Friday, July 27, 2018

Yuppie Fishtanks: YIMBYism explained without "supply and demand"


YIMBYism is the idea that cities need to build more housing in order to relieve upward pressure on rents. In Northern California, where I live, YIMBYs tend to get into fights with progressives about market-rate housing. YIMBYs don't want to build only market-rate housing, but they think market-rate housing has to be an important component.

NorCal progressives, in contrast, tend to think that market-rate housing is bad - either they think it lures more high-earners into a city and pushes up rents (induced demand), or they object to private housing developers making profits, or market-rate housing just sounds like cities catering to the needs of richer residents instead of poorer ones. Instead, the progressives tend to support what they call "affordable housing" - either public housing, government-subsidized housing, or privately-subsidized housing mandated by inclusionary zoning.

When defending market-rate housing, many YIMBYs appeal to the idea of supply and demand. If you supply more market-rate housing, the market rate itself will fall, making many previously unaffordable houses into affordable ones. This might be true - in fact, evidence suggests it is true, at least to some extent - but I think it's a weak defense, for several reasons.

First of all, supply and demand is a simplistic model. It assumes a single homogenous good, when in fact everyone knows that housing comes in a bunch of different types. It doesn't take location into account, when everyone knows location is crucially important in urban real estate. And there are some situations, especially labor markets, where supply and demand just seems like a bad model for how the economy really works.

Second, the effect of new supply on rents might not be enough to help working-class families. If you build a ton of new housing and rents only go down by 3% - or go up by 3% less than they would have otherwise - it's not going to do a lot to help the people who progressives really want to help. Because of this possibility, "supply and demand" can sometimes sound a bit like "let them eat cake".

But in fact, I think it's very important to build market-rate housing. And though the forces of supply and demand are probably at work, I don't think the supply-and-demand model captures exactly why market-rate housing is important. So in this post, I want to try to explain the YIMBY position without invoking supply and demand.


Background: Invasion of the Tech Yuppies

The structure of the U.S. economy has changed a lot in recent decades. Knowledge-based industries like tech, medicine, and finance are much more important - for simplicity's sake I'll refer to all of these as "tech". Tech businesses have ever more of an incentive to cluster together in cities, which means that tech workers - who tend to earn high salaries - have been moving into cities like San Francisco.


If they're going to work in the city, these tech workers are going to want to live in the city. Where will they live?

Some will move into shiny new glass-and-steel apartment complexes downtown:


Looks kind of like a fishtank, doesn't it? A beautiful fishtank for yuppies.


But these beautiful giant yuppie fishtanks have limited space. So some of the incoming techies will go looking for apartments in other parts of town - neighborhoods occupied by long-time residents.

Many of the long-time residents currently renting these units are working-class. Many come from disadvantaged minorities. Some are artists or other creative types. 

The incoming techies have lots of money to spend, and landlords - the people who own the units where the long-time working-class residents live - know this. Therefore, they have an incentive to raise the rent, which usually means the working-class residents have to move and the techies will occupy the nice old Victorian apartments pictured above.

Now, often they can't do this, because of rent control. But there are things they can do to get around rent control. They can convert units to condos. They can evict tenants under the Ellis Act. Or they can just wait for residents to move out, then raise rents.

Additionally, not all apartments are subject to rent control, so often this isn't even necessary - landlords can often just raise the rent, which usually results in the replacement of working-class tenants with yuppie newcomers. 

The result: Displacement, gentrification, and an increasing rent burden on everyone not protected by rent control. 


How to Prevent Displacement From the Tech Invasion: The YIMBY Solution

The YIMBY solution to the problem described above is simple: Build more of the pretty glass fishtanks to catch the incoming yuppies as they arrive.


Most of the yuppies would probably rather live in the fishtanks. The fishtanks tend to be located downtown, near to where the yuppies work (SoMa, Embarcadero, etc.), rather than in the older residential neighborhoods. Additionally, the fishtanks are pretty and modern and new, with gyms and common space and other stuff yuppies like. Probably more attractive for the average yuppie than an aging Victorian far out in the Mission or Haight with no built-in community or on-site services.

Even more importantly, long-time working-class residents and struggling artists and disadvantaged minority families are highly unlikely to go live in a yuppie fishtank. That means that every unit of yuppie fishtank housing - i.e., new market-rate housing - that you build will either A) be occupied by a yuppie, or B) sit empty on the market. Landlords want to fill all of their units, so if there are too many fishtanks and (B) happens, they'll drop the rent until more yuppies move in.

Eventually, every yuppie fishtank unit that you build will be occupied by a yuppie.

Now if the new fishtank units catch the incoming yuppies and prevent them from invading long-time residential working-class neighborhoods, that's good!

And if the new fishtank units lure yuppies away from long-time residential working-class neighborhoods, that's also good!

If the new fishtank units instead draw yuppies in from other cities - for example, in the Peninsula to the south - that's not ideal, but also not so bad. It means more yuppies in the city, but they'll be living in fishtanks instead of in long-time residential working-class neighborhoods. In other words, it's a wash - it neither increases nor decreases the total number of gentrifiers. (In any case, I think this is unlikely to happen much. The number of tech yuppies moving to SF is constrained by the number of tech offices in SF - almost no one wants to commute down the peninsula and back every day if they can help it. and yuppies are usually rich enough to be able to live near their jobs if they want.)

So the YIMBY solution to the yuppie invasion isn't - or shouldn't be - just to build market-rate housing anywhere and everywhere. It's more like the following:

A) Build market-rate housing that appeals specifically to yuppies, clustered in specific neighborhoods away from long-time working-class residential areas.

B) Instead of tearing down existing housing to build market-rate housing, replace parking lots and warehouses and other inefficient commercial space with new market-rate housing.

In other words, YIMBYism is about yuppie diversion. It uses market-rate housing to catch and divert yuppies before they can ever invade normal folks' neighborhoods.


Why Affordable Housing Is Not a Great Solution to the Yuppie Invasion

Affordable housing - a catch-all term encompassing public housing, publicly subsidized housing, and privately subsidized housing - is popular among progressives, and is often put forward as an alternative to market-rate housing. 

Although YIMBYs believe affordable housing is good (for reasons I'll explain below), they also believe it's not a very good solution to the yuppie invasion described above. Why? Because affordable housing accommodates gentrification instead of preventing gentrification. 

Suppose you're a long-time working-class resident who gets displaced by rising rents. Now the government offers you affordable housing somewhere else in the city. Well, at least you still have a place to live, and at least you're still in the city you've always lived in, right? But you have to move out of your home, which is expensive and emotionally draining. And you probably have to move to a new neighborhood, where your local ties will be weaker. In other words, it would have been better if you never had to move at all.

So if cities can catch and divert the incoming yuppies (with new market-rate housing) instead of accommodating displaced working-class people, it's much better.


Why Affordable Housing Is Good Anyway

Affordable housing isn't a great solution to the tech yuppie invasion, but YIMBYs still want to build affordable housing. Why? Because affordable housing allows working-class people to move into the city to avoid commutes. 


Building new market-rate housing probably doesn't draw many new yuppies into a city from outside, since if their jobs are outside the city they'd still have to commute; most people would rather not commute, and yuppies can typically afford to live near where they work. But many working-class people are forced to commute from outside the city. Affordable housing changes that equation. It allows more working-class commuters to live closer to their jobs.


NIMBY Solutions to the Tech Yuppie Invasion?

The YIMBY solution of catching and diverting incoming yuppies with market-rate housing (yuppie fishtanks) seems like a good one because it creates a city where everyone, yuppies and working-class folks alike, can live, while limiting the disruption to long-standing neighborhoods and communities. 

But some progressives dream of other solutions, based on strengthening protections against yuppie invasions of long-time working-class neighborhoods. For example, repealing the Ellis Act, making it harder to evict tenants. Or strengthening rent control, making it harder to raise rents when a tenant leaves.

YIMBYs generally support repealing the Ellis Act. Rent control is more ambiguous, since it tends to hurt a lot of working-class people while helping others. 

But initiatives like these, on their own, won't be enough to create a good city for working-class residents. 

When combined with prohibition of market-rate housing development, these initiatives seek to drive yuppies out of a city entirely. By creating an iron-clad, invincible wall around working-class neighborhoods and apartments, and confining them to ever-shrinking, ever-more-highly-priced islands of market-rate housing, this strategy seeks to force yuppies (and possibly their employers as well) to leave for greener pastures.

But this is not a good idea. Driving yuppies and tech businesses out of the city means lower tax revenues. Those tax revenues are essential for paying for city services for the poor and working-class. Public housing, housing subsidies, homeless shelters, drug addiction clinics, social workers, public transit - these things all rely on tax revenues. And tech businesses and yuppies provide those revenues.

NIMBYism, even progressive NIMBYism, doesn't lead to a city that works for everyone. It sacrifices prosperity, and (even more importantly) the social services that prosperity makes possible, in order to avoid the cultural change that comes from having yuppies walking the streets.

That doesn't seem like a trade worth making. A successful city is one that doesn't simply preserve itself in amber, but embraces positive change that will improve the lives of its working class and poor residents. 


Wait - Does This Explanation Really Throw Away Supply and Demand?

Astute readers will notice that supply and demand isn't completely absent from this explanation of YIMBYism. But this explanation contains several major departures from the textbook supply-and-demand theory that you might learn in an Econ 101 class.

First of all, in a typical supply-and-demand model, there's only one kind of housing. In this explanation, there are three kinds of housing - "yuppie fishtanks" (new market-rate housing), long-time resident housing, and affordable housing. Market segmentation is real. This is something activists actually understand better than people who think only in terms of supply and demand.

Second of all, a typical supply-and-demand model of housing ignores location. In this explanation, location is crucial - the YIMBY solution is to build new market-rate housing in neighborhoods like SoMa, so that incoming yuppies go there instead of to neighborhoods like the Mission.

(Now, there are far more complicated economic models out there that capture all of these ideas and more. These models are actually more nuanced and realistic than my explanation here. But it's very hard for most people to think in terms of these models, and these models can also give different predictions depending on their assumptions.)

So when defending the YIMBY position, it's important to go beyond simply yelling "supply and demand". I hope this post gives YIMBYs a language to talk about market-rate housing without having to assume that all housing is the same, or that location doesn't matter. 

Market-rate housing isn't the only solution to the problems facing cities like San Francisco. But it is an important, even crucial part of the solution.

Saturday, July 14, 2018

Noah Smith's Japan Travel Guide


Now is a GREAT time to travel to Japan. The country has really opened up, thanks to Abenomics, a weak yen, and the impending 2020 Tokyo Olympics. New technology has also made it a lot easier to get around the country, and to find cool stuff. Japan is in the middle of a huge tourism boom, and who knows how long it'll last, so you might as well be part of it. Go see the world, take a trip to Japan!

Anyway, for a long time, people have been asking me for tips about what to do when they go to Japan. So instead of re-writing a list of recommendations every time, I thought I'd write a blog post. So here it is: Noah Smith's Abbreviated Illustrated Guide to Travel in Japan.

This list is HEAVILY weighted toward the "urban Japan experience", rather than touristy/historical stuff like temples, shrines, etc. or outdoorsy stuff like skiing and hiking. I've found that Japanese cities are the most distinctive thing about the country, and that people who do the "wander around in the city" thing and hit up some of these attractions on their first trip there tend to have the most fun. 

It's also heavily weighted toward a first-time or second-time visitor who probably doesn't speak fluent Japanese, so it doesn't contain much hole-in-the-wall or out-of-the-way stuff either - i.e., Japan residents or regular Japan-goers will find this pretty "basic". If you're a Japan resident or regular Japan-goer who wants cool hip underground stuff to do and little unknown hole-in the wall restaurants or whatever, hit me up. Or better yet, you show me stuff. ;-)



When to Go

The most popular time to go to Japan is in late March/early April for the cherry blossoms (hanami). Warning: It will be very crowded and expensive. 


July/August is also a great time to go - you can see awesome fireworks and go to little traditional festivals with a bunch of yukata-wearing folk. It's fairly hot and humid. November is also a nice time to visit, and is much cheaper than spring or summer.



Getting Around

Getting around in a foreign country can be a bit of a challenge, but with these handy tips you should have no problem, even if you don't speak a word of Japanese (though you should learn Japanese because it's a cool language!).

Flights: There are lots of random cheap flights to Japan, and you just have to search a bunch to find them. But one trick you might want to try is to fly out of LAX. Try booking a round trip from LAX to NRT (Tokyo), and then booking a separate round trip to and from LAX to your home airport, and see if that saves you some money.

Lodging: Airbnb, at least until recently, has worked AMAZINGLY well in Japan. Many Airbnb owners are commercial operators, rather than owner-occupiers as in the U.S. So for a much cheaper price than a Japanese hotel, you can stay in a fully furnished Japanese apartment! Apartments for 2 or more people are especially cheap and often spacious. However, Japan has just stepped up regulation of Airbnb, and there was one episode where many reservations were cancelled. The cancellation thing should be a one-time event (I hope), but still, you'll have to check to see how available Airbnb is when you make your trip. If you can't find an Airbnb, try staying at a cheap hotel like Solare.


Pocket WiFi: This is incredibly useful. It'll let you use wifi anywhere in Japan, even on trains. This means you'll have a functioning cell phone without having to pay for international data rates (or phone if you use a voice calling app), AND wifi for your laptop. You can rent a pocket wifi from Global Advanced Communications. You pick it up at the airport when you arrive, then put it in an envelope and drop it in a post office box when you leave. An alternative is to get a Japanese SIM card, which is slightly cheaper and doesn't require you to carry around a WiFi, but which will slow down considerably after 7GB of data. If you go with this option, I recommend Mobal. Finally, some Airbnb places come with a pocket WiFi, so if you get one of those, you don't have to pay for data in Japan at all! The only drawback is that you'll have to find the Airbnb place from the airport without data.


Google Maps: Google Maps works incredibly well in Japan. Many Japanese streets don't have names, so you can find yourself wandering around aimlessly for a long time...unless you use Google Maps, in which case you can unerringly walk directly to your destination every time. You can copy-paste Japanese addresses into Google Maps and it will handle them just fine.

Japan Rail Pass: This pass allows you to take any JR train for free. That includes the shinkansen (bullet train), which is the easiest way to go between most cities in Japan. It also lets you ride JR trains within cities, which are especially useful in Tokyo. JR passes come in 1, 2, and 3-week-long varieties. If you're going to travel around the country, this will save you a lot of money, but if you're going to just stay in Tokyo, or just go to one other nearby city, it probably isn't worth it. You can buy a Japan Rail Pass in your own country at an approved location or through a travel agent, or you can buy it in Japan at the airport until March 31, 2019.

Suica/Pasmo Card: Suica and Pasmo are actually two names for the same thing. This is a refillable RFID card that will let you use JR trains AND subways AND private rail lines throughout Japan. The only things you can't use it for are shinkansen and a few other special rapid trains. It's super useful. You can get it at the ticket machines at any train station. That is also where you refill it. Suica/Pasmo cards can also be used at all convenience stores, many drink machines, and many supermarkets! Super useful.


From the Airport: If you fly into Tokyo, use the Keisei Skyliner to get to the city, UNLESS you got the JR pass, in which case use the Narita Express because it's free. If you fly into Osaka, use the Nankai Airport Line.

Local Transportation: You'll mostly be using the train. Taxis are around but they're very expensive. Uber is basically nonexistent. The train stops running between midnight and 1:00 AM, so be careful not to get stranded. In Osaka you can also buy a bicycle if you want, which will run you about $100.

Paying for Stuff: You will need cash in Japan, so keep some on you. Visa cards can be used at a lot of stores and restaurants. Suica/Passmo cards can also be used in many grocery stores and convenience stores. But you will need cash. To make international ATM withdrawals, use the ATM in 7-11, which is pretty ubiquitous, or another ATM chain called Prestia. Google Maps can help you find the nearest 7--11 or Prestia if you're short on cash.

Pronunciation: Japanese is a fun and easy language to learn, but even if you don't know any, it's important to pronounce things right when asking for directions. Lots of things are written out in English letters, but you still have to pronounce them right. All "a"s are pronounced "ah", like in "ha ha". All "o"s are long, like in "so". All "u"s are pronounced "oo", all "i"s are pronounced "ee", and all "e"s are pronounced "eh" like in "pet". "R"s and "L"s are sort of halfway between the two, somewhat like the "R" in Spanish.


Daily Living

Climate Control and Laundry: Almost all rooms have wall AC/heater units. The remote controls are in Japanese, so if you can't read Japanese, use an online guide like this one. Many rooms come with an in-room washer/dryer, but the dryer will probably not actually dry your clothes, so you'll have to hang clothes up on the balcony to dry. An alternative is to use a wash-and-fold service, which you can look for with Google Maps.

Drinks: There are drink machines everywhere in Japan! You can use your Suica/Pasmo card at some; others you'll need cash for. They don't take 5 yen or 1 yen coins.

Convenience Stores: Convenience stores have most of the stuff you need, and they're everywhere. There are a few big chains: 7-Eleven, Lawson, Family Mart, and Sunkus being the big 4. 7-Eleven is the best, since it also has international ATMs (note that 7-Eleven is sometimes "7 & i" in Japan, but otherwise looks the same). Convenience stores have water, snacks, drinks, crappy food, random household stuff, condoms, tampons, etc. You can use your Suica/Pasmo card here. Convenience stores are open 24/7, which is...convenient.


Pharmacies: The big chain is Matsumoto Kiyoshi, which is similar to Walgreens or CVS. There are some other chains too. Some Matsumoto Kiyoshis are open 24/7, others are not.


Supermarkets: There are a ton of supermarkets around. The best one is Aeon, but it's rare. You just sort of have to look around for random supermarkets, they're on main streets. In supermarkets you can buy cheap prepared food, if you just feel like grabbing something quick and don't want to go out.

Food Courts: Next to many big train stations, there are department stores. In the basements of department stores, there are food courts. These are not sit-down food courts like in an American mall; they are take-out. But the food tends to be pretty good, and there's a huge selection. If you need some good food fast, these are a good bet.




Places to Visit

There are too many cool places to visit in Japan for me to tell you even a few of them, and if I do tell you some, you'll all just go to the same places and won't be able to swap stories. So I suggest you wander around, ask friends who live there, look on the internet, etc. etc. But just in case you still want me to tell you some places to check out, here's a short list. 


Tokyo

Much of what you'll visit will probably be on the west side of the city. This is where all the famous "cool" neighborhoods are: Shibuya, Shinjuku, Harajuku, Shimo-Kitazawa, etc. So I recommend staying somewhere near that area, for easy access. You'll mostly use the JR Yamanote line (loop line) to get around.

Shibuya: Remember that one crazy neon-drenched intersection you see in every Western movie or news report about Japan? That's called Shibuya Crossing, but its real name is Hachiko Square. (It used to kick Times Square's ass, before they redid Times Square and turned it into Blade Runner.) Hachiko Square is a convenient place to meet up with people, people-watch, or begin your adventures into Shibuya. Shibuya has tons of good places to eat, lots of giant stores and malls, alleys full of cool little bars and trendy dance clubs, and (weirdly) startup offices. Just go there and wander around. It's the quintessential "urban Japan experience" you're probably looking for.


Harajuku: This is where the fun kids hang out, or used to before it got taken over by tourists. You can still go to cool boutiques like Dog or 6%Dokidoki and see fashion kids of the type advertised on the @TokyoFashion Twitter account. Fight the crowds on Takeshita Street, or wander the less crowded backstreets of Ura-Harajuku. Most importantly, visit Tokyo Design Festa Gallery, a free art gallery with a cool cafe out back. I've met too many interesting people there to count, and the crowd is fairly international. 


Yoyogi Park (Yoyogi Koen): This is Tokyo's equivalent of Central Park or Golden Gate Park. It's right next to Harajuku station on the JR line. The park has a huge and beautiful old Shinto shrine called Meiji Jingu, a huge hangout area where people picnic a lot, and wooded jogging/biking trails. During hanami season in late March/early April it's especially amazing, especially on the weekends. At the south end of the park is a footbridge that crosses to a cool amphitheater area where they have events on weekends, and if you keep walking that way you'll get to Shibuya.


Shinjuku: This maze of neon backstreets is another quintessential "urban Japan experience". If you come out of the east exit from JR Shinjuku station, you'll arrive at an old red-light district known as Kabukicho. In Shinjuku you can also go to Robot Restaurant (warning: it's silly), hit the bars at Golden Gai, explore Japan's most famous gay district at Ni-chome, or even see the last few yakuza if you go to the right monjayaki restaurant. Or just wander around, really.


Akihabara: This is known as "geek city", but it probably won't seem that different from the rest of Tokyo. Go wander around some geek shops, play video games (Taito Station is my favorite arcade), visit a maid cafe (warning: pointless, cheesy and overpriced), etc. But don't expect to be mobbed by anime geeks in full cosplay (for that, go to Comiket or other similar events).  

Shimo-Kitazawa: If you want to go to a hipster neighborhood, this is probably your best bet if you're in Tokyo for the first time. Jake Adelstein lives here, so make sure to bring a sword.
(Note: This is a joke. Swords are very illegal in Japan.)

Odaiba: A giant game center, with some little beaches nearby where people party in the summer. Nice views of the city and bay from the monorail (which is actually not a monorail, interestingly enough).

Ikebukuro: Where the fun kids hang out and do fun stuff now that Harajuku and Shibuya have been mobbed by tourists. Of course now you'll read this guide and mob Ikebukuro too, and they'll have to find somewhere else! Damn general equilibrium!

Shimbashi: Also known as Shinbashi, this is where to go if you want to see and interact with Japan's famous "salarymen" in the after-work hours. Well, this or Yurakucho. Or Kanda. Or Ikebukuro. Damn, Tokyo has a lot of salarymen.

Daikanyama: This is a very cool, modern, "new urbanist" style mini-neighborhood near Shibuya.

Asakusa: This has another cool shrine, and an old-looking district around it, as well as a nice riverwalk.

Roppongi: Here's where to go if you want to hang out with English-speakers, meet seedy characters, or hit the international clubs. Go to the top of Mori Tower for a nice panoramic view of the city. There's a nice art gallery in the building too, which always has surprisingly good stuff in it.

Ageha: Ageha is probably Japan's best dance club, if you like dance clubs. It's a little ways out of the city, so you have to take a bus. 



Osaka

In Osaka, you'll mainly be getting around via subway. The Osaka Municipal Subway is the best-run train system in the entire Universe. In most of Japan, you walk on the left, but in Osaka you walk on the right, so remember to do this, so that you bump into all the people visiting Osaka from other cities. Also, watch out for bicycles. 

Umeda: Umeda is Osaka's answer to Shinjuku, but is actually kind of what Shinjuku was like before it got mobbed by tourist hordes. Lots of great food and cool neon streets. Visit the Hep Five mall and go up on the ferris wheel to get a nice view of the city.


Namba: Even cooler than Umeda. See the Glico Man and the other big neon signs next to the Hikakebashi bridge, and walk around the riverwalk there. Go to Dotonbori street and eat some yummy food and go to cool shops. Walk down Namba Walk, a covered shopping arcade, all the way up to Shinsaibashi (where there are many good restaurants and clubs). Or go underground and wander the endless vast subterranean shopping centers. Or head over to Nipponbashi (where I used to live) and go shopping for electronics. You really can't miss, in Namba. 


America-Mura: This mini-neighborhood, near Namba in the south of Osaka, is called "America town", but is neither American nor a town. It IS, however, a very cool place to hang out, with fashion shops and fashion kids in the daytime and cool clubs and bars at night. The streetlights look like robots, and one building has a giant clown on it. Go catch a live show at Sunhall, which was a rockin' place a decade ago and probably still is. Or buy cool clothes at Tom's House (or anywhere else, really). Or go buy rock & roll records at Time Bomb. Or just hang out in Triangle Park, which isn't actually a park, but more of a concrete slab where kids sit around. In Ame-Mura you can almost feel the ghost of young Noah Smith wandering around taking pictures of fashion kids and asking for band recommendations...


Osaka Castle Park: Also known as Osaka-jo Koen, this is a big nice park with a castle at the center. The castle has been destroyed and rebuilt multiple times, and is now a facsimile, but the park is really great and has fun people to meet and excellent views of the city. And lots of stray cats.


Tennoji Zoo: A zoo that has some Asian animals that you might not see as much in Western zoos.

Sakuranomiya: The best place to do hanami if you're there for cherry blossom season.


A Few Other Places

Kyoto: Everyone likes to go to Kyoto and see the temples and shrines and geisha (who are actually not geisha but who cares). If you do that, make sure to go to Kiyomizu, Yasaka, and Gion, and then Kinkakuji and/or Ginkakuji if you want even more traditional stuff. If you'd rather do something more hip in Kyoto, go hang out on the Kamogawa riverbank.


Okunoshima: This is an island full of bunnies. It takes a day to get there and a day to get back. You decide if it's worth it, for an island full of bunnies.


Hakone: A town with a bunch of onsen. If you want the real "country ryokan and onsen-hopping" experience, go here. You can also take a bus or taxi to a tea shop that has great views of Mt. Fuji. But if you want to see my favorite onsen in Japan, go to Kawayu in Wakayama south of Osaka, and visit the senninburo (giant outdoor river bath). 


Himeji: Possibly the only real samurai castle in Japan. Unfortunately, samurai were quite short and didn't have access to much metal or other materials, so the castle consists mainly of plain wooden corridors that are too small to stand up in. It also has a haunted well. 

Really, I'm the wrong person to ask about touristy stuff around Japan, since I don't do a lot of touristy stuff. Places like Sapporo, Okinawa, Hiroshima, Mt. Fuji, etc. are pretty famous tourist destinations, but I've actually never been to them.


Food to Eat

The problem with Japanese food is that A) there is a ton of amazing stuff, but B) the traditional stuff that people typically go for is not the best, and C) there is a lot of bad stuff too, so if you go around trying random stuff you also won't have the best experience. On top of this, I'm a bit afraid of sending too many people to a few awesome restaurants that I know, for fear of swamping them and forcing them to become uncool tourist attractions. So writing a Japan food guide is tricky. Instead, I'll focus on types of food to try, and mostly let people find their own stuff, recommending only a few places. To search for good food, use Google, Tabelog, and Tripadvisor.

Izakaya: The best food in Japan is actually found at izakaya, which are basically Japanese tapas restaurants. The problem is that lots of izakaya are cheap chain restaurants - good for parties, but not exactly fine dining. But the slightly upscale izakaya are the place where real creative cuisine happens in Japan - in fact, not eating at izakaya is the biggest food mistake that tourists make. But there is such a dizzying array of izakaya that it's impossible to give any general guidelines for how to find the good ones. Just two of the many that I'd recommend are Teppen in Shibuya and Fumoto Akadori in Tamachi. If you must go to a chain, go to Nijyu-Maru or Za-Watami.

Ramen: Everybody loves ramen, but you should definitely eat ramen in Japan, because it's just...better. There are two basic types: A) ramen without a ton of fat in it, and B) ramen with a ton of fat in it (aburamen). For normal ramen, a very good place is the most famous touristy place, Ichiran. For fatty aburamen, my favorite is Kyushu Jangara Ramen in Harajuku. Ramen is one of the rare foods that's as good in Tokyo as in Osaka. There's actually better stuff out there too - ramen gets as fancy (and as snobby) as you like.


Nabe: Japanese hot pot. Really damn good. Served year-round but more popular in the winter months. Try chanko nabe, the traditional food of sumo wrestlers. 


Yakiniku: Barbecue! Japan does it very well. This can include pricey wagyu, Korean-style stuff, or weird seedy places that are difficult to describe. Try them all! A favorite of mine is Shibaura, not to be confused with the neighborhood of the same name.


Okonomiyaki: A bready cabbage pancake with meat or other stuff inside and sweet barbecue sauce and mayo on top. Do NOT eat this in Tokyo; eat it only in Osaka. 


Kaitenzushi: This is what Americans call "sushi boat" - sushi on a conveyor belt. Japan does it better than anywhere, of course, and it's actually pretty cheap. Genrokuzushi in Osaka is the best, and Heiroku Sushi near Harajuku is fun and touristy and good.

Monjayaki: This is a Tokyo specialty - a gooey hash made on a griddle at your table. The best places are in a neighborhood called Tsukishima. 

Kaiseki: This is a kind of restaurant where you get a long series of very small, very well-presented dishes. It's fairly expensive.

Italian food: Japanese Italian is different from what you'll get in the States or elsewhere. For lunch, little Italian eateries can't be beat. Il Buttero in Shibuya is a good example. 

Beer: Japan has gotten into the craft beer game, and there are lots of nice places where you can try good stuff. My personal favorite is Craftheads in Shibuya. Weirdly, Japan is into craft pilsners, which you don't see a lot of, so that's worth trying.

Sake: There are too many awesome sake places in Japan to count. The key is to try "amakuchi" and "karakuchi" sake, to avoid just getting the dry-tasting stuff we usually get in America. Also, of course, try a bit of nigori. 

Crepes: The best place to eat Japanese crepes is probably on Takeshita St. in Harajuku, or Namba shopping arcade in Osaka.


Drinks: Drinks I recommend include Pocari Sweat (sports drink), Bikkle (yogurt drink), and royal milk tea (especially the Ko Cha Ka Den brand found in Coca Cola drink machines). My coffee drinking friends strongly recommend Boss Coffee.


Snacks: A great salty snack is Jagariko, potato sticks that come in a small paper tub. A great sweet snack is Choco Takenoko, small cones of graham cracker dipped in chocolate. Other stuff, like Pocky, you're probably used to already.



Fun Stuff To Do

This is just a random list of fun stuff to do in Japan. Some of this is redundant to stuff above.

Shell out some money and go to a music festival like Fuji Rock or Sunset Live.

Shop for cool clothes in Shibuya, Harajuku, or Ame-Mura.

Buy some fireworks at a corner store and shoot them off in the park (legal!).

Drink on the street or in a park (legal!).

Shop for kitschy fun stuff at Village Vanguard.

Go to a rabbit cafe, an owl cafe, a cat cafe, or whatever type of animal cafe you can imagine. It probably exists. Just Google it.

Play goofy video games at Taito Station

Go see the awesome art at Design Festa (and don't miss Design Festa Gallery, open year-round!). 

Visit the Shibu House art incubation space (you have to email them for an invite).

Take a riverboat cruise around Osaka or a boat cruise around Tokyo Bay.

Walk around the huge underground shopping malls in Osaka and get totally lost.

Picnic in Yoyogi Park or Osaka Castle Park.

Go to a rave, which is still probably fun even now. Or go clubbing at Ageha

Go to a live house (music club) like Sunhall, Fandango, or any of the places in Shimokitazawa.

Go to a summer festival. Or see some amazing Japanese fireworks, which often put the 4th of July to shame.

And obviously, go to a park if you're there for cherry blossom season. In fact, just live in the park. Camp out there every day. Meet all the people. It will make you happy.


And there you have it! Noah Smith's Abbreviated Illustrated Guide to Travel in Japan! This guide will be updated with random recommendations over time, but those are the basics. Happy travels, and post pics!



Izakaya List

I asked friends of mine for izakaya recommendations...I will list them as they trickle in. Places I can personally vouch for are marked with an asterisk..

1. Seigetsu*

2. Nozaki Saketen*

3. Bakushuan

4. Donjaca

5. Tamakin Roppongi*

6. Uratsubaki*

7. Maru Aoyama

8. Teppen

9. Fumoto Akadori

Saturday, June 30, 2018

Book Review - "The Space Between Us"


"Hey, there ain't no space between us!"
- a flight attendant who saw me reading this book


This is a very important book about a very important topic (segregation and race relations). It is also a book that strongly agrees with my priors about how the world works. And not just my priors, but with my desires - I want segregation to be a bad thing. So because I'm so biased in favor of this book's thesis, I'm going to try to be especially hard on it in this review. Just realize that that's what I'm doing here. You should absolutely read this book. The research it explains is eye-opening, well-executed, and very important for our national future. And the theory that Enos weaves to explain his observations probably captures important features of reality, and deserves to be a central part of our national discussion.

Having said that, let me proceed to being overly critical.


The Basic Idea

A very simplified version of Enos' basic theory goes like this: Racial conflict is exacerbated by segregation, proximity, and outgroup size. In other words, when you have a bunch of people living very close to you, but who are also kept separated from you, you start to view them as an enemy group, and you vote and behave accordingly.

You can easily imagine a situation like this. Suppose you live in an all-Protestant neighborhood, separated from an all-Catholic neighborhood by a wall. The wall makes it easy to think of them as a hostile enemy tribe. But since the "enemy" is right there, just over the wall, in great numbers, you live in fear of them.

Enos delves into the psychology of why this might happen, but the basic idea is not hard to comprehend. 

One subtle but crucial point is that Enos thinks the impact of geographic segregation is distinct from the impact of contact. In other words, simply interspersing people of different races will reduce tension independently of how they interact with each other, since interspersing people reduces the degree to which they think of each other as belonging to separate groups. 

It is this last part of the theory that, in my opinion, ends up being the weakest link in the chain, with important and unsettling consequences for policy.


Testing the Theory

There's no way to test this theory directly other than to design and populate cities from scratch. Instead, researchers like Enos have to rely on four limited techniques of observation:

1. Correlational studies

2. Lab experiments

3. Natural experiments

4. Randomized controlled trials

Each of these approaches has its limitations. 

Correlational studies are subject to selection problems and lots of other types of confounding effects. What we really want to show is causation.

Lab experiments can demonstrate that a stylized version of a social science theory holds in a laboratory setting. But the real world may be very different than the lab, in a lot of ways that matter. The experiment might just be a bad analogy for the real world - for example, when people claim that a few undergrad students trading in an econ lab for stakes of $10 is not similar to a real-world market with high stakes, repeated interactions, and knowledgeable participants. Also, the real world may simply have so much else going on that an effect identified in a lab, though real, just isn't very important. 

Natural experiments are great (as long as you correctly identify a natural experiment instead of imagining one exists when it didn't really). But the limitation of natural experiments is that they don't measure exactly what you want them to. They are found by accident, so they're never quite what you want. And they can never be precisely replicated in different contexts, like lab experiments can.

And RCTs are limited by size. If you could get funding (and IRB approval) to make whole new cities, it would be easy to test the effects of geography on race relations. But in the real world, you're stuck with small stuff, like sticking a couple of guys on a train platform. These small-scale RCTs don't always scale up, and there's lots of stuff you can't control, and they're expensive to replicate in different contexts.

Of course, researchers know about all of these limitations, and Enos explains them at length in "The Space Between Us". And he does exactly what a researcher ought to do when faced with these limitations - he uses all four methods. 

But even using all four methods doesn't mean you can verify a social science theory as big and sweeping as Enos'. Even the most diligent, careful, brilliant researcher can sometimes seem like a master swordsman hacking away at a boulder.

Despite these limitations, Enos does - in my opinion - convincingly demonstrate two-thirds of his theory. He does show that the size and proximity of an outgroup pretty predictably generate negative feelings toward that outgroup. But the third part of his theory - the idea that geographic segregation plays a big role, above and beyond the impact of human interaction, in determining which groups get defined as an "outgroup" in the first place - is harder to demonstrate. And it's here that I feel Enos; methods, though probably the best available, don't end up being conclusive.

This is due to two interrelated problems: A) the question of contact vs. context, and B) the problem of scale. Both are problems that Enos discusses extensively, but in the end I don't think there's an easy solution. 


Context or Contact?

"Contact" is human interaction. "Context" is the overall situation humans are in - in this case, where people live. There is lots of evidence that extended contact with people of other groups gives people a more positive attitude towards those other groups (though some kinds of contact may be more effective or less effective at this task). Negative contact, meanwhile, can increase prejudice. Enos' theory, however, is about context - it's about living arrangements having the power to change attitudes above and beyond the effect of direct interaction.

The problem is that it's very difficult to separate contact from context, observationally. In a lab, you can control the two - you can have people sit in chairs not talking to each other, or allow them to talk. But in the real world, it's hard to tell who's interacting with whom. If you put Protestants and Catholics next to each other in a city and you see a deterioration in relations between the two, was it due to proximity (Enos' theory) or due to some kind of negative interaction that sprung up between the two? If you see that desegregation leads to an improvement in race relations, was it because people got used to each other after chatting on the street, or because desegregated living arrangements made group differences less salient (Enos' theory)? Hard to tell.

Sometimes context and contact aren't even conceptually distinct. For example, take Enos' famous Boston Train Experiment. In this experiment, Enos sent Spanish-speakers to train stations in Boston, and found that observing Spanish speakers made Anglophone whites more likely to take a hard line against immigration.

Was this an experiment about contact, or context? The title of Enos' paper is "Causal effect of intergroup contact on exclusionary attitudes", which would seem to indicate that it's the former. But in "The Space Between Us", Enos writes that he "altering both space and contact", "increasing socio-geographic impact", and "moving Boston to the right on the horizontal axis of the plane of context" (p. 110). He thus claims that the Train Experiment altered context - that it didn't just represent an interaction between Anglo white Bostonians and Spanish speakers, but that it actually made those Anglo white Bostonians feel like Spanish speakers had moved in next to them. Enos thus claims this experiment as evidence for the impact of context on racial attitudes.

The truth is, we don't know which it was. It might be that the Anglo white train commuters were annoyed at the experience of hearing a language they didn't understand, and that Enos was therefore measuring a negative contact effect. Or it's possible the Anglo white train commuters really did feel like their neighborhoods were becoming more Hispanic. (Asking additional survey questions might have helped differentiate these two hypotheses, but those responses might not have been completely reliable.)

Enos says that when possible, he attempts to control for intergroup contact when measuring the effect of context. This is the right approach, but the problem is that it's often impossible outside of a lab. The same issue crops up in some of the other studies Enos describes in the book. Personally, I think that Enos theory describes a real phenomenon - context matters, and probably in the way Enos describes. The lab experiments Enos runs, together with his correlational studies, add to the pile of circumstantial evidence.

But the fact that all the ecological causation studies involve a lot of contact makes it hard to identify and validate Enos theory. And there's a second problem that directly impacts the theory's potential usefulness: the problem of scale.


Proximity or Segregation?

Enos' theory is that all else equal, proximity increases racial tensions, and segregation increases them as well. But how do you tell the difference between the two? If a black family moves in nextdoor to me, is that decreasing segregation (which Enos thinks should soften racial tensions) or increasing proximity (which Enos thinks should heighten racial tensions)?

In a very nice diagram on p. 26, Enos explains the difference between desegregation and proximity. In one panel, the white and black dots are all clumped together, but the two clumps are very close. In another, the white and black dots are interspersed:


Visualized thus, the distinction seems to make sense. But what if we zoom out? What if each clump becomes a dot, and the clumps become interspersed? A high-segregation, high-proximity situation (bad in Enos' theory) would then become a low-segregation, high-proximity situation (not so bad in Enos' theory), just by zooming out and considering a different scale.

To put this another way, imagine a neighborhood where every block is either all black or all white, but the white and blacks alternate. Is that integrated or segregated? Suppose you think it's segregated. Now change it so that each block is integrated, but each building is either all black or all white. Is that integrated or segregated? Note that if we're free to keep increasing the resolution of our segregation measures, so that every "desegregation" still results in a "segregated" distribution, then each "desegregation" is just an increase in proximity (bad in Enos' theory).

The lack of any guide to what resolution we should use to measure segregation means that this resolution can be used as a free parameter, to make the overall theory ("proximity bad, desegregation good") fit almost any outcome. Enos is definitely tempted to do this at times. On p. 203 he writes:
[I]n fact, typical measures of segregation probably understate the actual segregation in Los Angeles because much of the separation between Latinos and Blacks happens at a much finer level, alternating from block to block within neighborhoods, and our measures of segregation are not equipped to capture this.
And on p. 223:
As populations became intermixed in closely segregated blocks, proximity between groups increased.
What is desegregation, if not intermixing populations?

And on p. 20:
For my purposes, though, there is no single "right" unit [of geographical area], but rather the psychologically salient local environment of each individual. 
But if the researcher is free to guess what environment is salient, how can the theory be tested?

Throughout the book, Enos is consistently better at measuring the impact of proximity than the impact of segregation. His most eye-opening and well-designed study is a 2015 paper looking at how white people in Chicago changed their voting patterns after nearby mostly-black housing (such as the Cabrini-Green Homes project) was torn down and poor black residents dispersed. Enos finds that white people who lived near the projects voted less, while white voters far away from the projects didn't change. It's a natural experiment, and is thus a powerful demonstration of how the proximity of an outgroup can raise racial threat. Enos measures proximity by physical distance, rather than any predetermined unit of area, which lends credence to his finding.

But while researchers can use distance to measure proximity in a study like this, they can't use it to measure segregation. Segregation, unlike proximity, has no natural units, so to measure it we have to specify a resolution at which to measure the dispersion or concentration of groups of people.

Ideally, that resolution should be included as a parameter in a quantitative model, along with proximity (represented by distance), relative size, and maybe some other variables. The segregation-resolution parameter could be estimated on one dataset (say, Chicago), and then tested on other data sets (say, New York City, Los Angeles, etc.). If the segregation resolution that worked in Chicago also worked to predict racial attitudes in NYC and L.A. and elsewhere, it could be treated as a structural parameter - a more-or-less universal constant of human psychology.

Of course, this is a lot easier said than done. It requires extremely high-resolution datasets on where people of various groups live. AND it requires natural experiments in multiple cities in order to validate the model out-of-sample. Much much easier said than done.

But in the meantime, we're left to wonder...and worry.


The Question of Policy

The overarching question of "The Space Between Us" is whether or not Hispanics and other Americans will experience racial conflict in the years and decades to come - and, even more importantly, how to prevent or reduce this conflict. Should we implement initiatives designed to get Latino and Anglo populations to mix more? Would that exert a psychological effect that would reduce the salience of the difference between the two groups, causing them to start to think of themselves as one single group? Or would it exacerbate the backlash that led to Trump's election?

Take Enos' statement on p. 223, recounting a case in Los Angeles where "as populations became intermixed in closely segregated blocks, proximity between groups increased." According to his theory, that's a recipe for conflict. If block-by-block segregation is even worse for race relations than neighborhood-by-neighborhood segregation (because of higher proximity), what does that say about the prospect for the success of federal housing desegregation initiatives? If these resulted in "populations became intermixed in closely segregated blocks", would that backfire and make race relations worse?

It's because of this question - which "The Space Between Us" doesn't answer - that the book ends up having an uncomfortably alt-right sort of undertone. Enos provides lots of evidence about why proximity between racial groups induces conflict - a staple of alt-right thinking - but little evidence that desegregation could be used to reverse the problem, or even what that would entail.

In fact, Enos' otherwise wonderful diagram on p. 26, showing the difference between proximity and segregation, has a very disturbing picture in the lowest panels. When illustrating a "low proximity, low segregation" situation - i.e., what Enos thinks would minimize racial conflict - it displays a dense clump of white dots at the center, surrounded by a far-flung scattering of black dots:


Not exactly what I think of when I think of "desegregation". And not exactly the racial-geographic future I imagine for a tolerant, integrated America.


Back to Contact

Enos' book does offer a ray of hope regarding America's racial future: Tuscon, Arizona. In the final chapter, he describes how Tuscon has achieved much more harmonious relations between Anglo whites and Hispanics, through long-term positive interaction between the two groups. But he worries that in the rest of America, far-flung suburban development patterns and the increasing social isolation described by Robert Putnam will conspire to prevent this sort of long-term positive conflict, leaving Anglos and Hispanics permanently and bitterly divided.

In other words, Enos' good and bad visions for America's future depend not on context, but on contact. He doesn't propose large-scale desegregation initiatives (perhaps because of the measurement difficulties described above). Instead, his vision of racial tolerance relies on something outside the scope of his theory: long-term positive contact.

And in fact, this seems like exactly the right approach. Enos' theory may be right - and in fact, in spite of the measurement difficulties I still think it is right, and that there is some structural psychological scale at which segregation operates. But that doesn't mean it's helpful.

In Enos' theory, there are basically three ways to reduce racial conflict:

1. Reduce proximity between races. This sounds scary and bad.

2. Reduce the size of minority outgroups. This sounds even more scary and bad.

3. Reduce segregation. This is obviously the good option. But measurement difficulties mean that it's hard to know how to do desegregation right.

So instead of trying to use context-based theories to heal racial divides, it seems like we should use contact-based ones - in other words, we should do desegregation in a way that's designed to facilitate positive long-term contact among people of different races.


A Big Complicated World

Fortunately, there are probably additional ways to address the problem of race relations in America. Enos' book, like many books that are centered around a theory, tends to ignore or downplay all the other factors that affect attitudes toward outgroups. For example, in America, black-white relations are deeply affected by the history of slavery, Jim Crow, lynchings, race riots, and other terrible events; that will make Anglo-Latino relations in Phoeniz different from black-white relations in Chicago in ways Enos' theory doesn't describe. When measuring general attitudes towards outgroups, relative amounts of wealth and political power - which Enos touches on only lightly - should be taken into account as well.

This isn't a problem with "The Space Between Us", it's just a natural limitation of this sort of book. When reading it, you have to keep in mind that there's a lot of other stuff going on in the world.

But that also offers a reason for hope. There are probably many ways of improving race relations that don't involve the expensive, politically difficult, long-term process of changing living patterns and urban development. Geography is undoubtedly a big factor, but it's not an iron law that governs everything that happens to our society.


Anyway, that's it for my overly critical review. Just remember to put these caveats in context (no pun intended). "The Space Between Us" is definitely a book worth reading - the research it describes is both well executed and eye-opening, and the theory it puts forth probably describes a very real phenomenon. 

Sunday, April 01, 2018

DeLong vs. Krugman on globalization


I'm going to do the inadvisable, and argue with Brad DeLong. Hopefully this will turn out OK, since it's in response to Brad doing the inadvisable and arguing with Paul Krugman (thus breaking at least two of his own rules).

The topic is globalization. Krugman has a new essay in which he lays out what seems to be a rapidly crystallizing conventional wisdom on the recent history of globalization. Some excerpts:
[D]uring the 1990s a number of economists, myself included...tried to assess the role of Stolper-Samuelson-type effects in rising inequality...[these analyses] generally suggested that the effect [of factor price equalization from globalization] was relatively modest, and not the central factor in the widening income gap... 
[T]he basic fact in the mid 1990s was that imports of manufactured goods from developing countries [were only] around 2 percent of GDP....[T]his wasn’t enough to cause more than a few percent change in relative wages... 
In retrospect, however, trade flows in the early 1990s were just the start of something much bigger... 
Until the late 1990s employment in manufacturing, although steadily falling as a share of total employment, had remained more or less flat in absolute terms. But manufacturing employment fell off a cliff after 1997, and this decline corresponded to a sharp increase in the nonoil [trade] deficit, of around 2.5 percent of GDP. 
Does the surge in the trade deficit explain the fall in employment? Yes, to a significant extent...[A] reasonable estimate is that the [trade] deficit surge...explains more than half of the roughly 20 percent decline in manufacturing employment between 1997 and 2005...[S]oaring imports did impose a significant shock on some U.S. workers... 
The 90s consensus, however, focused almost entirely on asking how the growth of trade had affected the incomes of broad labor classes, as opposed to workers in particular industries and communities. This was, I now believe, a major mistake – one in which I shared... 
This is where the now-famous analysis of the “China shock” by Autor, Dorn, and Hanson (2013) comes in...[T]he effects of rapid import growth on local labor markets...were large and persistent...
So does this mean that...trade war would be in the interest of workers hurt by globalization? The answer is, as you might guess, no... rapid change appears to be largely behind us: many indicators suggest that hyperglobalization was a one-time event, and that trade has more or less stabilized relative to world GDP... 
So while the 90s consensus on the effects of globalization hasn’t stood the test of time very well, one can acknowledge that without accepting the case for protectionism now. We might have done things differently if we had known what was coming, but that’s not a good reason to try turning back the clock.
In other words, the new conventional wisdom on trade and globalization can be summed up as:

1. Trade was pretty much good until the late 90s or 00s,

2. The China Shock was unprecedented, and hurt lots of workers in America and other rich countries, and

3. Now the China Shock is over, and a trade war would be bad news.

This is a story I myself have told, in a series of Bloomberg posts.

DeLong is not having it. He has a long essay in which he claims that the supposed negative effects of globalization in the 2000s were, instead, entirely due to bad macroeconomic policy.

I sagree with much of what DeLong writes, but I also disagree with some of it. Here's a point-by-point breakdown of the parts that strike me either as questionable or as not completely to-the-point.

DeLong:
I think that from the early 1970s to the mid-1990s international trade, at least working through the Heckscher-Ohlin channels, put less than zero downward pressure on the wages of American "unskilled" and semi-skilled workers...From the early 1970s to the mid-1990s the relative wage levels of the then-current sources of America's manufacturing imports were rising more rapidly than new low-wage sources of manufacturing imports were being added. The typical American manufacturing worker faced less low-wage competition from imports in the mid-1990s than they had faced in the early 1970s.
DeLong thinks this contradicts Krugman, but I don't think it does. Krugman is considering only the latter part - the addition of new low-wage trading partners (and the effect of this, even considered in isolation, was small). I think Krugman would agree with DeLong that erecting trade barriers that prevented the entry of new low-wage trading partners into the global trading system in the 1970s, 1980s, and 1990s would have had net negative effects that far outweighed any positive Stolper-Samuelson effects.

DeLong:
[W]e could have protected Detroit and Pittsburgh from the consequences of their managerial and technological failings—but it would have been at immense cost for the rest of the economy, a very unfavorable benefit-cost tradeoff. 
In fact, the U.S did quite a lot to try to protect Detroit and Pittsburgh. We jawboned Japan into appreciating the yen and implementing Voluntary Export Restraints, and enacted all kinds of protectionist measures toward European steel. The protectionist measures probably failed to help U.S. steel or auto companies, or their workers, in the long run. But there is the possibility that it was these measures that prompted Japan to start building its car factories in the United States. Most Japanese cars sold in the United States are now also made in the United States, which has sustained quite a number of manufacturing jobs.

Meanwhile, DeLong overlooks the possibility that U.S. research spending, intended as a protectionist industrial policy measure, led to positive externalities that helped the U.S. technology industry become as successful as it is today. We tend to think of manufacturing's importance in terms of the good blue-collar semi-skilled jobs of the 1950s, but I think this perspective is severely limited. There are a number of reasons we might want high-value-added manufacturing to stay in the United States that have nothing to do with factory employment - it generates local multipliers, it creates products that are easy to export, and it may have a beneficial effect on the overall productivity growth of the economy.

DeLong:
[T]he coming of "hyperglobalization" strengthened opportunities for U.S. workers without formal education to find jobs where their skills, experience, and tacit knowledge could be deployed in ways that were highly productive.
For manufacturing workers, this seems to be directly contradicted by Autor et al.'s "China Shock" paper, which shows that workers exposed to Chinese imports tended to experience greatly reduced lifetime incomes. (Autor et al. also claim that the China shock had negative aggregate employment effects, though this claim is heavily model-dependent and the model is kind of iffy.) In any case, DeLong's claim that globalization in the 2000s improved productivity for U.S. workers overall is in need of some empirical support. There are papers that do say that Chinese import competition spurred U.S. innovation, but this doesn't necessarily support a story about beneficial worker reallocation.

DeLong:
What "hyperglobalization" did do was provide the top 1% and the top 0.1% with another lever to break apart the Dunlopian labor relations order, break the Treaty of Detroit, and redistribute the shared joint product from highly productive mass production backed by valuable communities of engineering practice upward in the income distribution. But there were many such levers in the U.S. from the 1970s to today. And "hyperglobalization" was, as I see it, one of the weakest and shortest of them.
This is another claim in need of evidence. It's true that unionization started declining in the U.S. since before globalization or hyperglobalization really got underway. But it's also possible that the U.S. weakened its pro-union laws and law enforcement because of fear that union wage demands would kill American competitiveness in the face of increasing import competition.

More importantly, in absolving globalization of the blame for rising inequality, DeLong ignores the cross-country evidence. Here are some graphs of the Gini coefficient of disposable income in various rich countries.

Graph 1:

Graph 2:

It seems highly unlikely that market fundamentalism and plutocracy were such a potent mind-virus or political movement that they simultaneously prevailed not only in the United States, but in Sweden, Denmark, France, Germany, and Japan.

The global nature of the runup in inequality across countries with very different policy regimes implies that it was something global - some combination of trade and technology - that did the trick. To write trade out of the equation and to blame technology mostly or entirely seems suspect, at least without solid empirical evidence. Having read a lot of papers on this topic, I'd say there's very little consensus.

DeLong:
Moreover, from the perspective of the country as a whole and from the perspective of many of the communities affected, the China shock was not a big deal for local labor markets. Yes, people are no longer buying as many of the products of American factories as Chinese imports flood in. But those selling the imports are turning around and spending their dollars investing in America: financing government purchases, infrastructure, some corporate investment, and housing. The circular flow will it: the dollars are of no use outside the U.S. and so the dollar flow has to go somewhere, and as long as the Federal Reserve does its job and makes Say's Law roughly true in practice, it is a redistribution of demand for labor and not a fall in the demand for labor.
The idea here is that trade deficits involve increased foreign financial investment into the United States, because a trade deficit is matched by a current account deficit. But an increase in foreign portfolio investment does not imply an increase in business or government investment (in things like infrastructure, housing, or whatever). In fact, if a trade deficit corresponds to a decrease in national savings - as it did in the 2000s, during "hyperglobalization" - then U.S. business/government investment goes down, not up. More generally, the idea that real investment is sensitive to the cost of capital is pretty suspect. Some people claim that cost of capital matters a lot, but the evidence for this is very iffy. 

DeLong:
And here is the kicker, as I see it: the types of people and the types of jobs funded by the imports of the China shock looks very much like the types of people and the types of jobs displaced from the tradeable manufacturing sector. Yes, some local labor markets got a substantial and persistent negative shock to manufacturing, often substantially cushioned by a boost to construction. Other local local labor markets got a substantial and persistent positive shock to construction. And on the level of the country as a whole the factor of production that is (truly) semiskilled blue collar labor does not look to me to have been adversely affected.
Again, the idea that displaced manufacturing workers got just-about-as-good jobs in other sectors (like construction) is directly contradicted by the Autor paper. In fact, job displacement of any kind seems to hurt lifetime income

As for semiskilled blue collar labor being adversely affected or not, it's certainly true that wages and income for the lower quintiles of the distribution stagnated during the 2000s, before taking transfers into account. Autor et al. haven't proven that China was the big culprit behind this stagnation, but others haven't disproven it either. Krugman, for his part, seems only to claim that it was one nontrivial factor. It doesn't make sense to dismiss it quantitatively until better evidence is in. 

DeLong:
And this gets me to my fifth quarrel with Paul Krugman here. As I see it, the most important thing we missed about globalization was how much it required support from stable and continuous full employment.
If globalization increases the costs of fiscal austerity and tight money, that seems to be a mark against it, even if you're totally against austerity and tight money. Policy is stochastic. Bad leaders get elected, foolish officials get appointed, and humans make mistakes. Anything which makes the economy more fragile in the face of random bad policy draws seems like it's imposing a cost on the economy, since we can't always count on getting good draws. 

So I agree with DeLong on a number of issues here. It's important to have good countercyclical fiscal and monetary policy. Deregulation-fueled financial crises, and bad policy responses to these crises, are scarier than globalization. We should think about globalization's hard-to-measure positive effects in addition to its easier-to-see negative effects. 

But in his zeal to defend globalization from the Trumpists, I think Brad has overstated the case against the new conventional wisdom articulated in Krugman's essay, and overstated the case for not worrying about China Shock type cases. And thinking of the alternative to free trade as being base, crude, Trumpist protectionism rather than research-heavy industrial policy aimed at boosting high-value-added exports - certainly not a way of thinking unique to Brad, but rather a false dichotomy that is endemic throughout the economics commentariat - seems like a failure of our collective vision.