Archive for October, 2008

Crazy stuff, or Grace Jones is back

October 28, 2008

Grace Jones is back, it seems (linking to Dagbladet generates traffic; traffic is fun; mor fun than trafficing, for example). There is a lot of crazy stuff lying around out there on the web, and you find it when you least expect it. I googled Grace Jones and came across an imitation (or reconstruction, or tribute,  or cover picture (?) maybe) of a famous picture of her on vvork.com.

It doesn’t say who neither the model nor the photographer is; maybe it is the administrator of the webpage. I did not hang around long enough to figure out what kind of place vvork.com is, but check it out, some of the artwork presented there is actually interesting. I liked the empty bookshelf. However, the short movie ‘Semiotics of the Kitchen’ (1975; Martha Rosler) is quite crazy (in a good sense). You have to watch it to the end to understand it, or, at least I had to (I’m not too smart).

Hattip: vvork.com

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Manchester Orchestra

October 26, 2008

I discovered this band by chance while I lived in California. I was in a record store and found the cover of their debut (and so far only) album interesting (It has a cool name too: I’m Like a Virgin Losing a Child). I listened to 2 mins. of track number 7 (Sleeper 1972; the content of the songs are often surprising given the age and experience of these guys, particularly the main songwriter Andy Hull; this one I think is about his dead father, which, by the way, is not dead at all), liked it and bought the record. Later I saw them live at the House of Blues in San Diego, and while I really like the record I loved their live performance. It was a short set (festival), but intense. The closer “Where Have You Been?” was monumental, and seemingly always is:

I could probably write a lot about this band. For example, it is worth checking out their podcasts (you’ll find them on their webpage or on youtube) which has a lot of fun stuff and you almost get the feeling that you know the band. However, I’ll won’t (write a lot), but just mention their recent EP ‘Let My Pride Be What’s Left Behind’. The first track, ‘I Can Feel a Hot One’ (available as mp3 here) is just beautiful and shows another side of the band than the clip above.

A develish currency

October 21, 2008

This morning the US dollar was exchanged for 6.666 Norwegian kroner (see snapshot from the online norwegian business newspaper Dagens Næringsliv below). The observation confirms what I’ve believed for some time now (Kee Hap!). I have appreciated the recent renewed strength of the dollar, by the way, since I still have a small dollar deposit in an American bank. Fortunate misfortune, I guess.

Recession numbers

October 20, 2008

James D. Hamilton is one of my favourite economists. He has written a great book on time series, and while in California I was lucky to sit in on his econometrics class; he is a fabulous lecturer. On his blog Econbrowser he offers analyses and comments to current economic conditions and policy. In a recent post he discusses numbers that indicate that the US economy is in a recession (industrial production fell by 33.6% (annual rate) in September). More interesting, however, are the comments to the post where a reader asks whether academic economists did (or didn’t do) their job to warn about the possibility of the severe economic breakdown that seemingly is happening in the US. Underlying this question is the much bigger question of whether (macro) economists know what they’re doing.

I find the critique against academic economists misplaced. Many of the best economists work in the financial sector and in related governmental agencies, and neither these nor the academic economists were able to forecast the current crisis. (Well, as Jim points out, several economists did warn of potential danger. The sheer size of it, however, was seemingly not predicted with enough confidence.) There is no reason to believe that academic researchers are better at forecasting than those employed in the financial sector. (Those in the finance sector would not necessarily publish their forecast, but if any of them had any reliable forecasts of the crisis we’re in, their companies would have positioned themselves relative to that, and it seems that none of the Wall Street companies had done so.) This also tells of the extreme difficult of forecasting in economics.

Logic of metaphors

October 18, 2008

Does the logic that applies to a mathematical model always carry over to the real world when the model is a metaphor for something in the real world? It is not obvious to me:
Much of (theoretical) economic science works like follows: There is some interesting or important social problem or issue. The economist sets up a mathematical model (a metaphor) which accounts for the most important socioeconomic forces and related phenomena. The economist then performs a mathematical analysis (according to strict, logical rules) on the model to see what happens or to find implications of different possible setups. The inferences are then interpreted and related to the real world. Does this practice hold water? It must, or someone would have questioned the practice earlier, but it is not obvious to me at all! More accurately, I have moments of doubt; I am trained in logic (as a mathematician) and believe in it; I have not yet seen a logical argument I do not believe in. Still, the way economics often work is somehow dissatisfying.

Also, what is logic? I can give examples of logic and illogic, but examples are not enough. Here is the first definition of ‘logic’ from the American Heritage Dictionary, looked up on dictionary.com:

The study of the principles of reasoning, especially of the structure of propositions as distinguished from their content and of method and validity in deductive reasoning.

A field of study? Okey, interesting, but that was not exactly the bull’s eye. Obviously, logic has to do with structure of propositions and pertains to reasoning, but it does not answer what logic is. Maybe the right question is How do logic work? Or Why is something logical? Something is logical because it adheres to the rules of logic. Okey… And why are the rules of logic the way they are? Are they inherent in the (human) brain? Or can we change them if we’d like? Earlier, when I studied math, I was certain that mathematical logic had to be built-in and was sure everyone could understand logical arguments if they would allow themselves. Now, I’ve met so many otherwise brilliant people that does not seem to grasp logic with ease and I got doubt. (Maybe I shouldn’t; logic is always hard to me.) Also, I was certain (one is more certain about things when one is young, or so it seems) that logic was universal. The idea was the following; if there was alien life somewhere, ever so different from earthly life, they still had to have primes. (Note that I resort to examples here: Prime numbers is my favorite example of hard logic.) So, if I were to give up logic, I would have to give up primes (or find another reason for them). Now, I cannot imagine a world without logic, without primes. However, a lot of people seem to get by without much concern for logic, particularly not primes. Am I just mad, questioning logic? No, that is not it. (Or if it is, it does not matter.) It has to be something else. The fourth definition may look more promising:

The relationship between elements and between an element and the whole in a set of objects, individuals, principles, or events: There’s a certain logic to the motion of rush-hour traffic.

Notice that an example is provided to clarify what is meant. Even though it is very common to provide examples in dictionaries it is not always necessary. I also notice that they have not provided an example pertaining to principles, which is what I’m interested in here. I guess it is hard to come up with a simple, short example which anyone can understand. ‘The relationship between principles.’ Hm. Sounds like an empty phrase. (Maybe not. Is logic the relationship between arguments?) I’m not getting anywhere with this, but this is an ongoing debate I have with myself, and now with you. (You didn’t see that coming, did you? The moment of surprise!)

Going back to my initial concern with the application of logic to metaphors and how it carries over to what the metaphor is a metaphor for, obviously one big issue is the logic itself. But what is the logic of the metaphor? Logic is a hard nut to crack. The logic of the metaphor is more elusive to me. Even though something follows from logic applied to a metaphor, what is the logic of the conclusion carrying over to the real world. My experience in economics is that often, when interpreting a logical result in a metaphor, it is often justified with additional explanations, often with an ad hoc flavour, all to make it more easy to accept. The alarm bells are ringing. There is a sales man at the door, and he tries to avert or attention from the crucial matter: Does the logic of the metaphor hold? Does it?

Picture of the day

October 16, 2008

The photographer William Claxton is dead. I had never heard of him before I read he was dead, which is sad. I’ve never been a too much into photographic art, but I found his portrait of Chet Baker beautiful though. Particularly the contrast in light and focus. I think I have to go home and put on one of his records.

A positive take on the (US) economy

October 16, 2008

I don’t know why I even bother, but I still keep an eye on the unfolding crisis. Casey B. Mulligan has written a rather optimistic op-ed in The New York Times where he claims that it is not necessary to rescue the economy because it is stronger than what it might seem. And it would not suffice to bail out the banks if necessary anyway; he dismisses the bailout plan. And by arguing that the economy is strong and not that dependent on banks, he calls of the announced depression at the same time. Given the gloom reported in most newspapers, this must be said to be rather optimistic. I gather that we live in the short term and are all dead in the long run, Mulligan argues that a short term banking crisis does not necessarily matter much:

And if it takes a while for banks and lenders to get up and running again, what’s the big deal? Saving and investment are themselves not essential to the economy in the short term. Businesses could postpone their investments for a few quarters with a fairly small effect on Americans’ living standards. How harmful would it be to wait nine more months for a new car or an addition to your house?

Also, this post on the Environemental Economics blog points out that the stock market has given a handsome return over the last 60 years even after the recent turmoil. So, cheer up, folks!

Why I fucked up and why not, and why not?

October 15, 2008

So, whenever a good idea comes along, ever so small, it is important to get it down on paper (or blog or whatever; in writing) before it evaporates. I had a lucid moment while on the bus home from work today; I came up with the perfect title for my not-yet-written autobiography! ‘Why I fucked up and why not, and why not?’ What do you think? As most ideas, it has caveats (and quite a few). But let me discuss why I like it first.

I like it because it tells you three things, and not very many titles do that. So, it’s kind of clever, maybe too clever, but I tend to like clever things; particularly my clever things. Anyway, the title tells you that I fucked up and whatever follows (not necessarily a book, that is) tells you why. But, as most things, the story (of my life, presumably) has more than one potential take. (I think that is a proper use of ‘take’, according to dictionary.com ‘take’ has more than 120(!) different possible definitions, the one I use here is no. 71, I think, or 72.) So, the text that follows my brilliant title would also argue for why I not fucked up (obviously assuming that fucking up seems the most trivial conclusion). Finally, the title promise to argue for the apprehension (am more uncertain of ‘apprehend’ here) of fucking up, or at what seemingly is fucking up but might not be that in the appropriate perspective. That was four things, actually.

It’s like the title has several layers, and may be confusing at first. (I like to confuse, it may give me the upper hand as long as I don’t get confused myself.) Now, all this requires (here comes the caveats) is that I live my life (that is, survive), fuck up (seemingly) and have a good reason for it, or maybe just a helluva interesting life. A tall order, I admit. And of course, the autobiography would probably sell better if something followed the title. On a second thought (the first was on the bus), it may not be necessary to fuck up. All it takes is to do something that can be described in a simple word (to keep the title short). For example, if I make it (what?), it would be ‘Why I made it, why not, and why not?’ I’ll keep you posted on other twists I can come up with.

New Words

October 14, 2008

There’s a post on new words on the Freakonomics blog. (Posted by Stephen J. Dubner a while ago.) I don’t know if I have anything sensible to say about it; I just thought it was funny. I don’t have any new English words, I’m afraid. (I did come up with a word that those present (in a bar) had not heard before while in the US, however; I said I wanted a more ‘draftish’ beer. On another note I’m looking for words that does not exists all the time at dictionary.com, but that does not mean I’ve invented new words if you know what I mean.)

I have some Norwegian words that would be new to most people, though. How about ‘skræta’? Or ‘nirda’? I don’t know how these words came about, suddenly all my friends were using them. (If I’m not mistaken, none of my friends really know how the words came about either.) The words were used as substitutes for body parts young males tend to refer to a lot. A word I participated in giving a new dimension, if not necessarily a new meaning, is the word ‘slum’ (Norwegian for getto; poor neighborhood) (a more appropriate spelling would be ‘sluum’, which actually would make it a new word, but that would maybe be cheating). A situation is ‘slum’ when it is uncomfortable, tiresome,  boring or otherwise bad in some sense.

My wife has come up with a new word, by the way. ‘Beintmålar’ is another word for the instrument you use when checking that something is horizontal (Norwegian: Vater). A great word, I think. Anyone else?

Time to get a haircut?

October 10, 2008

Steven Levitt is having his:

I have a colleague who told me some time back that he had identified a strong leading indicator of economists who think they are on the short list for winning the prize: getting a haircut the week before the Nobel is announced. He claims to have many data points supporting his theory.

The economics Nobel is announced Monday. If I’m not mistaken, this very colleague is sporting a snazzy new haircut.

Picture of the day

October 8, 2008

Over at Dagbladet they’ve published some rather amazing pictures from the surface of Mercury. The pictures are taken by the NASA spacecraft MESSENGER. Americans do a lot of stupid things (basing their economy on the real estate market, for example), but NASA is great.

The United States of France

October 7, 2008

In Time magazine Bill Saporito caricatures how Americans love to mock the French:

They work, what, 27 hours in a good week, have 19 holidays a month, go on strike for two days and enjoy a glass of wine every day with lunch. For this, they pay a tax rate of about 103%, and their labor laws are so restrictive that they haven’t had net job gains since Napoleon.

(The online version of the comment is even more elaborate.) In the comment Bill Saporito mocks the Americans for mocking the French while becoming ‘more French than France.’ Read the entire comment, it is great. I have to pay attention to this guy!

Piled Higher & Deeper (PhD Comic)

October 7, 2008

As I am a PhD Student in economics  it may not be surprising that I find the PhD Comic very funny. It originates from a student newspaper published at Stanford University in the US, I think. The comic is set among a group of PhD Students in computer science or thereabouts, but PhD Students (or grad students as they are called in the US) from any field, former or present, will probably recognize most of the stuff going on. To everyone else it offers a glimpse of some of the troubles most PhD Students struggles with at some point or another.

This strip and the next (click on ‘next’) addresses the financial crisis (I had to mention those). The second strip is certainly food for thought! (Any suggestions on what the graph can tell about the quality of people going into PhD studies?)

And here is the first of five consecutive strips about a visit to CERN and the largest particle accelerator in the world. The strips were published around the time when they started up a new series of experiments held to produce dooms day; not a coincident I guess.

My last post on the crisis (yeah right)

October 3, 2008

As most recurring news event, the crisis has started to bore me. I cannot help but bring attention to Joseph Stiglitz latest comment on the bailout still, published at the Economists’ Voice.

One reason I think Stiglitz’ views are interesting is that he argues how I did myself in a recent conversation: The bailout does not address the fundamental problem; all the bad loans. Instead, a rescue operation should help homeowners in trouble. According to Stiglitz, this could be done rather quickly and the measures he proposes would be a lot cheaper than bailing out Wall Street.

Earlier I wrote about the problem the managers of the bailout funds will face valuating the rotten assets, and a possible solution.  As Stiglitz points out, paying a fair price for the bad loans will not fill the hole in the banks’ balance sheets. The solution of a decentralized bailout, thus, is clever, but it would work oposite to the overall goal with the bailout.

Stiglitz concludes that the American taxpayer will in all likelihood have to suffer. He goes on to ponder what only some of the bailout money could do; health care for children for example. Over on the Environmental Economics blog someone commented on what a billion dollars to each of 700 American universities could do to the education sector. In conclusion, Stiglitz does note think the (just voted through Congress) bailout is sufficient. It annoys, then, that he still think it makes sense to go ahead with the bailout. I beg to differ.

Time to act?

October 1, 2008

In this comment Martin Wolf conveys his opinion on the failed bailout. He says he understands why the congress turned it down, but also that the decision was a mistake:

It [Congress’ failure to ratify the bailout plan] is understandable because the use of taxpayer money to buy so-called “toxic” mortgage-backed securities from the greedy fools who created the crisis is hard to tolerate. It is also understandable – even creditable – that those Republicans hostile to “socialism” do not want to bail out the undeserving rich, at least before an election. It is understandable, too, because, for reasons I put forward last week, the plan is not convincing. It is designed to deal with a problem of illiquidity in what seems certain to be a growing crisis of insolvency, particularly as house prices fall and the economy continues to weaken.

Yet the rejection is grossly mistaken because the resulting ruin will hurt the weak and destroy the legitimacy of the market economy. The plan is indeed flawed. But failure to ratify it is unlikely to convince anybody that something better will be forthcoming. It will convince them [who?], instead, that the US is choosing to be impotent. At a time of such fragility, when the insurance offered by government is most indispensable, this is the worst possible message. It is a pity Mr Paulson did not choose another plan. It is a pity, too, that a former titan of high finance was charged with bailing out Wall Street. Yet it was still a mistake to reject the plan. It was necessary, instead, to build upon it.

I am not sure I agree that any medicine is better than no medicine. Particularly not when the doctor may have better stuff in his laboratory. I do certainly not understand his claim later in the comment that first it is necessary to resolve the crisis, and think about the long term consequences of the settlements later. Anyway, Wolf thinks it is time to act:

Government must start to show it is in control of events. In the twilight of a failed US administration, that may seem far too much to ask. Winston Churchill, Roosevelt’s partner, said: “The United States invariably does the right thing, after having exhausted every other alternative.” The alternatives are now exhausted. It is time for politicians to do the right thing.

I found the caricature that accompanied the article funny and to the point. It remains to see whether it is water or gasoline he has in the pipes.