Five Books That Have Changed My Life

I read a lot of books. (See "Why I Read More Books than Economic Journal Articles.") Many books lead me to feel profound awe and gratitude toward the author. Today, let me acknowledge five books that have changed my life.  

The first is Isaac Asimov's Foundation. Characterization is not Isaac Asimov's strong suit, but what he does do is to paint a grand picture of a future Galactic Empire falling apart, and a band of social scientists working hard to make the dark times to come as short as possible. Though they are called "psychohistorians," the description of psychohistory might as well be a description of macroeconomics: it is hard to predict what individuals will do, but the average behavior of large aggregates of people can be predicted. Even though it is hard to predict the actions of a single individual, I credit Isaac Asimov's foundation series as predisposing me towards a career in economics. The Foundation series may have also predisposed me toward macroeconomics, though it was not the direct catalyst for becoming a macroeconomist. On that, see "Why I am a Macroeconomist: Increasing Returns and Unemployment."

(I also credit high school forensics with predisposing me towards economics— for me debate, extemporaneous speaking and one turn at oratory as my second event at the national tournament. See "A More Personal Bio: My Early Tweets." As for being an academic, I had decided much earlier I wanted to be a professor like my Dad; the question was in what field.)

Update: Simon Wren-Lewis tweets:

A conjecture: that more economists would rank Asimov's Foundation is one of their favourite books than scientists. Here is Paul Krugman writing about it ["Paul Krugman: Asimov's Foundation novels grounded my economics"]

The second book that changed my life was Psycho-Cybernetics by Maxwell Maltz. I tell that story in "How I Became Optimistic": 

For several years when I was a teenager, I felt that facing reality meant I mustn’t fool myself by being optimistic. Studiously avoiding optimism had the side-effect of making me less cheerful. But then I read the Maxwell Maltz’s book Psycho-Cybernetics. Maxwell made an argument that changed my life. He argues that visualizing positive outcomes is a way to be prepared in case something good happened and a way to instruct one’s subconcious mind to strive for that outcome. In other words, visualizing a desired outcome is a way to tell one’s subconscious mind what its objective function should be.

To me this was like a bolt out of the blue. Visualizing a positive outcome was not a claim that that outcome would happen, it was simply presenting a certain image to one’s mind without any claim to inevitability, in a way meant to increase the probability that the positive image might be realized. Thus, it was possible to carefully maintain objectivity for analytical decision-making and evaluation purposes, while still gaining the psychological benefits of optimism.

In this case, it was not the book as a whole that changed my life; it was this single idea that changed my life. 

The third book that changed my life was the Book of Mormon. As I vividly remember telling my Harvard classmate and friend Anne Harrington (now Franklin L. Ford Professor of the History of Science at Harvard) when I was leaving Mormonism around the age of 40, the main story of my life until then was not about being an economist but about my spiritual journey within and then out of Mormonism—a journey I was very fortunate to take in reasonable sync with my wife Gail. 

At the end of the Book of Mormon (in Moroni 10:4) it gives this challenge:

And when ye shall receive these things, I would exhort you that ye would ask God, the Eternal Father, in the name of Christ, if these things are not true; and if ye shall ask with a sincere heart, with real intent, having faith in Christ, he will manifest the truth of it unto you, by the power of the Holy Ghost.

This worked as advertised for me. I read the Book of Mormon, prayed to ask if it was true, then felt a remarkable warm feeling in my heart. I gave the Book of Mormon—and Mormonism in general—enormous credit for having made this true prediction that was confirmed so strongly. Not only that, I also took very seriously the next verse in the Book of Mormon (Moroni 10:5), saying that was a model for asking God any question: 

And by the power of the Holy Ghost ye may know the truth of all things.

This was heady stuff, especially when combined with the promise in Mormonism's Doctrine and Covenants 121:46, "The Holy Ghost shall be thy constant companion" and further tips for the epistemological procedure in Mormonism's Doctrine and Covenants, 7:8,9

But, behold, I say unto you, that you must study it out in your mind; then you must ask me if it be right, and if it is right I will cause that your bosom shall burn within you; therefore, you shall feel that it is right.

But if it be not right you shall have no such feelings, but you shall have a stupor of thought that shall cause you to forget the thing which is wrong ...

On the strength of such seeming confirmations and personal inspirations, I was a fully believing Mormon until I neared the age of 40. I worked toward converting people to Mormonism for two years in Japan (in the Tokyo area), and after that served in many capacities in the Mormon Church ("home teacher," "Elder's Quorum President," Sunday School teacher, Ward membership clerk, etc.). I was also an enthusiastic apologist for Mormonism and continued to advertise Mormonism. (When she came to visit the University of Colorado Boulder a week ago, Ellen McGrattan spontaneously recalled how I had given Book of Mormon to V. V. Chari as part of my continuing proselyting efforts when I told her I was no longer a Mormon.) Intellectually, Mormonism was a grand adventure that led to my reading the Bible twice and the other Mormon books of holy writ (including the Book of Mormon and the Doctrine and Covenents) many times, as well as getting a fascinating take on ancient history from the Mormon apologetics of Hugh Nibley (whom I had the chance to get to know personally while I was earning my Master's degree in Linguistics at Brigham Young University).

In my 30's, I discovered that the epistemological procedure above didn't always work. I had several occasions where things ascertained through this procedure were falsified; that is a part of the story of why I left Mormonism. And a friend pointed out to me that a feeling in my heart didn't logically imply something to be true in the "universe out there." That is a part of the story of my journey out of Mormonism. 

Despite no longer considering myself a Mormon, I am still a Mormon by the Mormon Church's own technical definition (which I know well from my stint as a membership clerk). Indeed, by that technical definition a deacon, priest and elder of the Mormon Church. More importantly, other than Mormonism's occasional anti-intellectualism, more deeply entrenched inequality for women, harsh treatment of gays, and Mormonism's authoritarian streak, I have enormous affection for Mormonism.

Despite occasional lying in an official Church capacity, in other contexts Mormons are some of the most honest people in the world. Mormonism encompasses what I would describe as an extensive modern oral wisdom tradition that is shared every Sunday over a pulpit occupied by regular Mormons, not just leaders. I have benefitted greatly from having been immersed in that modern oral wisdom tradition for so many years. Sociologically, Mormonism has solved to a remarkable extent many of the problems that bedevil our society. And Mormonism gives its members strong encouragement to go out and save the world, not just religiously, but in material ways as well.   

Given my experience with Mormonism, I feel strongly that Mormons and Mormonism should be treated in a way that is more equal to other Christian denominations. Looked at fairly, Mormon doctrine is no stranger than, say, Catholic doctrine. Mormonism is, indeed, more supernaturalist than the many liberal Christian churches that keep their supernaturalism safely sequestered in the afterlife and in the distant past, but there are other Christian churches and New Age groups that are equally supernaturalist. Mormonism does have a history of polygamy, but that is getting to be a century ago (except for rebels from the Mormon Church), and current trends in parts of American society have been toward greater acceptance of polyamory (though accepting polyamory is a step too far for me). To make a comparison, I think most nonsupernaturalists would find the views of Mormons on most things to be more congenial than the views of Christian Evangelicals. In short, don't look down on Mormons! Almost all churches that haven't distanced themselves from their history have a lot of baggage. Mormon baggage is no worse than the baggage of most other religions. (I consider my own religion of Unitarian-Universalism as a religion that has distanced itself from its history, although it does teach its members about its history. And I think the history of Unitarian-Universalism genuinely has less bad stuff than the history of most religions.)

To appreciate Mormonism better, a good place to start is these posts,

and this Bloomberg View article by Megan McArdle:

If you are curious beyond that, follow the links in my posts above or type "Mormon" into the search box that comes up when you click the link "search" at the top of my blog.

Link to the Wikipedia article for Darwin's Dangerous Idea by Daniel Dennett

Link to the Wikipedia article for Darwin's Dangerous Idea by Daniel Dennett

In addition to the experiences that I felt tended to falsify Mormonism's epistemological procedures and my distress at some of the negatives of Mormonism mentioned above, another big part of my journey out of Mormonism was my growing appreciation for the picture of the world that evolutionary theory and modern cosmology provide. (Mormonism's official position, as laid out in a document given to Brigham Young University students in biology classes is that it is OK with evolution. But Mormon doctrine as it stands tends to marginalize evolution.) Darwin's Dangerous Idea by Daniel Dennett was the most mind-expanding of all the books I read on evolutionary theory and cosmology. This is the fourth book that changed my life. Though it was a major part of my mind-expansion during my 30's, it is better to put it in the context of other books I read as well. I said this in my Unitarian-Universalist sermon "Godless Religion": 


  • Imagine in your mind’s eye what the Copernican Revolution putting the Sun at the center rather than the Earth did to the Biblical worldview.
  • Think of modern discoveries about the Big Bang and the size of the Universe.
  • Think of what modern advances in neuroscience mean about the connection between the material and the spiritual ...
  • Think of the discoveries of anthropology about the wide range of often very firm religious beliefs different cultures hold (see for example Pascal Boyer’s wonderful book Religion Explained).
  • Think of Darwin’s theory of evolution and modern advances in understanding genes, with the lengthening of the history of the Earth from a few thousand years to billions of years, the idea that human beings could have arisen through evolution, and the idea that genes determine a large fraction of the way we are.

These scientific advances, let alone all the scientific advances now being discovered and yet to come, have shaken old religious interpretations to the core wherever people have taken the implications of that science seriously. In his book Darwin’s Dangerous Idea, the philosopher Daniel Dennett has compared the idea of evolution to a universal acid that changes everything it touches. Among scientific ideas, it is not the only universal acid. 


Darwin's Dangerous Idea is, in my view, the 20th century book that best expresses the grandeur Charles Darwin writes of at the end of The Origin of Species:

There is grandeur in this view of life, with its several powers, having been originally breathed into a few forms or into one; and that, whilst this planet has gone cycling on according to the fixed law of gravity, from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.”

In Darwin's Dangerous Idea, Daniel Dennett manages to combine philosophical rigor with accessibility. Darwin's Dangerous Idea is not only mind-expanding, it also provides excellent mind-training because it deals with such hard concepts so clearly. 

I have also admired other books of Daniel Dennett's. In his honor, let me list here all the places where Daniel Dennett appears in this blog (culled by putting "Dennett" into the search box at the search link at the top of this blog):

 Link to the Amazon page for The Obesity Code by Jason Fung

 Link to the Amazon page for The Obesity Code by Jason Fung

The fifth book that changed my life is The Obesity Code, by Jason Fung. At 5 foot 7 inches or maybe a bit more, I weighed well into the 180s a year ago. Today I am in the low 150s. I have The Obesity Code and Jason Fung's companion book The Complete Guide to Fasting to thank. (Thanks also to my wife Gail, who searched these books out, read them first and recommended them.) To see how trenchant Jason Fung's take on obesity is, take a look at my post "Obesity Is Always and Everywhere an Insulin Phenomenon" or go straight to reading the books.

Almost all approaches to weight loss have been proven to have only temporary effects for the vast majority of people. Jason Fung's approach is not in that large category of weight-loss approaches that have been proven not to work in the long run. The difference is that Jason Fung embraces fasting: periods of time with no food, or only very restricted types of food. (In addition to "Obesity Is Always and Everywhere an Insulin Phenomenon," see "Forget Calorie Counting; It's the Insulin Index, Stupid."

What most people don't realize is that in terms of one's experience during weight-loss, there is a nonlinearity in amount of food eaten. Calorie restriction—say anywhere from 400 to 1500 calories a day—is a miserable experience. Fasting—no food or almost no food—is remarkably easy. The reason is that when food consumption (and consumption of sweet beverages) is low enough, one's own fat stores start to be turned into blood sugar. By contrast, calorie restriction gives just enough food that for most people it keeps one's own fat locked away in the fat cells; a lack of sustenance from conversion of internal fat to blood sugar combined with the low levels of food consumption then leads to internal cellular starvation. In brief, as long as someone still has adequate fat stores on your body, they will paradoxically feel much better fed eating no food or almost no food than they will with 500 to 1500 calories a day. (But it isn't a deep paradox; what matters is nutrition in the bloodstream, not how much you are eating.)

I have written in "Diana Kimball: Listening Creates Possibilities" and in a series of tweets I storified as "On Fighting Obesity" about how excited I have been and am about these insights into obesity, weight-loss and how to avoid the large suite of "diseases of affluence" that typically go along with obesity. I have taken on as part of my mission in life and on this blog fighting obesity. In my talk "Restoring American Growth" last Spring I used a thought experiment to point out how much a solution to our obesity problem would add to social welfare. Paraphrasing:

Suppose we had had exactly the same growth in measured GDP as actually happened, but there had been no rise in obesity. Think how much better off America would be. 

The same can be said for most other nations as well. For example, I have been told that the rise in obesity in Arab countries has been especially severe. For those countries, a simple, and what I believe would be a religiously acceptable modification in Ramadan customs would make a huge difference: in that month of fasting, instead of eating a big meal before sunup and then a big meal after sundown, change to having only the big meal after sundown, and only water, tea and coffee before sunup. The experience of no food for about 20-22 hours every day is likely to be much easier if the big meal leans toward foods low on the insulin index I discuss in "Forget Calorie Counting; It's the Insulin Index, Stupid."

I write in this blog—only slightly tongue-in-cheek—about "saving the world." I don't know of any more powerful way to save the world than to stop and reverse the worldwide rise in obesity. (For example, this is much bigger than eliminating the zero lower bound, which I have written on extensively.) And the great thing about fighting obesity is that it doesn't require going through policy makers. Leaving aside the minority of individuals who have no problem with being overweight, every individual who gets clearer about what really determines obesity and weight loss—and the attendant diseases of affluence, such as diabetes, heart disease and strokes—is empowered to make his or her life much better than it otherwise would be. 

Thanks to my wife Gail, for the excellent suggestion of marking Thanksgiving by writing about the books that have changed my life. And thanks to all the authors who have made a difference in my life through their writings, even beyond those featured above. 

 

 

John Locke's Song of Praise for Work

Link to the Wikipedia page for this painting: "The Angelus," by Jean-François Millet Hat tip to this website

Link to the Wikipedia page for this painting: "The Angelus," by Jean-François Millet

Hat tip to this website

John Locke, in section 32 of 2d Treatise on Government: “Of Civil Government” (in Chapter V "Of Property") writes:

But the chief matter of property being now not the fruits of the earth, and the beasts that subsist on it, but the earth itself; as that which takes in and carries with it all the rest; I think it is plain, that property in that too is acquired as the former. As much land as a man tills, plants, improves, cultivates, and can use the product of, so much is his property. He by his labour does, as it were, inclose it for the common. Nor will it invalidate his right, to say every body else has an equal title to it; and therefore he cannot appropriate, he cannot inclose, without the consent of all his fellow-commoners, all mankind. God, when he gave the world in common to all mankind, commanded man also to labour, and the penury of his condition required it of him. God and his reason commanded him to subdue the earth, i. e. improve it for the benefit of life, and therein lay out something upon it that was his own, his labour. He that in obedience to this command of God, subdued, tilled and sowed any part of it, thereby annexed to it something that was his property, which another had no title to, nor could without injury take from him.

I want to highlight two aspects of this chapter. First, I find John Quiggin's post "John Locke Against Freedompersuasive. John Quiggin argues as follows:

Given his reputation as a defender of property rights and personal freedom, Locke has been accused of hypocrisy for his role in promoting and benefiting from slavery and the expropriation of indigenous populations, actions that would seem to contradict his philosophical position. This is too charitable. 

The real contradictions are to be found within Locke’s philosophical writings. These are designed to fit his political positions both in England, where he supported resistance to the absolutist pretensions of the Catholic James II, and in America, where he was part of the slave-owning ruling class (albeit from afar). ...

Considered in the American context ... Locke is not offering a theory of original acquisition. Rather, his theory is one of expropriation, designed specifically to justify the “fraud and injustice” to which Hume refers.

Locke’s central idea is that agriculturalists, by mixing their labor with the soil, thereby acquire a title to it. He immediately faces the objection that before the arrival of agriculture, hunters and gatherers worked on the land and gained sustenance from it. So, it would seem, the would-be farmer has arrived too late. The obvious example, to which he refers several times, is that of European colonists arriving in America. Locke’s answer is twofold.

First, he invokes his usual claim that there is plenty of land for everybody, so appropriating some land for agriculture can’t be of any harm to the hunter-gatherers. This is obviously silly. It might conceivably be true for the first agriculturalist ... or the second or the fiftieth, but at some point the land must cease to be sufficient to support the preexisting hunter-gatherer population. ...

Locke’s real defense is that regardless of whether there is a lot or a little, uncultivated land is essentially valueless. All, or nearly all, the value, he says, comes from the efforts of the farmers who improve the land. Since God gave us the land to improve, it rightfully belongs to those who improve it.

In my post "John Locke on Diminishing Marginal Utility as a Limit to Legitimately Claiming Works of Nature as Property" I argue against the expropriation of native lands as follows:

To justify, theoretically, taking that land from the Native Americans, one would have to add the principle that when technology changes so that people need less land to support themselves, then previous land claims need to be reevaluated. In general, such a principle is a recipe for a big mess. Better to, at a minimum, require rich outsiders to purchase land as European Americans did from Native Americans in a few cases, and as the European New Zealanders did to a much greater degree from the Maori. If technology has really improved dramatically, they should be able to do so.

One of the ways that John Locke justifies both the expropriation of native lands and slaveholding is by quoting the Bible. I discuss his Biblical justification of slavery in "John Locke Treats the Bible as an Authority on Slavery." The Bible verses alluded to in section 32 that he uses to justify expropriation are Genesis 2:15, before the Fall, 

The Lord God took the man and put him in the Garden of Eden to work it and take care of it. 

and Genesis 3:17-19, after the Fall:

“Cursed is the ground because of you;
    through painful toil you will eat food from it
    all the days of your life.
It will produce thorns and thistles for you,
    and you will eat the plants of the field.
By the sweat of your brow
    you will eat your food
until you return to the ground,
    since from it you were taken;
for dust you are
    and to dust you will return.”

From the point of view of these verses, hunter-gatherer populations were violating a command of God by not being farmers. John Locke is unfair here in counting the labor of farmers. Hunting and gathering is also labor.

Cultivation is not the only way to improve land. Land can also be "improved" by combining it with the knowledge of where to find plants to gather and animals to hunt on that land. But John Locke won't count that. 

The second aspect I want to point to is that after correcting John Locke to include all kinds of labor in improving land, not just cultivation, I do feel sympathetic to the idea that labor is not only honorable, but honorable enough to sometimes by rewarded by a claim to something that was unmade by humans, or to some of the income of things that were unmade by humans. 

One of the arguments these days for a universal basic income is that it frees people from the necessity to work, as if needing to work were an undignified imposition on people. It may be that we have somehow subtracted dignity from many forms of work, but work itself is not inherently undignified!

Some day the robots may be able to do all the work for us. But I see that day as at least 100 years off. In the meantime, much needs to be done, and we need everyone to pitch in! Instead of giving everyone a basic income without needing to work, let's give everyone a basic income as long as they do work, and make sure there is a way to work.

Personally, I like Morgan Warstler's plan for this using wage subsidies for those at the low end of the wage distribution. One way I might emend his plan is to augment the income floor for those who do government help in the form of wage subsidies by adding in some credits that can be used only to buy services from others who are also receiving this kind of government help. By that means, the poor can be encouraged to help one another by providing inexpensive services to one another, in addition to, as now, the poor providing services to the rich and the rich providing often overpriced services to the poor.

Another way it is necessary to add to Morgan Warstler's plan is that services done under the rubric of the wage subsidy system needs to be free of the most onerous limitations of occupational licensing. Streamlined, minimalist occupational licensing requirements for those working under that rubric can be the beginning of streamlined, minimalist occupation licensing requirement for everyone. 

Update: Morgan Warstler replies on Twitter. 

 

Forget Calorie Counting; It's the Insulin Index, Stupid

In my post "Obesity Is Always and Everywhere an Insulin Phenomenon" I explain why insulin is so central to obesity. In brief, among its many other effects insulin is an instruction to fat cells to take in blood sugar and turn it into stored fat. As a result, knowing the details of what ramps up your body's insulin production is much more helpful for weight loss than counting calories. 

The Problem with Calories In/Calories Out. But isn't it obvious that weight-loss is all about calories in/calories out, given the familiar energy balance identity below?

Weight Gain in Calories = Calories Consumed - Calories Expended

The basic problem with that view is in the title of my storify story "How the Calories In/Calories Out Theory Obscures the Endogeneity of Calories In and Out to Subjective Hunger and Energy." To understand weight-loss or weight gain from the energy balance identity, you have to understand calories consumed and calories expended. And insulin is the key to understanding calories consumed and calories expended.

As mentioned above, high insulin levels cause sugar to be taken out of the bloodstream and turned into fat in the fat cells. The low blood sugar levels then have two effects: making you hungry, so you want to eat more, and making you feel less energetic, so you burn fewer calories.

(If your body produces too much insulin for too long, it can create enough insulin resistance to cause Type II diabetes. Once you have Type II diabetes, administered insulin or an insulin-promoting drug may play a role in treatment. But dietary modifications may help. Jason Fung is an expert on that, and has a Center for Intensive Dietary Modification that he talks about in his book The Complete Guide to Fasting.)

People often say the way to lose weight is to "Eat less, move more." By itself that is not so stupid, but what is off track is to think that you "Eat less, move more" by trying to "Eat less, move more." Instead, just keep your insulin levels down, and your body will automatically make you want to eat less and move more without you trying at all—other than whatever effort it took to keep your insulin levels down. (Here I am taking a bit of poetic license in counting a rise in basal metabolism as "moving more.")

Some aspects of a low-insulin strategy for weight loss will look very similar to what you might try to do anyway under the naive take on calories in/calories out that surrounds us in our culture: for example, eat lots of greens, avoid anything with added sugar; avoid eating late at night. But many other aspects of a low-insulin strategy are quite different than the conventional wisdom.

What I think is the correct advice—and hope will become conventional wisdom in a better future—is to avoid all foods and beverages that cause the body to produce a lot of insulin and to lean towards foods and beverages that cause the body to produce relatively little insulin. This post looks at the evidence on which foods and beverages cause the body to produce a lot of insulin and which don't in order to give advice about what are healthy and unhealthy foods to eat in relation to weight gain and weight loss and the suite of "Western diseases" such as diabetes, heart disease and strokes that are highly correlated with weight gain and weight loss.   

Multipliers. "Table 2" linked above (from the paper linked above that) reports the results of experiments in which experimental subjects ate a particular food, and then their insulin was measured over a period of time after that. The table focuses on differences between different foods and beverages. But there are also difference across people and across time in insulin production.

Compared to other people, you will produce more insulin in response to any given food or beverage if you are "insulin resistant." Basically, if you have had chronically high insulin levels, some cells in your body are likely to respond less to insulin, and so your body produces more insulin. It is a little like people who have hurt their hearing through many years of loud music; because they can't hear as well, they often turn up the volume of the music even more to make up for the lost hearing. The bottom line is that the more you have acted to raise you insulin levels in the past and the less you have done to lower your insulin levels in the past, the more insulin any given food is likely to cause your body to produce now.  

Compared to other times of day, you will produce more insulin in response to things you eat late in the day. On this there is less evidence than one would like, but here is what Jason Fung says in Chapter 12 of The Complete Guide to Fasting

... is there a difference between eating during the day and eating at night? Well, the studies are few, but perhaps revealing. In a 2013 study, two groups of overweight women were randomly assigned to eat a large breakfast or a large dinner. Both ate 1400 calories per day; only the timing of the largest meal was changed. The breakfast group lost far more weight than the dinner group. Why? Despite following similar diets and eating about the same amount, the dinner group had a much larger overall rise in insulin. An earlier 1992 study showed similar results. In response to the same meal given either early or late in the day, the insulin response was 25 to 50 percent greater in the evening.

Insulin production being high late in the day has a very obvious implication for weight loss: if you can, make your big meal of the day lunch, not dinner. For most people this is possible at least on the weekends. Actually, as far as timing goes, a big breakfast is likely as good, maybe even better, but as I will discuss below, many common breakfast foods are particularly high in their insulin production, so it might need to be a big breakfast that doesn't look like breakfast food to you. So suggesting that lunch be the big meal might lead to less misunderstanding. 

The fact that doing badly in relation to insulin in the past will cause you trouble now has several important implications:

  1. Prevention is much, much easier than cure. For most people, if they simply avoid added sugar and avoid eating late at night starting from a young age, they won't get fat. But if you are already overweight, chances are you have some degree of insulin resistance, and you will have to be stricter in your actions to reduce insulin production in order to have the results be reasonable insulin levels despite the high multiplier you have because past actions have led to insulin resistance. (Let me be clear that any past actions that have led to insulin resistance may not be your fault at all. They may well have been out of ignorance caused by the bad dietary advice the government has given us.)
  2. Just because someone else can get away with eating something doesn't mean you can. Indeed, you can learn something about your own insulin responses without any elaborate testing equipment: just notice which foods have a rebound effect where they lead to your getting hungry again an hour or two later. (For me personally, the big heap of white rice routinely served in Asian restaurants with almost any meal was an obvious example of this.)
  3. Reversing insulin resistance and thereby reducing one's personal multiplier for insulin production can be very valuable. Even apart from the direct health benefits, reversing insulin resistance expands the range of foods one can eat without causing trouble. (For example, reversing insulin resistance can add to the number of different kinds of whole fruit one can eat without trouble. That is valuable because many fruits have benefits that need to be balanced against the relatively high levels of insulin production most of them cause.) The only thing I know powerful enough to do much toward reversing insulin resistance is serious fasting of the sort Jason Fung talks about in The Complete Guide to Fasting

The rest of this post gives a few general rules about good and bad foods and beverages and then divides foods and beverages into groups according to their food insulin index or "insulin index" for short. I title each section according to my own rules of thumb about how to think of each insulin index range. This may give you some sense of what the numbers mean: 

  • 70 or above insulin index: "never" foods
  • Insulin index from 50 to 69: wicked treats: very bad, but not quite as bad as some other things
  • Insulin index from 30 to 49: except on special occasions (such as a meal at a good restaurant) portion sizes should be kept small 
  • Insulin index from 20 to 29: go-to staples for a low-insulin approach
  • Insulin index from 10 to 19: especially good foods
  • Insulin index below 10: suitable for eating and drinking even on an extended "modified fast." 

Also, for comparison, straight sugar (glucose) has an insulin index of 100. 

For simplicity, I will report only the point estimate of the insulin index for a food or beverage. Table 2 at the link reports standard errors. You should double those to get an idea of a reasonable range of what could be true. In particular, if you think one of the insulin index ratings doesn't make any sense, it is fair to look up the standard errors in the table, then add double the standard error and subtract double the standard error to get a reasonable range of what the true insulin index might be for that food. It is especially valuable to be suspicious of the point estimate of an insulin index and pay close attention the confidence interval obtained by looking at plus or minus 2 standard errors when the insulin indexes for similar foods seem very different than the insulin index for the food you are looking at. I do a bit of that below. 


Now the general principles:

General Principle #1: Avoid "Lowfat" Foods

The first general principle is to avoid all lowfat foods. The highfat versions both taste better and have a lower insulin index. So as economists would say, all lowfat foods are dominated: worse on taste and worse in terms of making you fat. Always choose the high fat version of everything. Let me give here some of the comparisons from the table between lowfat and highfat versions of things:

  • vanilla ice cream: 65
  • lowfat vanilla ice cream: 69
  • milk: 24
  • 1% milk: 34
  • skim milk: 60
  • reduced-fat cottage cheese: 40
  • lowfat cottage cheese: 52
  • tuna canned in oil: 16
  • tuna canned in water: 26
  • Chips Ahoy chocolate chip cookie: 33
  • Chips Ahoy reduced-fat chocolate chip cookie: 49
  • potato chips: 45
  • 40% reduced-fat potato chips: 51

From here on, I will list only the highest-fat versions of things in the table since eating lowfat versions of things makes no sense unless you want to fool yourself that you are eating more healthily than you are. 

General Principle #2: Avoid Cold Cereal

Many, many different kinds of cold cereal have been tested. They all have fairly high insulin indexes. I won't list them all. Below are the worst and the best, but aside from all-bran original, even the best is pretty bad:

  • grapenuts: 110
  • rice krispies: 94
  • original shredded wheat: 91
  • special K (US version—Australian version much better): 86
  • Kellogg's cornflakes (US version—Australian version much better): 82
  • wheaties: 78
  • frosted flakes: 72
  • ...
  • 7 whole grain puffs: 59
  • great grains: 57
  • Kellogg's cornflakes (Australian version—US version much worse): 55
  • sustain: 52
  • honeysmacks: 49
  • cracklin' oat bran: 48
  • special K (Australian version—US version much worse): 48
  • Quaker 100% natural granola oats, honey and raisins: 41
  • Kellogg's all-bran original: 23

General Principle #3: Avoid Sweet Beverages, Including Fruit Juice

The trouble with sweet beverages is that the sugar in them is too easily and quickly digested, and so causes and insulin spike. That includes fruit juices. The fiber in fruit is needed to slow down digestion and moderate the insulin spike. Making fruit into juice stops the fiber from doing its work.

Even beverages with artificial sweeteners can cause an insulin spike simply from a mental anticipation effect: it is easy for your body to start looking forward to some real food if you taste something sweet. Some artificial sweeteners have other effects on insulin, but for those that operate through a mental anticipation ("cephalic") channel, my view is that they are more OK when sprinkled on real food than when drunk as part of a "zero calorie beverage" which makes the body expect nourishment that won't actually be there. 

If you want to know about the effects of a particular non-sugar sweetener on insulin, try googling "insulin [name of non-sugar sweetener]" and you might find articles like this on the effects of stevia and aspartame on insulin.

General Principle #4: Avoid Things with Added Sugar

This one is pretty obvious. One more lenient rule of thumb is to avoid anything with any form of sugar listed among the top three ingredients. 

General Principle #5: Avoid Starchy Foods

The body can turn starch into sugar so fast that starches cause insulin spikes similar to sugar itself. But in case it is not so obvious what is a starchy food, I list them all in the category for the appropriate insulin index range. 

General Principle #6: If You Drink Alcohol, Lean Towards White Wine Instead of Red Wine or Beer

For other health reasons, I am not going to recommend drinking alcohol. (The idea that alcohol is good for health doesn't replicate well, empirically.) But it is worth knowing that while beer has an OK insulin index of 20, white wine has an insulin index of only 3. (Gin has an even lower insulin index of 1, but such high levels of alcohol have other negative side effects for health that have nothing to do with insulin.) Because grapes have a relatively high insulin index, I suspect that red wine, which leaves more of the grape in has quite a bit higher insulin index than white wine. Indeed, I wouldn't be surprised if the insulin index for red wine is in the same ballpark as for beer. Given this principle, of alcoholic beverages I will only list white wine below.


On to the groupings. Note that many foods and beverages haven't been tested, so one has to guess based on the things that have been tested. One good example is what I said about cold cereal above. I'll bet cold cereals that haven't been tested have quite a high insulin index, too! (Below I will leave cold cereals out, since I dealt with them all I need to above.) Remember to choose the highest-fat version of everything available. Lowfat versions of things will have a higher insulin index than what I list below!

Insulin Index above 70: Foods and Beverages to Avoid Completely—Or If You Must, Only the Tiniest Bite

  • jellybeans: 117
  • pancake and waffle mix: 110
  • honeydew melon: 93    (95% confidence interval from 63 to 123)
  • Mars bar: 89
  • potatoes: 88
  • baked beans (with added sugar): 88
  • strawberry lowfat yogurt: 84
  • fruit punch: 76
  • 97% fat-free pretzels: 74
  • sherbet: 76
  • white bread: 73
  • whole-wheat bread: 70

Insulin Index from 50 to 69: Wicked Treats—Very Bad, But Not Quite as Bad as the Things Listed Above

  • fat-free blueberry muffin: 69
  • blueberry struesel muffin: 69
  • sweetened iced tea: 69
  • peaches canned in syrup: 65
  • vanilla ice cream: 65
  • peach-mango frozen yogurt: 64
  • water crackers: 64
 Image from the Wikipedia article for "Water biscuit," a.k.a. water cracker

 Image from the Wikipedia article for "Water biscuit," a.k.a. water cracker

  • chocolate cake brownie with chocolate frosting: 60
  • black grapes: 60
  • bananas: 59
  • Panjacks: 58
Website for buying Panjacks—but don't buy any!

Website for buying Panjacks—but don't buy any!

  • white rice: 58
  • croissants: 58
  • chocolate chip cookies: 57
  • McDonald's french fries: 57
  • orange juice: 55 
  • Australian french fries: 54
  • peaches canned in juice: 54
  • fat-free oatmeal raisin cookie: 54
  • doughnuts with cinnamon sugar: 54
  • battered fish fillets: 54
  • supermoist yellow cake with chocolate frosting: 53

Insulin Index from 30 to 49: Portion Sizes Should Be Kept Small Except on Special Occasions

In addition to keeping portion sizes small, make sure to combine things in this category with other things that have a lower insulin index. Try not to eat them all by themselves.

  • apple juice: 47
  • apple pie: 47
  • pizza: 47
  • brown rice: 45
  • Australian Jatz crackers: 45
  • potato chips: 45
  • corn chips: 45
  • coca cola: 44
  • oranges: 44
  • apples (red delicious): 43
  • white fish: 43
  • cinnamon swirl pastry: 42
  • lentils: 42
  • carrot juice: 41
  • Australian grain bread: 41
  • frozen corn: 39
  • popcorn: 39
  • honey-raisin bran muffin: 37
  • snickers bar: 37
  • beef steak: 37
  • white corn tortillas: 36
  • chocolate milk: 34
  • muesli bar: 34
  • beef lasagna: 34
  • Chips Ahoy full-fat chocolate chip cookie: 33     (95% confidence interval from 27 to 39)
  • raisins: 31    (95% confidence interval from 21 to 41)

Insulin Index from 20 to 29: Go-To Staples for a Low-Insulin Approach

  • porridge (I assume this means unsweetened, non-instant oatmeal): 29
  • brown pasta: 29
  • white pasta (spirals): 29
  • tuna canned in water: 26
  • milk: 24
  • taco: 24
  • eggs: 23
  • navy beans: 23
  • prawns: 21
  • tofu: 21
  • 7% fat cheddar cheese: 20

Insulin index from 10 to 19: especially good foods

  • chicken fried in olive oil with skin: 19    (95% confidence interval from 11 to 27)
  • cream cheese: 18
  • roast chicken without skin: 17    (95% confidence interval from 9 to 25)
  • tuna canned in oil: 16
  • Australian hot dog (I assume with no sugar added): 16
  • peanuts: 15
  • Australian bologna (I assume with no sugar added): 11
  • Australian peanut butter (I assume with no sugar added): 11

Insulin index below 10: suitable for eating and drinking even on an extended "modified fast."

Jason Fung argues for the benefits of extended fasts (periods of time without eating) in The Complete Guide to Fasting. And many people find not eating for even a week surprisingly easy. Anyone interested in this should read the book before trying it and heed Jason's warning:

If you are on any medication, you need to talk to your doctor before trying an extended fast, because appropriate dosages are often affected by how much you are eating. If you are diabetic and don't have your doctor adjust your diabetes medicine for the fact that you are eating less for a period of time, you could die. 

Here, what I want to suggest is that for those who don't tolerate extended fasts (lasting more than a day) very well, it might work well to have a week, say, in which you only eat very-low-insulin-index foods. To my mind, that is too little variety to be a satisfying diet all the time, but if you think of it as a modified fast, a week of very restricted food choices wouldn't be that bad if you then go back to eating a wide variety of things. Here, I will list the things there is data on, then I will give my best guess about a wider range of things I suspect would have an insulin index below 10.

Let me note this: I assume the bacon in the list just below is bacon with no sugar added. Unfortunately, in the US, most bacon does have sugar added. You have to work hard to find bacon without sugar added and then pay extra. Bacon with sugar added likely has an insulin index quite a bit higher than 9. You may not always feel it is worth the extra money for bacon with no sugar added, but I would make a point of getting bacon with no sugar added for your modified fast, if you are going to eat bacon during your modified fast.

  • full-fat bacon (with no added sugar): 9
  • walnuts: 5
  • avocado: 4
  • olive oil: 3
  • white wine: 3
  • butter: 2

Based on this data and my guesses about the insulin index of things that weren't tested in time for this table, I would allow any of the following foods during a "modified fast":

  • full-fat bacon
  • any type of nuts (except maybe peanuts)
  • any type of nut butter that doesn't have any added sugar
  • avocados
  • oil of any kind
  • vinegar
  • salad dressing that has less 1 gram or less of carbs
  • hummus (see my discussion in the Conclusion)
  • butter
  • cream
  • coffee (but don't use a sweetener)
  • any kind of tea (but don't use a sweetener)
  • white wine (if you drink alcohol)
  • kale

This list means that you can have a very nice kale salad with bacon, avocado, olive oil, low-carb dressing and pine nuts, with a side of other nuts. And you can have "bulletproof coffee" which is butter melted into coffee, or stick with just cream in your coffee or tea. That doesn't sound so bad if it is only for a week.

It should go without saying that if you like these foods, it is great to eat them all the time—don't limit them to modified fasts. Part of my own practice is to make sure to eat a gigantic salad every day. That daily salad has a few other things in it, for example a tomato, mushrooms and half a cucumber, two eggs instead of bacon, and usually lettuce and spinach instead of kale, but it includes many things in this "insulin index so low it is suitable for a modified fast" category, including a whole avocado every day, pine nuts and all three of hummus, oil (olive oil or MCT oil) and full-fat 1-gram-carb ranch dressing. Preparing food causes an anticipatory rise in insulin, which makes me hungry, so I eat handfuls of roasted cashews and almonds and raw brazil nuts and salted raw macadamia nuts while I am preparing my salad. 

Even with a modified fast, be alert to any warning signs that you should increase the range of food you are eating. If you need to, you can always raise the upper limit on the insulin index for your modified fast above 9, or discontinue your modified fast entirely. Nausea or an irregular or unusually fast or slow heart rate are warning signs you should heed. Also, worry about a level of dizziness or weakness that seems scary to you. But I am hopeful that eating to satiation from the list of very-low-insulin-index foods will keep such symptoms at bay. Since, in a modified fast, you are eating until you feel full at least once a day from the list of very-low-insulin-index foods, it is also unlikely that you would feel the extreme hunger that is also a warning sign. This sensation is called "true hunger" in this "All About Fasting" blog post that I googled: 

True hunger is a sensation in the mouth and throat, similar to thirst, and not a gnawing pain in the stomach. The way it will get your attention is that [it] comes after many days of experiencing no hunger. Seemingly out of the blue, you'll have an intense desire for food. ...

Having once experienced this "true hunger", you will no longer confuse it with the emotional desire or physical discomfort we usually associate with hunger. Such physical "hunger pains" felt either in the stomach, or as "hunger headaches", are said to actually be withdrawal and detox symptoms from rich foods, chemicals, and stimulants.

In any case, be careful. Different people have different experiences, and because a lot of nutritional research has been barking up the wrong tree, research on fasting in general and on individual differences in responses to fasting or modified fasting is sorely lacking. It makes sense to do some experimentation to learn about your own reactions to dietary changes and fasting, but be cautious in the risks you take. 

The Conundrum of Fruit

As I alluded to above, one issue with a low-insulin diet is that many fruits have a high insulin index. And many fruits weren't tested in time for this list. Although there are many important differences, the glycemic index does have a positive correlation with the insulin index. Given the lack of direct data on the insulin index for many fruits, let me report some glycemic indexes for various fruits (mostly from this website). Unlike above, in my list below I put fruits with the lowest glycemic indexes first. Where there is insulin index data, I put that alongside for comparison.

Glycemic Index

  • tomatoes: 15
  • cherries: 20
  • grapefruit: 25
  • dried apricots: 32
  • pears: 38
  • apples: 39    (insulin index 43)
  • oranges: 40    (insulin index 44)
  • plums: 40
  • blueberries: 40
  • strawberries: 41
  • fresh peaches: 42    (insulin index 54 for peaches canned in juice)
  • bananas: 51   (insulin index 59)
  • grapes: 53   (insulin index 60)

Based on this data, for fruits with no direct insulin index data, I would guess the insulin index by multiplying the glycemic index by 1.1. Based on what I know, I have made cream and frozen cherries (or sometimes cherries and half and half) one of my healthy treats. I also love grapefruit. Apricots look like a good way to go as well. I view Pears and apples as fruits that should be eaten only in moderation. 

Given the other benefits of fruits, weighed down by the high sugar content, and therefore high glycemic index of most fruits, the other choice I have made for myself is use this fruit powder:

I don't have any commercial relationship with this product. Indeed, no one pays me anything for my blog. (I do get paid by Quartz for columns I write there.) But also, all I know about this product is what the advertisements for it say. I figure that taking many kinds of fruit and turning them into a powder that I mix with milk destroys some of the value of the antioxidants, phytochemicals, and other micronutrients, but for me the fact that the sugar has been subtracted in making the powder more than makes up for that. Overall, I feel I am getting an improved ratio of the good aspects of fruit relative to the bad aspects. I do eat some whole fruit (cherries and cream :), but I feel the variety of different fruits that are used to make this powder is valuable because it might give me a wider range of different antioxidants, phytochemicals and other micronutrients. 

In any case, I wanted to get across the message that, contrary to what you have been taught "fruits and vegetables" are not automatically healthy. Some vegetables—such as carrots, peas, and corn—are relatively starchy, and most fruits have a lot of sugar that weighs down the benefit from their other good aspects. Be just as careful with fruits and vegetables in your efforts to avoid too much fattening insulin production as with other things you eat. 

Conclusion

If everyone kept handy a table of insulin indexes and treated foods and beverages with high insulin indexes as fattening, and treated foods and beverages with low insulin indexes as good for keeping weight low, it could make a huge difference to health in the US and other countries around the world. This is an area where accurate information alone can do a lot to raise welfare. So spread the word!  

I hope that soon, many more foods and beverages will be tested for their effects on insulin production by the body, so that an insulin index table will soon be as complete as the calorie tables that I am warning you away from relying on.

Let me illustrate how I cope with the current state of the data on the insulin index. I wanted to guess the insulin index for basic hummus (with no added sugar). I first think about the insulin index for related foods like beans and lentils, but that still leaves me confused. Also I wondered whether being mashed up would affect the insulin index (anything that makes digesting something easier, including chopping something or mashing it can raise the insulin index), so I googled "hummus glycemic index" and found that it was 6. Multiplying by 1.1 or a bit more makes me hope insulin index for hummus is about 7, which would mean it was a very good food, suitable even for modified fasts. That is how I would then treat hummus until I found genuine insulin index data for hummus or for the chickpeas hummus is made from. An easier case is cucumbers. Without direct data on the insulin index for any of these, I start out expecting cucumbers to have a bit higher insulin index than lettuce or spinach. To confirm, I googled the glycemic index for cucumbers as 15 (giving me a guess of 17 for the insulin index for cucumbers), but find on the same webpage that spinach and lettuce have the same glycemic index of 15, somewhat higher than I expected. Googling kale glycemic index gets me an estimate of 4 or below for the glycemic index, which further makes me guess an insulin index of 5, which is behind my inclusion of kale in the "suitable for modified fasts" category above. Finally, curious about another ingredient in my daily salad, I googled a glycemic index of 15 for mushrooms. 

I learned a lot from studying this table of the insulin index for various foods and beverages. I hope you have learned something from my take on that table.

Finally, let me emphasize again: please read "Obesity Is Always and Everywhere an Insulin Phenomenon" if you haven't already. That is where I explain why insulin is so important for anyone who cares about their weight or the many deadly diseases that are highly correlated with weight. 

Update: I think you will find the discussion about this post on my Facebook page interesting. Also, let me copy out here a highly relevant Q&A with the same commenter in the comments for my post "On Fighting Obesity" and "'Forget Calorie Counting. It's the Insulin Index, Stupid' in a Few Tweets":

Matt: So i don't totally get the fascination with focusing on insulin vs calories in / calories out.

If you were to eat a ton of fatty meat, nuts, guacamole etc and low sugar you would still gain weight. I don't think many nutrionists / healthcare professionals would disagree. Would you?

What usually happens, however, is that carbs / sugar are insanely cheap and tasteful and ubiquitous now such that way more calories in vs calories out means weight has gone. As well as insulin issues and overconsumption of sugar. I just don't see why you disagree so much with saying yeah it is an calories in vs calories out thing, but primarily caused due to the massive increase in sugar / fast digesting carbs.

I think you partially agree to this by saying the problem with calories in / calories out is wrong due to the fact that calories in isn't totally exogenous.

In short, I think you are on to something with the importance of sugar, and fast digesting carbs, and the resulting insulin effects, I just think that you miss a good bit by not integrating that with the relatively accepted and common sense calories in / calories out framework.

Miles: I totally disagree. If you eat only high-fat food, you just can't get much down. You will be too full.

By contrast, people can eat a huge amount of sugary things. Sugar gives you a keen appetite.

How many calories you want to eat is governed in a big way by how much insulin is produced. Sugar produces a lot of insulin and makes you read to eat more an hour or two later. Fat by itself makes you not want to eat more.

Calories in/calories out talks as if calories in and calories out are exogenous. They aren't. They are governed in a big way by insulin.

Matt: The bloomin onion has 1,950 calories, of which 72 are due to sugar, and over 1300 are due to fat... you are telling me that is not fattening and that the fat in tht will be satieting? Or that a wedge salad that has 500 calories, and then the clam chowder that has 400 calories which is mainly fat is filling and won't make you fat? That's crazy....None have substantial refined carbs or "starchy", they all have huge, huge amounts of fat and added fat / frying / oil.

Sugar is bad, which seems obvious, and I totally agree. the insulin side you and taube talk about is just way exaggerated.

(btw, love your blog, and love your unique economic insights. It probably almost seems like I am trolling you since this is about my fourth comment on this topic, but I have lost and kept off 90 lbs over 4 years ( statistics shows <10 percent of people do this) with primarily a calorie counting philosiphy, and this was emphasized when i did nutrition research before recently going to outback (not a big govt rule guy at all, but them mandating calorie information for larger chains certainly has changed my habits, despite many studies I think showing smaller broad scale change). Just thought I would make what anecdotally and logically seems obvious about added fat (oil / butter / fried etc).

Miles: Just avoiding sugar and flour (which is highly correlated with avoiding processed foods) will do an enormous amount of good. So if you are getting that right, I am not surprised you are having a lot of success.

Yes, I do think that it is better to focus on the effects of food and drink on insulin than on calories, which implies that avoiding avoiding dietary fat is not helpful (unless you are substituting food with an even lower insulin index or are fasting—no food).

Think of it this way: many American adults gain about 1 pound a year. One pound of body fat corresponds to about 3500 calories. That means 1 pound a year is slightly less than 10 calories a day. So someone gaining 1 pound a year is keeping the calories in/calories out balance on average within 10 calories per day out of, say, 2000 calories a day overall. That is a remarkably close match! It is clear that people are not doing this consciously. So there must be unconscious regulatory mechanisms that are keeping calories in and calories out in very close balance. If those regulatory mechanisms get off by even 10 calories a day, it leads to being overweight in a now typical way. If those regulatory mechanisms get off by 30 calories a day, it can lead to serious obesity. So it is the regulatory mechanism you should pay attention to, and keeping it on track. The regulatory mechanism will handle the calories in/calories out for you. And insulin is central to the regulatory mechanism.

Let me also say that many things people think are fattening really are fattening, but are fattening for a different reason than people think:

  • Bread and butter: It is the bread you need to worry about, not the butter.
  • Pizza: It is the dough and the sugar in the toppings you need to worry about, not the cheese.
  • Hamburger: It is the bun you need to worry about, not the meat.
  • Ice Cream: It is the sugar (or nonsugar sweeteners) and corn syrup you need to worry about, not the cream.

Note: If you find the title of this post puzzling, take a look at the Wikipedia article for "It's the economy, stupid."

For more contrarian discussion of nutrition, obesity and chronic diseases, don't miss:

Also see the last section of "Five Books That Have Changed My Life."

Podcast: Miles Kimball on the Fed's New Jerome Powell Era

Link to the podcast shown above

Link to the podcast shown above

The interview with me on the Fed begins at the 26 minute mark. I posted "A New Era for the Fed" the same day I did this interview. 

There is also a segment about "What I Got Wrong" at the 53 minute mark, related to my posts "Jason Fung: Dietary Fat is Innocent of the Charges Leveled Against It" and "Obesity Is Always and Everywhere an Insulin Phenomenon." 

Michael Weisbach: Posters on Finance Job Rumors Need to Clean Up Their Act, Too

                                                                MIchael Weisbach

                                                                MIchael Weisbach

Michael Weisbach holds the Ralph W. Kurtz Chair in Finance at Ohio State University. When he saw the two posts here on the Economics Job Market Rumors website

Michael thought immediately of how bad Finance Job Rumors was as well. Finance Job Rumors is technically part of Economics Job Market Rumors, but in practice involves a different set of people, but with similar online behavior. I encouraged Michael to write a guest post about Finance Job Rumors. You see his words below.


I, like many others, was appalled (but not surprised) when I read about Alice Wu’s study about sexism in EJMR.  We in finance have our own message board inside EJMR (called Finance Job Rumors).  Unfortunately, we are not immune to the issues Ms. Wu describes in her paper. Our board regularly contains sexist and racist comments about many members of the profession. After communicating with Miles about his entry on the subject, which I thought was terrific, he invited me to post some thoughts about the finance board on his blog.

The finance board appears to be dominated by graduate students and assistant professors who are having difficulty finding success, either in completing their degree, getting a job they are happy with, or publishing their research. The overall theme of the board is unfairness. Posters love to complain about how the profession plays favorites and values connections more than it should. They are not in the “mafia” that runs the profession, didn’t go to “HRM” schools as students (the EJMR name for the top 5 or 10 schools), are not of a protected minority, do not have connections (either personal or professional) with the powerful people in the profession, and, most of all, in their own minds, are themselves true scholars unlike the people who are successful at getting papers published (whom they call “regression monkeys”).

What has happened on the finance site is that the comments have become, in a large number of cases, very mean and personal. The targets of posters’ vitriol are anyone who is successful. Favorite targets tend to be top assistant professors and the current stars of the job market. As Ms. Wu pointed out, women are much more likely to be criticized, especially if posters think they are attractive. But there are others as well: if one is related to a senior member of the profession, or if posters have decided that one does not deserve his status in the profession for some reason, the board can be particularly mean.

I of course have been criticized on the site. For example, I was interested to learn from an anonymous poster that I free rode on the seven papers and one book that I wrote with Ben Hermalin. In fact, he did all of the work on them while I did nothing meaningful.  Fortunately, this criticism is fairly minor and obviously incorrect, and most importantly for me, nothing about my personal life or appearance has made it onto the board (that I know about). I’m sure if I were an attractive female instead of a balding middle aged guy, a lot more would have been written about my appearance. And I’m sure it would have been especially hurtful.  It actually hurt quite a lot to read the relatively mild things that were posted about me, I can only imagine what it is like to one of the frequent targets of the posters there. It must be truly awful to be a new member of the profession and to read these things about oneself online. 

Ours is a tough profession. It is hard to do research, to get a good tenure track job, and to publish one’s research. Some of the issues the board focuses on are real. There is way too much discrimination against Asians, and it is true that high profile people get a far easier time from journals than people who have not yet developed reputations. It is natural that there is resentment. Many very smart, hard-working people cannot get jobs they are happy with and cannot publish their research in top journals.

But the board creates real problems.  Young scholars should not have to have anonymous posters assaulting their character or personal appearance, or making cheap shots about their work in a forum where a large fraction of the profession will see it. It isn’t clear what to do about the situation. There is freedom of speech and it is impossible to monitor or regulate what is posted online. As a first step, I would implore all posters to remember that when you discuss someone online, they will undoubtedly read it, as will their friends and sometime their families too.

           

A New Era for the Fed

FederalReserve1 (1).jpg

Congratulations are due to Jerome Powell on being nominated to be Chair of the Board of Governors of the Federal Reserve. At this point I know Jerome Powell only from news reports, though I was pleased to realize a few days ago that the locked-down Twitter account @jeromehpowell created in 2011 is following me, as well as several of my friends in the blogosphere. If he is reading this, let me say that I would be glad to craft a blog post on any topic he would like to hear my opinion on, and would be happy to do so while keeping his query confidential. 

As top dog, Jerome Powell may reveal a strategic perspective that was hidden from view while he was just a member of the Board of Governors being a team player. That sort of thing does happen: my grandfather was a Mormon Church leader who faded into the background—until by longevity he became President of the Mormon Church and turned out to be one of the pivotal leaders of the Mormon Church in the 20th century, with a broad strategic vision no one expected. 

But there is also an excellent chance that Jerome Powell, as someone who believes in consensus, and has come to respect the Fed's excellent permanent staff through his service so far, will continue to be guided in important measure by the Fed staff.

Given that possibility, it is more important than ever for the Fed's staff economists to step up their efforts to prepare for the next recession or other crisis, even though several more years are likely to intervene before that next recession or other crisis hits. The decline of the natural interest rate and inflation call for the development of new tools of monetary policy, beyond what were used during the Great Recession and its aftermath. (Anyone on the Fed staff who feels complacent about the future after the experience we have been through and the dangers that remain should wake up and smell the coffee!) And even if we had in place the key tools for dealing with future shocks—deep negative interest rates and vert high capital requirements—there are many other improvements that can be made to monetary policy.  

I have laid out my views on the urgent research agenda for monetary policy in my paper "Next Generation Monetary Policy." In brief, the pluses and minuses of each of these possible dimensions of monetary policy need to be studied carefully, so that by the time of the next recession or other crisis, we know the virtues and vices of each:

  1. eliminating the zero lower bound or any effective lower bound on interest rates
  2. tripling the coefficients in the Taylor rule
  3. reducing the penalty for changing directions
  4. reducing the presumption against moving more than 25 basis points at any given meeting
  5. a more equal balance between worrying about the output gap and worrying about fluctuations in inflation
  6. focusing on a price index that gives a greater weight to durables
  7. adjusting for risk premia
  8. pushing for strict enough leverage limits for financial firms that interest rate policy is freed up to focus on issues other than financial stability.
  9. having a nominal anchor.

Many of these will be very good for the nation and the world, but have political ramifications as well. For the Fed staff, let me say there is a good chance Jerome Powell will not only listen to you, but will be good at running political interference for the Fed to make it feasible for the Fed to get away with doing the right thing.