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washparkhorn

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Posts posted by washparkhorn

  1. AI is the ultimate deflationary headwind.

    https://economics.mit.edu/sites/default/files/inline-files/Noy_Zhang_1.pdf
     

    We examine the productivity effects of a generative artificial intelligence technology—the assistive chatbot ChatGPT—in the context of mid-level professional writing tasks. In a preregistered online experiment, we assign occupation-specific, incentivized writing tasks to 444 college-educated professionals, and randomly expose half of them to ChatGPT.
     

    Our results show that ChatGPT substantially raises average productivity: time taken decreases by 0.8 SDs and output quality rises by 0.4 SDs. Inequality between workers decreases, as ChatGPT compresses the productivity distribution by benefiting low-ability workers more. ChatGPT mostly substitutes for worker effort rather than complementing worker skills, and restructures tasks towards idea-generation and editing and away from rough-drafting. 

    CB970B41-0408-4BA2-AFE9-C47E80B456D9.thumb.jpeg.bd4cb30af6774f45ce41a6f3b73f0a7c.jpeg

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  2. Killing off the local and regional banks hurts. The non-TBTF banks have a better understanding of the communities they serve. They promote local and regional economic development and job creation at a time when the US is re-shoring for more resilient supply chains—a national priority. 

    Non-TBTF’s diversify risk and reduce concentration in the banking industry, which make the banking system more resilient and less prone to systemic risk.  

    And we need the non-TBTF’s for price competition in our “capitalist” economy, ostensibly for lower costs and better service. 

    Yellen and Powell - like their predecessors - protect the boys. 

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  3. Matt Stoller (pro-enforcement of antitrust laws) may be right:

    Quote

    I will just note that the FDIC was not panicking, and if it had been able to go through with its original plan, uninsured depositors would have gotten back 50% of their cash almost immediately, and the rest back shortly thereafter, with only a slight possibility of a haircut. If the Fed had opened up its discount window or a facility to discount good collateral, there might have been runs on mid-size banks, but those would have been contained. And if the Fed had actually broken up the Too Big to Fail banks - JP Morgan, Citigroup, Bank of America, Wells Fargo, and Morgan Stanley - there wouldn’t have been a run at all. The only reason people withdrew uninsured deposits is because they had de facto government banks. 

    But instead, Powell and Yellen, who run Biden’s financial policy, forced a bailout of all uninsured depositors, billionaires like Conway, and firms like Roku, which had $500 million sitting in a bank account. That’s utterly absurd. As one European bank regulator said in horror, “At the end of the day, this is a bailout paid for by the ordinary people and it’s a bailout of the rich venture capitalists which is really wrong.” And what it means is that a new class of banks, with $100 billion of assets, are now de facto government banks. The 5000 small community banks aren’t, so they will eventually get wiped out (as they are starting to notice. Little is as annoying as the solidarity that community bankers feel towards the Wall Street bankers trying to kill them.) More fundamentally, it shows that Dodd-Frank, with its homework for regulators, its stress tests, its living wills, its goal of ‘ending Too Big to Fail,’ is a conclusive failure.

    https://mattstoller.substack.com/p/fire-the-fed
     

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  4. The vc bros and their depositors (you know—the ones who say “learn to code” when they break things and people lose their jobs) weren’t bright enough to protect their deposits with insured cash sweeps—a fintech invention that has be around since the mid-2000’s. 

    So we socialized their losses with two trillion in liquidity. The least they could do is say thank you.

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