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The tragedy of macroeconomics

What I’ve been thinking about lately is just how little is knowable about macroeconomics in the real world. Does austerity help? Or is it ruinous? Hundreds of people who’ve made this their life’s work say yes. Hundreds of their colleagues, similarly experienced, say no. Questions on the macroeconomic level are absurdly complex because there are millions of variables. Nobody can even list them all let alone control for them.

This makes me think of the brain, the really complicated system that I know something about. And then I think: if the state of knowledge about economics is so shitty, then how can we know so much about how the brain works, since that’s even more complicated? [1] The answer is that at least with the brain we can do experiments. And people have done experiments for a hundred years, of increasing sophistication, on animals and people. (What does early visual cortex do? Let’s stick some probes into a cat and find out!)

The point of an experiment is that you have a hypothesis, you make an experimental manipulation, you see what happens, and you accept or revise your hypothesis. There is almost none of that in macro econ. Almost all data is post-facto, correlational data. And what ‘experimental’ data there is (how does the US economy react to the stimulus package?) has a sample size of 1.

I can’t decide if this makes it really good or really bad to be a macro economist. On the one hand, you really can’t ever know anything, or resoundingly win an argument. On the other hand, you can pretty much not be proven wrong on any opinion that isn’t completely retarded.

[1] Arguable depending on how you choose to define complexity. But you can make a defensible case that brain complexity > world economy complexity.

Write what you know

There’s a saying that you’re supposed to write what you know. Generally, that’s true — the further you get from what you know the worse the work gets. I think this is why so much fantasy/sci-fi is so bad — the people writing it don’t actually know science; and they don’t know fantasy, since it’s not real; nor do they seem to even know reality, which is maybe why they find solace in fantasy/sci-fi in the first place.

But the result is that the work isn’t grounded in experience so much as in other work, like painting a picture of a picture. You’ve seen it: mix in some elves, some swords, some magic and (lately) some brooding anti-hero. Carnage, blood, killing your babies has produced a new gritty world of f&sf that is even more retarded than the old one. There’s garbage in other kinds of fiction, too, but it seems to stink more when it’s genre, I suppose because the readers are more forgiving. There’s something to be said for departure from reality, whatever else its flaws, so the bar stays low.

Anyway, setting that aside, the problem with the ‘write what you know’ bit is that it can be misleading. I’ve been working on something for the last few days, for the first time since August, really, and it’s really struck me that I’m writing the same story over and over. Or rather, some depressingly large subset of what I do is the same story with altered particulars. And the story isn’t even very good. It’s authentic, yeah, but you know what else is authentic? Sitting on the couch and watching TV for four hours, every night of your life. Lots of people do that, but we have little need for their stories.

So then I started thinking about the stuff I’ve done that I’m actually proud of; and its defining quality seems to be that its written with my head not stuck up my own ass. In other words, a departure from the solipsistic universe I know better than anyone.

So now I think the canard should be: fuck what you know. Write what you aspire to. We’ll see how that goes.

Some thoughts on inequality

Brody sent a link to an interesting discussion with an economist who talked about income inequality, its implications, its causes, and who gave some references to what look like some cool stuff. Excerpt:

This [The Race Between Education and Technology] is a really wonderful book. It gives a masterful outline of the standard economic model, where earnings are proportional to contribution, or to productivity. It highlights in a very clear manner what determines the productivities of different individuals and different groups. It takes its cue from a phrase that the famous Dutch economist, Jan Tinbergen coined. The key idea is that technological changes often increase the demand for more skilled workers, so in order to keep inequality in check you need to have a steady increase in the supply of skilled workers in the economy. He called this “the race between education and technology”. If the race is won by technology, inequality tends to increase, if the race is won by education, inequality tends to decrease.

You can read the whole thing here. My feeling is that the crazy gaps — and the change in the rate of gap growth — is cancerous to a democracy; and will, in effect, transform the democracy into some quasi-democracy, which is essentially what’s already happened.

But my other gut feeling is that there might not be any other way: for the same reason that preferential link attachment in networks leads to vastly unequal linkage properties (where the most popular nodes are millions of times more influential than the average nodes), income calls out to income. You might try to dampen what happens at the upper part of the distribution, but in a world with free movement of capital and industry, the issue would just pop up somewhere else. The Republicans always talk about people and businesses chasing the lowest tax rates; mostly that’s bullshit (okay dude, enjoy the Libertarian wonderland of Somalia) but there’s a grain of truth to it.

Anyway, worth a read.

Burned Notice

Monica graduated from nursing school yesterday, and to celebrate we watched the last two episodes of Burn Notice, season 2. I guess it wasn’t so much to celebrate, as to get it over with so we don’t ever have to watch the show again.

Burn Notice has been obsessing me lately because the show is fun to watch, at least at first, without providing any benefit whatever to the viewer aside from simply passing time in a more engaging way than sitting quietly and staring at the ceiling. If you stuck an electrode into a person’s hypothalamus and allowed him to self-stimulate, the result would closely resemble the action that unfolded on the couch last night.

This has got me to thinking about what I want, and don’t want, from my fiction. What could BN have done to keep me from complaining, and to keep me watching? I’m trying to sort this out, but it takes a surprising amount of analysis to come up with an answer.

I’ll unwrap this little by little, but here’s a final thought for now: you know how they talk about stuff being a guilty pleasure? A James Patterson novel on the beach, for instance; or a show like BN. Music, sometimes. But what does that mean? What is it, exactly, that we’re feeling guilty about?

Harry Potter redux

Last weekend at Wilson’s house I saw most of Harry Potter and the Order of the Phoenix. A couple of days later, on a (rather extended) study break, I saw Harry Potter and the Half-Blood Prince. These movies brought to mind the release of the first one, and how excited I was at the prospect. I remember standing in line to get into the theater in Manhattan, with Elly. A crisp October. Everyone was buzzing. But by the end of the series I didn’t really care anymore.

For a long time I had diagnosed my change in attitude this way: Harry Potter works from a model of the world where the hero doesn’t exist. What I wanted, on the other hand, was for Harry to become super bad-ass and lay waste to people at the end. If Harry Potter were a basketball story, I’d want to see him working on his game, then showing up in the climax having all these wicked moves and kicking ass on the player who’d humiliated him. That never happens. Harry manages to do what he does with luck, trinkets he’s given, and help from his friends. He is decidedly underwhelming as a Chosen One.

For years I thought this was the big failing in the books, and the reason I’d lost my taste for the movies. I’m all about the grand heroics, the levelling up, the showdown. I want magical Michael Jordan, or something of the kind. But in the last few days I’ve been re-evaluating the HP franchise, and I get now that Harry’s flavor of heroism isn’t a failing, but a particular design choice, a choice that is actually braver and more profound than the version that I would have liked better.

Harry is basically just a guy — an admirable guy, a guy who you wouldn’t mind if he were dating your sister — but pretty normal, really. Not a real standout at anything, kind of where he is by accident, a magical trust fund baby with a hard luck story, yeah, and sure, a pedigree, although really his parents being awesome is no accomplishment of his. But he lives up to it as best he can, in an uncertain world, with bad odds, with help from his friends. It’s very un-Beowulf or Achilles. It’s also a lot closer to the stories most of us know from real life, and closer to most of the situations in which we’ll find ourselves, one way or another: we’re born, we’ve had some good opportunities, we don’t live in Somalia or Palestine, we’ve got health care (or at least the possibility of health care) and a free education.

Few people have the tools necessary to be Michael Jordan, in basketball or in any aspect of life. Hard work made him, but that’ll only get you so far without superhuman ability. But greatness in the way Harry is great is something you could really aspire to, and the mythology of the HP franchise is one much more proximate to reality than most of the hero stories we’re told. Nevermind that there’s wizards and shit: do what you can; be worthy of friendship; keep your friends close; and hope for the best. That’s a way guttier answer than almost anything else fiction will serve you up, especially in this genre.

Field of vision

Time has reached such a dizzying velocity that I cannot in any visceral sense imagine it getting any faster; and yet this is the same error I’ve made over and over. They say people are atrocious at internalizing non-linear responses — we can’t feel them in our guts because nature never required it of us — and so it proves. Just like compound interest never fails to surprise, the maddening increase in the increase of the velocity of time is like bracing to get punched in the face, then getting kicked in the nuts. Every year a shock, even when you try to account for the shock in your estimate.

The nice thing, I guess, is that intolerable things go away quickly. You get used to whatever it is, whatever tragedy, even when you think you won’t. The re-basing of our attitudes toward pleasure and pain is the glory and the tragedy of the human condition. And here we are, again: a cold day tomorrow, the future stretching ahead, promising whatever it’s promising.

Thanksgiving, dead a week and a half, blinked and I missed it.

WWCHD?

I wonder if Christopher Hitchens’s astounding erudition and productivity over the years is due to the fact that he never wasted time watching a season and a half of Burn Notice; or because he did not suffer the brain damage that results from it.

Hard to tease those apart.

Sometime in the next few weeks

I am going to start getting my life back.

Messes

I’ve been investigating various issues wrt motivation, pleasure, and reward. As you might imagine, these topics dovetail into each other and into a variety of other stuff, too. Which I guess is both the fun of it and why it’s so goddamn irritating.

But here’s a question: why is a messy office bothersome? Having papers scattered all over the place, piles of magazines, half-empty coffee cups — offices seem to have higher rates of entropy than the rest of the universe (that’s another question to investigate) and the end result is as unpleasant as it is ubiquitous. Conversely, clean, well-ordered spaces are aesthetically pleasant, even when no element within those spaces is pleasant. Why?

Good writing

From this month’s Dreamhost newsletter by Brett D, whoever that is:

I’m not saying that Simon is dreamy, BUT, flowers actually turn their blooms to face him whenever he walks by. I have seen this happen. It is fact.

Women appreciate his unwavering confidence and rugged good looks.

Men look forward to, and treasure for days after, his heartfelt handshakes.

Flora prefer his ambiance to the life-giving rays of the sun.

There is, quite simply, no finer specimen of humanity in the web hosting industry – perhaps the world.