can be used to make real estate less attractive as an investment and more attractive as shelter. For example, tax-free homeowner exemption up to $500K; non-owner-occupied single-family residential property taxed at twice the standard rate. Economically, this isn't hard to design. Politically, that's a different problem. Especially where I live in CA, where property taxes are the 3rd rail of politics.

Expand full comment

Real estate also comprises the commercial and industrial markets, which would be left untouched. Part of the problem is the global-financial aspect of real estate price appreciation, making real estate overall overinvested.

Expand full comment

Your point had to do with housing though. I'm less familiar with the commercial and far less with the industrial end. Short of capital controls, you're not going to solve the globalized nature of investments. (To be clear, I would not be opposed to limited capital controls, but that's another huge can of worms.)

Expand full comment

It is all related, but it takes a few links in the chain to be connected.

Homebuilders, multifamily developers, industrial developers, commercial and retail developers are all chasing after the same pot of money from investors, be they traditional banks, institutions (insurance companies and pension funds), oligarchs, sovereign wealth funds, etc.

While the whole spectacle looks so decadent to make the Gilded Age look austere in comparison, in actuality the money doesn't flow like a flooded river. Real estate financing is shockingly conservative.

The financing of real estate favors incumbency, not only in terms of property owners and developers who receive investments, but also in terms of what projects investors are willing to finance.

In terms of housing, in the U.S. you have a glut of single-family home subdivisions in the Sun Belt, where there is plenty of land to acquire cheaply and build on but not necessarily the economy to warrant such rapid growth. You also have rapid economic growth in West Coast cities and the Northeast, but because they were built out in earlier economic expansions, land is costlier to acquire and construction is going to be more time-consuming as well as challenging due to politics and economics.

In all cases, though, you are going to have a mismatch in housing supply because the market can't deliver the right product to match local needs. An economically growing area needs to be able to densify near economic activity, but can't, and when density rises, new housing stock will be expensive and chase the top-of-market. This is why all apartments are luxury apartments now. You don't want to be the only non-luxury apartment on the market.

Even subdivisions on the metro's edge and exurbs (an amenity area, rural area or even a smaller metro area, all of which are latching on to the large metro's commute and labor shed) are building to top-of-market, and this new housing is in competition from people already living in the area as well as people relocating from out of the region or the state. This dynamic sets the regional price floor of real estate. You'd have to do cross-region comparisons and cost-of-living calculations to evaluate whether something is actually expensive for your income and the job sector you are in.

Expand full comment