J. Bradford DeLong

But if you find any good smart liberal weblogs (i.e., to the left of kausfiles.com, and with a degree of sanity and credibility that counterpunch.org lacks), email me.

Semi-Daily Journal Archive: February-March 2002

Current Journal

Weblogs and Other Stuff Worth Reading:

Wall Street Journal (alas! subscription only) | Economic Calendar | From briefing.com | Morgan Stanley Global Economic Forum | Arnold Kling | Glenn Fleishman | (Unofficial) Paul Krugman | Joshua Marshall | The Economist | Arts and Letters Daily | Paul Krugman | Andrew Odlyzko | National Journal (alas! subscription only) | Hal Varian | Virginia Postrel | Mickey Kaus | Center on Budget and Policy Priorities | Institute for International Economics | Patrick Nielsen Hayden | Jonathan Rauch | Dan Gillmor | blogdex | Andrew Tobias | BEA Economy-at-a-Glance

In These Two Months:

Productivity | U.C. Berkeley Tourism | Twirlip of the Mists | BART | Stephen Moore | Monetary Policy at the Zero-Interest Rate Bound | Edward Said | Raincoats | Stephen Roach on Japan | Laptops Outside | Congressional Budget Debate | Fischer Quoting Robbins on Keynes | Patron Saint of Open Source | Steel Tariffs | Trade Deficit | Is the Recession Over? | Azores | David Brock | Forecast Uncertainty | Paul Krugman | Indian Economic History |February| Rich Baker's Puzzle | Dogs | ipaqs | The Unbearable Presence of the World Trade Center | Corporate Governance | Eating Meat


2002-03-30: Productivity growth in the 2000s: what will it be? I'm supposed to forecast what productivity growth will be in the United States over the next decade, and what policies could accelerate or retard it, in three different papers and for five different audiences over the course of this spring and summer. The tricky part is that it is not at all clear to me what the right way to proceed is. But it may not matter much: whatever approach I take, I keep getting optimistic answers--although I'm not sure whether this describes the set of possible worlds we might live in or my own disposition. There are natural optimists, like former IMF head Michel Camdessus, of whom his subordinate Michael Mussa once cracked, "He's so optimistic he sees the glass as half full even when there's no glass at all"...

In 1995 American productivity growth, which had been motionless and prostrate, face-down on the ground since the early 1970s productivity slowdown, suddenly picked up its mat and walked. By pre-1973 standards the pace of growth of labor productivity was nothing special. But by the standards of 1973-1995 it seemed nothing less than an economic growth miracle. Between the beginning of 1995 and the semi-official NBER business cycle peak in March 2001, U.S. nonfarm-business output per person-hour worked grew at an annual rate of 2.80 percent per year. Between the beginning of 1995 and the semi-official NBER business cycle peak in March 2001, U.S. real GDP grew at a pace of 4.21 percent per year.

As the computer revolution proceeded, nominal spending on information technology capital rose from about one percent of GDP in 1960 to about two percent of GDP by 1980 to about three percent of GDP by 1990 to between five and six percent of GDP by 2000. All throughout this time, Moore’s Law–the rule of thumb enunciated by Intel cofounder Gordon Moore that every twelve to eighteen months saw a doubling of the density of transistors that his and other companies could put onto a silicon wafer–meant that the real price of information technology capital was falling as well. As the nominal spending share of GDP spent on information technology capital grew at a rate of 5 percent per year, the price of data processing–and in recent decades data communications–equipment fell at a rate of between 10 and 15 percent per year as well. At chain-weighted real values constructed using 1996 as a base year, real investment in information technology equipment and software was an amount equal to 1.7 percent of real GDP in 1987. By 2000 it was an amount equal to 6.8 percent of real GDP.

The acceleration in the growth rate of labor productivity and of real GDP in the second half of the 1990s effectively wiped out all the effects of the post-1973 productivity slowdown. The U.S. economy in the second half of the 1990s was, according to official statistics and measurements, performing as well in terms of economic growth as it had routinely performed in the first post-World War II generation. It is a marker of how much expectations had been changed by the 1973 to 1995 period of slow growth that 1995-2001 growth was viewed as extraordinary and remarkable.

One approach is to use standard growth theory to model the impact of the computer revolution. Assume that technological revolution is lowering the cost of one particular form of capital--information technology capital--at a constant rate, and that that form of capital is an imperfect substitute for capital in general. Then use the standard tools of growth theory--the calculation of steady-state growth paths, convergence analysis, and so forth--to forecast future growth. The conclusions are that the economy's long-run labor productivity growth rate jumps up as it experiences a secularly rising information technology capital-output ratio, and that the decline in the price of capital looks very much like additional total factor productivity growth as far as its effects on labor productivity is concerned. Hence standard analysis paints a bright future.

But standard analysis assumes that a number of quantities are stable--the nominal share of expenditure on information-technology goods, the "income share" of high technology capital, and so on. All the evidence of the past two decades, however, suggests that these are all rising as information technology becomes cheaper and finds more and more uses. If it is indeed the case that uses of information technology are growing faster than their prices are declining--perhaps because this is one of the few waves of innovation that are true general-purpose technologies--than the late 1990s are likely to substantially underestimate what future productivity growth is likely to be.

The same conclusion--underestimation--follows from taking seriously Basu, Fernald, and Shapiro's point that times of rapid runup in capital-output ratios are times of high adjustment costs that lead measured output growth to undershoot long-run potential output growth. Here, too, the forecast is bright.

A fourth and last approach would be to inquire where the unexplained productivity "residual" comes from. If--as Paul David, Nick Crafts, and others have argued--it is really the case that long-run benefits from general-purpose technologies flow only after they have spread themselves throughout the economy, and that the true efficiencies come from learning how to reconfigure production to take proper advatnage of them, this provides yet another reason for believing that the full effect of information technology on economic growth has not yet been felt.

By contrast, I am having a very difficult time coming up with reasons why growth in the 2000s should be slower than growth in the late 1990s. Even though journalists write of the "new economy" going smash with the end of the NASDAQ bubble and the recession, it looks to me like the fundamentals of growth are still there...


2002-03-29: If your campus does not have many tourist attractions to which graduating seniors can take their parents, make sure that those it does have are shut because they are unsafe. It's called "deferred maintenance": "In the interest of public safety, the Sather Tower elevator will be closed to visitor use effective Monday, March 25, 2002. Engineers from Physical Plant-Campus Services and an independent consulting firm specializing in elevator certification inspections agree that the condition of the aging hoist motor is such that the probability of failure is now fairly high. Failure would cause the elevator cab to be stuck in place, possibly for several hours, requiring passengers to exit via a hatch on the top of the cab.

"With Cal Day and graduations on the horizon, we can expect increased use of the tower elevator with a concurrent increase in the risk of motor failure. Rather than put members of the campus community and our visitors at risk, I feel it is prudent to close the elevator pending the start of a planned tower renovation scheduled for completion no later than the end of November 2002.

"Out of necessity, interim access to the tower must be limited only to the Music Department and the Museum of Paleontology during the renovation. I understand that losing this cherished bird's-eye view of the campus and Bay Area, even temporarily, is a great disappointment. I assure you that it is absolutely necessary and thank you for your patience while the elevator and lighting renovations are underway.

"Ron Coley
Associate Vice Chancellor
Business & Administrative Services"


2002-03-28: I am both gratified by the number of people who write to ask me questions, and appalled by the number of requests that are either semi-literate or are clearly unedited regurgitations of homework assignments. Yesterday, however, I got a request which indicates that knowledge of my website has spread very far indeed...

Date: Thu, 28 Mar 2002 12:02:29 +0000 (GMT)
From: Mariama Xi <mariama_xi@yahoo.co.uk>
Subject: Homework help
To: jbdelong@uclink.berkeley.edu

[Tranfer path: Astarte Local Nexus > Interbranch
Transcoherence Service > Yahoo]
[Language path: Cartan > Inter385 > English21]

It would be, like, so cool if you could help me with
my homework for my intermentation on economics. If you
could provide any infomation on [translation failure]
or semi-local reciprocated meme transfers across
low-level toposophic hierarchies in immediately pre-S1
societies I'd be eternally grateful. I'd prefer
multiply connected ideoplast arrays because my exoself
is having trouble dealing with anything other than
trivial translations to and from linear languages with
tree substrates and I doubt a memeer of your magnitude
would be dealing in trivialities [low-grade sycophancy
glyph]

Thanks for your help,

Mari

Worthy of Twirlip of the Mists from Vernor Vinge's novel, _A Fire Upon the Deep_, or perhaps of David Brin's _Uplift War_. She kept up the role well: a further communication:

You're really a tribe? Do you make stealth V/STOL attacks
on other tribes and boil prisoners in pots and eat them like
God-Empress Victoria's tribe did with the Communists?
This is just so exciting!

Mariama Xi


2002-03-28: Ann Marie came out of the subway--excuse me, the BART [Bay Area Rapid Transit]--a couple of days ago late, sweaty, and tired. "I really should pack a full change of clothes every time I get on that thing," she said. "About once every two weeks the same thing happens. It gets delayed by 30 minutes. It comes--but is so so crowded you can barely wedge yourself in. The climate control system can't cope. You can't even read for the first four stops. This is the kind of experience that makes people drive."

It's true. At non-commuter times the BART is comfortable enough. But at commuter time--unless you're lucky enough to get on at the end of the line and have a route that avoids transfers--you are a strap-hanger, and being a strap-hanger is much less comfortable than being in your own car, even if it's an old, junky car. Add to that the fact that BART costs nearly as much as gas plus wear-and-tear on the car, and it's hard to see how BART has a long-term future for anything other than trips across San Francisco Bay itself, where the bridge choke points create large, variable, and unpredictable delays.

But the system is used nearly to rush-hour capacity now. So from the standpoint of those who run it, the fact that it does not seem like an especially good deal is not very relevant. The political will to expand capacity is lacking: buying more trains would be expensive...


2002-03-27: People have been asking me by email what I think of Stephen Moore of the Cato Institute. The quick answer is, "Not much." I have a five-point scale along which to rank commentators: category I try hard to shoot straight all the time; category II use strong arguments where they are available, but get excited and use weak arguments when they are sure they are right but the only arguments for their side are weak; category III don't care whether arguments are strong or weak, leading or misleading, they'll just use whatever sounds best; category IV will baldly lie; and category V are sufficiently clueless that they don't know whether they're telling the truth or not. By this scale, Stephen Moore ranks no better than category III: even when the good, straight, accurate arguments are on his side, he's likely to prefer something twisted and misleading that makes a better soundbite.

Let me give some examples. For category I my favorite example is someone like Alan Blinder, who always tries to shoot straight. The most recent example of category V I have run across is Ben Stein: consider his recent claim that the 1929-1939 Great Depression was caused by the New Deal; now at some point in the past Ben Stein probably knew that the New Deal belonged to Franklin Roosevelt and that Franklin Roosevelt took office in 1933, but that knowledge seems to be so long gone that Stein doesn't even know that he has a bad temporal sequencing problem; he flunks the Turing test--it's not at all clear that there is a mind at work in there. For category II--well almost all of us are in category II. For category IV, my best recent example is Robert Scheer's claim that the Bush Administration was subsidizing the Taliban government last spring by giving them $43 million--a claim that it is impossible to put forward in good faith once one has looked at the record.

But Stephen Moore falls into category III: a guy who doesn't seem to care whether the arguments he makes are strong or weak, and will in fact pass up a strong, reliable argument for a point and use a weak, misleading argument instead as long as he thinks it sounds better. For example... let me pull down from the shelf Stephen Moore and Julian Simon (2000), _It's Getting Better All the Time: 100 Greatest Trends of the Last Hundred Years_ (Washington, D.C.: Cato Institute). It's a book I by and large agree with: things are a lot better now than they were 100 years ago. It's a book I'm sorry I bought, because I cannot refer to it without carefully checking every word, and wondering on each page, "Is this a place where they're trying to make me a fool?"

Let me open it at random....

Page 59... in "the broadest measure of a nation's overall economic performance" they headline total GDP rather than GDP per capita. GDP per capita has multiplied more than sixfold over the century, but GDP has grown by more--more than twentyfold. But is total GDP a good measure of overall economic performance? No. A country where population quadrupled and living standards halved would see its total GDP double....

Page 61... nothing wrong here...

Page 63... the graph of median family income is no series I have ever seen before: certainly it is not the case that the years 1989-1994 are the only years since 1947 in which median family income has declined...

Page 65... oh this is an absolute beauty: "The Millionaire Next Door... less than 5000 Americans, or less than 0.1 percent of households, were millionaires in 1900.... Today there are almost 8 million millionaire households in the United States [or 7.7% of households." The problem is that a dollar back in 1900 had about 20 times the purchasing power of a dollar today. If you want to answer the question "How many people today are as wealthy as a 1900-millionaire?" you need to look at the people today with wealth more than $20 million--about 0.5% of households. Now it's not that Moore is confused about the statistics--it's just that he would rather give you the (phony) number that an American today is 77 times more likely than an American in 1900 to be a "millionaire" than the (real) number that an American today is 5 times more likely to have the purchasing power of a 1900-era-millionaire than an American in 1900.

Now on all four of these charts the basic point Moore wants to make is true: America is much richer and there are many more millionaires now than in 1900, median family income has risen steeply over time, the U.S. edge over other countries in productivity has grown, and American economic growth in the twentieth century has been amazing and remarkable. He can tell his story and he can tell it strong without resorting to false, erroneous, or misleading calculations at all.

Yet still he makes them. Only one of the four items above headlines what everyone would agree are the right numbers. The other three do not. And one of four is so far off as to approach Ben Stein territory: category V. Moore simply cannot resist gilding the lily. He cannot resist making things much "clearer than truth." The result is that I cannot believe a word he writes. It's frustrating. The book is completely usless With most people, when they make weak or misleading arguments, you know from that that their case is not strong. But Moore makes weak and misleading arguments even when he does not have to, even when the straight numbers are 100% on his side...


2002-03-26: "A meeting of the Federal Open Market Committee...January 29, 2002... if the economy were to deteriorate substantially... short-term interest rates... already... very low... unconventional policy measures... efficacy... uncertain... it might be impossible to ease monetary policy sufficiently through the usual interest rate process...." It was a decade ago that Larry Summers and I wrote that it would be unwise to work hard to push inflation below 4 percent or so precisely because of the danger that the economy might then wedge itself into the position that the Federal Reserve now fears.

Now it is important to note that the Federal Reserve is not contemplating any form of action. There is no clear and present danger. The minutes report that the Open Market Committee was discussing "... staff background analyses..."--contingency planning for possible future events that has bubbled up to and is found intellectually interesting by the members of the Open Market Committee.* The minutes say that this discussion was a sidetrack from the Open Market Committee's business at hand: "The members agreed that the potential for such an economic and policy scenario seemed highly remote..."

Nevertheless, the basic point is potentially very important, and I at least find it also very interesting. The Federal Reserve's conventional policy measures control a particular short-term interest rate--the interest rate on "Federal Funds", which are deposits in the twelve regional Federal Reserve Banks that commercial banks can use to satisfy the Federal Reserve-imposed reserve requirements. But the interest rate that matters in influencing business investment decisions is not the short-term, nominal, safe interest rate that is the Federal Funds rate, but the long-term, real, risky interest rates that businesses seeking to increase their capacity face when they try to borrow. The Federal Reserve seeks to keep the economy at full employment by changing interest rates in order to boost or retard business investment.

However, there is lots of slippage between the interest rate that the Federal Reserve usually controls and the one that is relevant for business:

First there is the gap between long-term and short-term interest rates. Long-term rates are usually but not always higher than short-term rates, and the gap depends on what people think future monetary policy is likely to be and is often stubbornly resistant to Federal Reserve action. If the Federal Reserve wants interest rates to be low, but if financial markets think that policy might change, it may take a very large reduction in short-term rates to carry long-term rates to the point the Federal Reserve wants. Second there is the gap between safe and risky interest rates. Everyone is sure that the U.S. government will repay its debts. But when you lend money to or buy a bond issued by a corporation, you are not sure. The risk and default premium drives another wedge between the interest rates the Federal Reserve typically controls and those that businesses have to pay. And this risk and default premium can also suddenly jump and remain stubbornly high. Here too, it might take a very large reduction in safe interest rates to carry risky interest rates to where the Federal Reserve wants them to be.

Last, there is the wedge between real and nominal interest rates. The Federal Reserve controls how many dollar bills you will have to repay at the end of a loan in order to borrow a dollar bill's worth of purchasing power today. But businesses care about real interest rates--how many units of your product you will have to sell in order to pay off the loan you took out to expand your capacity. If the nominal interest rate is 10% per year and the inflation rate is 10% per year, it is the same to you as a business as if the nominal interest rate were 0% and the inflation rate were 0%. In the first case you have to pay back more dollar bills to pay off your loan but, as long as the prices of your products rise with the average as inflation proceeds, the nominal number of dollar bills you can sell your products for grows fast enough to offset this.

Suppose, for example, that the Federal Reserve sets the Federal Funds rate at 3% per year, and that there is a term premium of 3%, a risk and default premium of 3%, and an inflation rate of 2%. Then the real interest rate that matters for business investment is 7%--3% plus 3% plus 3% minus 2%. Now suppose that the Federal Reserve staff appear, and say that their studies suggest that full employment requires a real interest rate of 3%. Then--with an inflation rate of 2%--the Federal Reserve is out of luck: It cannot drive the nominal interest rate on Federal Funds below zero, and so it cannot drive the real interest rate relevant for businesses below 4%--3% plus 3% minus 2%. Hence the Federal Reserve staff spends some of its time thinking about "unconventional policies": things it could do that might affect the term premium, and the risk and default premium. However, as the minutes noted, these policies have "...efficacy... uncertain."

Note that this potential problem would cast much less of a shadow on the future if inflation were a little bit higher. At an annual inflation rate of 5%, the Federal Reserve could push real interest rates down to 3% with normal, conventional interest rate policies: a nominal Federal Funds interest rate of 2% would produce a real interest rate of 3%--2% plus 3% plus 3% minus 5%.

Hence Larry's and my point a decade ago: if you think there is a good chance that maintaining full employment will require you to goose the economy substantially and push real business-relevant interest rates down to very low levels, then be wary of carrying the fight against inflation too far and pushing inflation too low. Either that, or figure out how to design unconventional policy measures that will be effective at unwedging the economy if the "zero bound," the fact that the Federal Funds rate cannot fall below zero, keeps the normal interest rate manipulation tools of the Federal Reserve from carrying the business-relevant interest rate to where it needs to be.


*Indeed, the fact that journalistic coverage of the minutes--by the Financial Times's Peronet Despeignes, for example--takes seven paragraphs to say that the contingency was regarded as "highly remote" seems, to me at least, to be likely to create a false impression in quick readers' minds of the policy relevance of the discussion.


2002-03-25: I find myself swinging toward the belief that the "linguistic turn" taken by the academic left has truly deprived many of them of the ability to think at all. Consider Edward Said--on September 16, 2001!--condemning U.S. political discourse for "...flinging about words like 'terrorism' and 'freedom' whereas, of course, such large abstractions have mostly hidden sordid material interests, the influence of the oil, defence and Zionist lobbies now consolidating their hold on the entire Middle East, and an age-old religious hostility to (and ignorance of) 'Islam' that takes new forms every day." Said seems to believe that if he classifies "freedom" and "terrorism" as "large abstractions," then they will disappear. And then he can turn his attention to what is really important--"oil, defence, and Zionist lobbies" and "religious hostility to Islam."

But whether or not terrorism is an "abstraction," it is certainly very large indeed, and very very real.

And "freedom" is very real as well...


2002-03-25: 12:30 in the afternoon, and it is time to take the recovering-from-expensive-knee-surgery dog out for her extremely short (in distance), extremely placid walk. We'll stay out for half an hour, sniffing things, because we all feel sorry for her. As we head out the door it begins to rain--hard. I grab my raincoat, put it on, and we head outside. Ten minutes later I'm standing there in the pouring rain, bored, watching the lame dog sniff something totally fascinating in the grass. And I think, "What a kick-a** raincoat..."

I remember the raincoats I had as a child. They all leaked at the seams. Stand outside too long in too heavy a rain, and you could feel drops forcing themselves through the stitching and onto your clothes. They all had no ventilation. Zip them shut, and soon your skin would begin to sweat as your body heated up the air inside the raincoat and it had no place to go. Leave it unzipped, and you stayed more comfortable but got wet faster.

Today's raincoat has excellent ventilation. Today's raincoat has very tight stitching. Today's raincoat has excellent systems for keeping your wrists water-tight, your neck covered, and your hood drawn tight (if necessary) around your face. The lining on today's raincoat actually keeps you warm. Highly water-resistant PVC-coated nylon feels softer and more supple. Fleece lining adds warmth. Rain stays out of eyes thanks to visor on hood. Large vents in front and back prevent you from overheating. Zipper and pockets have covered storm flaps, a feature you'll appreciate for keeping wet weather out. And you can buy it from Land's End for only $39.50!

It truly is much much better at performing its function--and much cheaper in terms of the hours of labor-time needed to earn the money to buy it--than the commodities that went by the same name a generation ago.

What other stuff that we use everyday has slowly, imperceptibly, but massively crept upwards in its quality over the past thirty years?


2002-03-24: Morgan Stanley's Stephen Roach is remarkably pessimistic about Japan...

Asia remains a study in contrasts. Tempting as it is, this region should never be painted with a single brush. Especially now. There is great diversity of culture, history, and economic performance. Looking ahead, Asia’s economic prognosis is very much a reflection of that diversity. That key point has come through loud and clear as I come down the home stretch of a two-week mission to the Far East.

Japan is the great tragedy of Asia. Sadly, there is no other way to put it. I have been traveling to Japan several times a year over the past 20 years. I have seen the world’s second largest economy at its highs and at its lows. But I have never seen the despair that was present this week in Tokyo. The nation seems to have given up. Whether you speak with investors, businessmen, or government officials and policy makers -- and I saw them all on this visit -- there’s a sense of utter hopelessness in the air. Yet another reformer -- this time, Prime Minister Koizumi -- has been devoured by the politics of inertia. Change is an anathema to the world’s most deeply entrenched political system. Japan is now barely able to pay lip service to reform. It’s always the same three tired words -- "It’s very difficult."

To his great credit, Robert Feldman, head of our Japanese team, figured this out long ago. His "CRIC Cycle" -- a model of the political economy of inertia -- says it all: During the past dozen years, Japan has been stuck in a seemingly never-ending loop of Crisis, Response, Improvement, and Complacency -- over and over again. Time and again, Japan’s response to crisis has been long on rhetoric and short on substance. Usually, there are modest signs of improvement that quickly give rise to a characteristic complacency, setting the stage for the inevitable next crisis.

Robert would currently place Japan near the end of yet another Response phase of the CRIC cycle, as the government’s hand was forced by yet another crisis -- this time the sharp decline in equity prices in early 2002 as well as the poorly executed financial sector and corporate reforms. Reflecting a better tone in the global economy -- however temporary -- Japan should enter yet another period of brief improvement. The subsequent rebound of the equity market should also be a palliative for business and consumer confidence. And it should look "less bad" in Japan for a while -- an impression already validated by the government’s recent upgrade of its assessment of economic conditions for the first time in 21 months. Unfortunately, this is precisely the type of low-quality improvement that invariably gives rise to another bout of complacency, which then sets the stage for the next crisis. In the CRIC cycle, crisis always reappears because the policy response is de minimus -- the least the authorities think they can get away with.

Moreover, there are new signs of yet another property bubble building in Japan. For the last few years, I have seen the construction cranes all over Tokyo. Not to worry, I was assured -- these are "rational" projects. Alas, it turns out they were not. According to Keiko Otsuki, our Tokyo-based property analyst, far more office space is coming on line than expected in metropolitan Tokyo over the next few years -- 2.7 square million meters in 2003, alone, versus a previously expected 2.0 million square meters. As a result, Tokyo office vacancy rates should exceed 8% for the next two years, worse than during the 1994 recession. For a floundering, demand-short Japanese economy, such a glut of new office supply spells one thing -- unrelenting downward pressure on rents and property prices and on the developers and lenders associated with this key asset market. In addition, there could well be more excess supply to come in the pipeline, especially if the Koizumi government’s urban renewal project ever gets off the ground. The construction industry has long had a stranglehold on the Japanese political system. The likelihood of yet another property overhang is clear testament to how insidious Japan’s dysfunctional political economy has become. And so Japan continues to slide down an ever-slippery slope of rolling recession, ongoing deflation, and yet another bout of yen weakness. My take from Tokyo is that there is literally no end in sight.

From <http://www.morganstanley.com/GEFdata/digests/20020322-fri.html>


2002-03-23: Back when I was an undergraduate, the sunny days just after the arrival of spring (i.e., mid-May in Cambridge Massachusetts) were glorious. We would take our books, our notebooks, and our felt-tipped pens and spread ourselves out on blankets on the banks of the Charles River. We would study for our exams, reading our library books and writing our notes. We would write our papers, filling pages upon pages with cursive words and paragraphs and then, as the sun began to set and the chill of a Cambridge spring night set in, go back to our electric typewriters to do final drafts.

Then came the computer age. We did our first drafts not on lined paper with felt tipped pens while soaking up the sun by the banks of the Charles River, but in small rooms with noisy machines and low-quality screens. We even did our reading by the computer, so that our notes could be in an accessible electronic form. Some of us bought expensive laptops with small hard disks and short battery lives, but the difference between them and the bigger machines back in our offices pulled us out of the sun. We became pallid.

But now--now I have an Apple Powerbook G4, with a hard disk larger than all of my accumulated files since the dawn of time, an uncrashable unix operating system foundation, and a speed that is faster than any of my desktop machines. Now I sit outside in the sun in the glorious days just after the arrival of spring. I study and research, reading my library books, writing my notes, and writing my first and final drafts as I bask in the sun. I even use 802.11b connections to access the entire world wide web from my back deck or, more and more now as the AirBears wireless network spreads across Berkeley, from any warm, sunny, green spot on the Berkeley campus.

Paradise has been regained.

Moreover, since I now live in Berkeley, the sunny days just after the arrival of spring come not in mid-May, but in early March...


2002-03-22: Stan Collender of the _National Journal_ is depressed about the state of the congressional budget debate for many reasons. The first--and most remarkable--is the "claim by several members of the House Budget Committee that the budget they reported out last week is actually in balance if the recently enacted stimulus bill is not counted." But these are the same representatives who voted for the stimulus bill. It is just "crazy," writes Collender, "[T]ry to imagine not rolling your eyes as someone told you that the federal budget would be in surplus so long as the Defense Department wasn't counted."

Here are the other reasons: (2) The House Budget Committee's abandonment of ten-year projections. (3) The Budget Committee's shift to the more-optimistic White House budget baseline just because it is more optimistic. (Ah, I remember my days in the Clinton Administration when we used the more pessimistic baseline because we are interested in actually achieving good economic policies rather than just winning rhetorical victories.) (4) Congress's continued inability to raise the ceiling amount on the federal debt--House leaders who would "rather see cash from government pension funds [borrowed without the consent of the fund owners] on a short-term basis than take the political heat for the vote on a debt ceiling increase which they eventually will have to do anyway." (5) Congress finally managed to pass an economic stimulus package only after the consensus of opinion had shifted to confidence that the recession was over and that a stimulus package was no longer necessary. (6) Christopher Cox (R-CA) wants to (a) vote for a reduction in the debt ceiling, but also (b) remove Social Security from the category covered by the debt ceiling limit, so that Congress can claim that it has (c) reduced the maximum allowable national debt while still (d) making it possible for the government to borrow more. (7) Once again Congress is unlikley to be able to pass its budget resolution on time. (8) The head of the Army Corps of Engineers was fired for agreeing with Congress that OMB's proposed budget cuts were unrealistic. And there's more....

There is no doubt that the quality and the degree of responsibility and honesty found in the federal budget debate took a steep nosedive in the last few Clinton years, and that the speed of the nosedive has accelerated since Bush was inaugurated.

I had a brief discussion with the extremely intelligent Rudy Penner of the Urban Institute (head of the Congressional Budget Office during part of the 1980s):

Brad praises how well and honest the budgetary process worked in the early and mid-1990s, and what an important role the Budget Enforcement Act [BEA] and its Pay-As-You-Go restrictions [PAYGO] that made any piece of legislation that increased the deficit out-of-order on the floor of the House and the Senate played in making the 1990s debate both high-quality and effective...

Rudy: ...One substantive point: You rightly praised how the BEA worked from 1990 thru 1997. But then it broke down completely. It may not be renewed or even worse it may be renewed and then ignored. I think now the only defense is presidential vetoes, but I'm not confident he'll use them.

Brad: The discretionary caps were pierced regularly and with gay abandon. But--and correct me if I am wrong--individual bills that moved outside of appropriations jurisdiction still had to be deficit neutral, didn't they? But the rapid dissolution of the effectiveness of the process after 1997 puzzles me greatly...

Rudy: Legislation involving mandatory accounts "had to be deficit neutral", but it wasn't after 98. PAYGO rules were routinely violated, but legally in the sense that a phrase was often included in the legislation that essentially said that this law is not subject to PAYGO rules.

Brad: Yeah. But up through 1997 (or so) inclusion of such a phrase would automatically lose you ten votes (or so) in the Senate. So what happened at the beginning of 1998 to change things so completely? That's still not clear to me...

Rudy: I believe it was the surplus. PAYGO was originally designed to stop tax and entitlement policy from increasing the deficit. (Really, to preserve the gains from the 1990 budget agreement.) After 1997, it had the effect of preventing any reduction of the surplus and that didn't make much sense. Fixing it wasn't easy tho a number of proposals were made. So they decided to ignore it. Now we need it again, but who knows what the Congress will do next...


2002-03-21: Stanley Fischer's Robbins Lectures have a quote from Lionel Robbins's wartime diaries (June 24, 1944) about John Maynard Keynes's intellectual dominance over the Atlantic Alliance's post-WWII economic planning:

Keynes was in his most lucid and persuasive mood; and the effect was irresistible. At such moments, I often find myself thinking that Keynes must be one of the most remarkable men that have ever lived – the quick logic, the birdlike swoop of intuition, the vivid fancy, the wide vision, above all the incomparable sense of the fitness of words, all combine to make something several degrees beyond the limit of ordinary human achievement. Certainly, in our own age, only the Prime Minister [Churchill] is of comparable stature. He, of course, surpasses him. But the greatness of the Prime Minister is something much easier to understand than the genius of Keynes. For in the last analysis, the special qualities of the Prime Minister are the traditional qualities of our race raised to the scale of grandeur. Whereas the special qualities of Keynes are something outside all that. He uses the classical style of our life and language, it is true, but it is shot through with something that is not traditional, a unique unearthly quality of which one can only say that it is pure genius. The Americans sat entranced as the God-like visitor sang and the golden light played around. When it was all over there was very little discussion.…

The more I work through the memoirs and the documents for post-WWII economic policy planning, the more I am convinced of the primacy of John Maynard Keynes's influence on the post-WWII economic institutions that were created. The view--common in "Small Britain" circles--that Keynes was ineffective in a struggle between allies over the economic shape of the postwar world seems to me to be extraordinarily at variance with the actual history. The system of economic management that he and his peers set up has, all in all, served us very very well over the past half-century and more.


2002-03-20: In honor of St. Columba of Ireland, Patron Saint of the Open-Source Movement:

In honor of Saint Patrick's Day, here's a reminder that one of Ireland's
other patron saints, Saint Columba, may have pioneered the anti-copyright
movement way back in the sixth century (A.D. 555, to be exact):

St. Columba had borrowed from the monk a fine manuscript of the
Gospels, and Columba had made a copy of the borrowed book, before returning
it. The monk claimed the copy also as his; the saint disputed this. His
argument in defence reads not unlike the defence made by modern infringers
of copyright: "I confess that the book in question was copied from the
manuscript of Finnen. But it was with my own industry and toil and burning
of the midnight oil. And it was copied with such care that Finnen's
manuscript is in no way injured by the act of copying. Moreover, my object
was to preserve more surely the best parts of the book and employ them for
the greater glory of God. Hence I do not admit that I have done any injury
to Finnen; nor am liable for restitution, nor am at fault in any way." But
Dermot, the judge, as manuscripts were then new in Ireland, had no exact
precedent, and he cast about for the nearest analogy. He found the Brehon
maxim, "With every cow goes its calf", "Le cach boin a boinin"; and so his
judgment was in favor of the monk, because "Le cach lebar a lebran", "With
every book goes the young of the book". (But the saint, it is recorded, was
very angry at this judgment, invoked the power of a rival chieftain against
Dermot, and thrashed him well in battle.) [Wigmore, John H., _A Panorama of
the World's Legal Systems_, Washington DC, 1936, p. 677]


2002-03-19: Well, it's been a couple of weeks since I started hearing that George W. Bush was going to cave on free trade and impose steel tariffs carefully crafted to boost employment in swing states. I've been waiting for the response, and it seems rather... quiet...

Where are all the right-wing economists who love free trade? Where are their op-eds critical of the Bush administration's steel tariffs? George Will (not an economist) and Treasury Secretary Paul O'Neill (not an economist) and the Washington Times editorial board have complained. But where are the economists who (a) like Republicans and (b) like free trade? (Paul Krugman doesn't count.) I saw a nice op-ed by Bruce Bartlett, but I haven't seen others, and I have been looking. If you see any, please tell me. And come on guys. There aren't that many administration jobs available anyway. Whenever the Clinton administration went against economists' outside consensus, the High Politicians and their media handlers knew that they'd been in a fight.

And where are the pro-free trade internal forces within the administration. Once again, whenever the Clinton people went against their economists' advice (health care reform, global warming, welfare reform) they knew they had been in a fight. Why wasn't the opposition of Paul O'Neill at the Treasury effective? Was it pointed out that the U.S. has--through many, many administrations back to the second Roosevelt--bet on free trade as a key part of America's long-run foreign policy as well as its economic policy? Where were the lobbyists for the public interest within the administration? Where were the cabinet members who are pro-consumer? What happened to Larry Lindsey? Glenn Hubbard? John Taylor? Mark McClellan? Bob Zoellick?

Alan Blinder said once that every economist who serves in any administration needs a special mindset--needs to wake up in the morning saying to him or herself, "O goody! Today I may be able, in doing my job, to do something that will get me fired! Then I'll be able to go home!" What he didn't say was that every economist who approaches his job with this mindset is vastly more powerful and likely to have a positive impact than an economist desperate to hang onto his or her executive-branch office space.

Arnold Kling <arnold@arnoldkling.com> writes: "My father, from St. Louis, says that Murray Weidenbaum has been very vocal and very public in his criticism of the steel tariffs. My guess is that the east coast media don't pay much attention to him."


2002-03-18: The U.S. trade deficit has not shrunk as rapidly since the recession began as most analysts were expecting. Imports have fallen by about fifteen percent, but exports have fallen too.

Last March 13, Alan Greenspan said:

During the past six years, about 40 percent of the total increase in our capital stock in effect has been financed, on net, by saving from abroad. This situation is reflected in our ongoing current account deficit, which, by definition, is a measure of our net investment in domestic plant and equipment financed with foreign funds, both debt and equity. But this deficit is also a measure of the increase in the level of net claims, primarily debt claims, that foreigners have on our assets. As the stock of such claims grows, an ever-larger flow of interest payments must be provided to the foreign suppliers of this capital. Countries that have gone down this path invariably have run into trouble, and so would we. Eventually, the current account deficit will have to be restrained. The nation's economic potential will be brighter if that comes about through an increase in domestic saving rather than a reduction in domestic investment.

If we were still on a gold standard, the United States would (eventually) have no choice but to trigger a domestic recession in order to deal with the trade deficit. But John Maynard Keynes and Harry Dexter White got rid of the gold standard. In large part the reason they got rid of the gold standard was to make deficits the problems of surplus as well as of deficit countries. As Bob Rubin and Larry Summers used to say: don't balance down, balance up. Europe and Japan need to loosen policy and accelerate their growth to boost their imports (from America).

Meanwhile--as long as the U.S. foreign debt is made up of foreign equity investments and foreign dollar-denominated securities--a large-scale dollar depreciation is not primarily our problem,* it's primarily their problem. It lowers American's terms of trade, yes, but the fall in the value of the dollar boosts the competitiveness of export industries. More important, it writes down the value of the external debt, and it does so smoothly and automatically. Thus the "surplus" countries have a much greater stake and incentive to balance up than America does to balance down (and alan Greenspan has gotten quite attached to a sub-six percent unemployment rate).

Since 1980, those countries that have gotten into big trouble from current account deficits have done so because their trade deficits have cumulated into large foreign currency-denominated debts that have meant that home currency depreciation does not write down the value of the debt. Thus whenever the currency depreciates, the home currency value of foreign debt becomes crushingly large. America is going to be able to avoid that (at least, America is going to be able to avoid that if the Federal Reserve and SEC do their job and keep both eyes on the derivative books of major (and minor) financial institutions).

*Maury Obstfeld and Ken Rogoff think that when the depreciation comes America is going to have to move 4% of its labor force from investment-goods industries to export industries within the space of a year or so, that that degree of expenditure-switching is going to produce some kind of recession, and that if monetary and fiscal policy do not hit the sweet spot when the depreciation comes that the recession could get very bad. But the absence of large-scale foreign currency-denominated debt means that the U.S. economy still has room to maneuver to avoid a serious crack-up.

Of course, were you to tell me that New York financial institutions' derivative books had a net notional principal that was long the dollar to the tune of $3 trillion, my mind would change. My mind would more than change: I would be reduced to a gibbering, nervous, fearful, insane wreck cowering beneath my desk...


2002-03-15: Today's statistical releases carried two messages of note. The first was that the producer price core inflation index (that is, excluding volatile food and energy prices) was completely flat last month: zero change. There is no inflation. Over the past year, in fact, the producer price index has fallen by 2.6%. The fact that inflation is totally dead and buried even though the unemployment rate is no higher than five and a half percent is totally remarkable. Virtually no one as recently as 1995 would have believed that such a configuration of statistics was at all possible.

Source: briefing.com

The Federal Reserve can thus concentrate on trying to maintain full employment, without worrying about controlling inflation at all. In fact, the balance of short-run risks is that the U.S. is more likely to fall into deflation (a more dire economic disease) than to see a return of inflation.

The second is that growth in industrial production has resumed. A month ago we thought that seasonally-adjusted industrial produciton was 0.1% lower in January than in December. Now we think that seasonally-adjusted industrial production was 0.6% higher in February than in December. The depth of the recession in manufacturing remains very large, however: capacity utilization (at 74.8%) is still lower than it has been since the very start of the 1980s. But back then unemployment was 10%, not its current 5.5%.

How fast will America's economic recovery in 2002 be? It is anyone's guess. The long-run effects of the terror attack on the World Trade Center on 911 on economic confidence are still unknown. The prospect of additional devastating terrorist atrocities remains. On the other hand, the enormous degree of monetary stimulus set in motion by the Federal Reserve over the past year has still not had nearly its full effect on spending: it is going to give the economy a mighty forward shove over the next nine months. And there is substantial fiscal stimulus as well produced by the huge swing in the federal budget. How will these forces resolve? The Economist's poll of forecasters finds a low estimate of a U.S. growth rate in real GDP per capital of 0.7% per year over the next two years, and a high estimate of 2.5% per year over the next two years.

Source: briefing.com

Source: briefing.com


2002-03-15:

Source: briefing.com

Slower growth in industrial capacity over the past year raises the fear that output growth will not be all that rapid as the U.S. economy comes out of the recession.


2002-03-15: I have an Erdos number! I have an Erdos number of 8! Wild Excitement!


2002-03-14: Now Ann Marie is not so sure she wants to go to the Azores this summer--where one of her grandmothers came from. She is put off by the description of the above-90 days during the summer.


2002-03-13: Just finished reading David Brock (2002), _Blinded by the Right: The Conscience of an Ex-Conservative_ (New York: Crown: 0812930991). The book is worthwhile. We need to be reminded just how large a chunk of the Republican political establishment went a lot slutty and a lot nutty in their management and use of Brock when he was their mendacious pit-bull sliming every liberal he could find in the 1990s.

The book is also quite scary, because the picture it paints of the moral state of the right wing in the 1990s is--if true--far worse and far more depraved than anything I had feared or imagined.

We knew that the right wing was happy to ally with the Reverend Sun Myung Moon--even though Republican Senator Orrin Hatch and others saw Moon's cult "a religious alternative to Communism"--against the real enemy, for they see the moral equivalent of Communists as much less threatening than American Democrats. We did not know that American Enterprise Institute fellows like Nick Eberstadt spent their evenings ridiculing their gay conservative friends behind their backs. And we did not know that conservatives like Elliott Abrams were deeply dismayed at the idea that the rot had penetrated so far that a conservative audience would applaud a known homosexual.

We knew that Rush Limbaugh did not know fact from fiction, and that William Bennett lied through his teeth when he called Limbaugh "... extremely sophisticated, extremely smart... very serious intellectually." We did not know that Heritage Foundation types ran meetings where "a replica of [George H.W.] Bush's head was presented on a silver platter." We knew that Newt Gingrich was not the "kind of guy who would impose a fundamentalist view of morality... marijuana, avoid[ing] service in Vietnam... divorc[ing] his first wife... an unfaithful husband to his second wife, Marianne..." We did not know that D.C. Circuit Court of Appeals Judge Larry Silberman was the source of the false information about his colleague, Judge Pat Wald, that showed up in Brock's _The Real Anita Hill_.

We knew that the conservative right was willing to go to great lengths to try to destroy the credibility of witnesses who accused Clarence Thomas of sexual harassment. We did not know that Senator Thurmond's aides were willing to risk criminal liability by giving Brock access to confidential FBI files. And we did not know that Justice Clarence Thomas, from the Supreme Court Bench, through intermediaries, gave Brock private information for him to use as a lever to intimidate potential sources critical of Thomas. We knew that Mayer and Abramson's book, Strange Justice, was much better than Brock's The Real Anita Hill. We did not know that Brock regarded his own book as a tissue of misrepresentations.

We knew that the American Spectator's "Troopergate" stories were false because the Arkansas state troopers' "wicked portrait of Hillary Clinton was a jumble of contradictions. In one scene, she was a man-hating feminist whose marriage... was a cynical pact for... power; in another, she was an anguished spouse, distraught over her husband's unfaithfulness..." We did not know that current Solicitor General of the United States Theodore Olson did not care whether what the Spectator published was true or false--of the American Spectator's Vincent Foster articles, for example, saying "bluntly... that while he believed... that Foster had committed suicide, raising questions about the death was a way of turning up the heat on the administration until another scandal was shaken loose, which was the [American] Spectator's mission..."

We knew that the replacement of independent counsel Fiske by independent counsel Starr was strange. We did not know that the key reason for it was that "...conservative insiders like the Silbermans and [Judge] Sentelle knew that Starr, though he would pass muster as independent to the outside world, would prove to be a reliable anti-Clinton partisan..." And we did not know that right-wing moneybags Richard Mellon Scaife believed that "...former Arkansas senator J. William Fulbright.... had been an agent of the Soviet KGB and had recruited Clinton as a Soviet spy" and commissioned an investigation.

We knew that David Brock had lost credit among the right when his 1996 biography of Hillary Rodham Clinton was not vicious enough. We did not know that Simon and Schuster's publisher, Jack Romanos, hoped that Brock would be able to discover and reveal that she was a lesbian. And we did not know that indpendent counsel Starr's deputies called her "bitch" when her face appeared on TV.

How much of all this is true? The anti-semitism, the gay-bashing, and so forth is attested by many other sources. It is neoconservative godfather Norman Podhoretz, after all, who is opposed to researching treatments for AIDS. The pieces of the book which are Brock recounting things he saw are likely to be reliable--he did see them, after all, and few have disputed his accounts of what took place. The rest? Unfortunately, here we have an author with a demonstrated inability to interview sources, unable to sift truth from falsehood. So as for the rest it is anybody's guess.


2002-03-13: The dentist reports that Ann Marie has broken one of her molars, and will need a crown at least to hold the tooth together. Combine this with the coming of the spring allergy season, her pneumonia, the fact that on the way to the pneumonia doctor her car was rear-ended by a Coca-Cola truck, dealing with the dog's knee surgery, and the possibility of her sister's well running dry in the Maine drought, and morale is low...


2002-03-09: Forecasts from the Economist. Note the extremely wide spreads...


2002-03-08: My friend Paul Krugman has been being beaten up on recently by Andrew Sullivan--the ex-New Republic editor whom at least some conservatives call "Mad Dog."*

Why Krugman is worthy of attack is not so clear. It's weird. At first, Sullivan attacked Krugman because Krugman had written many, many columns critical of Enron without revealing that his past connections with Enron (which paid him $50,000 for what looks like three days' work) suggested he had some reason to take it easy on them. Then--after someone told Sullivan that Krugman *had* disclosed his past dealings with Enron--Sullivan was attacking Krugman for not saying exactly how much he had been paid for serving on Enron's advisory board. Then Sullivan said that Krugman *had* been bought by Enron, as evidenced by a pro-Enron column that Krugman had written back in 1999 (long before there was any hint that Enron was cooking its books). Then Sullivan said that he was not accusing Krugman of doing anything "deeply unethical." Then he said that the real problem was not that Krugman's past connections with Enron had made him pull his punches but was how much Enron paid Krugman--"what many people would think of as a year’s salary by showing up for a weekend and gabbing about Asia..." It was as if Andrew Sullivan had suddenly become a left-wing leveller deeply concerned with the growing degree of income inequality in America, rather than remaining a right-wing celebrator of wealth, power, and class. And somehow people who had combined full-time journalism with serving on Enron's advisory committee (which Krugman did not: he abandoned such sources of income and disclosed past associations when journalism approached 50% of his activities) but whose politics were more to Sullivan's liking (Peggy Noonan, William Kristol, Lawrence Kudlow) escaped all but the lightest of Sullivan's censure.

It was hard to take any of this seriously, especially since Sullivan himself seemed to view it as a journalistic lab experiment of sorts, writing: "It will be fascinating to see whether any of the usual left-liberal journalist watch-dog magazines or bodies say anything about Krugman. The flagship left-liberal media-zine, Jim Romenesko’s MediaNews, routinely recycles smears against conservative journalists, but hasn’t mentioned this one [against a liberal journalist]..." This seemed to me to pass a milestone of sorts: I had never previously run into anyone who unselfconsciously referred to his own writing as a "smeer" in the way that Sullivan did. (Jack Shafer's take on this.)

The answer to Sullivan's question turned out to be "yes." The American media, it turned out, would "routinely recycle" smears against liberal journalist. A www.google.com search for "Krugman Enron Sullivan" on March 18, 2002 turned up 619 hits from the websites of Salon, the Washington Times, the New York Press, the National Review, the Sun-Times, the Washington Post, others, and, yes, Jim Romanesko's "flagship left-liberal mediazine."

But the most interesting thing about the whole episode--to me at least--was when I realized that I was not taking it seriously because of one of the professional deformations of economists--one that I share with Paul Krugman. What seemed to us to be perfectly reasonable and normal ways of behaving came across to others as rank hypocrisy. You see, economists believe that there are private goods, like shirts, and public goods, like an appropriately-strong greenhouse effect. Economists strongly approve of people pursuing their own material self-interest under the law by choosing which private goods to purchase. We believe in the market system, in which the pursuit of private interest produces public benefits. We are, after all, the only intellectual discipline for which obedience to market forces is a moral imperative.

Economists also strongly believe in changing the law to provide people with the right incentives to shape their behavior to help produce the appropriate amount of public goods: we believe in taxes on greenhouse-gas emissions to give people the right private incentives to keep the greenhouse effect at its appropriate strenght. (And if evidence showed up that an ice-age were on the way and that our civilization needed a stronger greenhouse effect, we would advocate subsidies for greenhouse gas emissions to encourage global warming.) Public goods need to be provided, and since the market will not provide them by itself, we need to enact taxes and subsidies to give private agents the right incentives.

But we economists do not believe in the raw, unshaped private provision of public goods. A single person who abandons their car to reduce greenhouse gas emissions does effectively zero public good but does themself considerable private harm. What is needed in the case of public goods--like local smog, or global warming, a less money-influenced political system, or a more equal distribution of income--is not isolated invididual acts of private virtue, but changing the rules of the game to give everyone the right incentives so that acting in the public interest is a no-brainer.

Thus we economists see no contradiction between both saying that taxes on the rich should be higher and writing "zero" in the box on our form 1040 where it asks if we want to make a voluntary contribution to reduce the public debt. But other people do. They say, "Hypocrites." They say, "If you drive a car, you have no right to call for higher gasoline taxes." From our economists' perspective, however, this is not the case. From our perspective, we are acting entirely appropriately and normally within the structure of incentives that exists, while calling for its reform and improvement.

And in any case the game of accusing people of "hypocrisy" is, in my view, unproductive, sterile, and short-sighted: that people fail to live up to their principles fully does not mean that they are a sham, or that the principles aren't good ones. The argument that the advocates of a principle are hypocrites is one of the weakest arguments that can be made against a principle--and when it is made is often a sign that there are no better arguments available.

Science fiction writer Neal Stephenson had some interesting things to say about this game in his book _The Diamond Age_:

"You know, when I was a young man, hypocrisy was deemed the worst of vices," Finkle-McGraw said. "It was all because of moral relativism. You see, in that sort of a climate, you are not allowed to criticise others--after all, if there is no absolute right and wrong, then what grounds is there for criticism?...

"...And so it was that they seized on hypocrisy and elevated it from a ubiquitous peccadillo into the monarch of all vices. For, you see, even if there is no right and wrong, you can find grounds to criticise another person by contrasting what he has espoused with what he has actually done. In this case, you are not making any judgment whatsoever as to the correctness of his views or the morality of his behaviour--you are merely pointing out that he has said one thing and done another. Virtually all political discourse in the days of my youth was devoted to the ferreting out of hypocrisy.

"We take a somewhat different view of hypocrisy," Finkle-McGraw continued. "In the late-twentieth-century Weltanschauung, a hypocrite was someone who espoused high moral views as part of a planned campaign of deception--he never held these beliefs sincerely and routinely violated them in privacy. Of course, most hypocrites are not like that. Most of the time it's a spirit-is-willing, flesh-is-weak sort of thing...."


*Sullivan seems to have now found another target, John Derbyshire, whose review of _The Time Machine_ seems in Sullivan's eyes to make him some kind of a pervert. Tinged with racism, yes--he seems to find the idea of someone being half-Irish, half-Zambian hilarious. Sexist, yes, in his assumption that anyone cast as the Ingenue in a major motion picture is dumb--there is just too much money at stake. Condscending, in not understanding how difficult a profession acting is. But a pervert?


2002-03-07: Ann Marie's pneumonia continues to hang on. Very scary--that our medical tools take so long to work and work so very incompletely when faced with viral pneumonia.


2002-03-03: I'm spending more and more time thinking about the economic history of India recently, and winding up more and more puzzled.

First, the speed with which growth accelerated in the mid-1980s after relatively small economic reforms under Rajiv Gandhi's regime--the last government of the Nehru dynasty--raises the possibility that the Rajiv Gandhi reforms were in some sense truly "strategic" for economic growth. Growth theory tells us that the speed of growth is proportional to the magnitude of the gap between the economy's current position and its steady-state growth path. The acceleration of growth in the mid-1980s suggests that a very large gap was opened by Rajiv Gandhi's reforms--that it shifted the economy's steady-state growth path upward by a remarkable amount. The lack of subsequent acceleration suggests that subsequent policy reforms have had much smaller long-run effects. Rajiv Gandhi focused on opening up financing for investment, and on freeing up the importation of capital goods. Are these truly strategic reforms for economic growth? How could we tell?

Second, there is the remarkable disjunction between the rapid growth produced by small steps toward neoliberal policies since the mid-1980s, and the slow growth produced by thorough-going classical liberal policies before 1947. It is possible to sketch out how this might be inconsistent. One could argue that despite market-oriented and commerce-encouraging British imperial policies, pre-independence growth in India was slow because of:

One can then account for how growth remained slow during the Nehru dynasty in spite of significant attempts to repair the institutional deficiences that existed under British rule because of a number of reasons:

But can all of this be assembled to make sense? Doesn't it implicitly need to claim that vast institutional improvements were made during the Nehru Dynasty's "license raj." The cultural changes of the Nehru dynasty years have removed many of the pre-independence blockages to growth (at least in large parts of Gujerat, Maharashtra, Karnataka…)?…


A review of Tirthankar Roy, _The Economic History of India 1857-1947_

Tirthankar Roy, _The Economic History of India 1857-1947_. Delhi: Oxford University Press, 2000. xiv + 318pp. Rs. 595 or $24.95 (cloth), ISBN: 0-19-565154-5.

Reviewed for EH.NET by Santhi Hejeebu, Department of Economics and History, University of Iowa.


Teachers of Indian economic history will welcome Tirthankar Roy's _Economic History of India 1857-1957_. Roy provides a chronological survey of the colonial economy by economic sector -- agriculture, small-scale industry, large-scale industry, plantations, mines, banking, and the public sector. The book also provides separate chapters on "the macroeconomy" and "population and labour force." In a heterodox field in which historical economists often find themselves defensive about their methods and struggling with a paucity of records, Roy offers a serious attempt to place the tools of economic analysis in the service of Indian history. The goal of his _Economic History of India_ is to convey to budding historians and economists how this might be done.

Despite the fact that the survey covers the colonial period, Roy does not view the government of British India as the prime mover of the economy. This is most evident in his lucid discussion of the de-industrialization debate. He writes, "De-industrialization means a decline in traditional small scale industry that (a) derived from technological obsolescence against British goods, (b) was sustained by colonial policies, and (c) remained uncompensated by new enterprise. The term makes explicit contrast between Britain which experienced industrialization, and her major colony India, which experienced de-industrialization, at the same time and due to the same set of causes, namely trade and technological change" (p. 124). The debate surrounding de-industrialization is as central to Indian economic history as that of slavery is to American economic history. Enormous intellectual effort was put to the issue in the 1960s and 1970s and to a lesser extent in the 1980s. After two major monographs on traditional industry during the colonial period, Roy is well placed to provide an alternative perspective, which he calls "commercialization." Roy maintains that "products of British mechanized industry replacing Indian hand-made goods [in India] was more exceptional than the rule" (p. 128). Machine-made cloth was a poor substitute for handloom cloth in important market segments of the textile industry. Market segmentation implied that large and small-scale industry did not directly compete leaving open the possibility of survival and expansion of the latter. His commercialization thesis also provides evidence of mechanization and organizational innovation in traditional industries. Thus if Roy does not see the British government as the prime mover, it's because he knows better. Roy's own contribution to the research literature has led him to fresh insights on what happened in the bazaar.

Pedagogically Roy's handling of de-industrialization offers a brilliant illustration of the delights of Indian economic history. It offers students an intellectual feast with all the elements for exciting classroom exchange: the performance of the economy and nationalist discourse, Marxist vs. neo-classical principles, complex social norms in a commercializing economy, implicit theorizing, institutional change, alternative hypotheses and tests of evidence, disputes over evidentiary standards. De-industrialization is certainly one of the livelier segments in my course and I am grateful for a teaching tool that organizes many strands of the debate.

Roy's book is not without its drawbacks however. Money and banking are barely touched upon. The banking sector illustrates well what Rajat Ray called the imperial "division of economic space" and thus lends itself well to a full discussion of how colonialism interacted with commercialization. Instead banking is anachronistically placed in the same chapter with plantations and mines, while monetary policy (i.e. exchange rate stabilization) is tucked inside the chapter on macroeconomy. The index does not even contain entries for either shroffs (moneychangers) or hundis (bills of exchange). What institutions operated in the informal banking sector and how did they operate? How did monetary policy affect the opportunities available to or choices made by indigenous entrepreneurs? The book does not provide clear answers.

One might find other points worth taking issue with. Roy at times skims too lightly over opposing views. For example, in chapter one he describes the "world systems school" as the most famous school to have expounded views of underdevelopment. Yet Roy does not cite Wallerstein's work explicitly and within a sentence or two, world systems theory becomes indistinguishable from Marxist theory. For good reason Roy does not share many of the specific views of what he calls the "left-nationalist paradigm." His terse treatment of such positions is however more than compensated by the focused and systematic treatment his provides overall.

Indeed Roy's clear and organized handling of complex issues (such as the economics of common property rights in agriculture) surpasses the treatment found in other textbooks. Dietmar Rothermund's _Economic History of India from Pre-colonial Times to 1991_ (Routledge, 1993) provides a drive-thru version of Indian history. It is a competent chronological overview that does not enter into any substantive historiographic or economic issues. However I would discourage exposing the young to such gems of economic analysis as "Compelled always to have an export surplus, India could not import too much" (Rothermund, p. 37). A more refined alternative is B.R. Tomlinson's _Economy of Modern India, 1860-1970_ (Cambridge University Press, 1996). The three core chapters of this work are masterpieces of synthesis but not easy to disaggregate into a sequence of coherent class lectures and exercises. Roy's work by contrast is neither too diluted nor too condensed. He keeps the narrative flowing and at the same time ably describes the economic issues at stake, the possible counterfactuals, and the evidence supporting competing positions. It should be noted that none of the available surveys of Indian economic history contain the photo essays or graphical expositions typical in textbooks on American economic history.

While the inner flap bills this as a textbook, the work will interest a wider audience. Roy's up-to-date overview of the historical research makes the field accessible to anyone interested in the development of the global economy and its national parts. It's a pity it ends at 1947.


Santhi Hejeebu researches the East India Company in the eighteenth century. She is currently writing an article called "Mechanism Design in the English East India Company" (joint with Pablo Casas-Arce). She is also interested in the organization of Indian merchant groups in the early modern period and is working on an article called "South Asian Firms: Competing Theories in an Emerging Field" (joint with Scott Levi). She teaches several courses in Asian economic and business history.


2002-03-01: Do You Think I Take Things Too Personally?

Btw, have you read any of Piers Anthony's less pulpy stuff like Incarnation
of Immortality or Bio of a Space Tyrant? The Xanth series just got
completely out of hand but he started off really well.

Lal

I read his _Macroscope_ a long, long time ago.

In the first few pages he introduced a character named Brad--intelligent, charming, decisive, an excellent companion and assistant to the somewhat-confused protagonist Ivo.

By page 100 Brad's mind had been destroyed by an alien video program...

By page 200 Brad had been accidently turned into a giant starfish by a misguided attempt by his ex-girlfriend to cure his mind using alien technology that she did not understand, and the giant starfish then immediately died...

I have *never* read anything else by Piers Anthony. And I never will.


2002-02-28: California strawberries are here!

The strawberries are no longer shipped by sea from Chile, or trucked and trained from Mexico. They are grown in the nearby Salinas Valley, setting of so many John Steinbeck novels!

The strawberries are no longer pink with white spots; they are red, red, red! The strawberries are no longer hard and tart; they are soft, juicy, and sweet, sweet, sweet! The strawberries are no longer $2.99 a pint; they are $1.49 a pint--soon to be $99 a pint, and then offered on special for $5.00 for an eight-pint flat! The strawberries are no longer small; they are humongous honking huge!

Memo: buy lots more stain remover for the clothes-washing machine.

Garden of Earthly Delights (Try Not to Think of the Real Wages of the Berry Pickers)

> :-) How sweet.

>Ciao, Roxanne

>Didn't buy cauliflower last week because they were 5$ @ lb.

$5/lb for cauliflower? Where are they grown? In their own private greenhouses with crystal channelers talking to them all day?

The person behind me in the fruit market as I bought my strawberries and other things was buying... cabbages... 25 cabbages... nothing but cabbages. They were clean, large, and beautiful, but they were still... cabbages. "That's a lot of cabbages," I said.

"Yes," he said, in a strong Russki accent. "It is for a business."

"A Russian restaurant?" I said

"Yes. How did you know?" he said, amazed at my powers of deduction.

"Kapusta? Borscht?"

It seemed a shame on a beautiful spring day in California to be cooking from a menu where everything had to have large amounts of beets, cabbage, rye, salt, and chicken stock...


2002-02-27: "Pierre Terjanian, Strasbourgeois of Armenian descent, if that helps you to contextualize. Dissertation on the French fiscal-military state and French centralization (and decentralization) from Philippe le Bel to Napoleon." And they say that Europe is hostile to labor mobility. How much of it is slow labor mobility, and how much of it is extremely rapid cultural absorption?


2002-02-26: Tom Kalil. Will put up half the money for innovation lunch starting in the fall. Wonders how does interdisciplinary social science work happen...


2002-02-23: One Thread...

Rich Baker:

There is a room with a machinegun and a guy with two dice. A person is
taken into the room and the dice thrown. If they come up with two sixes
then the person is shot. Otherwise he or she is let out and a group of
ten people brought in. Again the dice are thrown and if they both come
up sixes then the people are shot. Otherwise a group ten times bigger
is brought into the room. This "game" goes on until a group is shot.
(There is an infinite supply of people. Nobody goes into the room
twice.) If you're taken into the room, what is the probability that you
get out alive?

Argument 1. You are killed if two sixes are thrown. This happens 1 in 36
times. Therefore your chance of getting out alive is 35/36 = 97%.

Argument 2. Most people who are taken into the room are killed,
therefore you are very likely to die. For example, suppose the third
batch are killed. Then 100 people who go into the room die and 11
survive. The chance of getting out alive is then 11/111 = 9.9%.
(Working out the true probability is left as an exercise.)

Which of these arguments is true? What's wrong with the other one? (You
can make the situation even more extreme by making the probability a
batch is shot even lower.)


Brad DeLong:

You do realize that the fact that people believe in argument (1) is
the key reason why the stock market goes insane from time to time?
And that the more people believe argument (1), the more likely we are
to have an insane stock market bubble followed by a catastrophic
crash?


Rich Baker:

No, I didn't realise either of those things. How does that work?

Rich, who believes argument (1).


Brad DeLong:

Everyone thinks that the chance that the stock market bubble will
collapse in the next month is small, therefore I should buy. No one
thinks that the fact that I am thinking of buying indicates that we
are near the end of the bubble.

As with so many things in statistics, probabilities differ because
they are based on different information sets--what the probability is
depends on what you know about the different alternate histories that
may flow forward from your particular situation.

If what you know is that you have been herded in the room and the guy
with the machine gun is rolling the dice, then in 35 of the 36
histories to follow you breath a sigh of relief and exit the room.

If what you know is that a bunch of people have been and will be
herded into this room, and that of those herded into the room about
90% die, then your view of the histories to follow looks very bleak.

If you know, in addition, that you are in the 5th round of this
"game"--that there have only been four rounds before you--then your
view of the histories to follow turns optimistic again.

If you don't know what round of this game you are in, but if someone
able to look in the future tells you "it's interesting: this play is
only going to last for five rounds" then you turn bleak again.

And if you know, in addition, that the causally-connected universe is
not infinite in either space or time, then you conclude that the game
cannot be played at all. After all, expected deaths in round 1 are
0.0278 of a sophont; expected deaths in round 2 are 0.27 sophonts;
expected deaths in round 3 are 2.63 sophonts; if you get to round 490
(and there is a 1/3 chance that you will) expected deaths are 9.26 x
10 ^ 36 sophonts--meaning that you have to have a room large enough
to hold 10 ^ 38 sophonts and a... rather large machine gun at your
disposal.

Indeed, such games can only be played by Devis that can create
universes infinite in duration and extent for their pure amusement,
and juggle infinities like the Flying Karamazov Brothers juggle
beanbags. A simple God who can make a square circle can't do it.

GCU Ritu?

GCU St. Petersburg Paradox


Brad DeLong:

Oooops! That was supposed to be round 40, not round 490.

In round 490, your expected deaths (as of round zero) are 2.89 x
10^481, and you need a room (and a machine gun) large enough for
10^489 sophonts...

GCU Red Faced!


Ritu Ko:

>GCU Ritu?

The arrangements are simple to make, but I need to find a reason to do it.
And, no, watching humans find new ways to kill themselves is *not* fun.

>GCU St. Petersburg Paradox

Which one is this?

Ritu
GCU The Devi who believes in argument [2]


Brad DeLong:

>>GCU St. Petersburg Paradox
>
>Which one is this?


A guy flips a coin repeatedly. If it comes up heads the first time,
he pays you 1 ruble and the game ends. If it comes up tails the first
time and heads the second, he pays you 2 rubles and the game ends. If
it comes up tails the first two times and heads the third, he pays
you 4 rubles and the game ends. Et Cetera. Et Cetera.

How much should you be willing to pay for the opportunity to play
this game? Your expected winnings are, after all, infinite.


GCU What Happens to a Vizier Who Persuades His Sultan to Give Him One
Grain of Wheat on the First Square of a Chessboard, Two Grains of
Wheat on the Second, Four on the Third, Eight on the Fourth, and So
On, Anyway?


Ritu Ko:

>How much should you be willing to pay for the opportunity to play
>this game? Your expected winnings are, after all, infinite.

I'd pay up to the cost of a book [somehow this has long been my limit for
deciding if I wish to indulge a non-essential whim.] If it cost more, I'd
pass.


>GCU What Happens to a Vizier Who Persuades His Sultan to Give Him One
>Grain of Wheat on the First Square of a Chessboard, Two Grains of
>Wheat on the Second, Four on the Third, Eight on the Fourth, and So
>On, Anyway?

Birbal never got the wheat. Akbar agreed but discovered to his extreme
mortification that there was not enough wheat in his entire empire.

Ritu
GCU Birbal was cool


Martin McGrane:

I think what we're overlooking here is that while there is an unlimited
supply of people, nothing has been said about the supply of bullets. Even
if there is an infinite supply of bullets and maintenance for the
machinegun is considered, there is still a finite rate of fire for the gun
which means that in larger groups people will be dead of old age before a
bullet reaches them.

Of course, if the size of the room is finite then at some point people
will start to die from the crush and from that point on the infinite
masses die with abandon.

If the game goes on for too long another problem arises. As the mass grows
too large in this finite space we start to form a black hole (or perhaps a
gravastar).We now have problems getting information past the event
horizon. How do we know if the game is finished if no information can
leave the room?

Should we keep sending people in? I think this is the more important
question. Remember that we have an infinite supply of people so whatever
amount we send in is inconsequential in comparison to what remains.

Martin
ROU Always Helpful


Brad DeLong:

>I think what we're overlooking here is that while there is an unlimited
>supply of people, nothing has been said about the supply of bullets. Even
>if there is an infinite supply of bullets and maintenance for the
>machinegun is considered, there is still a finite rate of fire for the gun
>which means that in larger groups people will be dead of old age before a
>bullet reaches them.

Ooooh! Well done!

>If the game goes on for too long another problem arises. As the mass grows
>too large in this finite space we start to form a black hole (or perhaps a
>gravastar).We now have problems getting information past the event
>horizon. How do we know if the game is finished if no information can
>leave the room?

Ooooh! Ooooh! Very well done indeed!

>
>Martin

Demonstrating once again that appropriate physical background
knowledge is essential for successful problem solving...


GCU Martin Wins!


2002-02-12: Industrial Organization seminar. Carl Shapiro previews his "litigating states" Microsoft antitrust evidence. Very interesting... [DELETED] Another passing thought on Carl Shapiro's Microsoft seminar. No one is thinking about what the law should be. Everyone is thinking about how to use the current law to constrain or unleash Microsoft. None--or few--are thinking about how antitrust law and policy ought to change as a result of the "new economy." This is a bad thing.


2002-02-09: Family expedition on the very hilly Lafayette Reservoir upper rim trail: 5.1 miles horizontal; 1000 feet vertical up-and-down:


2002-02-05: On the intelligence of dogs...

Mother dogs provide a good illustration of the onset, rate, and offset of innate motor patterns with their puppy-retrieving behavior. The mother dog is in her nest. She hears a puppy giving a distress call. She gets out of the nest, goes to the site of the sound, picks up the puppy, then carries it to the nest and places it with the other puppies. (Isn't she smart!) Puppy-retrieval motor pattern onsets after the last puppy in the litter is born. It offsets thirteen days later. After that time, a pup can give the call, but the mother does not respond by retrieving it.

The puppy's retrieval call is a fascinating motor pattern. Each call is identical in pitch, amplitude, and duration. It is a species-specific call just like a birdsong. It is only given by puppies, and only when theyare lost. It is given continually until the pup is rescued. The onset of this innate motor pattern is at birth. The offset is roughly four weeks later, at the end of the suckling period.

My Italian Maremmano-Abruzzese, Lina, got caught short one day because of her attention to sheep, and whelped her first puppy in the field. She left the puppy still attached to its placenta and returned to her nest in the barn and had the rest of her litter. The first pup called and called to be retrieved, but Lina was still giving birth. There are some big questions here. Since the puppy was just born, blind and deaf, how did it know it was lost? How did it know which was the "I'm lost" signal? Didn't it need to practice the signal, and didn't it need to be rewarded for giving the signal? No--the signal and the knowledge of when and how to use it are built into the dog; it can't possibly be learned.

Being a good dog ethologist, from my office I recognized the repetitive calling of Lina's lost puppy, and knew why Lina wasn't responding, so I went to retrieve it. I took my tape recorder and recorded the sound, because here was a lost puppy still attached to its umbilical cord giving the correct signal. Fascinating.

Why did I have to rescue the puppy? Well, the puppy had the onset of sending the retrieval call, but Lina didn't have the onset for receiving the signal, because the last pup hadn't been born yet. Six hours later, Lina was ready, but I had already rescued the pup. If the little guy had had the energy to put out the signal repetitively for six hours, I'm sure Lina would have gone back for him, once the retrieval motor pattern onset. But I think the littlde tyke would have weakened and died long before six hours passed. The call is energetically expensive, and I can't imagine there was that much energy stored in the half-pound puppy.

If Lina was so smart, why didn't she just pick him up right after he was born and take him back to the barn with her? The answer is that if Lina had been a rat, she might have, for the retrieval motor pattern turns on two days before parturition in rats. But Lina is a dog and the retrieval reflex was off until after the last puppy was born.

When my students played the tape recording of the lost Lina puppy to my border collie, Flea, she got out of her nest (none of her puppies were lost), searched for and found the tape recorder, retrieved it, and put it in her nest with the puppies. It is not lost puppies that are retrieved, it is objects that emit the vocal signal.

At the end of thirteen days the retrieve-puppy behavior turns off in the mother, even though pups will continue to send the signal for a few weeks more. One evening, all dressed up and going out on the town, I heard a weak retrieve signal coming through the pouring rain from our dog yard. Slogging out through the wet, I found the pup, exhausted, out of the box, wet and cold and literally dying. Tilly, the mother, a purebread Siberian (#45, above average on Coren's intelligence scale), was not five feet away, curled up with the rest of her pups in her box. "Tilly," I implored, "what on earth is the matter with you! Can't you hear your pup is in trouble? Don't you hear the retrieve call? Can't you reason, think, recognize that your puppy is in trouble? Don't you love it?" "Sorry boss," she said, "but the retrieval motor pattern turned off last week and I don't have any cognitive ability to be aware of the impending danger nor can I deduce it from the information I'm receiving." Heat lamps, sugar solution, and some care saved the pup, and Tilly accepted it when I returned it two hours later.

Raymond Coppinger and Linda Coppinger (2001), _Dogs_ (New York: Scribner: 0684855305).


2002-02-04: At the World Economic Forum--Davos-in-NY--they handed out free Windows CE Compaq "ipaq" palmtops to serve as meeting planners, schedulers, and information-distribution devices. They didn't really work for the purposes for which they were distributed (although they are very nice computers for other purposes). By the time I picked mine up, the earnest person behind the desk was telling me to (a) let it synchronize often, (b) stay still while it synchronized, (c) be sure to try to synchronize only where you would have a good signal, (d) that under the conference load the systems were proving "temperamental," and (e) not to try to use it to send email.

So the first thing I did was try to use it to send one (1) email. It crashed. I reset it and used it to browse around the meeting schedule for a little while. It was slow. Then I downloaded some news headlines. Then I discovered that it *only* downloaded headlines--that there was no way to get to the stories that I could find. Then I used it to try to download the superbowl score: it crashed, restarted, announced that it had to download 8000 webpages immediately, took 45 minutes to do so, crashed again, restarted, announced that the avantgo software had no channels installed, and was a useless brain-dead hulk for the rest of the meeting.

Stripped of its "meeting companion" software configuration, however, it seems a quite nice machine, the ipaq. But no easy way to sync it with my Macs. So I'm sticking with my two-year-old Visor.

The outside of the ipaq bag has--in big letters--Compaq, Microsoft, Accenture. I find myself wondering just what they were thinking in selling the Davos-in-NY people a meeting-planner-and-wireless-communicator that chokes when it tries to send wireless email, has a mean-time-to-crash of 15 minutes, and has software sufficiently unstable that crash number 4 wipes key parts of its software installation and puts it into a brain-dead state. Did the Accenture people not test it at all? Did they fail to test it under anything like the load it would get during the meeting? Why would Microsoft want its Windows CE operating system associated with such an unstable applications package as the AvantGo system used by Accenture? Why would Microsoft want WindowsCE to be demonstrated on a computer like the ipaq that apparently doesn't have the horsepower or the wireless bandwidth to satisfy the one-second or even the ten-second rule? Why is Compaq associating its name with software companies like Microsoft and consultancies like Accenture that overpromise what its machines can actually deliver?

Unless the average experience was very different from mine, a lot of people left that meeting thinking that neither Compaq, Microsoft, nor Accenture should be trusted with any part of Our Digital Future...


2002-02-03: Yes, Virginia, the Manhattan skyline does look very different indeed. I had never noticed that the Hutchinson River Parkway was named after Anne Hutchinson, 1591-1643. Chris sings the praises of Bob Thomason's Sidwell Friends English course, "Fascism, Communism, and the American Writer."


2002-02-02: Ten Questions About the Evolution of American Corporate Governance:

(1) What testable claims are actually made by Mark Roe in his _Strong Managers, Weak Owners_? How would we test them?

(2) Just how were the late nineteenth-century Robber Barons able to raise so much capital without effective investor protections?

(3) The separation of investment from commercial bankings has legal foundations in the fact that progressive-era reform proposals were dusted off and applied to the securities markets because the New Deal had to do something. But does it have older roots?

(4) What do we think of the extent-of-territory theory: taht the U.S. is just so damn big that diversification is just too attractive?

(5) What do we think of the retail sales theory: Salmon Chase, James Stillman, Charles Merrill all made lots of money by pushing securities out to retail investors at relatively high prices?

(6) What do we think about the weak governance theory: that political influence was worth less in U.S., hence the benefits of diversification were more valuable than the benefits of having a central financier-negotiator to strike deals with the government?

(7) Paul Allen, a very smart guy, tried to become high-tech financier-baron and had his head handed to him. Why?

(8) Why does having Berle-Means corporations appear to produce large benefits for America but not for Britain?

(9) Why are new billionaires made in the first post-WWII generation only in media, oil, and real estate only?


2002-02-01: Patrick Gliddon goes over the top in his post on why he is a meat-eater. A 10 for the difficulty of the dive. A 10 for execution...

From: "Patrick Gliddon" <pgliddon@tpl.toronto.on.ca>
To: <culture@busstop.org>
Subject: Re: Meats (was Re: [Ghost] Is it a pet or is it food?)

--- Paul Walker wrote:
> What your
> argument basically comes down
> to, as far as I can tell, is that you don't like the
> taste of the meat...
> :-)


--randomhippy@yahoo.co.uk wrote:

I was going to stop arguing on this one, since I am
heavily outnumbered, and am giving a bad impression of
myself, but I suppose I may as well clarify my
position...

My reasons for not eating meat are as follows:

--snip the reasons--

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I wouldn't worry about giving a bad impression of oneself at all. Most of us do, and we all quite enjoy gently flicking our tongues at each other.

The only reason that *I* eat meat is because I crave its juicy, scrumptious, incredibly delicious meatiness.

I mean, it's not like I'm a hairless ape running around on the plains of Africa desperate for iron and protein, or anything else that might keep me alive for yet another fun-filled day fleeing from lions and tigers and bears (oh no!). I'm a rather sedentary North American who can get all my nutrient requirements from non-animal sources on the way home from the office. If I became a vegetarian I'd save money, and be able to spend it on consumer electronics. My waistline would likely reverse its outward expansion and return to its former lust-inducing lines. My blood chemistry would approach a healthier balance. My economic participation in the horrors of factory-style livestock farming would diminish. Highly troublesome areas of animal-human ethics would be avoided. The land that I pay others to farm so inefficiently could be returned to its former state.

But, hey, I'm a totally mindless gene-slave, completely unable to do anything but crave steak. And prime rib. And roast chicken. And stew. And stir-fried pork tenderloin. And Peking duck. And chocolate cake. And butter. And, praise be to evolution, even though I have a host of very good reasons at my fingertips to stop eating as much meat (etc.) as I do, my bodymind is constructed in such a way that all these mean absolutely nothing to me when confronted with 8 oz. of perfectly cooked medium rare filet mignon.

Animals? Torture them, confine them to cages barely large enough to move in, interrupt their normal social structures, cut down the Brazilian rainforests, kill them, cut them up and wrap their body parts in plastic--whatever--I don't *really* care. I desire meat, and I will not have the fulfillment of my gene-driven desire thwarted. I know all the vegetarian arguments, have very successfully lived as a vegetarian for months and years at a time, but the seductive smell of roasting flesh overcomes all obstacles, shuts down my rational faculties, and drives me into a feeding frenzy.

Patrick
GCU Resistance Is Futile; They Will Be Absorbed


2002-01-28: Vernor Vinge's Singularity Approaches: Overheard in My Office Building:

"You've got rogue libs. This time it's /usr/X11R6/lib/libgtk12.a. I suggest you get rid of the gtk/gdk/glib stuff in /usr/X11R6 too..."