Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, February 8, 2023

AI Summary. An analysis of Federal Reserve tightening cycles finds the rise in the 10-year Treasury rate ranks as the second largest across cycles, with the fastest pace of increase on record. Closing a historically large negative real federal funds rate gap — the policy rate minus inflation and the real neutral rate — will hinge on substantially reducing inflation.

Simon Kwan and Louis Liu Federal Reserve Bank Of San Francisco
Date Posted:

According to @sffed, the pace of the current tightening cycle has been unprecedented, and the magnitude of the tightening cycle ranks second in the postwar era (as proxied by the increase in the 10-year Treasury rate), with possibly more to run.

How large and fast is the current tightening cycle's rate increase?

Core argument: The increase in the 10-year Treasury rate during this tightening cycle is the second largest of all tightening cycles, and the speed of that increase has been unprecedented.

The current increase in the 10-year Treasury rate is the second largest increase of all tightening cycles, shown by the blue bars. Moreover, the green bars show that the speed of this increase has been unprecedented. Current increases in the federal funds rate are expected to reverse a historically large negative real funds rate gap at the beginning of the cycle. We compute the real funds rate gap by subtracting the inflation rate and the real neutral rate from the nominal federal funds rate. The smaller or more negative the real funds rate gap is, the more monetary accommodation is in the economy. Successfully closing the real funds rate gap will hinge on substantially reducing the inflation rate.

Takeaways by Macro Roundup® AI

  1. The increase in the 10-year Treasury rate during this tightening cycle is the second largest of all tightening cycles, and the speed of that increase has been unprecedented.
  2. Increases in the federal funds rate are expected to reverse a historically large negative real funds rate gap present at the start of the cycle, computed by subtracting the inflation rate and the real neutral rate from the nominal federal funds rate.
  3. Closing the real funds rate gap, where smaller or more negative values indicate more monetary accommodation in the economy, will hinge on substantially reducing the inflation rate.

AI Summary. The Chicago Federal Reserve's National Financial Conditions Index has eased considerably from very tight readings, driven mainly by improved risk sentiment alongside better mortgage rates and bond spreads. Longer-term real interest rates have fallen and the real yield curve remains very flat, indicating weak growth expectations and relatively tight short-run monetary policy.

Joseph Politano Apricitas Economics
Date Posted:

.@JosephPolitano argues that financial conditions might be loosening, citing the decline in the Chicago Fed’s National Financial Conditions Index since October 2022.

Are financial conditions easing even as monetary policy stays tight?

Core argument: The Chicago Fed's National Financial Conditions Index has eased considerably from very tight readings in early October, with improvements in risk sentiment contributing more than credit conditions.

Over the last four months, the Chicago Fed’s National Financial Conditions Index has eased considerably from its very tight readings in early October. While there have been some improvements in credit conditions, thanks in part to improvements in mortgage rates and bond spreads—the bigger contributor has been the improvements in risk sentiment. Longer-term real interest rates have fallen slowly over the last couple of months, and are now only a bit above early-2019 levels. The real yield curve is still very flat, with 5-year real yields moving alongside 30-year real yields, indicating weak growth expectations and relatively tight short-run monetary policy, but the fact that real rates are declining alongside corporate bond spreads suggests a partial easing of financial conditions.

Takeaways by Macro Roundup® AI

  1. The Chicago Fed's National Financial Conditions Index has eased considerably from very tight readings in early October, with improvements in risk sentiment contributing more than credit conditions.
  2. Longer-term real interest rates have fallen slowly and now sit only slightly above early-2019 levels, with mortgage rates and bond spreads also improving.
  3. The real yield curve remains very flat, with 5-year real yields moving alongside 30-year real yields, indicating weak growth expectations and relatively tight short-run monetary policy.

AI Summary. Chinese production of critical manufactured goods covers more than 81% of domestic demand, up from 67% in 2004, a shift toward self-sufficiency achieved through forced technology transfer, large subsidies for domestic producers, and often hidden import restrictions. Combined with an investment slowdown, this cut total Chinese trade from nearly 65% of GDP to under 40%.

Matt Klein The Overshoot
Date Posted:

.@M_C_Klein notes that China has been pursuing successful import substitution for some time. As of 2018 (the last year with comprehensive data), China could domestically produce 81% of critical manufactured goods, up from 67% in 2004.

Has China's push for self-sufficiency shrunk its trade share of GDP?

Core argument: Chinese production of critical manufactured goods covered more than 81% of domestic demand as of 2018, up from 67% in 2004, a shift toward self-sufficiency unmatched by any other major economy, developing or advanced.

As of 2018—the last year for which we have comprehensive data—Chinese production of critical manufactured goods is now sufficient to cover more than 81% of its domestic demand, up from 67% in 2004. The Chinese shift towards self-sufficiency since 2004 was unmatched by any of the other major economies, developing or advanced. China’s transition was achieved via forced technology transfer (including theft), massive subsidies for domestic producers, and a range of (often hidden) restrictions on imports. Combined, China’s investment slowdown and its push for self-sufficiency have driven down total trade (exports plus imports) from nearly 65% of Chinese GDP in 2007 to less than 40% as of 2022.

Takeaways by Macro Roundup® AI

  1. Chinese production of critical manufactured goods covered more than 81% of domestic demand as of 2018, up from 67% in 2004, a shift toward self-sufficiency unmatched by any other major economy, developing or advanced.
  2. China's total trade (exports plus imports) fell from nearly 65% of GDP in 2007 to less than 40% in 2022, driven by its investment slowdown combined with its push for self-sufficiency.
  3. China achieved its transition toward self-sufficiency through forced technology transfer including theft, subsidies for domestic producers, and a range of often hidden restrictions on imports.

AI Summary. Temporary Protected Status, which shields people from countries destabilized by war or disaster from deportation and grants work permits, has been extended to more than 700,000 immigrants in the U.S. illegally, primarily Venezuelans and Haitians. H-2B visas for seasonal low-wage foreign workers have increased but remain far below employer demand.

Santiago Pérez and Michelle Hackman Wall Street Journal
Date Posted:

Tight labor markets are causing employers to pay premium wages for migrant workers. The World Bank estimates that remittances to Latin America from workers in the United States grew by more than 9% in 2022. @WSJ

Do work permit programs meet employer demand for foreign workers?

Core argument: The Biden administration has granted Temporary Protected Status to more than 700,000 immigrants already in the U.S. illegally, primarily from Venezuela and Haiti, according to an analysis by the Migration Policy Institute.

The Biden administration has also vastly expanded a program known as Temporary Protected Status, which protects people from countries destabilized by wars or natural disasters from being deported, and gives them work permits. The administration has granted such protection to more than 700,000 immigrants already in the country illegally, primarily from Venezuela and Haiti, according to an analysis by the Migration Policy Institute.  The U.S. has increased the number of H-2B visas, which allow employers to hire low-wage foreign workers for seasonal positions, in recent years because of the shortage of workers, but the numbers are still vastly below the demand by employers.

Takeaways by Macro Roundup® AI

  1. The Biden administration has granted Temporary Protected Status to more than 700,000 immigrants already in the U.S. illegally, primarily from Venezuela and Haiti, according to an analysis by the Migration Policy Institute.
  2. The U.S. has increased the number of H-2B visas, which let employers hire low-wage foreign workers for seasonal positions, because of the worker shortage, but the totals remain far below employer demand.
  3. U.S. business owners are paying a premium to hire migrant workers in an extremely tight labor market.

AI Summary. Taiwan's leading weapons maker has test-fired an extended-range version of the Hsiung Feng IIE surface-to-surface missile, believed capable of striking mainland China. The missile can reportedly hit targets up to 1,200km away, far enough to reach major mainland cities such as Qingdao on the east coast and Wuhan in the center.

Lawrence Chung South China Morning Post
Date Posted:

Taiwan is testing a domestically developed cruise missile with the capacity to hit targets in mainland China. @SCMPNews

Taiwan is testing a domestically developed cruise missile with the capacity to hit targets in mainland China. @SCMPNews

Is Taiwan developing missiles able to strike mainland Chinese cities?

Core argument: Taiwan's top weapons builder test-fired an extended-range version of the Hsiung Feng IIE surface-to-surface missile, believed capable of striking targets up to 1,200km (746 miles) away on mainland China.

Taiwan’s top weapons builder has test-fired a missile believed to be capable of hitting mainland China, as cross-strait tensions show no sign of abating. The surface-to-surface missile is an extended-range version of the Hsiung Feng IIE, which is able to hit targets up to 1,200km (746 miles) – far enough to reach major mainland cities such as Qingdao on the east coast or Wuhan in the center.

Takeaways by Macro Roundup® AI

  1. Taiwan's top weapons builder test-fired an extended-range version of the Hsiung Feng IIE surface-to-surface missile, believed capable of striking targets up to 1,200km (746 miles) away on mainland China.
  2. The missile's 1,200km range places major mainland Chinese cities within reach, including Qingdao on the east coast and Wuhan in the country's center.
  3. Cross-strait tensions between Taiwan and mainland China show no sign of abating.

AI Summary. A model of endogenous technology argues that differences in markups, externalities, and other social considerations can systematically distort which technologies markets develop, linking the direction of innovation to market sizes, input prices, markups, and regulations. The author offers suggestive evidence that such distortions are substantial in industrial automation, health care, and energy.

Daron Acemoglu National Bureau of Economic Research
Date Posted:

.@DrDaronAcemoglu finds that negative externalities and excessive focus on high-margin technologies can distort the path of innovation and reduce welfare gains by 10-50%. @nberpubs

Do markups and externalities distort which technologies markets develop?

Core argument: Markup differences, externalities, and other social considerations can systematically distort the equilibrium direction of innovation, according to a model of endogenous technology that generalizes existing comparative static results.

In the presence of markup differences, externalities and other social considerations, the equilibrium direction of innovation can be systematically distorted. This paper builds a simple model of endogenous technology, which generalizes existing comparative static results and characterizes potential distortions in the direction of innovation. From a positive perspective, the framework links the direction of technology to relevant market sizes (supplies of factors of production working with these technologies and consumer demand), the price of other inputs into the production process (for example, natural resources used in different sectors), markups and regulations. I show that empirical findings across a number of different areas are consistent with this framework's predictions and I use data from several studies to estimate its key parameters. Combining these numbers with rough estimates of differential externalities and markups, I provide suggestive evidence that equilibrium distortions in the direction of technology can be substantial in the context of industrial automation, health care, and energy, and correcting these distortions could have sizable welfare benefits.

Takeaways by Macro Roundup® AI

  1. Markup differences, externalities, and other social considerations can systematically distort the equilibrium direction of innovation, according to a model of endogenous technology that generalizes existing comparative static results.
  2. The framework links the direction of technology to market sizes, including factor supplies and consumer demand, the price of other inputs such as natural resources, markups, and regulations, with empirical findings across several areas consistent with its predictions.
  3. Combining parameters estimated from several studies with rough estimates of differential externalities and markups yields suggestive evidence that distortions in the direction of technology can be substantial in industrial automation, health care, and energy, and that correcting them could have sizable welfare benefits.

Thursday, February 9, 2023

AI Summary. The Council of Economic Advisers constructed a wage measure for non-housing services, averaging hourly wages across 175 detailed nonfarm payroll sectors weighted by each sector's share of 2019 labor costs in services consumption excluding food, energy, and housing. Because the weights are fixed, the index is less sensitive to compositional shifts than unadjusted average wage measures.

Ernie Tedeschi Council of Economic Advisors
Date Posted:

.@ernietedeschi builds a new measure of average hourly earnings (AHE) gains in non-housing services (NHS) sectors. The measure suggests that wage growth is coming down rapidly, contributing to declining overall inflation.

Can a fixed-weight wage index better track non-housing services inflation?

Core argument: The Council of Economic Advisers constructed "NHS AHE," a weighted average of hourly wages across 175 detailed nonfarm payroll sectors from the monthly Establishment Survey, weighted by each sector's share of 2019 labor costs in final demand consumption of services excluding food, energy, and housing.

This blog post presents a wage measure that Council of Economic Advisors has constructed to be specific to NHS industries, called “NHS AHE.” To summarize, NHS AHE [non-housing services average hourly earnings] is a weighted average of the hourly wage in 175 detailed nonfarm payroll sectors from the monthly Establishment Survey, weighted by each sector’s share of 2019 labor costs in final demand consumption of services excluding food, energy, and housing. Because the weights are based on NHS labor costs, the index better reflects the dynamics of wages serving as inputs into NHS production than commonly-cited wage measures like AHE and ECI. And because the weights are fixed to 2019 levels, the index is less sensitive to compositional shifts than unadjusted average measures like AHE. Figure 2 plots the yearly percent change in the NHS wage series for production and nonsupervisory workers and NHS inflation.

Takeaways by Macro Roundup® AI

  1. The Council of Economic Advisers constructed "NHS AHE," a weighted average of hourly wages across 175 detailed nonfarm payroll sectors from the monthly Establishment Survey, weighted by each sector's share of 2019 labor costs in final demand consumption of services excluding food, energy, and housing.
  2. Because its weights derive from non-housing services labor costs, NHS AHE reflects the dynamics of wages serving as inputs into non-housing services production better than commonly cited measures such as average hourly earnings and the Employment Cost Index.
  3. Fixing the NHS AHE weights at 2019 levels makes the index less sensitive to compositional shifts than unadjusted average measures such as average hourly earnings.

AI Summary. White House Council of Economic Advisers economists constructed a wage series covering only the wages that feed into "supercore" prices — core services excluding housing — and calculate that 12-month wage growth for nonmanagement workers in those industries slowed from 8% to 5.2%. That decline is steeper than the drop for all private-sector workers, from 5.9% to 4.4%.

Greg Ip Wall Street Journal
Date Posted:

.@greg_ip reports on @ernietedeschi new wage tracking measure which finds “supercore” wage growth has declined from 9.7%, annualized in the three months ended October 2021 to 4% in January 2023.

Is wage growth slowing faster in the industries that drive services inflation?

Core argument: The Council of Economic Advisers calculates that "supercore" wage growth for nonmanagement workers slowed from 8% on a 12-month basis last March to 5.2% in January, using a wage series built to track only wages feeding into supercore prices.

CEA economists constructed a wage series tracking only wages that go into “supercore” prices. By this measure, supercore wage growth for nonmanagement workers has ebbed significantly in the past year, from 8% on a 12-month basis last March to 5.2% in January, the CEA calculates. That is much steeper than the drop in wage growth for all private-sector workers from 5.9% to 4.4%, in the same period, and for nonmanagement workers, from 7% to 5.1%. The drop is even sharper looking at shorter periods. According to the CEA’s measure, such wages were growing at 9.7%, annualized, in the three months ended October 2021. By January, growth had slowed to 4%, below that for all private-sector workers, at 4.6%, and private production workers, at 4.4%, in the same period.

Takeaways by Macro Roundup® AI

  1. The Council of Economic Advisers calculates that "supercore" wage growth for nonmanagement workers slowed from 8% on a 12-month basis last March to 5.2% in January, using a wage series built to track only wages feeding into supercore prices.
  2. That decline was steeper than the drop in 12-month wage growth for all private-sector workers, from 5.9% to 4.4%, and for nonmanagement workers, from 7% to 5.1%, over the same period.
  3. On a three-month annualized basis, the CEA's supercore wage measure slowed from 9.7% in the three months ended October 2021 to 4% by January, below the 4.6% for all private-sector workers and 4.4% for private production workers.

AI Summary. US manufacturing employment has surpassed the peak set during the previous business cycle for the first time since the late 1970s, reaching just under 13m workers, the most since 2008. The large manufacturing productivity gains of the 1990s and 2000s appear to have given way to output growth requiring more hiring.

Justin Fox Bloomberg
Date Posted:
Is Database:
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The 13M Americans working in the manufacturing sector in January surpassed the peak set during the previous business cycle in February of 2020, a first since the 1970s. This growth has been accompanied by a decline in real output per hour worked. @foxjust

Is the recovery in US manufacturing jobs durable?

Core argument: US manufacturing employment surpassed its prior business-cycle peak in May 2022, the first time this has happened since the late 1970s, according to revised 2022 payroll data from the US Bureau of Labor Statistics.

For the first time since the late 1970s, US employment in manufacturing has surpassed the peak set during the previous business cycle. This happened in May 2022, according to the revised 2022 payroll jobs data released last week by the US Bureau of Labor Statistics. As of January 2023, the sector employed just short of 13 million Americans on a seasonally adjusted basis, the biggest number since November 2008. The huge manufacturing productivity gains of the 1990s and 2000s appear to have given way to a situation where producing more stuff actually requires hiring more workers.

Takeaways by Macro Roundup® AI

  1. US manufacturing employment surpassed its prior business-cycle peak in May 2022, the first time this has happened since the late 1970s, according to revised 2022 payroll data from the US Bureau of Labor Statistics.
  2. US manufacturing employed just short of 13 million Americans on a seasonally adjusted basis as of January 2023, the largest number since November 2008.
  3. The large manufacturing productivity gains of the 1990s and 2000s appear to have given way to a situation in which producing more output requires hiring more workers.

AI Summary. The World Organization for Animal Health reported just over 100m poultry died or were culled from avian influenza over a four-month stretch, more than triple the total in the same period a season earlier. Signs of the virus adapting to other animal species, including minks in Spain, have raised questions about spread to humans.

Megan Durisin and Lisa Pham Bloomberg
Date Posted:

Between October ‘22 and February ‘23 over 100M chickens have died or been culled, more than 3X the rate in the previous season. The virus has spread to minks, sparking questions about potential transmission to humans. @bloomberg

Is bird flu killing far more poultry than last season?

Core argument: Just over 100 million poultry died or were culled due to avian influenza between the start of October and Feb. 3, according to the World Organization for Animal Health.

Just over 100 million poultry died or were culled due to avian influenza between the start of October and Feb. 3, according to the World Organization for Animal Health. That’s more than triple the number in the same period in the previous season, which ended with record losses from the disease. There have also recently been signs of the virus adapting to different animal species, including minks in Spain — sparking questions of whether the outbreak could spread to humans.

Takeaways by Macro Roundup® AI

  1. Just over 100 million poultry died or were culled due to avian influenza between the start of October and Feb. 3, according to the World Organization for Animal Health.
  2. That toll is more than triple the losses in the same period of the previous season, which ended with record losses from the disease.
  3. The virus has shown signs of adapting to different animal species, including minks in Spain, raising questions of whether the outbreak could spread to humans.

AI Summary. The share of single Americans who say they are looking for a committed relationship and/or casual dates fell to 42% from 49%, according to survey data. The decline was driven by single men, down 11 percentage points to 50%, with no significant change among single women at 35%.

Risa Gelles Watnick Pew Research Center
Date Posted:
Is Database:
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The share of single men who are looking for a relationship and/or casual dates has declined from 61% in 2019 to 50% in 2022. 32% of American men and 28% of women were single in 2022. @pewresearch

Are fewer single Americans looking for relationships, especially men?

Core argument: Some 42% of single Americans say they are looking for a committed romantic relationship and/or casual dates, down from 49% in 2019, though similar to the share in Pew Research Center's February 2022 survey.

The percentage of single Americans who are looking for a relationship or casual dates is lower than in 2019, especially among men. Some 42% of single Americans say they’re looking for a committed romantic relationship and/or casual dates, down from 49% in 2019 (but similar to the proportion found in the Center’s February 2022 survey). This drop is largely driven by single men, who are now 11 percentage points less likely than in 2019 to say they are looking for a committed relationship and/or casual dates (50% in July 2022, down from 61% in 2019). During the same time frame, there has been no significant change in the share of single women who are looking for a relationship or casual dates: 35% said this in 2022, compared with 38% in 2019.

Takeaways by Macro Roundup® AI

  1. Some 42% of single Americans say they are looking for a committed romantic relationship and/or casual dates, down from 49% in 2019, though similar to the share in Pew Research Center's February 2022 survey.
  2. Single men largely drove the decline, with 50% saying in July 2022 that they were looking for a committed relationship and/or casual dates, down 11 percentage points from 61% in 2019.
  3. Among single women, 35% said in 2022 that they were looking for a relationship or casual dates, compared with 38% in 2019, not a significant change.

AI Summary. Adult children moving back in with parents is associated with negative shocks to the child's marriage, income, and employment, though most such shocks and moves are temporary. The authors find no clear association with parental health, wealth, or hours worked, but do find a higher self-reported probability of working full-time after age 65.

Grant Seiter, Mary Lopez and Sita Slavov National Bureau of Economic Research
Date Posted:
Is Database:
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A new @NBERpubs study finds that in 2020 ~ 1/3 of children between the ages of 18-34 lived with their parents, but found no clear evidence that this impacts parents’ current or future labor market choices, or their wealth, health, or life satisfaction.

How do adult children moving back home affect parents' retirement plans?

Core argument: Roughly one-third of U.S. adults aged 18–34 lived with their parents in 2020, with men and 18–24 year-olds more likely to co-reside than women and 25–34 year-olds.

The share of U.S. adult children living with their parents has increased since the 1960s. Figure 1 shows that in 2020, approximately one-third of children between ages 18 and 34 lived with their parents, with men and 18-24 year-olds, respectively, more likely to co-reside than women and 25-34 year-olds. We examine the relationship between adult children returning home and parental retirement outcomes using data from the Health and Retirement Study (HRS), a nationally representative panel of individuals over the age of 50 and their spouses; the HRS also tracks children of respondents. Our child-level analysis suggests that a boomerang event is likely associated with negative shocks to a child’s marriage, income, and employment. The event study analysis suggests that many of these shocks are temporary, and correspondingly most boomerang events are transitory. At the parent level, we find no clear, statistically significant association between boomerang children and parental health, wealth, probability of working, hours worked, or well-being. However, we do find an increase in the self-reported probability of working full-time after age 65. That increase is concentrated among men, those under the age of 62, and those in the top half of the initial wealth distribution. Overall, our results provide evidence that parents may delay their anticipated retirement when children return home.

Takeaways by Macro Roundup® AI

  1. Roughly one-third of U.S. adults aged 18–34 lived with their parents in 2020, with men and 18–24 year-olds more likely to co-reside than women and 25–34 year-olds.
  2. Using the Health and Retirement Study, a nationally representative panel of individuals over 50, the authors find no clear, statistically significant association between boomerang children and parental health, wealth, probability of working, hours worked, or well-being.
  3. The authors find an increase in parents' self-reported probability of working full-time after age 65, concentrated among men, those under 62, and those in the top half of the initial wealth distribution.

AI Summary. In Georgia's Senate runoff, Warnock's campaign spent $126.2m to Walker's $48.5m, nearly a 3-to-1 advantage, and the Democratic group America Votes knocked on 4m doors versus 400,000 targeted by Walker's supporters. Democrats also used paid relational organizing, ballot collection, and litigation to expand voting opportunities.

Victoria Marshall The Federalist
Date Posted:
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Warnock outspent Walker nearly 3 to 1, with $126.2m in expenditures compared to Walker’s $48.5m. Warnock also knocked on 4mm doors, outpacing Walker’s 400,000.

How did spending and ground game advantages decide a Senate runoff?

Core argument: Raphael Warnock's campaign spent $126.2m in the Georgia runoff against Herschel Walker's $48.5m, a financial advantage of nearly 3 to 1.

In the Georgia runoff, Warnock's campaign outspent Walker nearly 3 to 1, with expenditures of $126.2m compared to Walker's $48.5m, highlighting a significant financial advantage. This disparity was mirrored in ground game efforts, where America Votes, a Democratic group, knocked on 4m doors, vastly outpacing the 400,000 doors targeted by Walker's supporters. Such strategic spending and voter outreach efforts underscore the importance of robust financial backing and effective voter engagement in modern elections. The Democrats' focus on ballot harvesting and relational organizing, where individuals were paid to encourage friends and family to vote, further exemplifies the shift towards data-driven, targeted campaign strategies. These tactics, combined with litigation efforts to expand voting opportunities, illustrate a comprehensive approach that prioritizes securing ballots over traditional Election Day turnout, ultimately contributing to Warnock's victory.

Takeaways by Macro Roundup® AI

  1. Raphael Warnock's campaign spent $126.2m in the Georgia runoff against Herschel Walker's $48.5m, a financial advantage of nearly 3 to 1.
  2. America Votes, a Democratic group, knocked on 4m doors in Georgia, against the 400,000 doors targeted by Walker's supporters.
  3. Democrats combined ballot harvesting, relational organizing that paid individuals to encourage friends and family to vote, and litigation to expand voting opportunities, prioritizing securing ballots over Election Day turnout.

"...Walker was outspent by Warnock nearly 3 to 1 (Warnock spent $126,232,942 to Walker’s $48,455,356)...Simply put: Walker was outspent, out-fundraised, and had very little help as opposed to Warnock and his campaign/party machine....America Votes, a left-wing get-out-the-vote group, knocked on 4 million doors leading up to the Georgia runoff (in contrast, the Walker-backing Faith and Freedom Coalition aimed to knock on just 400,000 doors) and made more than 1 million phone calls encouraging likely Democrat voters to cast ballots...."

Victoria Marshall, "3 Unsexy Reasons Warnock Beat Walker In The Georgia Runoff,"The Federalist, December 7, 2022, https://thefederalist.com/2022/12/07/3-unsexy-reasons-warnock-beat-walker-in-the-georgia-runoff/

3 Unsexy Reasons Warnock Beat Walker In The Georgia Runoff

The Georgia runoff is over. Raphael Warnock came out on top (as expected). And Republicans are once again running the “quality candidate” canard as the reason for Herschel Walker’s loss (in addition to the overblown, overused, Trump scapegoat). Yet despite the fact Walker was outspent by Warnock nearly 3 to 1 (Warnock spent $126,232,942 to Walker’s $48,455,356), Walker performed remarkably well, netting 48.6 percent of the vote to Warnock’s 51.4 percent.

This as Georgia Gov. Brian Kemp only came out in full force for Walker after he coasted to reelection in November (loaning his field organizing team to the Senate Leadership Fund — the GOP’s Senate super PAC which backed Walker). This translated to just a $2 million ground operation on Walker’s behalf.

Simply put: Walker was outspent, out-fundraised, and had very little help as opposed to Warnock and his campaign/party machine. While GOP establishment types might try to convince you that it was the Trump effect or Walker’s poor candidacy, this is nothing but willful ignorance. Winning elections after the 2020 election rule changes is all about the strength of a candidate’s ground game. Without that, there is no chance of ever succeeding to federal office. Here’s how the Warnock campaign did it.

1. Ballot Harvesting

Ballot harvesting, or the practice of going door-to-door soliciting mail-in ballots from voters, is an art form Democrats have perfected since unsupervised mail-in balloting (and a month of early voting) became legal in the wake of the Covid-19 lockdowns. Democrats in key battleground states know that collecting ballots is more important than collecting votes (i.e., generating Election Day turnout), and so they calculate how many ballots they need to secure a victory, and aim singlehandedly at that.

There are several Georgia-based leftist nonprofits that engage in ballot harvesting and curing. America Votes, a left-wing get-out-the-vote group, knocked on 4 million doors leading up to the Georgia runoff (in contrast, the Walker-backing Faith and Freedom Coalition aimed to knock on just 400,000 doors) and made more than 1 million phone calls encouraging likely Democrat voters to cast ballots. Other Democrat groups such as Stacey Abrams’ Fair Fight and the New Georgia Project have engaged thousands of volunteers to push their GOTV efforts, including registering largely non-white Georgian residents to vote. VoteBuilder, a voter registration database run by the Democratic National Committee and each respective state’s Democratic Party, gives such activists the information necessary to group and target Democratic voters and contact them about filling out and sending in their mail-in ballot.

2. Smart Spending

Georgia Democrats were very strategic about how they spent their money leading up to the runoff. While the GOP was largely focused on the old model of generating Election Day turnout through campaign mailers and TV ads (thanks to greedy GOP consultants), Democrats spent their dollars on initiatives that guaranteed them votes. Case in point: the Democratic firm Relentless paid 1,455 Georgians to contact more than 58,000 friends and family urging them to vote for Warnock. As Axios reported, Relentless paid each participant $200 to contact between 40-50 family members and friends, encouraging them to vote for Warnock. This isn’t the firm’s first rodeo, however. During the 2021 Senate runoff, the firm used the same tactic and boosted target voter turnout by 3.8 percent. Warnock’s own campaign also paid individuals $500 in a similar scheme. So did the Progressive Turnout Project (although this type of “relational organizing” was not limited to just Georgia). Research shows that voters are more likely to respond to appeals to vote from people they know.

3. Litigating Election Law

Democrats ride election litigation like a jockey riding a horse. Democrat mega-lawyer Marc Elias, the Georgia Democratic Party, and the Warnock campaign filed a lawsuit back in November against the Peach State to prevent it from banning early voting on the Saturday after Thanksgiving — despite a state law explicitly prohibiting it. While there was still plenty of time available for early voting without that Saturday, Georgia Democrats argued the law would result in voter suppression (a.k.a., give them less time to harvest ballots). A Georgia appeals court bought their argument. The Georgia lawsuit is just one example of multiple efforts by Democrats nationwide to manipulate election law in their favor or sue until they get what they want.

What This Means

Despite what corporate media pundits tell you, Georgia is not a swing state. Republicans overwhelmingly swept all other down-ballot races this past election cycle. Nationally, Democrats were focused on control of the Senate, and accordingly focused their strategy and efforts on keeping their Georgia Senate seat. They did this by pulling out their most effective ground game tactics such as harvesting (and curing) ballots, spending millions of dollars in various get-out-the-vote efforts, and going to court to expand and cement their radical post-2020 election law changes. And it paid off. If Republicans can’t stop their tactics, then the GOP would do well to mirror them.

AI Summary. Groups selected on a specific admission test tend to score lower on other intelligence measures, since selection favors those who overperform on that test; one study of Harvard undergraduates found a mean IQ of 130 on an alternative assessment versus about 145 on admission tests.

Pumpkin Person Pumpkin Person
Date Posted:
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Elite students overperform on admission tests due to selection for “good luck.” Harvard undergrads have a mean IQ of 130, adjusted for test obsolescence & sample bias, vs 145 on the SAT.

Does selecting on one test overstate a group's measured intelligence?

Core argument: Harvard undergraduates score an IQ of 145 on the SAT used to select them, while a study using the WAIS-R found a mean IQ of 130 after adjusting for test obsolescence and sample bias.

Despite Harvard undergrads and Harvard Law students both achieving an IQ of 145 on their respective admission tests (SAT and LSAT), their actual IQs are likely lower when assessed with a different measure. A study using the WAIS-R test found Harvard undergrads had a mean IQ of 130, adjusted for test obsolescence and sample bias. This discrepancy highlights the phenomenon where elite students overperform on admission tests due to selection for "good luck." For Harvard Law students, lacking direct WAIS data, an estimated regression to the professional mean suggests an IQ of 136. This underscores the importance of not measuring a group's IQ by the test used for their selection, as it may not reflect their true cognitive abilities.

Takeaways by Macro Roundup® AI

  1. Harvard undergraduates score an IQ of 145 on the SAT used to select them, while a study using the WAIS-R found a mean IQ of 130 after adjusting for test obsolescence and sample bias.
  2. Harvard Law students also register an IQ of 145 on the LSAT, and, absent direct WAIS data, an estimated regression to the professional mean puts their IQ at about 136.
  3. Elite students overperform on the admission tests that select them because selection favors "good luck," so a group's IQ should not be measured by the test used for its selection.

Pumpkin Person, "The IQ gap between Harvard undergrads & Harvard Law students,"Pumpkin Person, November 13, 2022, https://pumpkinperson.com/2022/11/13/the-iq-gap-between-harvard-undergrads-harvard-law-students/

The IQ gap between Harvard undergrads & Harvard Law students

Circa 2013, Jonathan Wai reported that Harvard undergrads had a mean SAT of 1490 which at the time equated to an IQ of 145. Meanwhile Wai reported that Harvard Law students had a mean LSAT score of 173.5 which also equates to an IQ of 145.

However by definition, elite students over perform on the very test used to recruit them, because one of the things they’re recruited for is “good luck” on the admission test. Thus it’s interesting to ask how Harvard students perform on a random test (not used in the selection process)

As I’ve noted many times the best data on the subject was obtained by Harvard scholar Shelley H Carson and her colleagues who had an abbreviated version of the WAIS-R given to 86 “Harvard undergraduates (33 men, 53 women), with a mean age of 20.7 years (SD 3.3)… All were recruited from sign-up sheets posted on campus. Participants were paid an hourly rate…The mean IQ of the sample was 128.1 points (SD 10.3), with a range of 97 to 148 points.”

Note: The actual scores were 99 to 150 but Carson reduced them by 2 points because it’s known in the literature that the abbreviated version yields IQs 2 points lower than the full-scale IQ. However she can’t just assume measurement error favours the full-scale, so I am going to return these 2 points and say the full-scale IQ was 130.1.

It should be noted however that the WAIS-R was published in 1981, and that the norms were collected from 1976 to 1980. Carson’s study was published in 2003, so presumably the test norms were 25 years old.

James Flynn cites data showing that from WAIS-R norms (circa 1978) to WAIS-IV norms (circa 2006) the vocabulary and spatial construction subtest (used in the abbreviated WAIS-R) increased by 0.53 SD and 0.33 SD respectively. These gains would result in the composite score of the abbreviated WAIS-R becoming obsolete at a rate of 0.26 IQ points per year, meaning the Harvard students’ scores circa 2003 were 6.5 points too high. This reduces the mean IQ of the sample to 122.6 (U.S. norms).

Also recall that this was an abbreviated version of the WAIS-R and thus only correlates about 0.9 with the full version. Dividing the number of IQ points above 100 by 0.9 raises their IQ from 122.6 to 125, a good estimate of how they would have scored on the full test.

It should also noted that this was a psychology study, and thus a disproportionate number of psych students likely took part. Realistically, us psych majors are not as bright (on average) as harcore STEM majors. Add to this the fact that the abbreviated WAIS only had a ceiling of 150, likely preventing some participants from showing their full potential. Given these two facts it seems reasonable to round up the mean score to 130.

Still, 130 is only 66% as extreme as their 145 IQs derived from the SAT. But as Jensen noted, except when content and format is very similar, different IQ tests only correlate 0.66 with one another so this is the expected result. One might ask why I’m regressing to the U.S. mean and not the mean of SAT takers. The answer is that virtually 100% of gifted American teens have taken the SAT, so regressing them to the SAT population would be redundant.

How would Harvard Law students scores on the WAIS?

To my knowledge there have been no studies of Harvard Law students taking any version of the WAIS, but if there were, I’d expect them to also regress to the mean. However unlike the SAT, we can’t assume that virtually all smart young American adults have taken the LSAT and thus we can’t regress them to the U.S. mean. We can however assume that virtually all Harvard Law students become get their degree, and the average IQ of Americans with professional degrees is about 125 so instead of regressing to the U.S. mean of 100, they’d regress to the professional mean of 125.

But given that correlations are lower in a restricted sample like professionals (say 0.56 instead of 0.66) we’d expect their WAIS IQs to be:

145 - 125 = 20(.55) + 125 = 136.

Conclusion

Even though Harvard undergrads and Harvard Law students both score IQ 145 on their respective admission tests, their actual IQs are likely 130 and 136 respectively. This is not to say that the WAIS is necessarily more accurate than the SAT or LSAT; rather it’s to say that the IQ of a group should never be measured by the very test that selected them, because by definition, they likely overperformed on that.

Brandon Adams Comment: “That is an interesting piece. I think it has a few problems though. 1. Based on the piece you just sent (about the Flynn Effect operating disproportionately on the middle and left of the distribution), this adjustment is incorrect. It should be noted however that the WAIS-R was published in 1981, and that the norms were collected from 1976 to 1980. Carson’s study was published in 2003, so presumably the test norms were 25 years old. James Flynn cites data showing that from WAIS-R norms (circa 1978) to WAIS-IV norms (circa 2006) the vocabulary and spatial construction subtest (used in the abbreviated WAIS-R) increased by 0.53 SD and 0.33 SD respectively. These gains would result in the composite score of the abbreviated WAIS-R becoming obsolete at a rate of 0.26 IQ points per year, meaning the Harvard students’ scores circa 2003 were 6.5 points too high. This reduces the mean IQ of the sample to 122.6 (U.S. norms).This adjustment would only be sensible if the distribution shifted but maintained constant shape. That is not what happened. 2. Test Sample: 86 Harvard undergraduates (33 men, 53 women). "It should also be noted that this was a psychology study, and thus a disproportionate number of psych students likely took part. Realistically, us psych majors are not as bright (on average) as harcore STEM majors. Add to this the fact that the abbreviated WAIS only had a ceiling of 150, likely preventing some participants from showing their full potential. Given these two facts it seems reasonable to round up the mean score to 130." I don't know which factor is more problematic, the unrepresentative sample, or the fact that the test caps at 150. 3. The effect of chance on scores would be highly dependent on the details. We would expect the chance factor to be high if every student in the country took the SAT exactly once and then reported this score on their college applications. But there are three sources of complexity that can be introduced: 1) Does the student take the test more than once?, 2) Does the college have a method for adjusting the scores for students who take the test more than once when making admission decisions?, and 3) In the reporting of SAT scores to US News and World Report (or whatever database is used), are they reporting only the best score of admitted students who took the test more than once (or, worse, the best score on each section)? Likely what's happening is that Complexity 3) is the big problem, and therefore the bias effect is real. It's likely the case that if students are taking the test multiple times, but then only their best scores are recorded in the database, then that would result in an even larger bias than a world in which every student took the test exactly once.As a side note, I believe that if a psychometrician were trying to assess the IQ of people that were known ex ante to be highly intelligent, they would use a test where the scores are centered around a relatively high IQ (a test with very hard questions throughout). Attached is an interesting paper from the behavioral finance literature. The authors add one field to a database of hedge fund returns; the field consists of the average SAT score at the manager's undergrad institution. They find that this variable has strong explanatory power for returns. A 200 point SAT difference would equate to.73% higher returns per year, in their sample."”

Ed Conard Comment: “There is likely selection bias, especially of the kind Brandon describes. But there is definitely bias of the kind described by the study. People who luck out and score highly tend to end up at schools that accept high scorers. Again, there is a more comprehensive study of this in the DB.I don’t have a lot of experience with the STEM majors at top schools. My impression of the top student who end up at places like Bain is that they don’t average anything close to 145. Probably 130ish. My experience is that 145 makes you the smartest guy in a room at places like Bain Cap with the smartest business oriented people. …and that 150+ is need to be competitive with the top college professors but not the smartest guy in the room. Summers is probably 155. Again, I would say that to succeed in business you need a lot more than smarts. That’s why student with IQ lower than competitive professor choose business and not academics and vice versa. And perhaps more importantly, software is more important/powerful than hardware. I believe people have horrible s/w."”

Mark Hill Comment: “I have a further issue practical issue: when you recruit Harvard students to take an IQ test via signup sheet and offer an hourly rate, do you expect a representative sample or some significant selection bias?"”

Brandon Adams Comment: “Harvard is a terrible setting to illustrate this general phenomena. This is the starting point of the article: "Jonathan Wai reported that Harvard undergrads had a mean SAT of 1490 which at the time equated to an IQ of 145." That is not a statistically sound approach to the problem. I believe he's saying that "an SAT score of 1490 equates to an IQ of 145," which is not the same thing as saying that "a population whose mean SAT is 1490 equates to a population mean IQ of 145." To be statistically sound, you would need to translate all of the students' individual SAT scores into individual IQ scores, and then take a mean. When doing so, you would need to answer the question, "Conditional on a student getting a 1600, what is their expected IQ?" 20-25% of the sample might fit this profile. A 1490 avg for the institution as a whole likely implies a mean IQ much higher than 145 (though that doesn't mean much bc 1490 is biased to the high side for reasons we have mentioned)."”

Ed Conard Comment: “My strong suspicion is that 1) high-scorers tend to take the test multiple times. That’s an important way to get a high score. (BTW, I took it once and got high the night before.) 2) Colleges don’t adjust. 2a) Often you don’t have to report that you took the test except the one you submit. And 2b) colleges largely accept students so that they can report high scores. The new test optional option allows schools to accept low-scorers without having to report their scores. That’s the case because the schools don’t care about admitting the smartest students. They care about reporting high scores. …and funding their endowments so they can raise their own pay. 3) see 2; the schools are only reporting the highest scores. Columbia had so many tricks for falsely trumping up their scores that they were called out and lost their ranking. The most prestigious colleges (e.g., Harvard Law) are now refusing to participate in the US News rankings because they want to admit low-scorers and not have their scores and post graduate performance monitored.”

Ed Conard Comment: “It’s valuable to have you critique the statistical methods. So I don’t want to discourage it. Bad analysis leads to bad conclusions. That said, there is information in all data and analysis. The author probably couldn’t get the individual scores. So he is doing want he can with the data he has to indicate what he is trying to learn. Notwithstanding your point about top-coding, my guess is that the mean of the sat scores converted to IQ is very close to the scores covered to IQ and then averaged. That seems small not large in this case. Top-coding should make the IQ of the pool as measured by their admission test higher than 145. 128 is a long way from 145 (plus). Surely that large difference means something significant. We should not pooh-pooh what we can learn from this just because the analysis is less than perfect. I agree that a large share of the difference might be the difference between those who took the second test - psych students who may be lower than the Harvard average. But my guess is that those students also had very high SAT score on average and lots of 1600s too. Although, the psych majors may skew towards the ones who discovered they were lucky scorers. Nevertheless, my experience with the top business-oriented grads from the top schools is that their IQs feel closer to 128 to me than 145. They are not lowly psych majors. Most were econ majors with top grade points who excelled in quantitative classes, albeit not classes that included the top math and science majors. Although many were science majors. (Mark, aren’t you a John Harvard scholar in biology/science? Baines are much higher than the average student at the top school in my experience. 145 stands out among smart people as a recognizable difference. Not many people stand out IQ-wise at places like Bain Capital where the average is probably higher than 128, but probably not 135 despite their high scores and GPA is quant-oriented majors. Most people who stand out are top college professors. They are often famous. Again, I think s/w makes a bigger difference than h/w. Worse, they seem inversely correlated at high levels.”

Though this point was interesting"...Circa 2013, Jonathan Wai reported that Harvard undergrads had a mean SAT of 1490 which at the time equated to an IQ of 145. Meanwhile Wai reported that Harvard Law students had a mean LSAT score of 173.5 which also equates to an IQ of 145. However by definition, elite students over perform on the very test used to recruit them, because one of the things they’re recruited for is “good luck” on the admission test. Thus it’s interesting to ask how Harvard students perform on a random test (not used in the selection process) As I’ve noted many times the best data on the subject was obtained by Harvard scholar Shelley H Carson and her colleagues who had an abbreviated version of the WAIS-R given to 86 “Harvard undergraduates (33 men, 53 women), with a mean age of 20.7 years (SD 3.3)… All were recruited from sign-up sheets posted on campus. Participants were paid an hourly rate…The mean IQ of the sample was 128.1 points (SD 10.3), with a range of 97 to 148 points.”..Even though Harvard undergrads and Harvard Law students both score IQ 145 on their respective admission tests, their actual IQs are likely 130 and 136 respectively. This is not to say that the WAIS is necessarily more accurate than the SAT or LSAT; rather it’s to say that the IQ of a group should never be measured by the very test that selected them, because by definition, they likely overperformed on that...."