Readings: Trade, 8s, Kangaroos, Liverpool, and The Simpsons


Free-er Trade

While no-one apparently cares anymore as we lurch toward isolationism and xenophobia, free-er trade remains among the free-est of free economic lunches. That’s the conclusion in an important new study with this remarkable claim: fully liberalizing migration would increase welfare about threefold and would significantly affect the evolution of particular regions of the world.

Granted, these are economists saying this, so they would say that. But the study is compelling, even if highly analytical and model-based, with resulting limitations (about which it is upfront to the point of almost arguing with itself now and then). More broadly, the ideas are rich and provocative, like that under trade liberalization and free movement, Venezuela, Brazil, and Mexico would become some of the most productive regions of the world, and sub-Saharan Africa could rise to first world status by 2090. It’s a remarkable and unsettling piece of work — which will almost certainly affect nothing, other than maybe inspire some excellent SciFi stories.

Accounting Performance Art

I am intrigued by the PwC settlement today with the FDIC over Colonial Bank audits back during the financial crisis. I often argue that accountancy is largely a pomo performance art, sort of self-referential financial theater. This seems that. After all, as former FDIC chair Gruenberg neatly summarizes, “PwC did not detect that hundreds of millions of dollars of assets claimed by Colonial did not in fact exist, had been sold to others, or were worthless”. This is sort of a trifecta of material, undetected financial thingies that PwC was, in principle, being paid to detect.

One wonders, or at least I do, or did, what PwC was doing in lieu of noticing material amounts of non-existent mortgages at a company whose main financial product was mortgages. Perhaps they were distracted, like in the classic “invisible gorilla” experiment, and PwC auditors were busy counting basketballs rather than noticing missing mortgages. Or noticing a gorilla.

Either way, it’s always nice to see audit performance art being performed at its highest level. And, equally, it is appealing to see PwC admit no liability in having apparently missed most of what might matter in doing an audit of a troubled mortgage company’s non-mortgages. Kudos.





  • All five major US sports leagues now have sports gambling sponsors /v @fmtofficesport


I’m a sucker for these sorts of long-run races, so seeing the changing ranking of cities by population for the last five hundred years is remarkable. In particular, I was struck by two things: for how long Istanbul was the largest city in the world; and how recent brief New York’s ascendancy to top spot was.