Thursday, December 29, 2011

Off to Turkey

One last, quick post. Tomorrow I fly to Turkey to apartment shop and knock on more doors for employment ideas. Also will be seeing some good friends. Until I return, Happy New Year!

Monday, December 26, 2011

Book Review (Antiquities Edition) First and Second Maccabees

Growing up in the protestant evangelical persuasion means the Apocrypha might as well have meant "Apostate." I'd never read any of its books, even though some of the history it contains is relevant to understanding New Testament Jewish culture. In honor of Hanukkah this year, I decided to read 1 and 2 Maccabees for the first time. I learned a lot. 

1 Maccabees was apparently written in Hebrew (wikipedia), though the only surviving text is Greek. 2 Maccabees (wikipedia) is believed to be entirely of Greek authorship. Both focus on the liberation of Jews living in modern-day Palestine during the 2nd century B.C. 1 Maccabees is longer and covers many more events in detail.  2 Maccabees moves more quickly and focuses on a four-year period. 

They both read like a combination of the movies Braveheart and 300, in fact I can see how these books could have inspired certain scenes in both films. It reads like most men want the Bible to-- brave warriors standing up for God and slaughtering their oppressive enemies, liberating their people, and having their names echo in eternity.  I can imagine that Mel Gibson was heavily influenced by the books, as further evidenced that he is making a movie about Judah Maccabee.

The conclusion of the movie Hoosiers features a locker-room scene with two pastors leading the heroic underdogs in a pre-game devotional. The senior pastor quotes (unattributed) from 1 Maccabees 3:19:
"For the victory of battle standeth not in the multitude of an host; but strength cometh from heaven."

The events of the books are believed to be prophesied in Daniel 11 & 12, when Antiochus IV Epiphanes rules Jerusalem and outlaws the Judaic laws, desecrates the temple, and massacres many Jews.  This prophecy is repeated in the New Testament as a foreshadowing of the Antichrist.  The horrors that the Jews experienced are gruesomely detailed.  In 165 B.C., Judah Maccabee leads a revolt and kills Antiochus and various others who would take his place.  The temple is cleansed, the idols torn down, and the sacrifice restored.  This is where we get Hanukkah from, although the legend of the oil miracle is not recorded in the books.  1 Maccabees records the Jews' diplomatic outreach to a growing Rome while seeking protection from their neighbors.  It records the in-fighting among the various post-Alexandrian factions and Israel being stuck in the middle. Eventually, Judah Maccabee is killed before an army of 20,000 invading Assyrians. 

Jesus would have celebrated the Feast of Dedication (John 10) and it seems that many of His followers were expecting him to be the ultimate Judah Maccabee against the Roman Empire, instead of the Lamb of God being led to the slaughter. Reading 1 & 2 Maccabees helps me understand the expectations and disappointment of Jesus' followers. 

Knowing that these books were included in the King James Bible and other early texts circulated also helps me understand a little of their influence on Christian culture through the centuries. We get various ideas and idioms in our English language from the Apocrypha via the King James (I read the books in their original King James. I recommend finding another translation). I would say the books also influenced whoever wrote the Book of Mormon, much of it reads very similarly.

In all, I recommend reading these as essential reading for anyone interested in learning more about Jewish and Middle Eastern history.  I doubt you can really understand Hanukkah without them.

Sunday, December 25, 2011

To my son on his third Christmas

Dear Elias,
This is Christmas #3 for you, and hopefully the last one in Missouri.  We've almost completed an Advent tree, for which you've hung the ornaments after sitting patiently through the stories. 

You've also enjoyed playing with a Hanukkah dreidel and eating gelt (chocolate coins) because I was inspired by your Highlights magazine to incorporate that into our holiday as well. 

This picture pretty much sums up a good bit of your interests right now.

Mrs. B is your best friend and she is talking to your Aflac duck. You enjoy your various stuffed animals conversing with one another.  You also enjoy Spiderman, what little you've seen of him.  You like singing the 1960s cartoon theme song, appropriate because this was a popular meme in the U.S. in 2011. Your other pairs of pajamas are mostly Thomas-related.  

You do a few things that are worth recording for posterity. We scold you for them but I inwardly smile because it shows you have some natural obtuseness.  When we say "Right now!" you reply "Right later!"  When we say "put it right here," you say "put it left here."  When I say "stand up" you say "sit down."  You almost always do what we say so it's hard to categorize your responses as outright defiance. But it shows you cleverly know your opposites want to be your own person. You often will say "no" to something you know is a good idea because it was suggested to you rather than you coming up with it on your own.  

God is showing us some of the ways He has made you special.  You like to be in perpetual motion, whether it be piggybacking on daddy, spinning upside down, or driving your big wheel down the flimsy ramp we made for you in the front yard. You love music, whether it be listening to your Bible verse CDs during nap time, or watching Lawrence Welk reruns on Saturdays, or singing with us at church. You still request to have "room time" in the mornings where you play and listen to your children's music in your room. 

You have a proclivity to memorize things.  You've memorized a dozen or so books, a few memory verses, the Pledge of Allegiance, and countless songs.  You can count to twenty nine in Turkish, and can count in French and Spanish as well.  You're learning to recognize words and read, plus figuring out how to spell; yesterday you almost spelled "train" correctly. Thanks to PBS and the letters we stick on the bathtub. 

You are also off the charts, weighing in at 48 pounds and taller than plenty of kids older than you. I'm pleased about this for you and hope it continues.

Our plan is to be in Turkey this time next year.  You'll be older, wiser, and probably asking a lot of questions. I've enjoyed the last three years because we could pretty much do holidays and such however we wanted as you were none the wiser about how they "should" be.  My promise is to never belittle or grow tired of your questions.

I pray 2012 will be a great year of growth and maturity for you. That you make friends of various cultures and experience things most 3 year old American boys do not.  But always that you will continue to read with us, pray with us, and sing with us.That you grow up to be a Godly man of good character.  That your current contrariness grows into helpful skepticism and a greater curiosity about how the world works. 

I love you very much and hope you one day enjoy more letters from me than I have written thus far.

Friday, December 23, 2011

History of Christmas

I don't use my blog for article recommendations much anymore, I use my Twitter and G+ accounts instead.  However, I came across this Five Books interview with Bruce Forbes, a professor of religious studies at Morningside College in Iowa, that is worth reposting here:

Forbes offers his five reading suggestions on the history of Christmas, and I learned a bit in the interview that I did not know before. In America we currently have Fox News and others making Christmas and the "War on Christmas" part of a wider culture war, which examination of the historical context of the holiday makes look ridiculous. For example:
Where did the Christmas tree come from?The Christmas tree is mostly of German background, dating back to the 17th century and widespread by the 18th century. I think of Christmas as like a snowball which you roll, and which picks things up along the way. The snowball rolls very interestingly here. The German influences reach England because of the House of Hanover, so the German Christmas tree gets brought to England. Then the prints of Queen Victoria and Prince Albert with a Christmas tree are published, and cause great interest in the United States. That’s how the Christmas tree becomes popular in the US.
Finally – and of course most importantly – where did gift giving come from?That’s a complicated history. In the Church we’d like to say that it has to do with the wise men bringing gifts to baby Jesus, starting a gift-giving tradition. For much of Christmas history, gift-giving was more token, and sometimes was on St Nicholas’s day rather than on Christmas. But more recently – since the 1800s – it has become a great Christmas tradition. Gifts were given in different ways over time. Early on it was in a stocking, then it was under a small Christmas tree on a table. Now, of course, the Christmas tree has gotten bigger and is on the floor. And the gifts have grown and grown. 
Read the whole thing.  The Christmas we celebrate today, whether the modern consumer-driven shopping one, or the "Here comes Santa Claus" one, or the "it's all about Jesus' birth and gift-giving" one-- all would have been foreign concepts to most societies through the ages.

This leads me to a piece I read by Jim Wallis this week that I agreed with, reposted over at Jesus Creed. Wallis is attacking Fox News' "defense" of Christmas in the culture war.  But even Wallis seems to have a higher view of Christmas represents than what history does.

My conclusion: Most Americans are unaware of how they have adopted a version of the holiday that is a very modern, not ancient, creation.  Which leads me to my last point:  Here's a thoughtful and humorous post by a Türk who offers 10 Reasons Why Turkey Should Not Celebrate Christmas.

Sunday, December 18, 2011

Book Review (Kindle Single edition) Launching the Innovation Renaissance - Alex Tabarrok

Launching the Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast by Alex Tabarrok. What do Dean Baker (of the Progressive left) and Alex Tabarrok (of the Libertarian right) have in common?  Both want to change the patent system in the U.S. to eliminate needless monopolies and foster more innovation. Both want to reform our visa system to allow more high-skilled workers in to end protectionism for the elites.

Tabarrok's Single has received bipartisan praise and the only major criticism seems to be that the book is too short-- I agree. My other criticism would be that he didn't distribute it for free, as Baker did his.  The George Mason economist and Principles textbook co-author begins his book by focusing on problems with the U.S. patent system. How instead of creating incentives for innovation, our patent maze creates incentives for rent-seeking behavior.  Billions of dollars are wasted in legal battles as firms like Google try to buy up patents that they could be sued over later if they innovate in an area that some patent troll has broadly staked a claim on.  These wasted resources hurt our productivity growth.

Immigration reform is also a necessity, the U.S. allows in a ridiculously low number of high-skilled immigrants.  Tabarrok doesn't focus as much as Baker does on how this is equivalent to trade protectionism for high-skilled workers, but shows how this is hurting U.S. productivity growth.

Education is another of Tabarrok's targets, famously showing how college is oversold and how the U.S. is turning out only as many, if not fewer, math and technology graduates as it did 25 years ago, even though demand for these positions has soared. The heavily-subsidized U.S. education system is turning out too many workers in fields like English and Psychology for which there are few jobs available. These graduates end up taking lower-skilled jobs that they did not need their degrees for, hence wasting both their own and taxpayer dollars. Tabarrok would like to see better teachers at the secondary level and takes on the teacher unions that oppose any type of merit pay system and make it notoriously difficult to fire even teachers with criminal offenses.

The problems he points out are clear-cut, backed up by plenty of evidence, and the solutions he gives are relatively straight-forward and often peer-reviewed.  You can read it in one sitting, and I highly recommend it.

Saturday, December 17, 2011

Thoughts on Higher Education (Part 1)

Since I have just finished a career stop in teaching at the undergraduate level, I may occasionally post some random thoughts of what I've learned about education.
Last night's commencement speaker, Dr. John Marshall, said something to students that I thought was profound enough to record. He defined education as an "external discipline" that you accept in order to bring about internal discipline. He said "You'll know you are educated when you are harder on yourself than your teachers ever thought about being on you."  I thought that was a pretty good description of being educated, it definitely works for me.

The previous fall semester started with a faculty seminar led by Dr. David Dockery of Union University. He said something I'll probably never forget: "If you haven't changed your mind about something in the last ten years then you have no business teaching."  I often wonder if I am personally too easily swayed by new ideas or the exact opposite-- too set in my ways and current beliefs. I love those who challenge me and change my mind about things. But I have contempt for those who believe differently than I do if I don't feel they've studied the subject matter enough, or as much as I have.

The two highlighted thoughts above are ones I will carry with me for a long time.

Friday, December 16, 2011

What Did Romney Preach and Teach?

Mitt Romney was Bishop and later Stake President of a Boston area Mormon temple for 15 years and yet I don't see the media asking much of what he believes, as conservatives did with Jeremiah Wright in 2008, even though Wright was only Obama's pastor and not running for office himself. This may be because, unlike Wright, Romney in his Bishop role may not have publicly preached much as that role is generally left to members. But it's very conceivable and highly probable that before Romney was elevated to Bishop that he preached sermons. What Romney preached would reveal important character traits. His sermons would reveal his beliefs, values, and what, if any, political issues he considered relevant enough to preach to his congregation about.  The only snippets we have of Romney's pastoral role (Romney called himself a "pastor" for the first time in one Iowa debate) come from a few articles which mention that he was a diplomatic team-builder whose biggest controversial stand was counseling women out of having abortions, something that helps his standing with conservatives since he has famously flip-flopped on this issue multiple times.

Albert Mohler, President of Southern Baptist Seminary and a very evangelical conservative, wrote this blog post that seems to defend Romney from attacks about his religion--Mormonism:
"Furthermore, we must be honest and acknowledge that there are non-Christians or non-evangelicals who share far more of our worldview and policy concerns than some others who identify as Christians. The stewardship of our vote demands that we support those candidates who most clearly and consistently share our worldview and combine these commitments with the competence to serve both faithfully and well."

However, I find Mohler's argument problematic in Romney's case because Romney was not just some casual congregant at a Mormon church, he was an ordained Mormon Elder, Bishop, and Stake President-- high-ranking offices for which he was compensated, and offices that gave him the responsibility to defend doctrine in direct conflict with the Christian worldview.  A Stake President, according to the Church Handbook:

1. He is the presiding high priest,
2. He is a common judge.
3. He directs the Church welfare program and operations.
4. He oversees finances, records, reports, and properties.

The first role described by the Handbook:
"Members of the stake presidency are teachers. They teach the gospel in meetings, classes, and interviews. They also bear their testimonies often...They ensure that teaching is effective and doctrinally correct.

So, Romney's beliefs would have come out in his teachings, if not sermons per se.  Romney was baptized in a Mormon temple and swore a blood oath to protect the church and keep its secrets.  As Bishop, he would have had the role of keeping his congregants from questioning that doctrine and leaving to join other faiths, which Mormons officially see as "apostate" (see the Church Handbook of Instructions here).

The Church of Jesus Christ of Latter-Day Saints is very strict about its core beliefs, and Romney could not have held his  positions unless he agreed wholeheartedly to uphold LDS doctrine.  This matters because not only is core LDS doctrine entirely in conflict with orthodox Christianity, it requires one to accept various logical contradictions and tenets that contradict scientific and historical evidence. Furthermore, LDS bishops are given strict guidelines of how to deal with people who are questioning the Mormon faith or considering converting to another faith-- and these guidelines, such as excommunication, may look harsh to outsiders.  It is not without good historical, philosophical, and biblical reasons that Mormonism is labeled a cult universally by the Catholic church and all protestant denominations.

Jim Spencer, a former Mormon elder turned Christian apologist writes in his book Beyond Mormonism of what it is like to accept the logical contradictions of Mormonism and the shunning that occurs when one begins to question the church or ultimately leave, as he did.  He describes the phenomenon associated with all cults of chucking one's brain at the door as "snapping."  Spencer and other converts claim that all practicing Mormons suffer from this same well-documented psychological phenomenon, and I believe this is relevant to examine in a presidential candidate.

One question I would ask journalists following the campaign is how did Romney treat those in his church who were questioning Mormon doctrine and history?  Did he treat them similarly to how he treated Brett Baier of Fox News when he brought up various contradictions in Romney's statements over the years?  Or was Romney the sort of open-minded, highly-educated intellectual that he portrays during the debates?  His record as Bishop and Stake President would be helpful in this regard.

So far, the press has not openly discussed the doctrines Romney would have taught and expected his church members to believe as a Mormon pastor, which is odd because Jeremiah Wright's church's doctrinal statement was a major campaign issue in 2008, and Obama was pressured to disavow his membership.

Mormons maintain that all LDS presidents are infallible prophets.  Joseph Smith and Brigham Young's prophecies are considered to be correct and infallible, or else they would be false prophets.  This includes examples such as Smith's claims that men dressed as Quakers live on the moon, and Young's claim that men also live on the sun (Journal of Discourses 13:271-2).  It requires belief in the Book of Mormon's teaching of various warring ancient tribes living in the Americas, who were visited by Jesus, for which there is no archaeological evidence.

The LDS' religion is also very America-centric.  Romney would have taught his church that Elohim chose to re-establish his "lost" church in America via Joseph Smith, and that Jesus' next coming would be to a small town in Missouri, not Israel or anywhere else.  This has implications for how Romney looks at the rest of the world and conducts foreign policy.

There are other problems that I believe deserve scrutiny. Romney was a Mormon missionary in Europe from 1966 to 1968, achieving the highest possible position as a missionary. This was before the Book of Mormon was edited (in 1978) in order to allow African-Americans to hold Elder positions (they were denied such authority until then) after the LDS President received a "revelation" from God.  This means Romney had to support and promote the official 1966 LDS position-- that blacks were spiritually inferior to whites. While Ron Paul gets criticized for some racist writing attributed to him in the early 1980s, Romney has not faced any such criticism for swearing to promote officially LDS doctrine that was overtly racist.

Romney has had to teach other official doctrine, such as Jesus and Satan being spirit-brothers (along with everyone reading this) from the same father --Elohim-- and that man's sin is not atoned for by Jesus' blood alone, but can be atoned for by man's own blood (Journal of Discourses 4:53-54).

As a Christian myself, I find the lack of questions in regards to Romney's faith curious and problematic. I find evangelicals such as Al Mohler claiming that Romney shares a Christian worldview highly problematic given how contrary Mormonism is to the Christian worldview. If he were a Muslim, would there not be more scrutiny, even if he was a pro-life, pro-Israel Muslim?

If you do not believe a person's worldview is relevant to his effective leadership, then none of the above should trouble you.  But I believe a person's worldview is at the core of his decision-making process.  Romney hasn't answered key questions about his worldview, and I think it's high time we start pressing him--and ourselves--with those questions.

Wednesday, December 07, 2011

Book Review (#35 of 2011) Frederick Taylor - The Principles of Scientific Management

Since I've been reading seminal works this year, I decided to read this 1911 classic when it was posted on Project Gutenberg a while back. Taylor is credited as the father of scientific management as a field and this work is cited in Principles of Management classes like Smith's Wealth of Nations is in a Principles of Economics class.  It's another example of a book that is oft cited but rarely assigned to students to read-- I recall reading only excerpts from it in several Management classes as an undergrad, but the book is short enough to be fairly easily required reading.

Consider this part of the Introduction, written 100 years ago, after Pres. Theodore Roosevelt gave a speech urging conservation of national resources:
"We can see our forests vanishing, our water-powers going to waste, our soil being carried by floods into the sea; and the end of our coal and our iron is in sight. But our larger wastes of human effort, which go on every day through such of our acts as are blundering, ill-directed, or inefficient, and which Mr. Roosevelt refers to as a, lack of "national efficiency," are less visible, less tangible, and are but vaguely appreciated...As yet there has been no public agitation for "greater national efficiency," no meetings have been called to consider how this is to be brought about. And still there are signs that the need for greater efficiency is widely felt."
Taylor is an engineer who sounds like a supply-side economist.  Taylor's cause is fundamentally a Progressivist one, but he stands in opposition to Marxist elements agitating around him who are pitting the worker against the owner. Taylor is promoting a management style that requires heavily-involved owners and managers to increase the efficiency of the workers, the profitability of the businesses, and the wages of the workers.
"The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee."
This is a nationalist cause for Taylor-- maximum productivity means maximum standard of living for Americans.

"It is no single element, but rather this whole combination, that constitutes scientific management, which may be summarized as:  Science, not rule of thumb.  Harmony, not discord.  Cooperation, not individualism.  Maximum output, in place of restricted output.  The development of each man to his greatest efficiency and prosperity."

Taylor addresses the issue of shirking, or "soldiering" in his parlance, which he sees as widespread and contrary to the American spirit as demonstrated when Americans compete hard in sports on weekends.  This is fundamentally a problem of incentives-- if I'm paid by the day then I have no incentive to work quickly, but rather to prolong the number of days it takes to complete a job. Several examples of this in piece work is given, including the classic 1903 paper "Shop Management" on the Midvale Machine Shop.

Taylor confronts the following thinking that promote such shirking and inefficiency:

First. The fallacy, which has from time immemorial been almost universal among workmen, that a material increase in the output of each man or each machine in the trade would result in the end in throwing a large number of men out of work.
Second. The defective systems of management which are in common use, and which make it necessary for each workman to soldier, or work slowly, in order that he may protect his own best interests.
Third. The inefficient rule-of-thumb methods, which are still almost universal in all trades, and in practicing which our workmen waste a large part of their effort.
Scientific management is more than properly aligning incentives, like just paying someone for output rather than a flat daily rate. It requires investment in scientists who will first carefully observe the work being done and determine the most efficient way to do it. What's the proper size of the shovel? What's the maximum number of repetitions until a job is finished?  How far and how fast should the worker walk?  How often and for how long should his breaks be?  What is the "One Best Way" to do the job? The scientist becomes a micromanager, training workers in new ways of doing things in order to maximize productivity with the incentive dangled that the worker will receive higher pay for doing it this way.  

The example Taylor gives is from his time at Bethlehem Steel with workers shoveling pig iron. Here's a summary: 
"We found that this gang were loading on the average about 12 and a half long tons per man per day. We were surprised to find, after studying the matter, that a first-class pig-iron handler ought to handle between 47, and 48 long tons per day, instead of 12 and a half tons. This task seemed to us so very large that we were obliged to go over our work several times before we were absolutely sure that we were right. Once we were sure, however, that 47 tons was a proper day's work for a first-class pig-iron handler, the task which faced us as managers under the modern scientific plan was clearly before us. It was our duty to see that the 80,000 tons of pig iron was loaded on to the cars at the rate of 47 tons per man per day, in place of 12 and a half tons, at which rate the work was then being done. And it was further our duty to see that this work was done without bringing on a strike among the men, without any quarrel with the men, and to see that the men were happier and better contented when loading at the new rate of 47 tons than they were when loading at the old rate of 12 and a half tons." 
(Note: Taylor enlisted famed mathematician Carl G. Barth in his efforts.)  Taylor and his crew succeeded in achieving the 376% increase in productivity.  Workers went from earning the standard $1.15 a day to $1.85 a day, a 38% increase in their wage that put them well above what competing firms offered. Interestingly, when someone from another firm came and promised workers an even higher wage the Bethlehem management gave them its blessing to leave.  The workers came back to Bethlehem shortly thereafter because they found the other company's management always found ways to keep them from being productive to earn the higher promised wage. Other examples are given.  

Taylor's system requires owners to investment in scientific managers, and requires scientific managers to invest heavily in the workers, something with high up-front costs. Floor managers need not be highly educated engineers, only trained in how to use a slide-rule, which is sort of the 1900s equivalent of a scientific calculator.  

Wikipedia records Taylor's contribution to management thought and engineering, both here and places like Lenin's Soviet Union. I wouldn't hesitate to require this book in either a Principles of Management or Managerial Economics course.

The practicalities of Taylor's recommendations are questionable, and Wikipedia records that Bethlehem didn't implement all of his suggestions or methods.  But it's easy to see how the field of Management grew out of his work.  The book reminded me of the last time I worked on an assembly line and the plant had what I called the "Kaizen Team" who were people in white coats and clipboards monitoring our processes and looking for any ways they could improve efficiency.  The workers resented the team and suffered from Taylor's fallacy #1 (above) of assuming improved efficiency meant permanently eliminating their jobs (in some cases the workers were correct, however). I doubt many on the Kaizen Team had read Taylor in the original, though.  

Saturday, December 03, 2011

Aspiring Young Minds

Cleaning out some old stuff from my parents' house, I ran across this memory.  It's an early one where I became somewhat skeptical and cynical of education.

The left hand side is the blue "1st Prize" ribbon I won at my 5th grade science fair, qualifying me for an entry into the Fayette County (KY) science fair.  My dad is a civil engineer specializing in things like water and environmental hazards. He put together an experiment in which we looked at how various levels of oil contamination kill fish.  I remember a particularly long Saturday at his office lab where we measured precise amounts of water and oil to put into probably five separate containers. I remember the annoyance of having to tare the scale and to get the water amounts absolutely equal in weight with a medicine dropper. One container had no oil, and the others contained gradually increasing amounts.  We placed equal amounts of his lab minnows (of which there were probably thousands in his lab) in each container. Over the next several days or weeks, I measured the survival/death rates of the fish.  

I don't remember if we calculated a regression equation for the relationship between oil contamination and fish casualties, but we probably plotted some graphs.  My dad made sure it was high quality.  

The red ribbon on the right is the "Participant" ribbon from the county science fair. I remember having to spend another even longer Saturday near the Civic Center downtown as judges went through hundreds of projects.  I never met the judges, I think perhaps we were required to leave while judging occurred. When we returned to the hall in the evening, I remember some of my classmates getting prize ribbons but mine had this blank red ribbon on it and a "disqualified" remark. Disappointment.  One judge was at least kind enough to write me a note-- he said my project was good but killing something was against the rules, so I had to be disqualified (and should have been disqualified at the school level as well, but apparently my teacher and school judges didn't know the rules. We certainly didn't know there was such a rule.). 

You'll notice that my name is even spelled wrong on the certificate, adding insult to injury. 

I was slightly confused-- why was it real science and perfectly okay when my dad runs these kinds of tests all the time in his lab, but not real science when 5th graders do it?  (I seem to remember later dissecting frogs and pigs in school, am I to suppose that they died a natural death or something?)  The irony that the event was sponsored by the local water company didn't hit me until now.  

I have now trashed the items in the picture, but they can live on here for posterity, and maybe be useful for when Elias is in the 5th grade and runs into such barriers and setbacks to his intellectual curiosity.  I wonder what age he'll be when I finally tell him "Those who can, do. Those who can't, teach."  My guess is that I was in the 5th grade when my dad told me that. 

Sunday, November 27, 2011

From the Management

Blogging will continue to be sparse as I am busy working on moving my family overseas for the indefinite future.  A lot of things I'd like to write about, as well as plenty of things I wish I had time to read, but right now more important matters are pressing.

Monday, November 14, 2011

Does your school need a football team?

60 Minutes did a good profile of UMBC President Freeman Hrabowski last night.  These aspects of UMBC stand out:

"Much of the hard work at UMBC is in science, engineering and math which accounted for 41 percent of the bachelor's degrees earned there last year - well above the national average of 25 percent. Nationwide, most college students who start off in the sciences either change to a different major or don't graduate. UMBC keeps undergrads engaged by including them in research typically left to graduate students...Students can also get jobs and internships at one of 76 companies located on campus. Most are technology startups...(But) one thing you won't find at UMBC..."

A football team. The chess team is great, but there is no football team.  

Hrabowski: "People talk about that. Right. I mean, well-- well, first of all, it takes a lot of money for a football team to win." (emphasis mine)

The rest of the piece is worth reading or watching. So long as the U.S. is graduating fewer math and science majors than it did 25 years ago,  the less it is accumulating capital and productivity growth for the future. UMBC is pushing the other direction, and to do so it recruits and invests in training students and measuring themselves by whether they actually graduate rather than devoting millions to developing "student-athletes" who may never graduate (I put "student-athlete" in quotes since it is a term invented by the NCAA with huge legal ramifications as pointed out in the Taylor Branch piece I think everyone should read).

As a nation, we need to figure out what we want more of-- a higher standard of living or just better sports.  I vote for the former. 

Sunday, November 13, 2011

Book Review (#34 of 2011) Toynbee - Turkey: A Past and a Future

Turkey: A Past and a Future by Arnold Joseph Toynbee. This book was published in 1917 in the midst of World War I (now free at Gutenberg or at Amazon for Kindle).  Toynbee was a British historian who had evolving views on Turkey over his career.  This book gives an overview of where the Ottoman Empire came from, who the Osmanli Turks were, and what their future, and the future of their subjects, looks like.

Toynbee uses several contemporary sources to explain the rise of Turkish Nationalism, which was leading to changes internally that would have immediate consequences following the War. Toynbee fills in some gaps for me, explaining where the nationalism comes from and why Turkey implemented its controversial policy of expelling Armenians and other groups from their country.

The symbiotic relationship between Germany and Turkey is also explored, Germany was eager to help the Turks complete a railroad system and other development projects that would require German workers and expertise and lead to further gains from trade for both nations. All of this was to create a bulwark for their aspirations of empire:

"Thus Germany's economic activity in Turkey has been not for prosperity but for power, not for peace but for war" (l. 480).  

Other people groups subject to the Ottoman Empire were agitating for their autonomy, which was causing some decline in the prosperity in the furthest regions of the Empire as they were often neglected by Istanbul.

There is much eerie foreshadowing in this book. At the time, the Zionist movement in Palestine was growing strong as Jews fleeing Eastern Europe migrated to Palestine, usually through Germany. Toynbee speculates on their fate. The Jewish problem for Germany is sadly foreshadowed by events in Turkey, and several Germans living in Turkey wrote official protests or resigned teaching positions to protest Turkish policy in 1915:

"'If we persist in treating the (questionable policies) an internal affair...then we must change the orientation of our German Kulturpolitik...[W]e teachers must give up telling our pupils in Turkey about German poets and philosophers, German culture and German ideals, to say nothing of German Christianity...The things of which everybody here has been a witness for months past remain as a stain on Germany's shield in the minds of Oriental nations'" (l. 564). 

Just imagine these words being written about Germany itself twenty years later.

Toynbee also quotes statistics of Americans and others who were working in Turkey prior to the start of the war, building schools and hospitals and such. These, too, were closed down as battle lines were drawn.

Like other people writing around this time, Toynbee seems a pessimist on the future of Turkey.  The Turks were seen as less advanced as other nations and with little hope of catching up.  I have some biographies of Ataturk on my list to read very soon, because he steps into this void and strives to move Turkey forward very quickly and reverse the decline of the nation.  That's the part that I want to explore next.

I give this book 4.5 stars out of 5. I consider it a concise must-read for anyone interested in this brief period of Turkish history.

Thursday, November 10, 2011

The eerie calm

The market is more optimistic today, but it just reinforces my belief that sometimes the market is slow to accept what it really doesn't want to, just as it did from late 2006 - 2008. None of the fundamentals changed from yesterday to today.  InTrade is currently giving 70% odds to a country leaving the Eurozone by 2015. Knowing that, it's amazing to me that euro bond yields aren't higher across the board.  It's very much similar to 2006 when delinquencies on home loans started to rise and were expected to get worse, but no one wanted to believe home prices would fall across the board, or that AAA-rated securities based on those loans weren't as advertised. The 17-country euro zone as we know it is done, it's just a matter of time

Wednesday, November 09, 2011

How prices are useful

One frustration I have watching the news is the media's incessant obsession with political polls.  For example, Herman Cain has been showing an approval rating just under Mitt Romney's, which you hear regurgitated every night as "he could be the Republican nominee."  The problem is, we have a better predictor out there of people willing to put their money where their mouth is.

Herman Cain as the GOP nominee is currently trading at  $0.45/share on InTrade, meaning the market gives him a 4.5% chance.  Compare that to Mitt Romney's 68% probability. When I point that out to people, I sometimes hear "Yeah, but the market doesn't know what will happen between now and next summer; markets aren't efficient," etc. etc.  One guy told me "I'd rather listen to the people at 538, because at least they have a proven track record..." He doesn't realize that that is the exact same thing as saying you believe a particular investment advisor that a certain stock is underpriced.  If it's really true, then buy the stock and get rich.

If you think Cain has a decent shot at the nomination then the market says you stand to make a good deal of money by betting on him. And if everyone else feels the same way, they will too, otherwise they're leaving free money on the table.  Once you put your money where your mouth is with everyone else, Cain's value will rise.   The fact that no one is doing that indicates that they don't actually think it will happen.  Prices are very useful things. Why the nightly news show us the Dow and S&P, and sometimes talk about bond yields, but focus on polls rather than market indicators for politics is a mystery to me.

Thursday, November 03, 2011

Book Review (#33 of 2011) Agamemnon of Aeschylus

The Agamemnon of Aeschylus was a play written by Aeschylus in 458 B.C. as part of a series (the Oresteia) that won him first prize in the archonship of Philocles.  This version was translated into English rhyming verse by Gilbert Murray who also adds helpful footnotes.

Given that the original is in Greek, and this version has not only been translated into English but then made to rhyme in English, makes one wonder how true to the original spirit it remains. For example:
"Paris to Argos came;
Love of woman led him;
So God's altar he brought to shame,
Robbing the hand that fed him."

Author Philip Caputo offered the Oresteia as his one reading recommendation last year, which is why I wanted to read it. .

Agamemnon triumphantly returns home from the Trojan War. He is greeted by Clytemnestra who feigns the loving wife longing for her husband.  She then lures Agamemnon and then Cassandra, his captured slave, into the house and murders them. The elders and comrades of Agamemnon move to take revenge against Clytemnestra and her lover, Aegisthus. But Clytemnestra halts the dispute and everyone awaits the return of Agamemnon's son, Orestes, from Troy to exact the revenge.

Early in the play, I found language that sounds biblical enough to make me wonder either about the Greek translation or think about the Gospel authors' exposure to classic Greek literature.

"But the wise Shepherd knoweth his sheep,
And his eyes pierce deep
the faith like water that fawns and feigns."

My favorite part was when Agamemnon is replying to Clytemnestra, who is trying to tempt him to show hubris by treading on tapestries of crimson and gold. He responds by contrasting the honor he seeks with the respect shown only to gods:

"'Tis God that hath 
Such worship; and for mortal man to press
Rude feet upon this broidered loveliness...
I vow there be danger in it. Let my road
Be honoured, surely; but as man, not god"

"God giveth, for I reckon no man blest
Ere to the utmost goal his race be run.
So be it; and if, as this day I have done,
I shall do always, then I fear no ill." 

But alas, poor Agamemnon:
"For woman's sake he endured and battled well,
And by a woman's hand he fell."

An Occupy Wall Street discussion question

This is a message board exercise students in Principles of Microeconomics have to do this weekend.  They will have read Chapter 7 of Good Intentions entitled "How Did Ben & Jerry Get So Rich?"

This chapter deals with CEO compensation.  Many people are outraged that CEOs earn so much more than the average worker. You have likely seen the news coverage of Occupy Wall Street and similar groups protesting this, among other things. 
In 2005, the median annual salary for a CEO of a Fortune 500 company (the largest 500 companies in the U.S.) was $6.7 million.  The median salary of a factory worker was $29,544. Some people think this is unfair.  
Tom Brady, quarterback of the New England Patriots earned $18 million in 2010, while his current wife also earns somewhere around $15 million as a model. Peyton Manning's contract was set to pay him about $23 million this year to QB the Colts (and will still pay him most of that even though he hasn't played a single game due to an injury). 

1. Chapter 4 of Good Intentions discussed how workers are paid according to their productivity-- classical labor theory says workers should be paid according to the marginal product of their labor--about as much as they add value to the overall economy.  Do you think the median Fortune 500 CEO is 227 times more productive than the median factory worker?  Is Tom Brady 609 times more productive?  Is Peton Manning 778 times more productive?

2. Why do you think the media and politicians focus on salary and bonsuses for CEOs and not athletes? 

3. The NFL is a government-granted monopoly, it is exempt from antitrust legislation. Most CEOs and factory workers work for companies competing globally. How do you think this affects the salaries above? 

Tuesday, November 01, 2011

"Book" Review (not counted) - Read This Before Our Next Meeting

Read This Before Our Next Meeting by Al Pittampali; I got this when it was free for Kindle. It's really an essay and not a "book," by my definition-- it's not a Kindle Single either.  It is a simple 80 page manifesto for changing how we do meetings.  You can visit his website at

I work in a College of Business and I often joke to myself "How many MBAs does it take to run an efficient meeting?" The correct answer is either "zero" or "more MBAs than we have on faculty now." I lean toward "zero."  It's amazing to me that we don't incorporate a class on how to hold meetings into curriculum.

Pittampali's suggestions for creating the "Modern Meeting" are almost identical to my own when I ask myself what I would do differently if I ran things.  My college violates just about every one of his tenets.

The author's Modern Meeting:
1. Supports a decision that has already been made.
2. Moves fast and ends on schedule.
3. Limits the number of attendees.
4. Rejects the unprepared.
5. Produces committed action plans.
6. Refuses to be informational. Reading memos is mandatory.
7. Works alongside a culture of brainstorming.

"The Modern Meeting focuses on the only two activities worth convening for: conflict and coordination" (l. 286). In other words, the Boss should have already made a decision and informed everyone of it long before, meeting with people individually if necessary.  The meeting simply exists to implement the decision and openly resolve any conflicts about it.  Concrete tasks will be assigned through the meeting:
"If you don't receive an action plan from the meeting I invited you to attend, you have every right not to attend my next one" (l. 375).

Numbers 3, 4, and 6 above are crucial for me. 90% of our meeting time is listening to someone give a report that is purely informational and could have been written in some bullet points emailed out earlier. This is unproductive and inefficient, wasting everyone's time.

But no one wants to read memos before a meeting, just like students who never read textbooks before coming to class.  Just like Sunday school Christians usually never read their lessons or study the text before Sunday or study about what their pastor is preaching on.  We come wanting to be entertained, wanting new information. But that is not the job of the meeting, the job of the meeting is decision and action.

But, we're a College of Business, we should be better. We demand our students be prepared, and so should we. "This is not high school; we strive to be a world-class organization. We can't tolerate your unpreparedness anymore. Unprepared participants are dead weight" (l. 365).  Save the learning for your own time, a meeting is not a seminar.

I recommend reading the book in your spare time, won't take you any longer than a long-form journal article. Then give it to someone who you wish would run meetings better...

Monday, October 31, 2011

NCAA Eligibility Requirements at Division II level

I wanted to catalog this for easy find later, but also because I think it speaks for itself.  To be eligible to play, a D-II student:

  • Must earn 24 hours a year, counting summer courses.  
  • Of those 24 hours, 18 must be earned during regular academic year (so, must be non-summer courses).
  • A student must earn a minimum of 6 hours credit the previous semester.  
  • Division II student-athletes must complete their four seasons of eligibility within the first 10 semesters (5 academic years) of full-time enrollment. 
  • GPA requirements: 
    • After first year (24 hours): 1.80 
    • After second year (48 hours): 1.90
    • After third & fourth years (72+ hours): 2.00

Developmental (read: remedial) courses only count toward hours for NCAA eligibility in the student's first year of college.

The way I see this play out for fall sports (ie: football) is a coach will have a student take 12-15 hours in the Spring, with an additional 6 in the summer.  Then, a student need only pass 3-6 hours in the fall to get 24 for the year (they have to be enrolled in 12 hours).  So, the student will flunk all but 3-6 of his hours and play all he wants to.  If something goes wrong, he can make up the difference in spring or the following summer.

Of course, that doesn't bode well for the student's degree track. But a lot of those kids aren't going to graduate, that's not what they're recruited for.  Many fall within the 6 hours needed to walk across the stage but just short of a diploma.

Coaches also utilize the redshirt option, to help a student raise the GPA or take 15-18 hours so that the student can be cut to 12 hours a semester in other years.

Students who don't meet the minimum entrance requirements of a university can enroll in a Junior College.  So long as they fulfill the 24 hour 1.8 GPA requirement they can transfer and be immediately eligible to play in the fall.  Often they will take remedial courses (since they count in the first year) and other easier credits (Weightlifting and Human Sexuality are two I see most frequently along with a lot of Physical Education courses.  Football, basketball, etc. also count as a one-hour credit course) to get to 24.

I've also seen a student allowed to play without having an official transcript sent from a previous university-- no official proof that he met the above requirements for the previous academic year.  The student had played for two previous colleges and sent a transcript from the first school but not the second.  He declined to give answers why when repeatedly asked.  He transferred again after the season, having flunked all of his classes but played rather well.

DII schools are not subject to the same Academic Progress Rate evaluation that DI schools are.  DIII schools have no minimum eligibility standards other than those set by the university.

Sunday, October 30, 2011

The Triumph of NGDP Level Targeting

I've been busy with too many things to blog.  My more fluid thoughts are found on Twitter or on Google Plus. But a significant event has been the triumph of Scott Sumner's years-long push to get NGDP targeting on the forefront of discussions of optimal monetary policy, which I've commented on several times here.  I started incorporating ideas from Sumner's posts in my Macro, International, and Money & Banking classes two years ago. Two weeks ago, Goldman Sachs' economists published a paper advocating the Fed to adopt the target, and since then several news outlets have picked up the story as other economists have jumped on the wagon publicly.  Many of the relevant links are on David Beckworth's post today, he also deserves a good deal of credit for being a "market monetarist" pioneer, and he's taught me as much via his blog as the other market monetarists have.

It's truly a bipartisan affair.  Obama's former CEA Chairwoman, Christina Romer, Brad DeLong and Paul Krugman on the Left.  Mitt Romney's economic adviser-- Greg Mankiw-- Robert Hall, and Scott Sumner on the Right.  That's partly why the Fed was made to be independent-- it's not beholden to political whims and wrangling like Congress is. There are theoretically no political constraints to it adopting Pareto-optimal monetary policy.

Saturday, October 22, 2011

Taylor Branch on the NCAA

Whether you're a sports fan or not, I encourage you to read "The Shame of College Sports" by Taylor Branch in last month's The Atlantic. Branch gives a fascinating history of the NCAA, and how it has tried to maintain its monopoly position by enriching a relative few and destroying some college athletes' careers.  I've discussed these issues on this blog several times, this post being among the most recent. Branch shows how a series of lawsuits is currently trying to expose that the NCAA's rulebook contains clauses that trample very basic civil rights in an unprecedented fashion.

The first question I find myself asking in reading the article is why so many religious colleges, who have a faith-based mission statement that they supposedly take seriously, would give obeisance to an institution like the NCAA?  The answer is that it's about the money but also about college presidents and donors who demand strong athletics.

The second question is why so many people can sit by and watch it happen. Why don't pastors think about this more?  Why doesn't Occupy Wall Street add this civil rights abuse to their list of grievances, along with the increasing divide between what college coaches make next to the athletes that make them their money and faculty who uphold the mission of the schools?

As a Christian, I believe we're to test everything, examine everything. The NCAA is very problematic to a growing number of examinations.

Sunday, October 16, 2011

On World Food Day

Today is World Food Day.  A day to recognize that many people on earth do not have enough.  I've been thinking about it this week because last Sunday night PBS aired a Sesame Street special on hunger. It was a different take on hunger than ones I grew up with because it focused on fresh produce. Not only are some people in America unable to earn income to feed themselves, many do not have access to healthier options.

The show first highlighted an unemployed single dad on Martha's Vineyard, where an aunt housed his family in a guest room. He visited a local food bank where someone donated shares in a local cooperative farm specifically to his family.  As a result, his kids were fed and began cooking and enjoying fresh vegetables instead of canned ones or processed materials. He was overwhelmed because his kids were not only fed, but were now connoisseurs.  Eventually he got a job as a bus driver and they got their own place.

The show then switched to the Bronx, where a mother was desperate to find cheap fresh food for her daughter. They went into some neighborhood groceries to highlight how bananas were over twice as much as they would be outside the Bronx.  The cheap stuff were the processed things and potato chips.  In this scenario, the protagonist was a charity that provides fresh produce and meals made from them.  There was a line around the block of locals eager to partake. The mother was a volunteer in the organization, and her daughter also decided to help.

Elmo visited a community garden worked by volunteers in an urban setting, and it appears the producers wanted to promote this idea as a way of encouraging an increase in the supply of produce and healthier options.  In many of my travels around the world I've found that urban dwellers often have a plot of land either near their apartment or outside the city where they grow some food for themselves, or for sale. This doesn't happen as much with America's city-dwellers. Why is that?

If I were an alien visiting America I would find this bizarre. Much of America lives in houses with acreage used solely for growing grass. Most could support seasonal gardens growing crops of some variety. Most don't because of the opportunity costs involved-- the time and resources it takes to grow a garden are high enough that people are better off working their regular jobs and then trading with those who produce vegetables. If people in a city are lining up around the block for access to vegetables, it signals that somehow the market isn't functioning properly. If many people in non-urban areas are unemployed and not growing their own food, it tells me the opportunity cost of their time still isn't low enough for it to be worth it to them. Maybe because they can just go to a food bank instead?

Why are prices so much higher in Bronx stores than in others?  Why isn't supply meeting demand?  Is it because NYC has so many restrictions on businesses and so little viable space for them?  Why do cities like New York work so hard to keep Wal-Mart out, when it could provide goods and services much more cheaply?  (Some people criticize Wal-Mart's produce for being unripe when picked and such, but I think something is better than nothing.  And Wal-Mart's relatively unpublicized buy local initiatives have put a lot more fresh local produce in their stores than in previous years.)  

Why do so many of the unemployed in non-urban America not grow food on their lawns? (I'm thinking about my immediate area in SW Missouri).  Even the Martha's Vineyard dad was living in his aunt's large house which appeared to be on a large farm plot, capable of growing food. It struck me as bizarre that he'd be totally dependent on someone else's land. Was the opportunity cost really that high?

These are various unresolved questions I had while watching the show.  I'm sure there is research with answers to all the above, but opportunity cost for me to look them up is currently too high.

Saturday, October 15, 2011

Book Review (#32 of 2011) The End of Loser Liberalism

One way to get me to read your book is offer it for free, and the other is to have a nice blog. I found Dean Baker's The End of Loser Liberalism: Making Markets Progressive to be a pleasant read. Baker works for the liberal CEPR and is a shill for the unions. His blog, Beat the Press, applies basic economics principles to debunk various articles in major outlets, which is why he's linked on this blog.

If you can get past comparing every cost-saving measure he proposes to how much the "Bush tax cuts for the wealthy" cost, and get past his overlooking of various economic problems with unions, you'll like this book.  Baker's goal is to move the goalposts and argue that Progressives are not and should not be anti-markets.  He highlights ways Conservatives have disguised various policies as "free market," when in reality they are not. In that, he does everyone a valuable service. Baker's ideas are quite Hayekian. He generally sees the market as favoring Progressive outcomes:
"Progressives should want a free market" (141).  "In the same vein, we can structure the market more generally to produce progressive outcomes. The enormous growth of inequality over the last three decades did not come about as the result of the natural workings of the market; it came about through conscious design. The job of progressives is to point this out in every venue and in every way we can. It is not by luck, talent, and hard work that the rich are getting so much richer. It is by rigging the rules of the game" (154). 

Trade deals, for example, are never "free trade" as they are labeled and trumpeted in the media. They always contain a large number of restrictions, usually involving patents and "intellectual property rights," and containing provisions that open the market for our financial services. Most of these clauses favor people who work in higher-skill industries, while the trade deals generally lower barriers for goods produced in low-skill industries. Other high-skilled workers (doctors, accountants, etc.) are in services that are not easily tradable, so trade deals don't increase the competition they face.  This could be offset if we allowed freer flows of labor along with goods and services. Most high-skilled immigrants (doctors, engineers, etc.) to the U.S. are unwilling to take low-skill jobs in farming and construction. But due to visa laws and making it onerous for employers to sponsor visas, the supply of these workers in the U.S. is relatively small. Hence, wages for these sectors are high. In the 1990s, physicians groups argued against increasing visas for foreign physicians because these physicians were willing to work for less, and hence would lower physicians' wages via competition.  Meanwhile, low-skilled workers in manufacturing are increasingly faced with tougher competition and making the same complaints-- but the situation currently favors the doctors over the factory workers.

In this there is no daylight between Baker and a Libertarian. We'd all be better off if all barriers were removed. But as far as immigration goes, a Milton Friedman quote comes to mind: "You can't have open borders and a welfare state."  So, Baker argues that we should take advantage of the fact that every other country in the world pays less for healthcare than we do, and find a way to increase trade in services.  If we signed trade agreements in health care, where Medicare would pay for services in places like Singapore as well as the U.S., we'd see incredible savings.  Someone could have a heart bypass for $40,000 in Singapore as opposed to $100,000 in the U.S., and the taxpayer or the insurance customer could save.  The market would develop ratings for international hospitals and insurance companies could build PPO networks just as they do in the 50 states. Government agreements could work out how lawsuits are handled.

The basic Ricardian analysis of comparative advantage typically leads teachers and students to conclude that the U.S. will continue to shed manufacturing jobs and gain more higher-skilled service jobs. But Baker points out that this broad process cannot be indefinite:

"There is no logic whatsoever in the view that somehow the United States will remain dominant in highly skilled occupations, exporting the services produced in these areas to the rest of the world while importing manufactured goods from the rest of the world. It is perhaps a racist conception to believe that workers in the developing world somehow lack the capacity to compete effectively in skilled professions with people in the United States...To imagine that the United States can maintain an advantage over these countries in international trade involving these occupations would require a view that these engineers and designers can be effective when working in Silicon Valley or Seattle but suddenly become 80 or 90 percent less efficient if they return to their home countries or the countries of their forebears. The United States is destined to import major quantities of highly paid professional services in the decades ahead, just as it now imports major quantities of manufactured goods. The argument for the benefit from these imports is the same as the argument for the benefit of importing manufactured goods: it allows us to buy these items at lower prices than if we relied on domestic production. This frees up income to purchase other goods and services, making us richer and increasing growth" (97)
Any sector of the economy where you see increasing gains over time raises a flag that the market must be kept from functioning properly. Whether it be a tech stock bubble, or a housing bubble, or CEO pay.  The fact that U.S. CEOs has increased relative to the median worker, and they are paid roughly twice as much as European counterparts without a noticeable difference in value added, is evidence somehow they are being shielded from competition:

"This pay gap suggests the possibility of large gains to the U.S. economy and to groups of workers who are not in top corporate management from taking advantage of lower-paid top management at foreign companies wherever possible...(T)he public has no patriotic obligation to favor contracts with U.S.-based companies simply because the companies have a headquarters in the United States. Where foreign-based companies like Fiat can offer lower costs, at least in part because their executives are lining their pockets much less amply at the company's expense, progressives should jump at the opportunity to bring them on board."
Baker is not promoting nationalism, but rather economic efficiency, as Progressive which is refreshing.

Baker's hypothesis for why these ideas aren't widely embraced by the public is that the media and political class consists mostly of high-skilled, highly-educated workers who want to see their salaries, and the salaries of their equally high-skilled friends and neighbors, shielded from competition.  Meanwhile, they aren't as connected to lower-skilled workers and don't care as much.  It's also true that many large Progressive donors work in finance (George Soros) or Hollywood, both of which are highly protected sectors, so some Progressive politicians don't want to hurt their financial position.  Baker also just believes the general population lacks economic literacy, as seen with his macroeconomic chapters.

Baker takes the time to give an overview of how the Fed works and to explain the national income approach to the balance of payments because he believes most Progressives are ignorant about how these things work (I can't disagree!).  Treasury Secretaries' and political candidates' "strong dollar" rhetoric polls well because people have nationalistic sentiments about their currency, but the fact that the U.S. has run a trade deficit for the last 30+ years indicates that the dollar has been consistently overvalued. We'd likely be doing more manufacturing if the dollar was worth less.  He takes time to criticize the China-bashing of recent years by pointing out that:
"At the end of the day, the U.S. Treasury has enormous ability to influence the value of the dollar. It is certainly capable of forcing the dollar down against the Chinese RMB and other important currencies, if this is a major goal of economic policy. So far, a lower-valued dollar has not made the cut. A high valued dollar is in the interest of the financial industry and other powerful actors, and so the Treasury Department has not pursued a lower-valued dollar as major goal in negotiations with China or anyone else." 

Conservative politicians who are hawks over the U.S. budget deficit cannot logically simultaneously demand a "strong dollar" policy, something which I've pointed out a few times on my blog. Increasing national saving leads to an increase in net exports via a real depreciation of the currency.

Baker would like to see a Fed that pursues higher inflation and worries more about unemployment. He's not terribly far from market monetarism on some points.

Baker's final point is about patent monopolies. He is a champion of the government buying research patents from pharmaceuticals and providing other incentives-- like prizes-- for the development of drugs rather than seeing consumers hurt by higher drug prices as pharmaceuticals recoup the costs of their research. This is an approach discussed by libertarian thinkers like Tyler Cowen.  The reason we don't do that, according to Baker, is that it would mean more government spending on scientific research and conservatives paint this idea as central planning. He also applies this concept to music and the arts, which gets a little hard for me to fathom as reality. But I like the ideas and intention-- the way we have set up our patent monopolies have become very onerous and ridiculous as companies like Apple and Amazon, as well as "patent trolls," hire armies of lawyers to sue each other over patenting the most basic of ideas.  This system is slowing innovation and hurting consumers, while benefiting lawyers (regressively).

Baker wisely avoids talking about taxes and income redistribution. He wants Progressives to take up causes that Conservatives can't logically or genuinely argue against on the merits. The caricature of Progressives is that they are anti-market and pro-redistribution. Baker wants to change that.
"Conservatives' complaints about the economic distortions created by high taxes have some basis in reality, even if they are often hugely overstated. Progressives should steer clear of the potential for being seen as having an agenda that means slower growth and less job creation. Shifting attention to before-tax issues of income means talking about the big policy items, most importantly the Fed and the dollar, that have the greatest impact on economic outcomes." 

I give this book 4 stars out of 5.  Since I read his blog, I liked the full elucidation of Baker's ideas that he usually only alludes to in his posts for brevity's sake.  I'd rather have policy designed by a Progressive economist than one created by a Conservative non-economist.

Friday, October 07, 2011

Book Review: Treatise on Moral Sentiments, Parts 1 & 2

Since tackling Wealth of Nations in the spring, I felt like I needed to read the Treatise, since so many people remark on its contrast.  I wanted to see Das Adam Smith Problem for myself and see if I could see things the way Halteman does, that Smith's system contains a telos.

However, I find this book extraordinarily dry and unmotivating and probably will move to other more pressing things. But here's what I've gotten so far:
Part 1 deals with Smith's idea of sympathy -- "our fellow-feeling with any passion whatever" (8).  What makes us rejoice with someone or grieve with someone, or them with us?  Basically, when we're like-minded with them and can put ourselves in their shoes or they can do the same with us.  We judge others by our own standards:
"I judge of your sight by might sight...I neither have, nor can have, any other way of judging..."

Anger repulses us unless it's righteous anger, with righteousness shared universally (appealing to the "impartial spectator"):
"We admire that noble and generous resentment which governs its pursuit of the greatest the indignation which they naturally call forth in that of the impartial spectator...which never...desires to inflict any grater punishment, than what every indifferent person would rejoice to see executed" (37). Smith continues:

"As to love our neighbor as we love ourselves is the great law of Christianity, so it is the great precept of nature to love ourselves only as we love our neighbour, or what comes to the same thing, as our neighbour is capable of loving us" (37). 

Smith believes that contrary to common opinion "(O)ur propensity to sympathize with joy is much stronger than our propensity to sympathize with sorrow" (79).

What is love, what is passion?  Why do we feel the way we do?  Is it better to be loved by all quickly, like an instant celebrity, or to slowly build esteem and reputation over time?

The similarities between Smith's Moral Sentiments and Wealth of Nations are that they are both a compilation of his own observations about life.  One is about the feelings of the people, the other about their economic interactions.  Inasmuch, Smith strikes me as someone who had too much time on his hands. Smith's optimism also comes across in both books:

"What can be added to the happiness of the man who is in health, who is out of debt, and has a clear conscience?...This situation, however, may very well be called the natural and ordinary state of mankind.  Notwithstanding the present misery and depravity of the world, so justly lamented, this really is the state of the greater part of men" (81). With the caveat that "Though little can be added to this state, much can be taken of it."

Since Locke and the Enlightenment taught us that government arises from the consent of the governed, I found this quote interesting:
"That kings are the servants of the people, to be obeyed, resisted, deposed, or punished as the public conveniency may require, is the doctrine of reason and philosophy; but it is not the doctrine of Nature. Nature would teach us to submit to them for their own dread their displeasure" (100).

I think many of us resonate with this idea:
“Are you in earnest resolved never to barter your liberty for the lordly servitude of a court, but to live free, fearless, and independent? There seems to be one way to continue in that virtuous resolution; and perhaps but one. Never enter the place from whence so few have been able to return; never come within the circle of ambition; nor ever bring yourself into comparison with those masters of the earth who have already engrossed the attention of half mankind before you" (105). 

I liked Smith's observations about contemporary politics.  Politicians aren't the brightest or best public servants-- they're the most electable celebrity. The good ones make sure to hire a good support staff to do the heavy lifting and policymaking. We submit to our superiors because we wish we were them, not because we wish them well (paraphrasing, pgs. 95 and 113-114).

Part 2 gets more into the idea of what is kindness, what is justice?  Why do we punish someone caught trying to break into a home much less than someone who actually broke into the home? (II.III.17)  It illustrates Smith's belief in a God that would allow justice to be meted out in the afterlife, if not in this one:

"As every man doth, so shall it be done to him, and retaliation seems to be the great law which is dictated to us by Nature," (II.II.10).  "But if the murderer should escape from punishment...he would call upon God to avenge, in another world, that crime which the injustice of mankind had neglected to chastise upon earth" (II.II.25).

Justice is desirable because we see it as holding society together. The rebellious youth problem is universal across generations:
"We frequently hear the young and the licentious ridiculing the most sacred rules of morality, and professing, sometimes from the corruption, but more frequently from the vanity of their hearts, the most abominable maxims of conduct...and the consideration which first occurs to us, is the disorder and confusion of society which would result from the universal prevalence of such practices" (II.II.22).

What is misfortune?  How do all these affect our feelings and why?  These are the questions Smith is asking and answering.  (It's not even as interesting as this post makes it sound.  )

Monday, October 03, 2011

Occupy the Board of Governors

I'd like to ask all of the Occupy Wall Street protestors to read some Scott Sumner:

"One of the great mysteries of this recession is how the Fed has been able to get away with doing “the wrong thing” for three years in a row.  The BOJ would often claim to be unable to boost NGDP.  It was wrong, but the explanation sort of made logical sense.  But Bernanke could never make that claim, as his academic research showed the Japanese explanation was preposterous.  For instance, why did the BOJ repeatedly tighten monetary policy in the 2000s?
Of course the Fed never claimed to be out of ammo; indeed they have argued the exact opposite.  This makes the Fed’s public relations success an even bigger mystery.  Why have they gotten away with this stance?"
Read his piece in National Affairs, too.  Then, go occupy the Board of Governors and demand adequate monetary policy.  It's the Fed's fault.  And don't blame Wall Street for lining up at the trough when Treasury and the Fed offered them conditions-free life lines.  That was also arguably the Fed's fault.  Demand the Fed adopt an NGDP growth rate target and use its unspent ammo.  The whole world is watching.

Monday, September 26, 2011

Optimal monetary policy

If you only read one paper about monetary policy, make it this one. This should be put on every politician and presidential candidate's desk (or stapled to their forehead). If my students could just nail down the knowledge in this one paper, they will be equipped to be much better citizens. They would have a proper benchmark for measuring whether we're getting optimal monetary policy or not. 

Thursday, September 22, 2011

The Dark Ages

At the last GOP presidential candidate debate, two candidates (Romney and Gingrich) called Ben Bernanke "inflationary," and pledged not to re-appoint him. Rick Perry has accused Bernanke of "almost treasonous" actions and said he would be treated "pretty ugly down here in Texas."  Speaker Boehner and Minority Leader Mitch McConnell wrote an open letter to Bernanke urging him not to pursue monetary stimulus as there was "no evidence" any was needed.

After the FOMC announced its new policy yesterday, the Dow fell 200 points and is down another 300 points this morning.  The dollar appreciated in value against foreign currencies, gold and oil also fell.  The yields on the 10 and 30-year Treasuries fell to new 60 year lows.  The 30 year TIPS spread, a market indicator of inflation expectations, fell below 2% for the first time.  The yield curve indeed flattened.

All of the above indicate that inflation expectations have fallen off dramatically.  Inflation expectations are at historic lows. Accordingly, NGDP growth expectations have fallen dramatically, and the Fed's announcement itself indicates the FOMC is pessimistic about growth and employment.

It's really simple:  When demand for money increases, velocity (the inverse of demand) decreases. As a result, NGDP decreases.

The Fed's job is to manage the M x V side of the equation.  Yesterday's new policy brought no new increase to M, only a reshuffling of the Fed portfolio to try and get investors to move out the curve at the margin.  As Scott Sumner reminds us, a flat yield curve represents tight money, and not loose, "inflationary" monetary policy. If the Fed was pursuing the "inflationary" policies it's accused of the yield curve would be steeper and NGDP growth would be much higher.  Anyone who tells you otherwise is ignoring at least 400 years of economic thought.  Journalists who are puzzling as to why the market is acting this way should probably order some textbooks off Amazon.

NGDP expectations matter a great deal, as David Beckworth points out:

If firms expect more income, they will invest and produce more.  If workers expect higher incomes they will spend more and have more confidence in firms, leading them to hold less cash and save more in the form of stocks and corporate bonds, boosting asset prices.  The increase in consumption and investment and production boosts employment and incomes, and the cycle continues.

My thoughts are not new or leftwing-liberal-progressive.  Milton Friedman taught them. F.A. Hayek taught them.  This "new" (but really very old) school of thought is now called market monetarism, and it is what I most identify with. Ramesh Ponnuru of the National Review has taken up the MM fight several times. Scott Sumner wrote this must-read piece for the conservative National Affairs. If you have put your currency in the hands of a central bank, then its job is to achieve monetary equilibrium and it is the only entity that can do so.

I've become cynical about the GOP's ranting against the Fed because they obviously have the most to lose (2012 election) if the Fed does its job and the economy picks up.  I've become cynical about the President because he's allowed two seats on the Board of Governors to go unfilled, along with several positions in Treasury Department and elsewhere, at a time when all hands on deck are needed (the GOP have blocked or threatened to block several nominations, but he could always recess appoint around that and chooses not to). I've become cynical about the FOMC because three members loudly voted against the FOMC's decision yesterday because they do not support "additional policy accommodation at this time." But the most valid criticism of the Fed right now is that they have not plotted any forward course; they have not told us where they want the economy to go. They have simply told us they do not like where we are headed and want to rev up the engines to prevent going there, but they've left the ship in neutral and there is no specific destination. That is defacto the same thing as moving in the wrong direction.

It feels like a Dark Age to me.