The State of Macroeconomics

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John Quiggin has a couple of interesting posts on the topic over at Crooked Timber (image from Wikipedia):

I’ll start with the central issue of macroeconomics, unemployment. It’s the central issue because macroeconomics begins with Keynes’ claim that a market economy can stay for substantial periods, in a situation of high unemployment and excess supply in all markets. If this claim is false, as argued by both classical and New Classical economists, then there is no need for a separate field of macroeconomics – everything can and should be derived from (standard neoclassical) microeconomics.

The classical view is that unemployment arises from problems in labor markets and can only be addressed by fixing those problems. Within the classical camp, Real Business Cycle theory allows for cyclical unemployment to emerge as an voluntary response to technology shocks and changes in preferences for leisure – hence Krugman’s snarky but accurate quip that, according to RBC, the Great Depression should be called the Great Vacation. More generally, on the classical view, long-term unemployment has to be explained by labour market distortions such as minimum wages, unions, restrictions on hiring and firing, and so on.

The RBC school mostly treated the Great Depression as an exceptional case, to be dealt with later, and they have been no better on the Great Recession. While some have tried, it’s obviously silly to explain the current recession as the product of technology shocks in the ordinary sense of the term. If you treat the financial sector meltdown as a technology shock,RBC amounts to little more than the observation that opium makes you sleepy because of its dormitive quality. Since financial sector booms and busts are clearly driven by the the general business cycle, you get the theory that the business cycle is caused by … the business cycle.

Looking at the broader classical view, there are two big problems. First, over the past twenty or thirty years unions have got weaker nearly everywhere, minumum wages have generally fallen in real terms, or at least relative to average wages, and labour markets have been ‘reformed’ to become more flexible. So, you would expect low and falling unemployment. The low rate of US unemployment in the 1990s and (to a lesser extent) 2000s was indeed taken as a vindication of this prediction. So, sharp increases in unemployment are the opposite of what was expected. The even bigger problem is that, since 2008, unemployment has risen sharply in many different countries, with very different institutions. Many of these countries have reacted by cutting social protections (here’s Latvia, for example)[1] but unemployment has remained high.

the devil in history

Prisoners going to camps

Underlying academic debates about the adequacy of totalitarianism as a theoretical category, Tismaneanu suggests, is a question about evil in politics. Rightly, he does not ask which of the two totalitarian experiments was more evil – an approach that easily degenerates into an inconclusive and at times morally repugnant wrangle about numbers. There is a crucial difference, which he acknowledges at several points in The Devil in History, between dying as a result of exclusion from society and being killed as part of a campaign of terror and being marked out for death in a campaign of unconditional extermination – as Jews were by Nazis and their local collaborators in many European countries and German-occupied Soviet Russia. Numerical comparisons pass over this vital moral distinction. While the stigma of being a former person extended throughout families, it was possible to be readmitted into society by undergoing “re-education”, becoming an informer, and generally collaborating with the regime. When Stalin engineered an artificial famine which condemned millions to starvation and consigned peoples such as the Tatars and Kalmyks to deportation and death, he did not aim at their complete annihilation.

more from John Gray at the TLS here.

loving the collider

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The discovery of the Higgs is more than a profound vindication of advanced mathematics and its application in theoretical physics. It is also a surprising engineering and political achievement. No single nation is prepared to invest in a project as technically difficult and high-risk as the Large Hadron Collider. The machine itself is 27 kilometres in circumference and is constructed from 9,300 superconducting electromagnets operating at -271.3°C. There is no known place in the universe that cold outside laboratories on earth; in the 13.75 billion years since the Big Bang occurred, the universe is still roughly 1° warmer than the LHC. This makes it by far the largest refrigerator in the world; it contains almost 120 tonnes of liquid helium. Buried inside the magnets are two beam pipes, which, at ultra-high vacuum, contain circulating beams of protons travelling at 99.9999991 per cent the speed of light, circumnavigating the ring 11,245 times every second. Up to 600 million protons are brought into collision every second, and in each of these tiny explosions, the conditions that were present less than a billionth of a second after the Big Bang are re-created.

more from Brian Cox at The New Statesman here.

the gift of seeing things

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For Rainer Maria Rilke the year 1903 did not begin auspiciously. He and his wife, the sculptor Clara Westhoff, were living in Paris, where the poet had come in order to write a monograph on Auguste Rodin. The Rilkes were not exactly dazzled by the City of Light. In a letter to his friend the artist Otto Modersohn, dated New Year’s Eve 1902, the poet spoke of Paris as a “difficult, difficult, anxious city” whose beauty could not compensate “for what one must suffer from the cruelty and confusion of the streets and the monstrosity of the gardens, people and things.” A few lines later he compares the French capital to those cities “of which the Bible tells that the wrath of God rose up behind them to overwhelm them and to shatter them.” As one may gather, Rilke did not tend toward understatement, particularly when speaking of his physical and emotional health. In Paris he suffered a more or less serious nervous collapse, which no doubt clouded his view of the city.

more from John Banville at the NYRB here.

A Dose of Narcissism Can Be Useful

From Scientific American:

NarcissistNarcissism has long gotten a bad rap. Its unseemly reputation dates back at least to ancient Greek mythology, in which the handsome hunter Narcissus (who undoubtedly would be gloating over his present-day fame) discovered his own reflection in a pool of water and fell in love with it. Narcissus was so transfixed by his image that he died staring at it. In 1914 Sigmund Freud likened narcissism to a sexual perversion in which romantic attraction is directed exclusively to the self. Contemporary views are hardly more flattering. Enter the words “narcissists are” into Google, and the four most popular words completing the phrase are “stupid, “evil,” “bullies” and “selfish.”

In 2008 psychologist Jean M. Twenge of San Diego State University and her colleagues found that narcissism scores have been climbing among American college students in the U.S. for the past few decades. Although the data are controversial, these scholars argue that we are living in an increasingly narcissistic culture. Some of the opprobrium heaped on narcissists is surely deserved. Yet research paints a more nuanced picture. Although narcissists can be difficult and at times insufferable, they can also make effective leaders and performers. Moreover, because virtually all of us share at least a few narcissistic traits, we may be able to learn something about ourselves from understanding them.

More here.

Thursday Poem

Machines

Dearest, note how these two are alike:
This harpsicord pavane by Purcell
And the racer's twelve-speed bike.

The machinery of grace is always simple.
This chrome trapezoid, one wheel connected
To another of concentric gears,
Which Ptolemy dreamt of and Schwinn perfected,
Is gone. The cyclist, not the cycle, steers.
And in the playing, Purcell's chords are played away.

So this talk, or touch if I were there,
Should work its effortless gadgetry of love,
Like Dante's heaven, and melt into the air.

If it doesn't, of course, I've fallen. So much is chance,
So much agility, desire, and feverish care,
As bicyclists and harpsicordists prove

Who only by moving can balance,
Only by balancing move.

by Michael Donaghy
from Shibboleth, 1998
Oxford University Press

Wednesday, January 2, 2013

The Red and the Black

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Over at Jacobin, Seth Ackerman proposes this era's version of the Meidner Plan or John Roemer's A Future for Socialism, in Jacobin:

If a deterministic story about free markets generating optimal prices, leading to maximum output was no longer viable, then the failure of planned economies could hardly be attributed to the absence of those features. As Communist systems were collapsing in Eastern Europe, economists who had lost faith in the neoclassical narrative began to argue that an alternative explanation was needed. The most prominent theorist in this group was Joseph Stiglitz, who had become famous for his work on the economics of information. His arguments dovetailed with those of other dissenters from the neoclassical approach, like the eminent Hungarian scholar of planned economies, János Kornai, and evolutionary economists like Peter Murrell.

They all pointed to a number of characteristics, largely ignored by the neoclassical school, that better accounted for the ability of market economies to avoid the problems plaguing centrally planned systems. The aspects they emphasized were disparate, but they all tended to arise from a single, rather simple fact:in market systems firms are autonomous.

That means that within the limits of the law, a firm may enter a market; choose its products and production methods; interact with other firms and individuals; and must close down if it cannot get by on its own resources. As a textbook on central planning put it, in market systems the presumption is “that an activity may be undertaken unless it is expressly prohibited,” whereas in planned systems “the prevailing presumption in most areas of economic life is that an activity may not be undertaken unless permission has been obtained from the appropriate authority.” The neoclassical fixation with ensuring that firms exercised this autonomy in a laissez-faire environment – that restrictions on voluntary exchange be minimized or eliminated — was essentially beside the point.

Oh God, What Have We Done?

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Jackson Lears reviews Ray Monk's Inside the Centre: The Life of J. Robert Oppenheimer in the LRB:

J. Robert Oppenheimer, the physicist in charge of the Manhattan Project and hence ‘father of the atomic bomb’, was never openly remorseful. But he was nothing if not ambivalent, as Ray Monk makes clear in his superb biography. When the fireball burst Oppenheimer remembered the words from Vishnu in the Bhagavad Gita: ‘I am become death, destroyer of worlds.’ It was his own idiosyncratic translation, and it became his most famous remark. The next day, though, his mood was anything but sombre as he jumped out of a jeep at Los Alamos base camp. His friend and fellow physicist Isidor Rabi said: ‘I’ll never forget the way he stepped out of the car … his walk was like High Noon … this kind of strut. He had done it.’ His colleague Enrico Fermi ‘seemed shrunken and aged, made of old parchment’ by comparison. Yet his euphoria passed, and he sank into second thoughts, despondent about the calamitous consequences awaiting the Japanese. He walked the corridors mournfully, muttering: ‘I just keep thinking about all those poor little people.’ Racial condescension aside, he meant what he said, and during the days following the test his secretary said he looked as though he were thinking: ‘Oh God, what have we done!’

He was a brilliant physicist, a charismatic leader and a skilful administrator; he was also a deeply reflective and troubled man, sensitive enough to question the conventional wisdom of the powerful even as he struggled to maintain his influence among them. Monk ably captures all these dimensions, in part through sheer accretion of detail. But he does have a central theme, expressed in his title, Inside the Centre. Whatever else Oppenheimer wanted, he always longed to be at the centre of every important theoretical debate and policy discussion he could manage to enter; a child of wealthy and assimilated German Jews on the Upper West Side of Manhattan, he was the quintessential outsider as insider – yet never quite the insider he aimed to be, in part due to his own contrarian instincts. Committed to Enlightenment ideals of open inquiry, he submitted to regimes of suspicion and secrecy though without ever giving up his own doubts.

Reporting Poverty

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Emily Brennan interviews Katherine Boo in Guernica:

Guernica: After reporting on issues of poverty in the United States for so long, what drew you to write about India?

Katherine Boo: I met my husband, who is from India, in 2001. When I first started going to India, I’d be at these dinner tables where people, claiming a posture of great authority, talked about what was going on in these historically poor communities. They always seemed to fall into two schools of thought: everything had changed with the country’s increasing prosperity, or nothing had changed in the lives of low-income people. I wasn’t a subscriber to either. In fact, I was familiar with these arguments from my experience of writing about the poor in the United States. Most of the people who do the talking about what it’s like for the very poor don’t spend much time with them. That circumstance transcends borders.

It was my husband, who had watched my reporting and fact-checking process, the way I use official documents and taped interviews to be quite precise, who first said to me, “Well, this might be something you can do in India.” And at first, I thought, “I can’t do it. I’m not Indian. If I did write anything, I would just be some stupid white woman writing a stupid thing.” But there were people around me who were saying, “If you do it well, then who you are becomes less important.” My husband and these others were interested in issues of social equality and fairness in India and thought it would be valuable to know what it was like for low-income people there, know it with a little more depth. There was plenty of reporting going on in India, but specifically what I do—follow people over long periods of time—there wasn’t much of that in India. (There are some people in the United States who do it, and do it very well, but there are not a lot of them here, either.) In my kind of work, you don’t parachute in after some big, terrible event, which is important and has to be covered, but offers only a glimpse. It’s the kind of work in which you ask, what is my understanding of how the world works, and where can I go to see these questions get worked out in individuals’ lives?

the loser

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Somebody in Boots was Algren’s big chance, but when he stepped into the ring he swung and he missed. It was released in March 1935, and a year later it had sold only 762 copies. Algren hadn’t found a straight job, and after his publishing failure it seemed he wouldn’t be able to make it as a writer. He had nowhere to go, and no idea what to do next, and so resigned himself to nothingness. In the apartment of a girlfriend whose name has been forgotten, Algren removed the gas line from the back of a stove, placed it in his mouth, and breathed methane. The girlfriend discovered Algren nearly but not quite dead, and handed him over to Larry Lipton and Richard Wright, who looked after him for months. Eventually they had him committed to a hospital, which discharged him to his parents’ apartment. He spent the remainder of his life denying his suicide attempt. Seven years passed between the publication of Algren’s first book and his second, and during those years he grew into himself and became the stubborn, hilarious, fiercely loyal, brilliant, pugnacious, and fickle person he would be until his death.

more from Colin Asher at The Believer here.

Hallucinations

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Sacks’s weekend drug experimentation escalated: a cocktail of amphetamine, LSD, and cannabis let him see true indigo, a color unknown in nature, while morning-glory seeds gave him the conviction that a visitor, in actuality a psychoanalyst colleague of Sacks’s physician parents, was in fact only a replica of the woman he knew. In London, after extracting morphine from the drug cabinet in his parents’ home office and injecting it, he enjoyed a spectacular hallucination of the Battle of Agincourt on the sleeve of his dressing gown, remaining immersed in the vision for more than twelve hours; the span of time lost sufficiently alarmed Sacks that he gave up opiates altogether. In New York, he suffered acute delirium tremens after the sudden cessation of a serious chloral hydrate habit, experiencing intense hallucinations and fending off panic only by writing a clear, almost clinical account of what he saw. It was during this period that Sacks’s vocation as a writer would emerge, and the theme of writing as refuge and remedy will return in Hallucinations as a refrain.

more from Jenny Davidson at Bookforum here.

a kind of parallel government

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In parliaments and in the public square, European democracy appears to be on its last legs. The European Union, garlanded last month with an incomprehensible Nobel Peace Prize, has become ever more feckless. National governments pushing senseless austerity budgets are losing public favor by the day. But on TV, democracy is thriving, and nowhere more than in the Danish political drama Borgen. From Greece to Ireland, where political leaders have been reduced to glorified accountants, audiences have made a series about a peripheral EU administration the most surprising television hit in years. Borgen (“The Castle,” a nickname for Christiansborg, the Copenhagen parliament building) depicts the trials of a new prime minister, her squabbling coalition government, and an aggressive, scandal-hungry news media. A quarter of the nation watches the program each week, and Helle Thorning-Schmidt, the country’s actual prime minster, is said to be an obsessive fan. Borgen is more than a sensation; it is a kind of parallel government.

more from Jason Farago at n+1 here.

Sri Lanka’s Tamils pick up the pieces after the war

Anonymous in The Caravan:

ScreenHunter_100 Jan. 02 15.43On the afternoon of 19 May 2009, at around 1:20 pm, a ration shop accountant named Sivarajan ran to the front of the winding lunch queue in the Anandakumaraswami Zone 3 refugee camp to serve rice and sodhi, a watery concoction of chillies and coconut milk. Swarna, a former militant, sat in her tent nearby, yelling at her mother for having told an army man from the morning shift that their family belonged to Mullaitivu, on the northeastern coast, where the war between the Sri Lankan Army and the separatists—“Tigers,” she called them—was still raging.

At that moment, they got a text message on their mobile phones from the government’s information department. Addressed to all Sri Lankans, it proclaimed, in Sinhala—a language neither Sivarajan nor Swarna could read—that Velupillai Prabhakaran, the man who led a 26-year-long separatist battle for a Tamil Eelam (state), had been killed by the army in a lagoon just a two hours drive north of where they were. So when the news was announced in Tamil over a loudspeaker that evening, they did not believe it. When it finally sank in, they realised—neither with remorse nor relief, but mere wonder at its very possibility—that in an instant the war they had been born into had left their lives.

Nothing would ever be the same again.

More here.

Amnesia and the Self That Remains When Memory Is Lost

Daniel Levitin in The Atlantic:

ScreenHunter_99 Jan. 02 15.33Tom was one of those people we all have in our lives — someone to go out to lunch with in a large group, but not someone I ever spent time with one-on-one. We had some classes together in college and even worked in the same cognitive psychology lab for a while. But I didn't really know him. Even so, when I heard that he had brain cancer that would kill him in four months, it stopped me cold.

I was 19 when I first saw him — in a class taught by a famous neuropsychologist, Karl Pribram. I'd see Tom at the coffee house, the library, and around campus. He seemed perennially enthusiastic, and had an exaggerated way of moving that made him seem unusually focused. I found it uncomfortable to make eye contact with him, not because he seemed threatening, but because his gaze was so intense.

Once Tom and I were sitting next to each other when Pribram told the class about a colleague of his who had just died a few days earlier. Pribram paused to look out over the classroom and told us that his colleague had been one of the greatest neuropsychologists of all time. Pribram then lowered his head and stared at the floor for such a long time I thought he might have discovered something there. Without lifting his head, he told us that his colleague had been a close friend, and had telephoned a month earlier to say he had just been diagnosed with a brain tumor growing in his temporal lobe. The doctors said that he would gradually lose his memory — not his ability to form new memories, but his ability to retrieve old ones … in short, to understand who he was.

More here.

Study Suggests Lower Mortality Risk for People Deemed to Be Overweight

Pam Belluck in the New York Times:

Bmi-comparisonThe report on nearly three million people found that those whose B.M.I. ranked them as overweight had less risk of dying than people of normal weight. And while obese people had a greater mortality risk over all, those at the lowest obesity level (B.M.I. of 30 to 34.9) were not more likely to die than normal-weight people.

The report, although not the first to suggest this relationship between B.M.I. and mortality, is by far the largest and most carefully done, analyzing nearly 100 studies, experts said.

But don’t scrap those New Year’s weight-loss resolutions and start gorging on fried Belgian waffles or triple cheeseburgers.

Experts not involved in the research said it suggested that overweight people need not panic unless they have other indicators of poor health and that depending on where fat is in the body, it might be protective or even nutritional for older or sicker people. But over all, piling on pounds and becoming more than slightly obese remains dangerous.

More here.

Wednesday Poem

My Father's Hats ….

………………Sunday mornings I would reach
high into his dark closet while standing
on a chair and tiptoeing reach
higher, touching, sometimes fumbling
the soft crowns and imagine
I was in a forest, wind hymning
…………….. through pines, where the musky scent
of rain clinging to damp earth was
his scent I loved, lingering on
bands, leather, and on the inner silk
crowns where I would smell his
hair and almost think I was being
held, or climbing a tree, touching
the yellow fruit, leaves whose scent
was that of clove in the godsome
air, as now, thinking of his fabulous
sleep, I stand on this canyon floor
and watch light slowly close
on water I can't be sure is there.

by Mark Irwin
from New Letters, Volume 66, Number 3, 2000

Are we witnessing the decline and fall of men?

From The Spiked Review of Books:

MenIgnore the hyperbolic title. Hanna Rosin’s The End of Men and the Rise of Women is filled with worthwhile insights and raises serious questions about the meaning and implications of shifting gender roles. Rosin, an editor at the Atlantic and founder of Slate’s ‘DoubleX’, has emerged as one of only a handful of American writers who has understood the centrality of so-called ‘women’s issues’ to American culture.

Her thesis goes something like this: our society is in the midst of a whole host of social and economic changes that women are benefiting from more than men, and perhaps at the expense of men. It’s a compelling idea, not least because it seems to confirm what many people have observed in the course of their own experiences. It is not simply that men have lost their jobs, or even that those jobs are gone for good, or that it is mainly women doing the jobs that are now being created. It is more a sense of creeping demoralisation and ambivalence about the future that is as much in evidence in Charles Murray’s discussion of the decline of marriage, in his book Coming Apart, as it is in ‘The Myth of Work/Life Balance’ debate that appeared in the Atlantic last summer. Rosin intuitively understands that discussions like these are related to, and have been shaped by, changes in women’s status over the past 30 years. What isn’t so clear is whether the current situation is the inevitable consequence of a shifting balance between men and women or a symptom of something else.

More here.

The Future of Medicine Is Now

From The Wall Street Journal:

Here are six of today's potentially transformative trends.

DNA Sequencing for Routine Checkups

ChipAt a genetics conference in November, Oxford Nanopore Technologies unveiled the first of a generation of tiny DNA sequencing devices that many predict will eventually be as ubiquitous as cellphones—it's already the size of one. Since the first sequencing of the human genome was completed in 2003 at a price tag of over $2 billion, the speed, price and accuracy of the technology have all improved. Illumina Inc. has dropped its price for individual readouts to $5,000; earlier this year, Life Technologies introduced a sequencer it says can map the human genome for $1,000. The smallest machine is now desktop-size. But nanopore sequencing devices, which are designed to be even smaller and more affordable, could speed efforts to make gene sequencing a routine part of a visit to the doctor's office. DNA molecules are exceedingly long and complicated; that makes them hard to read. Nanopore technology measures changes in the molecules' electrical current as the DNA is threaded in a single strand through tiny holes called “nanopores” created in a membrane.

Letting Your Body Fight Cancer

Few advances in cancer care are generating more enthusiasm than harnessing the power of the immune system to fight the disease. Tom Stutz is one reason why. Last April, the 72-year-old retired lawyer was confined to a wheelchair, struggling for every breath, and required help with simple tasks such as eating, all because of a previously diagnosed skin cancer that had spread to his lungs and liver. “I was ready to check out, to be honest,” he says. That month, he began taking an experimental drug known as MK3475. Six weeks later, he started feeling better. Today, Mr. Stutz has jettisoned the wheelchair and regularly walks a 3.5-mile loop near his home in Los Angeles. “I feel terrific,” says Mr. Stutz, who learned after a checkup in the fall that his tumors had shrunk by about 65% so far. For decades, cancer researchers have wondered why the immune system typically doesn't treat tumor cells as invaders and target them. Part of the mystery was recently solved: Tumors protect themselves by hijacking the body's natural brake for the immune system. MK3475, being developed by Merck & Co., is among a new category of drugs that release the brake, unleashing an army of immune cells to hunt down the cancer. A recent report from a trial in which Mr. Stutz participated said that of 85 patients who took the drug, 51% saw their tumors significantly shrink; in eight cases, the tumors couldn't be detected on imaging tests.

More here.

Tuesday, January 1, 2013

inventing abstraction

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What possessed a generation of young European artists, and a few Americans, to suddenly suppress recognizable imagery in pictures and sculptures? Unthinkable at one moment, the strategy became practically compulsory in the next. Many of the artists had answers—or, at least, they cooked them up. The trailblazing Wassily Kandinsky and the bulletproof masters of abstraction, Piet Mondrian and Kazimir Malevich, doubled, tortuously, as theorists. They initiated what would become a common feature of determinedly innovative art culture to this day: the simpler the art, the more elaborate the rationale. That’s easily understood. We need stories. When they are banished within art, they re-form around and about it. But most interesting to me are the early abstract artists’ personal motives. The Swiss Taeuber-Arp and her husband, Hans Arp, from Alsace, were Dadaists in Zurich during the First World War. They seem to have been excited by the prospect of a passably pure, toughly modest aestheticism that jettisoned the traditions of a Europe gone mad with slaughter. Arp was making sprightly geometric and free-form collages and reliefs, often composed by games of chance—for example, shapes in colored paper dropped onto sheets of white paper and glued down more or less where they fell.

more from Peter Schjeldahl at The New Yorker here.