Tradeoffs
From David Foster Wallace's 1995 essay, The String Theory:
… it's better for us not to know the kinds of sacrifices the professional-grade athlete has made to get so very good at one particular thing. Oh, we'll invoke lush cliches about the lonely heroism of Olympic athletes, the pain and analgesia of football, the early rising and hours of practice and restricted diets, the preflight celibacy, et cetera. But the actual facts of the sacrifices repel us when we see them: basketball geniuses who cannot read, sprinters who dope themselves, defensive tackles who shoot up with bovine hormones until they collapse or explode. We prefer not to consider closely the shockingly vapid and primitive comments uttered by athletes in postcontest interviews or to consider what impoverishments in one's mental life would allow people actually to think the way great athletes seem to think. Note the way "up close and personal" profiles of professional athletes strain so hard to find evidence of a rounded human life — outside interests and activities, values beyond the sport. We ignore what's obvious, that most of this straining is farce. It's farce because the realities of top-level athletics today require an early and total commitment to one area of excellence. An ascetic focus. A subsumption of almost all other features of human life to one chosen talent and pursuit. A consent to live in a world that, like a child's world, is very small.
Hat tip to Tim Carmody filling in at Kottke.
Markets in everything
David Rees, the man behind the popular political comic Get Your War On, wants to sharpen you a pencil. Slowly. Attentively. And with a carefully selected sharpener or blade that suits the pencil best. If there are movements for slow food and slow reading, why not for slow writing implements?
"With an electric pencil sharpener, a pencil is meat," Rees said. "It's this thoughtless, Brutalist aesthetic. For me, it's almost a point of pride that I would be slower than an electric pencil sharpener."
This is how Rees' artisanal pencil sharpening works: You might send him your favorite pencil, but Rees more often selects and sharpens a classic No. 2 pencil for his clients, he promises, "carefully and lovingly." He slides the finished pencil's very sharp tip into a specially-sized segment of plastic tubing, then puts the whole pencil in a larger, firmer tube that looks like it belongs in a science experiment. Throw it at a wall, he says, and it won't break. The cost? $15.
For the pointer I thank Ellen P.
Why is there a boom in temporary hiring?
Trevor Frankel offers his thoughts:
The part that most clearly indicates policy is the problem is the temp hiring. If businesses are hiring temps off the bottom of a recession, it means that they're seeing demand pick up but they're too uncertain to actually hire someone full time. This is usually followed by permanent hiring, but in this recovery, it has not been. The only obvious culprits here are a) higher required wages and healthcare costs (minimum wage, housing interventions and Obamacare are prime candidates here) and b) general lack of confidence in the economy and policy (the political climate in general is the prime candidate here).
Here is some background:
Temp hiring has been off the charts – temp jobs are up 20% year over year, while permanent private sector jobs are down 1%. (source: http://www.ritholtz.com/blog/2010/08/follow-up-on-temp-services-hiring/)
This is not an argument which I have been pushing, but the boom in temporary hiring does lend some support to it.
P = NP?
Here is one discussion of how hard it is to find the betting market in this proposition. Here is a betting market of unclear size and relevance, on which Millennium math problem will be solved next; it apparently predicts 76 percent for P vs. Np.
Here is an overview of where the entire debate is at, in Wiki form.
All of the pointers are from the ever-curious Chris F. Masse.
Unusual questions from loyal blog readers
To what extent can someone who is starving cannibalize his/her self to stay alive? My logic in asking you this question was not, "I'm curious about cannibalism, let me ask the food critic." It was more along the lines of "This is a really obscure and somewhat far-fetched idea and question, Dr. Cowen would probably be the best person to present it to because of his wide range of knowledge and access to an intelligent readership."
That's from M.E. My answer is: "to a limited extent." By the way, I am giving a talk tonight, and there is a (substantial) prize being offered for the best question from the audience.
Correction of Brad DeLong
He is wrong to suggest that I am calling for deflation. He draws his conclusion by citing advice which is a thought experiment and which I call "patently absurd" elsewhere in the post. I also left this comment on his blog:
I am not calling for deflation, this is simply a misinterpretation of what I wrote. Further an unemployed person with debt is even worse off than an employed person at a lower wage. *And* even our fairly wimpy Fed is not going to allow a high rate of deflation and thus a big real increase in the debt burden.
Here is an earlier column of mine, entitled "How a Little Inflation Could Help a Lot." While I am increasingly unsure how much good such inflation would do, I have been arguing for a year that it is worth trying and for instance just yesterday I wrote in the Brad-cited post "I favor a more expansionary monetary policy".
Strange North Korean headlines
"Talks about Talks Yield No Talks"
Yet somehow it all makes sense. For the pointer I thank Peter Komarek.
Assorted links
Spontaneous order on the road
Here’s a video of a small town in Britain that turned its traffic lights off. Order ensued.
The experiment is not unique. Tom Vanderbilt wrote an excellent piece in The Wilson Quarterly a few years ago on traffic revolutionary Hans Monderman (see also this NYTimes piece) who has redesigned a number of city centers:
At the town center, in a crowded four-way intersection called the Laweiplein, Monderman removed not only the traffic lights but virtually every other traffic control. Instead of a space cluttered with poles, lights, “traffic islands,” and restrictive arrows, Monderman installed a radical kind of roundabout (a “squareabout,” in his words, because it really seemed more a town square than a traditional roundabout), marked only by a raised circle of grass in the middle, several fountains, and some very discreet indicators of the direction of traffic, which were required by law.
As I watched the intricate social ballet that occurred as cars and bikes slowed to enter the circle (pedestrians were meant to cross at crosswalks placed a bit before the intersection), Monderman performed a favorite trick. He walked, backward and with eyes closed, into the Laweiplein. The traffic made its way around him. No one honked, he wasn’t struck. Instead of a binary, mechanistic process–stop, go–the movement of traffic and pedestrians in the circle felt human and organic.
A year after the change, the results of this “extreme makeover” were striking: Not only had congestion decreased in the intersection–buses spent less time waiting to get through, for example–but there were half as many accidents, even though total car traffic was up by a third.
The experiments are interesting in their own right but they are also very good illustrations of spontaneous order; how order is possible without orders.
Hat tip: Dan Klein.
What’s the actual problem in the labor market?
David Leonhardt has a very good piece which presents some relevant facts about unemployment. Felix Salmon summarizes one part of the piece as follows:
In 2008, only 13.2% of the labor force was unemployed at some point. That compares to 18.1% in 1980, and 22% in 1982.
Real wages, which normally fall during recessions, have risen in this one. Even nominal wages are up.
Also from Felix:
The overriding impression is of most Americans actually doing OK, with an unemployable underclass bearing the brunt of the recession.
To those observations I would add that corporate profits are doing fairly well.
Those facts, in a nutshell, are why I am not AD-obsessed when it comes to explaining the current economy.
Furthermore, I don't buy the idea that so many of the unemployed are stupidly and stubbornly holding out for a higher wage than they can get, while at the same time they can be reemployed by a mere bit of money illusion. There are so many blog posts written to the Fed, to Bernanke, etc. "Hey guys, goose up the money supply! Bernanke, read your old writings!"
Yet I have seen not one such post to the unemployed: "Hey guys, lower your wage demands! It's good for you! You'll get a job and avoid the soul-sucking ravages of idleness. It's good for the country! It's good for Bernanke, you'll get those regional Fed presidents off his back! Why not? The best you can hope for is to get tricked by money illusion anyway! Show up those elites and get to that equilibrium on your own! Take control!" and so on. If such posts would seem patently absurd, we should ask what that implies for our underlying theory of current unemployment.
I sooner think of these unemployed individuals as having gone down economic corridors which are no longer promising and not facing any easy adjustment to set things right again. Furthermore I consider that portrait of their troubles to be more consistent with the general tenor of liberal, left-wing, and progressive thought, not to mention plain common sense.
Elsewhere, Matt Yglesias has an interesting post on the recalculation argument and its relation to political ideology. He claims that promoting the argument will make people like capitalism less and that may well be true. I would add:
1. The Industrial Revolution also was a tough slog for quite a few decades. Yet it was both worthwhile and it gave capitalism a bad name for a long time.
2. Alexander Field argues that the Great Depression brought greater productivity improvements than any other decade in U.S. history.
3. If one wishes to consider state intervention, in light of recalculation, one is pointed in the direction of direct employment of the struggling workers; the recalculation argument does not rule out intervention per se. This advice could potentially be useful and I don't see why even libertarians should consider it necessarily worse than $800 billion of fiscal stimulus.
4. Like Matt and many others, I favor a more expansionary monetary policy. But the last stimulus was oversold and there is no reason to oversell this one. We really don't know how well it will work (and I'm not referring to liquidity traps). But if the Fed tries more monetary expansion, we'll see how much of the current employment is cyclical and AD-related in the traditional sense.
5. By its very nature, a recalculation argument ought to be somewhat agnostic as to how much (and what kind) of recalculation is actually required. See #4.
Addendum: Bryan Caplan comments, non-ironically.
Betting markets in everything
Think you're going to ace freshman year? Want to put money on that?
A website called Ultrinsic is taking wagers on grades from students at 36 colleges nationwide starting this month.
Just as Las Vegas sports books set odds on football games, Ultrinsic will pay you top dollar for A's, a little less for the more likely outcome of a B average or better, and so on. You can also wager you'll fail a class by buying what Ultrinsic calls "grade insurance."
CEO Steven Wolf insists this is not online gambling, which is technically illegal in the United States, because wagers with Ultrinsic involve skill.
Student users claim it motivates them to work harder. Here is the full story, here is another. Here is an Andrew Gelman post.
How do they avoid adverse selection? Is it that they lure failing fools, who think that money will make such a difference?
For the pointer I thank Max Levine, a loyal MR reader.
The culture that is Virginia
Virginia received $35 billion in defense contracts, supporting more than 530,000 contracting and associated jobs in fiscal 2008, Fuller said. About 70 percent of those dollars flowed to Northern Virginia.
He said three years of 10 percent cuts to military contracting, as announced by Gates, could swallow up as much as half of the economic growth projected for Northern Virginia in coming years.
Here is more.
Assorted links
1. Are TV viewings actually up?
2. Sounds like excess capacity to me.
3. At the State Fair: deep-fried butter and chocolate-covered bacon.
4. Where does the Laffer Curve bend? (prize for the best answer goes to Greg Mankiw)
6. Japanese aquarium features frozen fish.
7. Very good post on carbon tax and innovation.
German imports jump
On the imports side, the picture was even stronger – good for Germany and its European trading partners whose economies benefit in the German slipstream. Imports soared 31.7pc to 72.4bn euros, the Destatis statistics office said, the all-time record since figures were first compiled in 1950.
Don't overreact to one report, of course, but that is better than virtually everyone was expecting. The standard line had been that Germany's export prowess, combined with a longer-term move toward a near-balanced budget, was sucking air out of the global economy.
*Seeds of Destruction*
That's the new tract by Glenn Hubbard and Peter Navarro; the subtitle is Why the Path to Economic Ruin Runs through Washington, And How to Reclaim American Prosperity.
Beyond the usual market-oriented prescriptions, the book defends a price floor for oil imports, price indexing of social security benefits, it is anti-fiscal stimulus, anti-easy money, for job training programs, and for health care it advocates eliminating the tax deduction, removing state-level barriers to competition, and malpractice reform. The authors also devote special attention to criticizing Chinese protectionism as a reason why American job growth hasn't been better.
I take Hubbard to be a (the?) future "kingmaker" for economic policy within the Republican party, with possible competition from Douglas Holtz-Eakin. If you wish to know where those debates and proposals are headed, this is the book to pick up.