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Math Lesson v. Popular Garbage

Now, popular garbage can and does take all kinds of forms. In this case, it’s Superfreakonomics, the swftly-selling follow-up to Levitt and Dubner’s Freakonomics. A counter-intuitive take on economics? Whoa, count me in!

Panned in all the finest establishments, not least (and maybe the best) by Elizabeth Kolbert in the current New Yorker, the new book has all of the appeal of high-minded contrarianism for the too smart to think mixed with the feel good ease of shortcuts to to problematic solutions. Consider the promise of certain geoengineering solutions to the AGW set (The denierati, in common parlance). Anyway, Kolbert slices, dices and disposes, but also gives the nod to one of Levitt’s colleagues at the University of Chicago, Raymond Pierrehumbert.

In an open letter published to RealClimate, Dr. P-h brings it:

By now there have been many detailed dissections of everything that is wrong with the treatment of climate in Superfreakonomics , but what has been lost amidst all that extensive discussion is how really simple it would have been to get this stuff right. The problem wasn’t necessarily that you talked to the wrong experts or talked to too few of them. The problem was that you failed to do the most elementary thinking needed to see if what they were saying (or what you thought they were saying) in fact made any sense. If you were stupid, it wouldn’t be so bad to have messed up such elementary reasoning, but I don’t by any means think you are stupid. That makes the failure to do the thinking all the more disappointing. I will take Nathan Myhrvold’s claim about solar cells, which you quoted prominently in your book, as an example.

He then goes on to quote-unquote do the math, to show that Levitt and Dubner’s refutation of solar energy capture solely on the basis of the waste it generates is yet another example of making us play a game of ‘fool or liar’, in which he respectfully eliminating the possibility they are fools. He even shows his work, by manner of screenshots of wikipedia searches and other applications of The Google.

So, to recap… the tally after 4 innings

Math lesson: 1,  PG: infinity- 1

But PG is definitely on the run.

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Time – the Revelator

We spend all manner of time and effort trying to de-couple these things which cannot be separated, no matter how much we want them to be.

I’m talking about economic growth and any of the things we don’t want to tackle because we’re afraid tackling them might harm our prospects for growth: health care reform, immigration policy, energy policy, especially regarding carbon emissions. Not only only will addressing these policy challenges head-on not jeopardize the future of the economy – the future of the economy is pretty-well destined to leave the toilet and head toward the sewer if we don’t address them. Stop me if you’ve heard this before.

gdpannualized1_2

via.

So what do you see when you see this graph? Are the prospects for growth drying up? Are they tied to other coincidental developments( peak stupid oil, the internet, the economic rise of Yurp and China? The wild swings of yesteryear and the policies that conjured them should not be the goal now. But this is a difficult idea for our better minds to grasp. We want to go back back back. Time goes forward forward forward, and well have to do way more with way less or we’ll just be like those crowds of people in old movies that are all dead now.

The prospects for and directions of future growth are changing; not in-a-phone-booth kind of changing but cloaked in the heavy disguise of things we’ve [supposedly] never done and so appear foreign and frightening, even un-American. But that charge is scurrilous and ignorant, and done they must be if the growth we crave is to become the reality we so desperately seek to escape. The extent to which we do not get this can become depressing; the extent to which we do will liberate us in the direction that turns hopes into certainty. Warning: An opposite set of outcomes may apply to the more resourceful among you.

Can you hear me, Doctor?

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Creative Destruction

Or, what will green mean once it has been destroyed and re-cast again? At the end of this Newsweek article about IBM and how it is “detaching” from the U.S., was this:

This is the new world of global business, one in which the U.S. becomes simply a market among markets, and not even the most interesting one. IBM is one of the multinationals that propelled America to the apex of its power, and it is now emblematic of the process of creative destruction pushing America to a new, less dominant, and less comfortable position.

It’s part global rah-rah, but having heard the term before in nearly the same context – as a seeming euphemism for the kind of havoc that is endemic to business interests in such a way as to insulate them from moralistic concerns about people or planet – it made me wonder how long it had been around and, at the risk of misunderstanding it, whether it could be true in multiple directions. I mean, destruction for gain, if truly amoral, could advance along an Eco axis if that was what where the gain is, Nes Pa?

Creative destruction was originally coined by Joseph Schumpeter (1883-1950) in his Capitalism, Socialism and Democracy. Some choice bits on CD:

Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary. And this evolutionary character of the capitalist process is not merely due to the fact that economic life goes on in a social and natural environment which changes and by its change alters the data of economic action; this fact is important and these changes (wars, revolutions and so on) often condition industrial change, but they are not its prime movers.

These would be new means of production and transportation, new markets, new forms of industrial organization. Sound familiar? Also note that he says capitalism can never be stationary; does this put sustainability out of play? If so, what then?

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation–if I may use that biological term–that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in. . . .

Ah, essential facts. We quickly revert to protecting that (competition) which does not require guarding, because its forms are designed to go away, or be transformed into something else. Something which may appear unrecognizable, but only because of our tendency toward the above reversion. One more:

But in capitalist reality as distinguished from its textbook picture, it is not that kind of competition (the price variable) which counts but the competition from the new commodity, the new technology, the new source of supply, the new type of organization (the largest-scale unit of control for instance)–competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives.

Now, there could be something very sexy about this, but we’ll have to get over the sad-sack ‘greed is good’ paradigm in which so many have found solace for so long, which has been under seige since the minute after it was created. It’s not merely being sanguine to say it is the nature of the system to destroy itself this way, just a reminder of the very necessary likelihood of possibilities that should be injected into the project. That are indeed its lifeline, if not its blood.

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You’ve Got Your Gender Composition in my Employment Parity

When the banality of economics becomes seductive. Via Matt Yglesias, Economix offers this chart undermining the truly pathetic neologism of a “mancession.” Please.

We could use crises to take a second look at issues in society – budget crises ostensibly allow us to prioritize our concerns, even if cowardly politicians address them with ridiculous across-the-board-cuts. Steep drops in employment bring up gender equity issues in the workforce in a way which, combined with other forces, should reflect not just changing demographics but shifts in national economy itself – toward education and healthcare, for example, and away from certain types of heavy manufacturing. Which itself reflects the tack away from industrial-based activity and toward a service economy. We will still have to make things and build stuff, and women may be increasingly designing the buildings, negotiating the contracts and cutting the ribbons. But this is less ‘XX takin’ XY’s jobs’ than ‘the nature of our jobs is changing.’

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Turning Japanese

I try to resist the impulse to use pop songs in post titles, but I’m only human. My disdain for Wally what’shisname, however, remains in tact. S’why I get feverish in certain airports, methinks.

So Krugman believes we are fiscally morphing into our seemingly reserved and genuflective brethren. But if you look at what is meant by the words Japanese, economic and model in the 1990’s vintage, you’ll see that what people refer to as the ‘lost decade’ was merely a decade of flat growth. Well, tell you what:

Get. Used. To. It.

Otherwise called a starting place, for most of what is going to follow. The dissonance of what’s happening in the financial economy right now, talk of recovery and longing for normal times is all due to the fact that there’s no going back. And we shouldn’t see this as a bad thing. Our pent-up imaginations have all the rough stuff shoved to the fore, and we’ve conditioned ourselves to be righteously afraid of it. But it’s just us, our dogs, cats and cattle, and back in there somewhere also is the idyllic train rides to see your lover and long walks to the park, stolen flowers, broken kisses and other things you can’t put on a price tag on without them seeming like an old lady‘s hat. The fact is old ladies are people and hats are things they wear out in the sun.

We’re trying to understand the tunnel of love from a technical standpoint and well, the two just don’t mix. You can’t say where or how we’ll come out of this, but seeing that as the fun part takes a little more than the promise of low, low prices or assembly-line built excitement. Sorry.

Technical note: I discovered posterous, and am trying to make the most out of the sweet spot of not knowing what it’s for before that, too, passes.

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What does 6.2% mean?

I can dig it when the Grey Lady steals my construct.

On Friday, the Bureau of Economic Analysis reported that gross domestic product fell at an annualized rate of 6.2 percent from the third to the fourth quarter of 2008. This was bad news, but some journalists have exaggerated the finding merely by misreading the report.

That post and graph is by a UChicago economist. Another economist I read regularly is Brad DeLong at Berkeley (who hopefully will be taking academic leave to work at the Treasury department very soon). Anyway, this post reminds me of something I heard DeLong say in a NPR essay, I think yesterday. He was talking about all the bad news that’s out there, about the fixation on the stock market as an indicator, the unemployment numbers, the CPI… and he was saying that its enough to make us all worried and scared. But he pointed out that because of certain trends in the fundamentals of the economy (which have been out of whack for several years, really), the stock market should be going down. And though we’ve known about most all of these trends and statistics since last fall, the news media has been more all over them of late. So while they are sufficiently dire that we should be worried and scared, we shouldn’t be more worried and scared than we were in December just because the news media is finally rending their garments.

But… check out DeLong; he has a great running gag (except its not so funny) about the Washington Post Death Watch that should serve him well when/if he gets back to DC.