Friday's WaPo reports that Virginia Attorney General Ken Cuccinelli, following up on his efforts to end efforts by state universities and colleges to avoid discriminating against GLBT folks, has decided to interfere directly in scientific research in a criminal way, http://www.washingtonpost.com/wp-dyn/content/article/2010/05/06/AR2010050605936.html. In particular, Cuccinelli is claiming that climate scientist, Michael Mann of hockey stick fame, engaged in billing fraud with the state while working on this subject while a professor of environmental sciences at the University of Virginia, where he has not been located for some years (now at Penn State). Cuccinelli is demanding all kinds of emails and other materials from the university, apparently attempting to imitate the climategate gang that did this over at East Anglia, only to end up with no fraud being discovered.
I think that some of the critics of Mann's work were correct, but this is an outrage. There is no evidence at all of fraud (and those claiming the email in which he spoke of using a "trick" as evidence for this do not understand or are wilfully misrepresenting how this term is used in these situations) on his part, whatever errors he may have made in his study of the hockey stick (and it really does not matter exactly what the temperature was 1000 years ago; I have posted on this here previously). As it is, Cuccinelli is trying to justify his money and time wasting lawsuit against the federal government for trying to regulate carbon dioxide emissions. Maybe Cuccinelli is trying to replace Sarah Palin as the tea party's fave pol, now that she has annoyed some of them by endorsing Carly Fiorina for governor in California?
Sunday, May 9, 2010
Saturday, May 8, 2010
A Rant on Degrees of Violence
We live in a violent society. When people become alienated they often do violent things. When the person is "one of our own," the violence is seen as a matter of individual responsibility. A man -- Joe Stack -- becomes troubled because the financial problems and flies an airplane into an Internal Revenue Service building. The response seems to be that he is mentally unbalanced or expressing justifiable indignation in an unacceptable way.
A young Pakistani immigrant suffers financial and family problems, turns to religion, and tries to explode a car bomb in crowded Times Square. The response focuses on the religious angle because his religion is not the dominant one in the country.
What if he had used a drone instead? Obviously, most of the victims have been innocent. Of course, we have no knowledge that our own drone attacks predominately kill "guilty parties"? And then again, if the drone attack had been successfully pointed at Wall Street, it would have undoubtedly kill people whose destructive activities have resulted in many destroyed lives. Would that be justified? Our own young people who operate the drones might be seen as some as heroes.
The analogy of Wall Street and the military may be unduly provocative. And yet, the banks resemble a victorious government demanding reparations from a defeated enemy -- in this case, the losers of the class war. Why should ordinary people have to pay for the destructive behavior of the rich and powerful?
I don't know if the people who recently burned the Greek bank were police provocateurs or militants angry with the government. In the former case, the objective was to harm the people who are presently being harmed by the financial crisis. In the latter case, they were behaving stupidly.
The man who flew the plane into the IRS building was upset about how much he was paying to support the government. I suspect that he, or the people who expressed sympathy for his cause, are less concerned about military expenditures than the social programs, comparable to what the Greek government is forced to cut.
Returning to the war theme, how much violence has been the product of people returning from the wars, serving the interests of Wall Street and the rest of big business. Timothy McVeigh was justifiably regarded as an outlier, but more common violence, such as individual homicides and suicides, seem to be far more common among people exposed to the violence of war.
How much more guilty are the supposedly respectable people who promote our wars abroad than the disturbed young man who attempted to kill a couple hundred people at most? Instead, his incompetent attempt at violence will be used to justify far greater violence abroad.
How can we put an end to such hypocrisy and the violence it entails?
Finally, what about the everyday violence experienced by people denied the opportunity for a decent chance in life? What about inadequate healthcare or education? Isn't that a form of violence? If a capitalist society rewards some people with multibillion-dollar annual incomes of the official unemployment rate is near 10%, is it time to see that capitalism itself is a form of violence?
A young Pakistani immigrant suffers financial and family problems, turns to religion, and tries to explode a car bomb in crowded Times Square. The response focuses on the religious angle because his religion is not the dominant one in the country.
What if he had used a drone instead? Obviously, most of the victims have been innocent. Of course, we have no knowledge that our own drone attacks predominately kill "guilty parties"? And then again, if the drone attack had been successfully pointed at Wall Street, it would have undoubtedly kill people whose destructive activities have resulted in many destroyed lives. Would that be justified? Our own young people who operate the drones might be seen as some as heroes.
The analogy of Wall Street and the military may be unduly provocative. And yet, the banks resemble a victorious government demanding reparations from a defeated enemy -- in this case, the losers of the class war. Why should ordinary people have to pay for the destructive behavior of the rich and powerful?
I don't know if the people who recently burned the Greek bank were police provocateurs or militants angry with the government. In the former case, the objective was to harm the people who are presently being harmed by the financial crisis. In the latter case, they were behaving stupidly.
The man who flew the plane into the IRS building was upset about how much he was paying to support the government. I suspect that he, or the people who expressed sympathy for his cause, are less concerned about military expenditures than the social programs, comparable to what the Greek government is forced to cut.
Returning to the war theme, how much violence has been the product of people returning from the wars, serving the interests of Wall Street and the rest of big business. Timothy McVeigh was justifiably regarded as an outlier, but more common violence, such as individual homicides and suicides, seem to be far more common among people exposed to the violence of war.
How much more guilty are the supposedly respectable people who promote our wars abroad than the disturbed young man who attempted to kill a couple hundred people at most? Instead, his incompetent attempt at violence will be used to justify far greater violence abroad.
How can we put an end to such hypocrisy and the violence it entails?
Finally, what about the everyday violence experienced by people denied the opportunity for a decent chance in life? What about inadequate healthcare or education? Isn't that a form of violence? If a capitalist society rewards some people with multibillion-dollar annual incomes of the official unemployment rate is near 10%, is it time to see that capitalism itself is a form of violence?
Friday, May 7, 2010
Employment and Unemployment Rate Both Increase
The news from BLS might sound like a mixed bag:
The household survey reports that employment increased by 550,000 in April, which increased the employment-population ratio from 58.6% to 58.8%. So why did the reported unemployment rate increase? The key here is this sharp increase in the labor force with the participation rate rising from 64.9% to 65.2%. Not bad for one month but a long, long way from full employment.
Nonfarm payroll employment rose by 290,000 in April, the unemployment rate edged up to 9.9 percent, and the labor force increased sharply, the U.S. Bureau of Labor Statistics reported today.
The household survey reports that employment increased by 550,000 in April, which increased the employment-population ratio from 58.6% to 58.8%. So why did the reported unemployment rate increase? The key here is this sharp increase in the labor force with the participation rate rising from 64.9% to 65.2%. Not bad for one month but a long, long way from full employment.
Wednesday, May 5, 2010
Oil Spill Doublespeak
White House officials stressed again Monday that BP would be held liable for the cost of the cleanup and economic compensation for losses on the Gulf Coast. But Democratic senators said the Oil Pollution Act of 1990, passed in the wake of the Exxon Valdez, caps economic damage liability at $75 million. Democratic Sens. Bill Nelson of Florida and Robert Menendez and Frank Lautenberg of New Jersey introduced legislation to raise that cap to $10 billion.
Ball, Jeffrey, Stephen Power, and Russell Gold. 2010. "Oil Agency Draws Fire: Republican Seeks Scrutiny of Regulator; BP Tries Well Fix." Wall Street Journal (4 May): A 1.
Monday, May 3, 2010
Immaculate Transmission Revisited
Over in VoxEU, Song, Storesletten and Zilibotti treat us to yet another explanation for China’s immense current account surplus, and as usual one that assigns the primary role to that country’s net savings. In this case the culprit is a bifurcated credit market that prevents Chinese investors from sinking their funds into the most profitable domestic enterprises. I will spare you the details; the giveaway/throwaway line is this one: “As a consequence, a growing share of domestic savings is invested abroad and this generates a capital account deficit and matching current account surplus.”
And how exactly does it generate the current account surplus? Why does the export of Chinese finance return in the form of net Chinese exports? Earlier in the article they denied that exchange rates have anything to do with it, so what other channel do they propose?
This is based on a forthcoming article in the AER, which means that a few reviewers there must have been asleep at the wheel. Looks like an easy outlet to publish in; I should give it a try.
And how exactly does it generate the current account surplus? Why does the export of Chinese finance return in the form of net Chinese exports? Earlier in the article they denied that exchange rates have anything to do with it, so what other channel do they propose?
This is based on a forthcoming article in the AER, which means that a few reviewers there must have been asleep at the wheel. Looks like an easy outlet to publish in; I should give it a try.
Sunday, May 2, 2010
Were Bubbles Or Fraud More Important In The Crisis?
This was not explicity the issue at hand at the conference on Consumer Decisionmaking: Insights from Behavioral Economics I attended recently at the Dallas Fed (cosponsored with UT-Dallas), but it emerged as an issue in the final talk by Christopher Foote of the Boston Fed, who tilted to the bubbles side, drawing on the earlier keynote speech by George Akerlof, although George did not pose it this way. For Foote, even though fraud and corruption increased during the bubble (and Akerlof argued that they tend to generally in bubbles), it was the housing bubble that sent everything over the top to come crashing down so disastrously ultimately.
Most of the other talks tended to focus either on misbehaviors by lenders and how to stop them (many participants among the 250 or so being people from many Feds or other govt agencies such as the FTC), or on the many psychological tendencies and limits that afflict consumers making them prey to such fraudulent and misleading activities. A good summary of these was given by the other keynote speaker, Sendhil Mullainathan. These include failures of perception, failures of analysis even when perception is accurate, and then failures to act even when both perceptions and analysis are accurate. I note a few other things reported including by Eckel and Croson of UTD that women, parents with children, and African Americans are too risk-averse for their own financial well-being, but from Jeff Carpenter of Middlebury, that risk preferences are not in general related to income or social class. Also unsurprisingly, people with low numerical ability tend to get into more trouble with their mortgage payments, all other factors held constant.
I support all the moves to educate people better, to regulate the lenders more to be more transparent in their activities, and so on. But in the end I think I agree with Foote that it was the bubble and the psychological tendencies ("animal spirits") to such that led us into this most recent disaster, not the longrunning exploitation of innocent victims by fraudulent lenders that did so.
Most of the other talks tended to focus either on misbehaviors by lenders and how to stop them (many participants among the 250 or so being people from many Feds or other govt agencies such as the FTC), or on the many psychological tendencies and limits that afflict consumers making them prey to such fraudulent and misleading activities. A good summary of these was given by the other keynote speaker, Sendhil Mullainathan. These include failures of perception, failures of analysis even when perception is accurate, and then failures to act even when both perceptions and analysis are accurate. I note a few other things reported including by Eckel and Croson of UTD that women, parents with children, and African Americans are too risk-averse for their own financial well-being, but from Jeff Carpenter of Middlebury, that risk preferences are not in general related to income or social class. Also unsurprisingly, people with low numerical ability tend to get into more trouble with their mortgage payments, all other factors held constant.
I support all the moves to educate people better, to regulate the lenders more to be more transparent in their activities, and so on. But in the end I think I agree with Foote that it was the bubble and the psychological tendencies ("animal spirits") to such that led us into this most recent disaster, not the longrunning exploitation of innocent victims by fraudulent lenders that did so.
Making the Most (Which Means Sometimes Making the Least) of PowerPoint
The abuse of PowerPoint has been in the news recently, but it is never far from the thoughts (or deeds) of conference-weary academics like myself. We sit through, and often inflict on others, endless presentations, typically in the form of monotone recitations of vacuous generalizations, or worse, dense paragraphs, plastered on the screen in front of us as bullet points. We squint at giant tables with tiny numbers. Our minds reel as equations fly by. It is enough to make you want to cry out “Chicken, Chicken, Chicken”.
Here is some simple advice I give my students, and try to follow myself, on the proper use of PowerPoint. Some of it was inspired by Edward Tufte, some is my own invention.
1. The center of attention for any speech should be the speaker. Speak in a way that connects to your audience. Make gestures and facial expressions. Look at them, not at a screen. A talk should be, above all, a form of human interaction.
2. If you have complex data, like large tables or long equations, put them in a paper handout, and distribute this to your audience. You can put much more on a page than on a computer screen, and your listeners will appreciate the opportunity to examine this information at their own pace. If I must display a table in Powerpoint, I try to have no more than eight cells, less if possible. This often requires ruthless paring and simplification.
3. The main purpose of PowerPoint should be to make the architecture of a talk more transparent to the listeners. The problem with oral communication is that, while it can be extremely engaging on a moment-to-moment basis, it is difficult to follow the structure of a long, complex argument. PowerPoint can help. Begin with a slide or two that presents the roadmap for the talk as a whole. Insert periodic slides that indicate where you are in this journey as you proceed. Most slides should serve to convey the structure of particular sub-points—mini-roadmaps, in a sense.
4. Slides should not be free-standing; they should not convey your argument apart from your verbal presentation. Bullet points, if you use them, should be compressed into as few words as possible, just enough to identify (but not explain) the ideas they refer to. (The bullet point for this recommendation could be “identification, not explanation”.) And never, never, never read the bullet points out loud to your audience. The center of attention should be on you, not the slides.
5. Think of each slide as a two-dimensional space, to be organized in a way that conveys the intellectual structure of your argument. In general, a list with equal indentation conveys logical parallelism. The vertical dimension of a list may convey sequence, but this usually needs to be indicated explicitly, for instance with arrows. A picture in the right column with several brief phrases in the left column says that these phrases pertain in a parallel or perhaps sequential way to the situation depicted in the picture. Indentation, on the other hand, implies either a subset/superset or supporting/supported relationship. When relationships between ideas are more complex than this, consider placing phrases in various locations on your slide, using boxes and arrows to make their interconnections clear.
6. Never, ever make a slide more complex than absolutely necessary. Abjure all of PowerPoint’s fancy bells and whistles. Keep fonts and color schemes as simple as possible. You want to your audience to glance at the slides periodically but pay attention primarily to you.
7. The reason so many PowerPoint presentations are dull is because a content-poor visual medium has become the center of attention. Reading an article or book is much more interesting, because articles and books typically have much more substance than PowerPoint slides. Listening to a lecture without PowerPoint is usually more interesting because of the human engagement audiences can have with a speaker who addresses them directly. So use PowerPoint sparingly: don’t try to replace the role of a written text, and don’t distract audiences from your communication with them. It should add a little clarity and a bit of variety to your talk, nothing more.
Here is some simple advice I give my students, and try to follow myself, on the proper use of PowerPoint. Some of it was inspired by Edward Tufte, some is my own invention.
1. The center of attention for any speech should be the speaker. Speak in a way that connects to your audience. Make gestures and facial expressions. Look at them, not at a screen. A talk should be, above all, a form of human interaction.
2. If you have complex data, like large tables or long equations, put them in a paper handout, and distribute this to your audience. You can put much more on a page than on a computer screen, and your listeners will appreciate the opportunity to examine this information at their own pace. If I must display a table in Powerpoint, I try to have no more than eight cells, less if possible. This often requires ruthless paring and simplification.
3. The main purpose of PowerPoint should be to make the architecture of a talk more transparent to the listeners. The problem with oral communication is that, while it can be extremely engaging on a moment-to-moment basis, it is difficult to follow the structure of a long, complex argument. PowerPoint can help. Begin with a slide or two that presents the roadmap for the talk as a whole. Insert periodic slides that indicate where you are in this journey as you proceed. Most slides should serve to convey the structure of particular sub-points—mini-roadmaps, in a sense.
4. Slides should not be free-standing; they should not convey your argument apart from your verbal presentation. Bullet points, if you use them, should be compressed into as few words as possible, just enough to identify (but not explain) the ideas they refer to. (The bullet point for this recommendation could be “identification, not explanation”.) And never, never, never read the bullet points out loud to your audience. The center of attention should be on you, not the slides.
5. Think of each slide as a two-dimensional space, to be organized in a way that conveys the intellectual structure of your argument. In general, a list with equal indentation conveys logical parallelism. The vertical dimension of a list may convey sequence, but this usually needs to be indicated explicitly, for instance with arrows. A picture in the right column with several brief phrases in the left column says that these phrases pertain in a parallel or perhaps sequential way to the situation depicted in the picture. Indentation, on the other hand, implies either a subset/superset or supporting/supported relationship. When relationships between ideas are more complex than this, consider placing phrases in various locations on your slide, using boxes and arrows to make their interconnections clear.
6. Never, ever make a slide more complex than absolutely necessary. Abjure all of PowerPoint’s fancy bells and whistles. Keep fonts and color schemes as simple as possible. You want to your audience to glance at the slides periodically but pay attention primarily to you.
7. The reason so many PowerPoint presentations are dull is because a content-poor visual medium has become the center of attention. Reading an article or book is much more interesting, because articles and books typically have much more substance than PowerPoint slides. Listening to a lecture without PowerPoint is usually more interesting because of the human engagement audiences can have with a speaker who addresses them directly. So use PowerPoint sparingly: don’t try to replace the role of a written text, and don’t distract audiences from your communication with them. It should add a little clarity and a bit of variety to your talk, nothing more.
Is Economic Theory Going Into Black Hole?
Back from conference at Dallas Fed on "Consumer Decisionmaking: Perspectives of Behavioral Economics." Keynote speaker George Akerlof spoke on his recent book with Robert Shiller, _Animal Spirits_. However, beyond his speech he spoke more forcefully, declaring at one point, "economic theory is going into a black hole," both micro and macro.
Friday, April 30, 2010
David Harvey and Ha Joon Chang
BBC has an discussion with them, which I just downloaded.
http://downloads.bbc.co.uk/podcasts/radio4/ta/ta_20100429-1708a.mp3
http://downloads.bbc.co.uk/podcasts/radio4/ta/ta_20100429-1708a.mp3
Wednesday, April 28, 2010
Dark Thoughts in the Gathering Peripheral Europe Storm
Back when governments chose to nationalize dubious private debts, paying top dollar to protect major wealth-holders and their institutional vehicles from ruin, two criticisms were voiced—that this would engender moral hazard, and that it would violate all reasonable standards of social justice. Both had merit, but less attention was given to a third, far more serious criticism, that fiscal space was limited, and that using it up to reflate the financial elites would leave us without options in the event of a future financial spasm.
If the events of the last two days continue and escalate, that spasm is upon us. Will governments have the resources to contain it?
If the events of the last two days continue and escalate, that spasm is upon us. Will governments have the resources to contain it?
Grounded
Now that I am beginning to return to civilized (i.e. Pacific daylight) sleep patterns, I can report that I too was held captive by the fulminations of Eyjafjallajokull. A month late, I experienced Ash Wednesday and also Ash Sunday, Monday and Tuesday. The highlight of my European adventure was a 30-hour bus ride from Sofia to Frankfurt, courtesy of Lufthansa. I had the pleasure of sampling cheese sandwiches from across southeastern and central Europe. (Hungary wins.) My favorite comment on the situation comes from the gifted chess scribe Mig, who writes of “Iceland's last wish to have its ashes scattered over Europe...”
The $3 Trillion Dollar War — Stiglitz & Bilmes Were Too Modest
One of the greatest uncounted US losses in our wars in Iraq and Afghanistan has been the mental damage to the young people who have been exposed to the violence and brutality of our war. The recent Wikileaks release of the young people killing Iraqis as if they were playing video games is a case in point.
The number of suicides offers additional evidence.
Maze, Rick. 2010. “18 Vets Kill Themselves Every Day.” Army Times (23 April).
Also, consider the frequent reports of domestic violence and homicides.
The number of troops who have been deployed to Iraq over the last 7 years must have been somewhere around 1 million. Since May 2003, the US has had less than 130,000 in only four months.
Economists like to think of human capital — a stupid expression for the creative capacity of people — as the key to economic growth. Ignoring the economic costs of the war, as well as the consequences for the Iraqis; not even counting the physical destruction of the lives and the bodies of those soldiers who survive, these human losses for the tortured souls and for those who are hurt by them should surely be enough to say that starting such a venture should constitute a crime.
The number of suicides offers additional evidence.
Maze, Rick. 2010. “18 Vets Kill Themselves Every Day.” Army Times (23 April).
Also, consider the frequent reports of domestic violence and homicides.
The number of troops who have been deployed to Iraq over the last 7 years must have been somewhere around 1 million. Since May 2003, the US has had less than 130,000 in only four months.
Economists like to think of human capital — a stupid expression for the creative capacity of people — as the key to economic growth. Ignoring the economic costs of the war, as well as the consequences for the Iraqis; not even counting the physical destruction of the lives and the bodies of those soldiers who survive, these human losses for the tortured souls and for those who are hurt by them should surely be enough to say that starting such a venture should constitute a crime.
Monday, April 26, 2010
Does Krugman Miss The Point On Epistemic Closure In Macroeconomics?
Paul Krugman has put up a post in which he complains about apparent closed-mindedness of Chicago-Minnesota RBC and ratex macro-modelers who do not like sticky-prices-wages New Keynesian models and are controlling some leading journals. He argues that at saltwater schools students learn about RBC and such like, while those at the freshwater ones do not learn about other approaches. I think there is some truth to this, and, with some exceptions, such as Robert Lucas, some of the people out of the Chicago-Minnesota mafia have made complete fools of themselves with their hysterical attempts at explaining what has gone on, combined with an overbearing arrogance and aggressiveness towards anybody who disagrees with them.
However, I think that once again Krugman is dropping the ball here. In terms of explaining what has gone on the NK sticky-wages-prices gang has not done any better than the fundamentalist loonies out of Chicago and Minnesota (and related places such as Arizona and Rochester and certain regional Feds). They all look pretty silly. After all, the bubble and the crash do not look like they are at all explained by either some exogenous productivity shock or by excessive wage stickiness. Neither is even remotely in the ball park.
Of course, what may have Krugman really upset is that his department at Princeton has hired one of the most overbearing and arrogant of all the Minnesota macro-modelers, Pat Kehoe, who is very loud about stating that "we have all the answers," and reportedly he is attempting to take over grad macro teaching at Princeton. In this case, maybe Krugman has a bone to pick, given that this stuff would probably be displacing the NK stuff, although what they really need to do is get serious about Hyman P. Minsky and agent-based modeling and some other approaches.
However, I think that once again Krugman is dropping the ball here. In terms of explaining what has gone on the NK sticky-wages-prices gang has not done any better than the fundamentalist loonies out of Chicago and Minnesota (and related places such as Arizona and Rochester and certain regional Feds). They all look pretty silly. After all, the bubble and the crash do not look like they are at all explained by either some exogenous productivity shock or by excessive wage stickiness. Neither is even remotely in the ball park.
Of course, what may have Krugman really upset is that his department at Princeton has hired one of the most overbearing and arrogant of all the Minnesota macro-modelers, Pat Kehoe, who is very loud about stating that "we have all the answers," and reportedly he is attempting to take over grad macro teaching at Princeton. In this case, maybe Krugman has a bone to pick, given that this stuff would probably be displacing the NK stuff, although what they really need to do is get serious about Hyman P. Minsky and agent-based modeling and some other approaches.
Sunday, April 25, 2010
Is The MIT Lock On the John Bates Clark Award Overdone?
I happen to think that Esther Duflo's work (with coauthors) on randomized field trials of practical development policies deserves respect, and I have no particular problem with her being this year's recipient of the John Bates Clard Award for 2010, the award given to the best under 40 American (either citizen or working here) economist. As both a current MIT faculty member as well as Ph.D. from there, she continues a streak that has been in place since 1999. Here is the list (the prize was once every two years before this year, starting MIT's Paul Samuelson in 1947).
1999 Andrei Shleifer, MIT Ph.D.
2001 Matthew Rabin, MIT Ph.D.
2003 Steven Levitt, MIT Ph.D.
2005 Daron Acemoglu, current MIT faculty
2007 Susan Athey, formerly received tenure on MIT faculty (now at Harvard)
2009 Emmanuel Saez, MIT Ph.D.
2010 Esther Duflo, MIT Ph.D. and current faculty
I have bigger problems with some of these people than others, but it must be asked if somehow there is a self-feeding control and domination of this selection process going on.
1999 Andrei Shleifer, MIT Ph.D.
2001 Matthew Rabin, MIT Ph.D.
2003 Steven Levitt, MIT Ph.D.
2005 Daron Acemoglu, current MIT faculty
2007 Susan Athey, formerly received tenure on MIT faculty (now at Harvard)
2009 Emmanuel Saez, MIT Ph.D.
2010 Esther Duflo, MIT Ph.D. and current faculty
I have bigger problems with some of these people than others, but it must be asked if somehow there is a self-feeding control and domination of this selection process going on.
Thursday, April 22, 2010
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