Thursday, September 17, 2009

Silver Linings and False Tradeoffs

Timothy Egan writes in the New York Times about something that used to trouble me a lot back in the dark ages of my life as a pretend political scientist. Lately, though it's been bothering me again, like some sort of recurrent rash, as I'm trying to sort out how to map expected utility maximization into a real world where people continually vote against their economic self-interest. If I were a true drinker of the rationality kool-aid, this should provide an opportunity to measure the intrinsic value of culture; that is, the economic benefit I give up in lost wages and benefits should be the value I place on things like living next to my friends, more leisure time (thanks John Cochrane), and various "psychic benefits." My problem is that most of these "psychic benefits" actually muck around with the expected utility framework itself. It stretches the fabric of believability to think that I'm clever and dispassionate enough to do the calculus of utility of maximization and also to believe that I'm actively trading off my happiness that our President fails (because it justifies my pre-existing worldview) for $x. [Skip this if you live in the real world and have, like, non-imaginary friends: the problem is that things like fear and love of stasis warp the expectation operator in non-linear and path-dependent ways, ways which can't be accounted for by applying a linear operator to even a path-dependent and multi-attribute utility function. I think.] Ok, in English. Thinking that Obama is trying to kill me when I get older and my enjoyment from having today look exactly like pre-Reese Witherspoon Pleasantville actually causes what I expect from the future to deviate from what is likely to happen. This is because I don't see a tradeoff from my happiness for economic failure and my income; I actually think that I can have a Rosie the Riveter economy and my iphone too. And that's why I felt sadder after reading this article than I have for awhile. Postscript: you should also read Timothy Egan's book, The Worst Hard Time.

So what did I think about after reading this? Well, besides a delicious sandwich? The Stiff Little Fingers of course...

Silver Lining

They tell you not to worry, they say they're terribly sorry
But that's the way it has to be, for the likes of you and me
Just be good and know your station
Always look on the bright side
Keep you faith and keep your patience
Your reward is after you've died

So don't be told, don't be consoled
Things are so bad, you can never make do
And there's always someone better off than you

They tell you that's your future, it's all down to human nature
Simply settle for what you got, that's destiny and that's your lot
All of us cannot come first, yes what you have is second best
But it might be a good deal worse
Third world peasants get even less...

Tuesday, September 15, 2009

Macroeconomics Monday Night Raw

Somewhat later this fall, I'll be teaching a class on the "Economic Environment of Business" and in preparation for that (since apparently there's been some sort of financial crisis in the interim since I taught it last) I've been (somewhat) assiduously following the current debate on the state of macroeconomics. If you're not in the business of teaching business, you might have missed it (hopefully because you were planning your trip to the Texas Bigfoot Research Conservancy upcoming conference) until it all boiled over into the pop-culture hotbed that is the New York Times Magazine. I'll try to collect some links here for background, and don't worry, I'm sure I'll eventually have something to say. It just is unlikely to be as clever (or stupid, depending on your views) as the following links. But first, a bastardized mini-synopsis (yes, that is redundant for emphasis) that likely does justice to neither side.

In this corner, the saltwater economists (because they teach at schools on the coasts, i.e. Princeton, MIT, and Berkeley) who take their cues from John Maynard Keynes, with special emphasis on his views that asset prices commonly diverge from fundamental values and that fiscal policy can affect the real economy due to the slow clearing of markets. In the other corner, the freshwater economists (because they teach at schools in the interior of the country, i.e. Chicago and Minnesota) who take their cues from John Muth (but are often associated with the later views of Milton Friedman), with special emphasis on their view that asset prices efficiently represent all of the current information about the economy and that fiscal policy can only infect the real economy by interfering with the quick clearing of markets. As always, the debate is over assumptions about rationality and the speed at which markets reach equilibrium; the freshwater economists look at the current economy and see mis-allocated resources and disequilibrium while the saltwater economists survey the same situation and see creative destruction and equilibrium. Let's get ready to rumble!

Don't know where you stand? Here's a riddle (apologies to Arjo Klamer in Conversations with Economists): What do you call someone with a PhD in theoretical physics who's making you a delicious deli sandwich? If you answer "a waste," wax up your surfboard and get your endless summer on; if you answer "a sandwich artist," it's time to go wakeboarding.

Oh yeah, the cast of characters for this tag-team steel cage hardcore rules match. To keep it from being a royal rumble, I'll only go for 3 wrestlers economists on each side, although there are lots of "managers" looming ringside, just like Jimmy Hart or Captain Lou Albano:

I'll have lots more to say about this as the semester goes on...for now suffice it to say I'm blogging from the Gulf Coast.

But now the background:

I'm exhausted. I've got an idea. It's called UFC 103.

Summer of Trailer Town

So a long time ago, back during the New Orleans Years, Era #1, I had a pool in my backyard. And inevitably, about halfway through the summer there were any number of people lazing around it, and many parties were planned. During a particularly hazy evening, I managed to decree that this summer, to distinguish it from the summer prior, was to be known as the Summer of All Calypso, All The Time. And that at least every third song played from then on should have a calypso beat, or "Summer" in the title. To aid in this endeavor, I compiled a cleverly titled CD called "The Summer of All Calypso, All The Time" that I burned and distributed to my less than eager friends. This begat later summers:

The Summer of British Steel

The Summer of Southern Rock

The Summer of 70s-ish Country

Sure I skipped a few years, but this year, late in the almost Indian summer, we have the Summer of Trailer Town. No reason really, but most if not all of these songs have some of the most quotable, depressing lyrics in my library, which for those of you who know me, is saying something. Plus for some reason, I'm in a Slobberbone kind of mood. And even though burning CDs is soooo 2005, I feel like sticking to the 79 minute limit makes the mind clearer, like writing a villanelle or sitting alone at a bar. I'll probably be posting my favorite lines from each song sometime later, like after I pour myself a glass of whiskey.

1. Move On / Chris Knight

2. Mach 1 / Trailer Bride

3. Dog Bumped / Tim Barry

4. I Can Tell Your Love is Waning / Slobberbone

5. Straight To Hell / Drivin 'N' Cryin

6. Thrice All American / Neko Case & Her Boyfriends

7. Our Town / Iris Dement

8. Slow Dancing / Lucero

9. Cursed / Chad Price

10. Pinball Song / Slobberbone

11. Murder, Tonight, In The Trailer Park / Cowboy Junkies

12. The Deeper In / Drive-By Truckers

13. Moonshiner / Uncle Tupelo

14. Smokin' 100's Alone / The Bottle Rockets

15. The Buck Starts Here / Robbie Fulks

16. (I Was Drunk At The) Pulpit / Palace Music

17. Drinkin' In My Sunday Dress / Maria McKee

18. Bible Song / Lori McKenna

19. Decoration Day / Drive-By Truckers

What the hell is wrong with you?

So I finally had it. I'm not sure when the actual moment tell the truth I think it's been brewing since the time in class when I answered the inevitable "How could we know a financial crisis was on it's way?" question flippantly with "when the Real Housewives of Orange County was renewed". Oddly enough the catalyst for this blog was this article in the New York Times on the Taylor Swift-Kanye West tempest in a thimble. I realized I have been an apologist for idiocy for too long, and that by nodding approvingly when I hear "Kendra is my fave show!" from a 30 year old I'm only pouring EVOO on the culture Slip-n-Slide ride that can only end with the renewal of Tool Academy. Too late. I truly am sorry. And this blog exists primarily to say what I wish I could have already said too many times before: What the hell is wrong with you?

And I need a place to post my Stone-Cold Lock of the Week Afternoon Annihilator NCAA picks. Purely for entertainment purposes of course.