Truth Claim of the Day

When I was young I thought I was experiencing a series of events.   Now I understand that I was experiencing the feeling of being young.  Sure you can go back and revisited a bunch of European countries, but it won’t seen the same as when you first tramped around Europe with a backpack, and the world seemed charged with mystery and meaning.

Please, discuss. The context is here.

What Zombies Are For

 People think that zombie stories are about humans doing what it takes to survive. They’re not. Zombie stories are, it turns out, about humans doing what they mistakenly think they need to do to survive. As it turns out, they’re wrong.

This is the gist of a post at OverThinkingIt.com, one of my favorite group blogs, on what really drives zombie fiction.

Every zombie war is a war of attrition. It’s always a numbers game. And it’s more repetitive than complex. In other words, zombie killing is philosophically similar to reading and deleting 400 work e-mails on a Monday morning or filling out paperwork that only generates more paperwork, or following Twitter gossip out of obligation, or performing tedious tasks in which the only true risk is being consumed by the avalanche.

That's Chuck Klosterman at the New York Times offering his take on the attractiveness of the zombie apocalypse.

I think both these articles make good points, but I would add a dimension they don't quite address.  I think one aspect that really captures people's interest is the deep seated paranoia of it all. Zombies are just ordinary folk who turned on you, and anyone can, at any time, cease being your best friend and come after your flesh. On top of that, we have to consider that in any good zombie story, the zombies are not the real enemy. Zombies are hardly ever evil, after all; they're more a force of nature, a disease or a storm to be endured. No, to have true evil in a zombie apocalypse you have to have other people:

Beware of your fellow survivors. Sometimes, they may be the biggest threat to your survival. Other humans who want your supplies or who have lost their minds in the disaster could try to kill you. Never let everyone know about all of your supplies, and never let your guard down completely.

What do you do when you can't rely on your community?*  I think this is a fear a lot of people feel deeply, but don't quite know how to express. And like all unexpressed fears, it expands and fills us up unless we have an outlet for it, like zombie stories.  For me, I see the zombie apocalypse as the Great Disaster: our civilization cannot possibly survive it; at best the human race might survive to build a new one.  If we do survive, we have a chance to repeat the same mistakes or learn from them and try to create a utopia.  Most likely, we will try to create heaven in our own image and end up with a hellish dystopia for a troubles, but that's another strain of fiction for another time.

So how do we deal with a disaster from which there is no bouncing back? If we really think those around us could betray us at any time, can we ever come together to build something with the resources we have left? How bad do things have to get before our greed and fear and need to come out on top keeps everyone on the bottom?

Oddly enough, those are some of the main questions of my research as a development economist.  Maybe we should take zombies a bit more seriously after all!

*Add to this OTI's observation that our defensive paranoia is always wrong--we need community to survive, we need to let someone else save us--and you're dangerously close to every Apocalypse bearing a gospel message. One with shotguns.

Are Recessions Possible?

The obvious answer seems to be 'yes.' The more difficult question is 'how?' WARNING: what follows is a more technical musing than I usually post here. I'll try to keep it as close to the principles level of accessibility as possible, but I won't be offended if those of you who are less economically interested skip this one.

The problem is that, at the macroeconomic level, there is an accounting identity that says INCOME=EXPENDITURE.  All of the income in an economy in a given period has to be spent on something.  All your income, after all, is just somebody else's spending, and all your spending is somebody else's income.  Every seller in one market is a buyer in another, and every buyer in one market is a seller in another (and yes, this even holds when some people live off other people's money, although it gets more complicated to sort out how).

This leads to something called Say's law, which basically says that if there are more sellers than buyers in one market (such as in the labor market when we have unemployment), there has to be some other market where there are more buyers than sellers, a shortage.  It's the only way for the accounting identity to be true, and it's true by definition.

So how can we have a recession, where it seems there are more sellers than buyers everywhere?  I've been thinking about this recently because of some recent discussion at EconLog (here, here, and here, for examples) about that very question. Scott Sumner and Nick Rowe argue that the excess demand has to be for money.  People want to hang on to (not to spend, but to have in their pockets) more of the good we use in exchange than they can get their hands on.  Brad DeLong and Paul Krugman, on the other hand, think there is excess demand for "safe assets," essentially places investors can store their value without any real risk that they'll walk away with less than when they started. Money is OK at this, but not great; a better option is typically government bonds, particularly when our faith in the quality of supposedly safe private firms is shaken.

Arnold Kling of EconLog, on the other hand, thinks we are in the middle of what he calls a recalculation, in which people find themselves working on things no longer in demand (more sellers than buyers) and don't yet know where the demand has gone. To my understanding, his story is basically that the recession, as we usually talk about it, is a myth. We don't have more sellers than buyers everywhere; it's just easy to see where we have more sellers than buyers, but it takes more time to figure out which markets have more buyers than sellers.

Well, the thing about markets is that when there's a shortage, it's a chance for some business to raise its prices and still sell more, thus making a ton of money. Sellers who want to make money (and don't they all?) in order to consume things they like (and don't we all?) will leave the market where there are too many sellers and enter the market where there aren't enough. Shortages and surpluses should always be rather brief.  Sumner and Rowe have an answer for this: the money market isn't normal, there's a single supplier of money, the Fed (and there are good reasons to have a single supplier as I've discussed in this series). DeLong and Krugman have a similar defense: the best safe assets are supplied by the government, and are thus influenced more by political pressure than market pressure.

What I haven't seen from the Recalculation Story (or, to use Kling's latest phrase, Patterns of Sustainable Specialization and Trade) is an explanation for why market adjustments are so slow. He has talked before about why economic busts happen much more quickly than booms, but that's not really what I'm after. What I want to know is why is the information that we have excess supply in many, many markets so easily obtained by everyone (this is what creates the unemployment in his story, after all), but information about where supply isn't keeping up with demand is so very hard for entrepreneurs to obtain. 

Is it that entrepreneurs have to borrow money to chase demand quickly, but it's hard to borrow during recessions? Is it that information transmits most quickly out of markets with many established firms (and if so, why)? Is it government intervention, particularly temporary attempts to undo the shift in demand?  I just really don't get what in Kling's view is holding entrepreneurs back, and make no mistake, if we don't have something holding entrepreneurs back, then recessions are just not possible.

Bad #6!  Let that entrepreneur go!

Some Insights from Practice Job Interviews

1.   Keep the summary of your job paper brief
1a. Don't summarize your job paper too briefly

2.   The fact that you can do Bayesian statistics is a selling point
2a. Don't sell the Bayesian stuff too hard; be as un-technical as possible

3.   Relax and be yourself, you're trying to find a good match
3a. Relax and be whatever it is they want, you're trying to find a job

4.   Ask questions about the interviewer to show interest
4a. Already know everything about the interviewer to show interest
 
5.   Similarly, asking about the town shows interest
5a. Similarly, asking about the town shows lack of interest

6.   If you're unclear, the interviewer might misunderstand you
6a. If you're clear, the interviewer might misunderstand you

7.   Be energetic and animated
7a. But not too energetic and animated

8.   Be careful about revealing personal information
8a. Reveal some personal information

9.   Have a long list of courses you can teach and research ideas you might explore

10. More specifics are always better (as long as they aren't technical)


If I promise not to unionize, do you think they'll hire me at the Wendy's?

Truth Claim of the Day

People who favor monetary and fiscal expansion worry about a 1930's scenario. People who favor restraint worry about a 1970's scenario.

Please, discuss. The context is here.

(Yes, I know this is a cheap excuse for a blog post. I'll try to do better for Thursday.)

Skepticism about Scepticism

Would that be Meta-Scepticism? Sckepticism? Bueller?

In any case, this post is a response to a piece by the Venerable Gentleman in which he describes his attitude toward modern science, and nutritional science in particular.  Aside from a link to a story in the Atlantic, the post essentially consists of a rationale and a rejection. The rejection indicates that the Venerable Gentleman (VG hereafter) is unconvinced of the unhealthfulness of drinking, smoking, highly processed food products, or saturated fats of any sort; it also includes a passing stab at Pasteur's germ theory.

The rationale is a bit more forceful:

The physical sciences are indeed brilliant and beautiful in harness, yoked to goals above themselves. But when these are abandoned in the name of Progress, we arrive at the same result as that of the coachman who to speed his horses onward cut their traces: the situation is certainly a vast improvement from their perspective, but the passengers had rather hoped to arrive at Brighton before tea-time.

The argument is that the sciences must be reigned by the Queen of Sciences, Theology.  Unless it is thus bound, it's conclusions are of little value or interest to VG.

But frankly, I'm not convinced.  I don't for a moment believe VG consumes Velveeta because the science that tells him it's unsafe has galloped in unbridled fashion from its theological roots. Why not? Because the only reason we've come to believe Velveeta is food at all is that science told us so.

It was modern physical science, which VG argues has little value in its modernist form, which invented highly processed foods and trans-fats. It was modern physical science which convinced our parents and grandparents' generations that these new inventions were healthy and good, contributions to human advancement thanks to the scientific age. And it is modern physical science which continues to argue that the sources of culinary and olfactory satisfaction for hundreds of generations prior to this scientific era are now dirty, dangerous, and outdated; we should turn to the modern Prometheus's of dietary engineering to provide us new, more potent, more sterile, and more safe forms of food and drink.

No, if I may offer a not-too-seriously-suggested narrative of my own, VG distrusts claims against processed food because his mother gave it to him when he was a wee lad, and his mother wouldn't give him something unsafe. He distrusts claims against the vittles which he loves because he loves them, not because he believes them more moral in character. But these claims are largely made by those outside the mainstream of physical science, those who see science as serving Mammon (meaning corporate profits) as master, a critique far more in line with what VG offers than with his opponents.

Perhaps he has reason to distrust mainstream science, too. After all, his cigar-chomping lush of a grandfather (whose character and very existence I have totally fabricated here) lived to the age of 95 before dying in a sword fight with a pirate, so the causal effect cannot be all that strong, can it? (unless we consider drinking and smoking as contributing factors to encounters with pirates, which come to think of it...)  In any case, though, while VG is free to follow or ignore such advice as he pleases, I must insist that he not try to hide his preference behind the curtain of Theology. I'm on to you, wizard.