Don't Be Too Certain

There's a fascinating graphic from Catherine Rampell that's been making the rounds on the economics blogs:

So what's the biggest problem facing business right now? Paul Krugman points out that it's insufficient demand, and

[...] the best thing government could do to help business would be to spend more, increasing demand. The fact that it's not going to happen doesn't change the fact that it's the simple truth.

Unsurprisingly, Brad DeLong agrees with Krugman, and adds that anyone who disagrees is clearly incompetent.

Tyler Cowen, however, doesn't see it as that clear-cut:

I didn't read this graph the same way. I saw poor sales as a "biggest problem" for fifteen percent (or so) of small businesses in periods of full or near-full employment. I also see "poor sales" as a "biggest problem" for about thirty percent of small businesses today. That change -- about fifteen percent of the total -- struck me as relatively small and indeed puzzlingly small, if indeed we are in a liquidity trap and weak AD is the overwhelmingly dominant problem. [...] I do think weak AD is an important problem to be addressed, I just don't think the absolute levels here imply "end of story."

Russ Roberts adds (like the good Austrian economist that he is) that if taxes plus regulation were a single category, it would take over the top spot from poor sales. Finally, the award for best additional information goes, as it often does, to James Hamilton:

The statement that businesses aren't hiring is simply false. According to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey, the U.S. private sector hired 3.9 million new workers every month, on average, over the first 7 months of 2010.

But if that's true, then why isn't total employment booming? The answer is that, according to the same JOLTS data, some 3.8 million workers quit or lost their jobs each month on average during Jan-July. [...] the fact that small changes in net employment figures mask a dynamic economy in which there are huge gross changes in employment status for individuals and firms is quite indisputable.

Firms are firing a lot of people, probably because of poor sales. Firms are also hiring a lot of people, just not enough to mask the firings.

So what's the take-away point of all this?

I have to go back to Chris's fascinating post on the rhetoric of the "third way." Although I hate to contend with someone who quotes Lewis, this sort of thing is precisely why we should be reluctant to pick one side to fight for: reality involves a lot more dimensions than partisans can allow themselves to consider. In particular, once we've identified the "most important problem" that needs fixing, we tend to act far more certain in our own conclusions than the evidence allows. We should this pitfall whenever we find it in ourselves.

I know I'll get some flak for this, but I would contend avoiding certainty (in this sense) even extends to spiritual matters, if only because we need to avoid placing our confidence in a favorite interpretation of Scripture rather than in Christ himself. Humility requires that we be willing to let go of a firmly held position and accept "middle things" if we learn we're wrong. If that's true even in matter's of God's Word, how much more true is it for empirical matters like economic and political arguments.

Holding a view like this basically insures I'll never get a job with the CEA or NEC, but then who wants to be Larry Summers, anyway?

This man is always right. Right?

A Little Undead

Just a short post today providing a link to last week's Zombie Week at Tor.com.  A lot of the posts are linked to the original, but look through Sunday's posts to see a few more. The available points of interest include samples of fiction, roundtable discussions of all sorts, essays on the mechanics of writing zombies, essays on the mechanics of zombies themselves, and a lot more.  Take a look.

Also, I may have linked to this before, but I like the animation so I thought I'd throw it in for good measure:

Teachers Good and Evil

In my recent post on education, I stirred up considerable debate by saying that the goals of education are consumption, productivity, and signaling, and essentially rejecting any idea of character building or promoting virtue. I stand by my view, even though I know there are many teachers out there who care primarily about character and virtue, because from the perspective of the student becoming a better person is still only a desired goal if it allows you to communicate something (signaling), to do something (productivity), or if you simply value your own character and want to enjoy something (consumption). It's not the only way to break down these motivations, but I believe it is the most intellectually helpful way.

But I don't want this view to suggest that I think teaching is a mechanical process, in which relationships don't matter and values aren't influenced. Far from it. Within this framework it is still possible for teachers to promote good or evil toward their students. An example of the latter came up in a post by Albert Mohler, in which an English professor at Northwestern indicates his goal of indoctrinating students:

“The children of red states will seek a higher education,” he explains, “and that education will very often happen in blue states or blue islands in red states. For the foreseeable future, loyal dittoheads will continue to drop off their children at the dorms. After a teary-eyed hug, Mom and Dad will drive their SUV off toward the nearest gas station, leaving their beloved progeny behind.”

Then what? He proudly claims: “And then they are all mine.”

That is creepy. Not the fact that the worldview of the professor will affect the students; as Mohler points out:

All teaching involves ideology and intellectual commitments. There is no position of authentic objectivity. Every teacher, as well as every student, comes into the classroom with certain intellectual commitments.

It's not the fact that the teacher is sharing his own ideology---or even that he is trying to influence the ideology of his students---that makes this approach to teaching bad. It's the fact that "winning" the ideological war is the only objective expressed here. This professor doesn't care about the objectives of the students, and he doesn't even seem to care about the students' virtuous character. All he cares about is shifting the student's worldview to be more in line with his own.  That's not education. That's brainwashing.

In subtle contrast to this terrifying approach to teaching, Chris links to someone's personal account of having his worldview dismantled by a professor. But this wasn't the work of someone lying in wait to pounce on an unsuspecting eighteen-year-old (or at least, it doesn't seem so). This was the patient, relationship building of someone who genuinely wants a student to understand the world better:

It was John who—in the course of one extended conversation on the political thought of John Locke—broke through my well-armored adolescent Marxism and first introduced me to the challenges of intellectual history. He managed this by the simple device of listening very intently to everything I said, taking it with extraordinary seriousness on its own terms, and then picking it gently and firmly apart in a way that I could both accept and respect.

That is teaching. It is also a certain sort of liberalism: the kind that engages in good faith with dissenting (or simply mistaken) opinions across a broad political spectrum.

Was this second teacher also brainwashing his student? Possibly. But it is at least as possible that he was trying to help build the student's character, or make him a more productive thinker with the capacity to enjoy the subtleties of philosophical thought.

So we have here two cases of teachers who seem to be ignoring the student-perspective goals of consumption, productivity, and signaling. While I believe thinking about teaching in the way I do precludes the brainwashing of the first teacher, I hope I can say it doesn't prevent the care and relational efforts of the latter.

The Nature of Conflict

Economist Robin Hanson has an interesting way of framing how we look at conflict between groups:

 Our fight, of [A] against [B] over [C], is but one battle in the ancient war over [F], along the great divide between [D] and [E]. Many do not realize how many of our apparently mundane conflicts are, in reality, battles in this ancient war. Today is a crucial day in this war, so we must not give up, and we must not lose hope, or someday [D] may lose [F] forever. Fight, fight!

(there are further comments at EconLog, if you're interested)  Hanson notes several group membership divides that can be used for [D] and [E], including "tyrants vs. freedom-lovers, rich vs. poor, faithful vs. heathen, urban vs. rural folk, men vs. women,[...]" and many others. Although it's never spoken of in these terms, I would say a lot of unnecessary conflict occurs along the Mechanics vs. Mystics divide, although most of the time we either like to frame it differently (Hanson's "intellectuals vs. ignoramuses" is a favorite of mechanics, while his "artists vs. undiscerning" seems preferred by mystics). This is an aspect Hanson doesn't explore, although I'm sure he would find it interesting: we often talk about the divide between [D] and [E], not because it is the real dividing line we care about, but because it sounds more important than the divide between [M] and [N].  When we notice and accept that a conflict is along mechanic vs. mystic lines, it becomes a lot easier to communicate and a lot harder to cling to being the "winner" of the conflict.

Aside from that admittedly minor contribution, I find it slightly terrifying to admit this is how many, many Christians I know think about their relationships with the non-Christian world. There is a divide between [D] Christendom and [E] Everybody else (Babylon?), and the war is over [F] civil society / American culture / our Christian nation / etc. Now, I'm not denying that this divide exists, nor that it is important. But I vehemently deny any version of the Christian worldview that says " Today is a crucial day in this war, so we must not give up, and we must not lose hope, or someday Christendom may lose civil society / American culture / our Christian nation / etc forever." If we believe Christianity, then we believe that Christ is God, and that no enemy can even vaguely approximate Him. He cannot lose anything He prefers to win!  Fear of losing something, anything, to the secular world simply doesn't compute with Christianity, and thus Hanson's 'ancient war' framing cannot rightly reflect a Christian view of the 'great divide.'

Again, this doesn't mean I think Christians shouldn't stand up for what they believe is right in public forums. Far from it. But we need to remember that we're not fighting a battle against an entrenched foe who may yet win the day if our courage fails.  We are spreading the world---with the gentle bedside manner of an oncologist (or the compassionate friend of an addict)---that sunrise is almost here, and will soon be here whether we want to keep our drunken nighttime revelry going or not. The change of seasons is not a war we need to win; it is a part of the nature of the world that we do well to keep in mind. And so it is with the victory of Christ.

Reich's Real Lesson

My friend Chris, never short of good questions and interesting articles, asked my opinion of Robert Reich's recent piece on the recession. I should perhaps start by admitting a certain presumption in critiquing the work of an academic much more accomplished than myself. He certainly knows more about the ins and outs of the American labor market than I do. But in the post, he ventures into the realm of macroeconomics and economic growth; here I think I still have the home-field advantage.

I'm hoping to make this into an educational opportunity. Like most educational opportunities, though, and especially those where the educator is unpaid, this is going to take some time. I'm going to try not to spend too much of my own time on this, which means I won't be economizing on words like I should. Sorry in advance. I'll try to compensate by including just enough snark to keep you awake; it's not wrong if it's for a good cause, right? My running commentary is below the jump break.

How to Deceive with Statistics

For this Labor Day post, I'm letting Alex Tabarrok of George Mason University handle this one for me:

Notice that nearly 30% of the smallest decile (10%) of schools were in the top 25 at some point during 1997-2000 but only 1.2% of the schools in the largest decile ever made the top 25.

Sounds like small schools are proven to be awesome! Oh wait, we've got a problem:

If for random reasons a few geniuses happen to enroll one year in a small school scores jump up and if a few extra dullards enroll the next year scores fall.

Thus, for purely random reasons we would expect small schools to be among the best performing schools in any givenyear.  Of course we would also expect small schools to be among the worst performing schools in any given year!  And in fact, once we look at all the data this is exactly what we see.

Tabarrok provides this really nice graph:

which shows that smaller schools tend to vary more, but on average they're not really any better than big ones in terms of test scores. We could argue that test scores are a bad metric of education quality, and that small schools are better for other reasons. But then we'd better not be pointing to test scores as the reason for supporting small schools.

This just goes to show that looking at extreme cases on one end of the spectrum only will almost always be misleading. This is one of the big reasons for the maxim "'Data' is not the plural of 'anecdote.'" Just remember that it's possible to reduce statistics to the level of important-sounding anecdotes if you do it wrong. Thanks to Marginal Revolution for the reminder.