Dismal Science

Found ten pages of notes from what must have been an economics class I probably took fifteen years ago (yes, I am a pack rat). Interesting. Economics was always something I felt I should know more about. In fact, I think anyone who goes into a voting booth should know something about it. At least a working knowledge. Sadly, I believe the common man is a complete ignoramus in this area. I’d guess maybe one in a hundred really grasps the subject, and one in ten can follow a cable business show with interest. Too pessimistic a guess? Maybe. But I throw myself in with the ignorami.

I found a couple of interesting factoids from my notes. Care for a few? All right. Since I don’t remember the source, and with all “factoids” of an economic nature, take with whole shakersful of salt:

Economists have proved notoriously inept at predicting upturns and downturns in the business cycle.

Ya think?

Half of all unemployed Americans find new jobs in less than seven weeks. Only about fifteen percent face unemployment spells longer than six months.

Bottom fifteen, welcome your newest member.

Why does discretionary fiscal policy (a.k.a. government spending) often fail?
1. Government is notoriously bad at forecasting
2. Government takes a long time to act
3. Spending plans often favor groups with the most political power
4. New deficit spending pushes up interest rates, crowding out private-sector investment
5. By pushing up interest rates, spending can push up exchange rate of currency
6. People may save extra money instead of spending it

Is there any way to take our money out of our politicians’ hands without devolving into some type of Soviet-style central planning machine?

Friedman and Phelps found that ultimately government spending to cut the unemployment rate only pushes prices up and does not push unemployment down.

They discovered this when? In the 1970s? Does anyone besides me get a sense of déjà vu reading this?

Congress created the Fed in 1913 to ensure geographic diversity and independence from politics. The Fed Chairman is appointed by the president every four years, but not in sync with the presidency. Seven governors, elected for 14-year terms, come from twelve districts throughout the country. A district can only be represented by one governor at a time.

Interesting esoterica. Now you know something that less than one percent of the population knows.

Hayek: governments cannot possibly gather enough information from throughout the world to intelligently choose prices. In contrast, market players do not need to know anything other than price in order to make their choice.

So … get rid of rent control, and don’t scapegoat the oil companies (ooh, I hope that sentiment doesn’t get me tarred-n-feathered. Remember, I’m one of the glorious, noble poor!).

Advertising expenditures in the US have remained a remarkably stable 2 percent of GDP ever since Franklin Roosevelt ran for president.

That’s very interesting. I wonder if the trend’s continued over the past fifteen years or so.

People take better care of private property than public property. Even Aristotle complained that communal property always looked worse than private lands.

Best argument I’ve heard for the alleged inviolable right to own property.

Circa the mid-90s the British controlled about 2 percent of US GDP, while the Japanese controlled 1.5 percent and the Dutch 1.2. However, the US controlled 7 percent of the UK economy, 8 percent of the Dutch, and 0.7 percent of the Japanese.

More interesting figures. Look at those Dutch! Who’d have suspected them – it’s always the quiet ones you gotta worry about. Wonder what the most recent figures are.

60 percent of Americans have savings accounts, 20 percent own individual stocks, 20 percent have certificates of deposit, 11 percent have mutual funds, 8 percent own bonds. Over 60 percent of American families have invested in their homes, which comes to about one-third of their wealth.

Check, no check, used-to-be-a-check, check, no check, check. I think. I may be in the process of being swindled. I’ll have to look into it and get back to you.

Entrepreneurs are the driving force of growth.

Agreed! Let’s all get off their backs! Perhaps one may hire me for what I can produce or provide, or perhaps I may successfully join their ranks in the near future …

Best economic advice: Don’t put your eggs in one basket.
Worst economic advice: If at first you don’t succeed, try, try again.

Perfect sense when you think about it a little bit – say, more than 30 seconds.

Ah, well, it’s all very interesting, and I could go on and on, but what’s the point? I’d just forget all the statistics, terms, and theories in a couple of hours anyway. I was always a B/C student in economics. Besides, using the concept of utility, and the fact that all of us, from LE right on up to Donald Trump, Warren Buffett, and the overlords of China, all of us have the same amount of hours in a day, I’d better get working on something more profitable.

Let’s Swim to the Moon

So the wife’s going away on a business trip for three days, and all day Sunday she’s doing laundry. All her laundry, ’cause she doesn’t know exactly what she’s going to bring with her. The problem is, something like half her wardrobe is line dry only, so by four o’clock in the afternoon there are pants and blouses and dresses and whatnot decorating all our chairs, tables, child-proof gates, and banisters. Even the deck railings are adorned with Chanel pieces.

A couple hours later, after we’ve all inhaled the delicious home-made pizza she’s made, and we’re herding the little ones upstairs for the bedtime ritual, I glance out the kitchen window and see her clothes still drying outside, lonely soldiers watching our house in the dark. I rush out to gather them up when I notice a bright shining object about 30 degrees high in the southeastern sky.

“That’s a planet,” I say out loud, “but I don’t think it’s Venus.” I rush inside, toss my wife’s clothes aside, and run upstairs to seek out my latest Astronomy magazine. Consulting its sky chart, I discover that it is indeed a planet: Jupiter. Jupiter! That’s the Little One’s favorite planet (because, I think, it kinda resembles a pizza).

I race up the stairs and yank my daughter away seconds before the brushing of teeth commences. We two-step-at-a-time down two flights of stairs to the basement office, tear through a couple of desk drawers, find my opera glasses, and hit the deck. With the glasses we can not only see Jupiter (only resolved to a somewhat larger pinpoint of light) but also, at an apparent inch away at a south-westerly orientation, one of its satellites – Callisto? Ganymede? She’s fascinated, and we’re fighting over the opera glasses.

Then, due east just over the horizon (which to me is my neighbor’s house and treeline about thirty feet away) I spot the full moon. I cajole the opera glasses from Little One with the promise of greater visual treasure.

What a surreal view that greeted me! The bright moon swam so low and so bright that it seemed to lay only five or ten miles away. An island shimmering in an Earthly cove, a terran inlet of three dimensions. Ghostly wisps of horizontal clouds imperceptibly flashed by, illuminated by the sun’s reflected glare. The lenses from the glasses gave the overall scene an olive-colored tint, and I could swear I could see birds flying in the far distance, perhaps for their nightly lunar layover.

Those mountains and craters five or ten miles away cast huge shadows across the bright plains and dark seas, where no doubt the Selenites toiled ceaselessly, burrowing tunnels between their wondrous crystalline cities, kept hidden from their sisters’ telescopic eyes. Gondolas helmed by wide-winged birds of prey pulled Victorian scientists, along with a somnambulant Greek physicist or two, through the dark olive ether to meet and explore and claim the vast lunar deserts and jungles for Queen and Country, and, perhaps, a muse or two. I knew the translunar air was breathable, though possibly a bit chilly. Oh to explore such a world, as men did up until the early decades of this century past, and in quite a different, unimaginable way only fifty years ago.

I handed the glasses to the Little One, who stared through them at the moon for long, long minutes until I finally told her in a stern voice to come back inside. I wonder what she saw through the lenses, and how it compared to my vision.

Ramanujan

...

Hymn to Intellectual Beauty

by Percy Bysshe Shelley, 1816

The awful shadow of some unseen Power
Floats tho’ unseen amongst us – visiting
This various world with as inconstant wing
As summer winds that creep from flower to flower –
Like moonbeams that behind some piny mountain shower
It visits with inconstant glance
Each human heart and countenance;
Like hues and harmonies of evening –
Like clouds in starlight widely spread –
Like memory of music fled –
Like aught that for its grace may be
Dear, and yet dearer for its mystery

…

Finished reading The Man Who Knew Infinity last night, the biography of the mathematical genius Ramanujan. The book was exhaustingly exhaustive yet somehow only revealed the shadow of this great and strange man. Perhaps a more in depth post further down the line to explain things; no clear direction for a review or intelligent comment is in my brain right now.

However, towards the end of the book author Kanigel does throw in a couplet from the above poem by Shelley, which I think mystically hints at the terrible greatness that was within this man, who died tragically at age 31 from tuberculosis, just coming into the height of his powers.

Yes, another post down the line will be coming, I think …