economics
mikethemadbiologist | November 10, 2010...except maybe--and that's a very, very tentative maybe--doing nothing; I'll get to that later. Tyler Durden:
....what will be far more important to end consumers will be the push higher in food and energy costs. The problem, however, is that for the lowest 20% of Americans, as per the BLS, food and energy purchases represent over 50% of their after-tax income (a number which drops to 10% for the wealthiest twenty percentile). In other words should rampant liquidity end up pushing food and energy prices to double (something that is a distinct possibility currently), Ben Bernanke may have…
mikethemadbiologist | October 29, 2010I've often wondered why college tuitions are rising so rapidly ever year. While in the ultimate sense, they rise because they can--there are enough wealthy people who can pay full freight, it's not clear what internal cost require such massive, regular price increases.
Well, Robert B. Archibald and David H. Feldman propose that these increases are part of larger economic trends. First, college has to be understood as a service industry (italics mine):
First, higher education is a service industry. From 1947 to 2009 the average annual price increase for services was 4.0 percent, while for…
mikethemadbiologist | October 23, 2010This is not a market that has any connection to the real world, but a casino--and you are definitely not the house:
As the New York Times dealbook noted in May:
These are short-term bets. Very short. The founder of Tradebot, in Kansas City, Mo., told students in 2008 that his firm typically held stocks for 11 seconds. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years, he said.
....The fact that the vast majority of stock market trades are held for 11 seconds shows that the stock market is not a real market with real traders governed by…
mikethemadbiologist | October 19, 2010To steal a phrase. By way of ScienceBlogling David Sloan Wilson, we come across an interesting white paper, "The Relevance of Evolutionary Science For Economic Theory and Policy" (pdf). Since I'm an evolutionary biologist, you would probably expect me to be partial to the white paper, but I'm not convinced.
ZOMG!! TEH DARWINISMZ!!
No, that's not why. I'll leave aside the focus on general equilibrium theory in economics* (I don't care for it either), and simply note that the current spate of problems really aren't theoretical in nature, but ideological and methodological.
The latter,…
mikethemadbiologist | October 13, 2010Apparently, if Newt Gingrich is to be believed (and why would anyone do that?), he doesn't understand how food stamps stimulate the economy:
Well, you know, I carry around a bumper sticker that says 2 plus 2 equals 4. So I'd be very curious how a dollar given to somebody becomes a $1.79. And I think if we could get that to work with the U.S. Treasuries, so if people gave the Treasury $1,000, it became $1,790, we could pay off the federal debt and never worry about spending or anything. I mean, I -- you know, somehow, I don't understand how liberal math turns $1 into $1.79.
As I've mentioned…
mikethemadbiologist | October 12, 2010Steven Pearlstein, who usually has a tepid, establishment take on things, sounds kind of shrill, even, perhaps, liberal when he talks about income inequality. Pearlstein does a good job of laying out the facts of inequality (and how it's become worse), but it's the implications of inequality that are worth citing (italics mine):
Concentrating so much income in a relatively small number of households has also led to trillions of dollars being spent and invested in ways that were spectacularly unproductive. In recent decades, the rich have used their winnings to bid up the prices of artwork…
drorzel | September 27, 2010It's that time of year again-- the Swedes will be handing out money to famous scientists, with the announcements of who's getting what starting one week from today. Thus, the traditional Uncertain Principles Nobel Prize Picking Contest:
Leave a comment on this post predicting the winner(s) of one of this year's Nobel Prizes. Anyone who correctly picks both the field and the laureate will win a guest-post spot on this blog.
The usual terms and conditions apply. If you don't have anything you'd like to guest-post about, you can exchange your guest post for a signed copy of How to Teach Physics…
mikethemadbiologist | September 23, 2010But, then again, I'm one of those pessimistic liberals, so what do I know? By the way, when the CEO of Wal-Mart is more sensitive to the needs of the unemployed than our political betters, you know we're screwed:
"The paycheck cycle we've talked about before remains extreme. It is our responsibility to figure out how to sell in that environment, adjusting pack sizes, large pack at sizes the beginning of the month, small pack sizes at the end of the month. And to figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.
"And you…
mikethemadbiologist | September 17, 2010I've decried before the lack of natural history in economics, and I'm thinking Mark Thoma, with whom I usually agree, seems to be doing just that. Thoma on the ongoing recession:
There are different types of recessions, and this one can be termed "a balance sheet" recession. It had a big impact not just on bank balance sheets, but on household (and, for that matter firm) balance sheets as well. Households were particularly hard hit due to declines in stock prices and declines in the value of housing. These losses were large, they upset plans for things such as retirement, and households…
catdynamics | September 16, 2010There are some things to be said for staring at scatterplots and times series plots
Calculated Risk, in case you hadn't heard, is one of the best economics and finance blogs on the Net.
Bill at CR is a demon for generating plots:This one is Business Outlook Survey - question is, of course, what is the instantaneous second derivative.
Or look at Government Employment - Fed, State and Local, and now, with Education sector excluded!
There is the Infamous Employment vs Recession chart
and
why you should go to university... (click to embiggen) - modulo opportunity costs of course
CR commenters…
drorzel | September 1, 2010There's been a lot of energy expended blogging and writing about the LA Times's investigation of teacher performance in Los Angeles, using "Value Added Modeling," which basically looks at how much a student's scores improved during a year with a given teacher. Slate rounds up a lot of reactions, in a slightly snarky form, and Kevin Drum has some reactions of his own, along with links to two posts from Kevin Carey, who blogs about this stuff regularly. Finally, Crooked Timber has a post about a recent study showing that value-added models aren't that great (as CT is one of the few political…
mikethemadbiologist | August 28, 2010Fred Clark, at Slacktivist, fires off a essential rejoinder to deficit reductionists and austerians, with bridge reconstruction as the particular example (italics mine):
Let's consider again the objection of deficit spending. The so-called deficit hawks object to repairing structurally deficient bridges because they say the government cannot afford to borrow money to do so -- even at the low, low rates at which the government can now borrow it. Maintenance on these bridges must therefore, in the name of "fiscal responsibility," be deferred indefinitely. This is nonsense -- a dishonest trick…
mikethemadbiologist | August 19, 2010At least if we're talking about microbes.
Nick Loman has a good piece summarizing the state of genome sequencing technologies. It's pretty accurate, although I'm always skeptical about capabilities until I've seen it function. But from my point of view, which is focused on microbial genomics, the actual sequencing--determining the nucleotides on a piece of DNA--is already incredibly cheap. In that context, there are two models that seem relevant:
1) Really rapid sequencing. Here, you could have a bacterial genome in a matter of hours, even if it's not that efficient in terms of cost…
mikethemadbiologist | August 9, 2010I don't know whether to laugh or cry over this recent speech by Fed Reserve Chairman Bernanke:
A report last week showed that the American economy, recovering from the worst recession since the 1930s, slowed to a 2.4 percent annual rate in the second quarter, less than forecast, as a scarcity of jobs eroded consumer spending.
The economy "is now expanding at a moderate pace," Mr. Bernanke said at the Southern Legislative Conference, a group of lawmakers from 15 states. "To be sure, notable restraints on the recovery persist," including housing, commercial real estate and the labor market, he…
mikethemadbiologist | August 6, 2010Of course, some of us are already there. A long time reader has been saying ever since the first unveiling of the stimulus package that Larry Summers' poor advice was going to kill the Democrats--and be crappy policy. He's not the only frustrated one, as word is that Christine Romer, chairman of President Obama's Council of Economic Advisers, is resigning.
Here's the crux of Summers' handiwork (italics mine):
Romer had run simulations of the effects of stimulus packages of varying sizes: six hundred billion dollars, eight hundred billion dollars, and $1.2 trillion. The best estimate for the…
mikethemadbiologist | August 5, 2010A phrase that has entered the political lexicon recently is 'structural unemployment', which means that the unemployment were seeing is not due to a recessionary (or depressionary*) downturn, but represents job loss due to a fundamental restructuring of the economy. In the NY Times, we find an article about wage cuts (italics mine):
Local and state governments, as well as some companies, are squeezing their employees to work the same amount for less money in cost-saving measures that are often described as a last-ditch effort to avoid layoffs....
Pay cuts are appearing most frequently among…
mikethemadbiologist | August 2, 2010I've decided to take a break from hate-mongering. Instead, I want to discuss two interesting posts about the state of economics by Brad DeLong and Tim Duy. Before I get to them, for those who wonder why I discuss this stuff, I find it fascinating that such an important discipline has had such little attention paid to some fundamental philosophical issues, such as whether economics is a 'hard' or social science, whereas there are philosophers who focus entirely on the physical sciences (I don't claim to be one at all, for the record). Philip Mirowski, whom I mentioned in a different context…
sastyk | July 27, 2010Interesting query and discussion at Martin Wolf's blog about how economics came to conflate natural resources and capital, and whether it should continue to do so. You'll want to read the comments too!
The idea that land and capital are the same thing is evidently ludicrous. It requires us to believe that the economic machine is self-sustaining -- a sort of perpetual motion machine. Capital is the product of savings and investment. It is the result of human frugality and the invention required to imagine and create new capital goods. Labour is also -- and in today's circumstances,…
mikethemadbiologist | July 26, 2010One of the things that freaks out some people in the 'hard' sciences (and I use that term broadly) about the social sciences is that they, unlike the hard sciences, they don't restrict themselves to positive statements, but, instead, deal with normative statements. In other (less high-falutin') words, the social sciences don't only try to explain why things are, they often make statements about how things should be. This not only makes my colleagues in the physical sciences uncomfortable, but it's also viewed as lacking rigor which means your penis will fall off.
This, to me, seems both…
grrlscientist | July 16, 2010tags: The surprising truth about what motivates us, tasks, simple tasks, complex tasks, commissions, innovation, mastery, economics, financial rewards, purpose motive, blog writing, making the world a better place, RSA, streaming video
This video is really interesting for two reasons: first, it's a hand-drawn animation that evolves in front of your eyes, and second, I think it explains why scientists like to write blogs for the public about science -- for free! Adapted from Dan Pink's talk at the RSA, this fascinating video illustrates the hidden truths behind what really motivates us at home…