Bollettino
Our friend B. writes from Spain (B. asked us to clean up the grammar of this letter. No need to. It is perfectly clear as is):
"Aznar wishes it is ETA, but it does seem to be Al
Qaeda now. It is the Spanish Gov. the one that is
actually bombing us with lame propaganda. The reason
everyone believed immediately that it was ETA is
because of the escalating tension that we have been
living in during the electoral campaign (Elections
this sunday!). My reading is that this terrorist
attack is Ben Laden getting back at Aznar for his
support to Bush. This afternoon Aznar gave a pathetic
press conference: he had to read a paper, because he
was not even capable of memorizing a few sentences. He
sounded like it was his goodbye speech, thanking the
police for their great job (!) against ETA during
these past eight years... This is the image that he
will leave behind. Today he was reaping the fruits of
his policy. The National TV is still intoxicating us
with interviews about ETA, people complaining about it
and so forth while INTERNET is already carrying the
news that Al Qaeda has lready called an Arabian paper
in London to acknowledge this attack.
The ETA subplot here began in January 4th. A Catalan
leftist politician (the equivalent of a PRIME MINISTER
of the Catalan Gov.) had a secret meeting with ETA in
Southern France. This rendezvous was later denounced
by a Spanish newspaper ABC, and the Catalan prime
minister had to resign. The funny thing is that he
left the government to run for the current elections
for the Spanish Congress. This infuriated Aznar. A
week later, ETA announced a special truce only for
Catalonia. This is new in ETA history. They had never
singled out a territory before. They claimed that we
were cool because our government was leftist and
independentist. This, as you can imagine, infuriated
Aznar even more. Last week, this is the third turn of
the screw, the Spanish police arrested two ETA
terrorist who were heading towards Madrid, driving a
van full of dinamite. They had plans to bomb Madrid.
This is why everyone assumed it was ETA right away.
The question is if ETA has emulated Al Qaeda by
bombing without warning (they usually warned before if
they attacked civilians) and by planning a massacre.
More people died in Madrid today than were killed by
ETA in the last 20 years, I think.
This is the story so far. Spain has not finished
fighting an inside demon and is already facing a new
screen, a larger scale terror. Aznar will pay a big
price for it."
Note: the Economist mentions a similar set of facts (although B. is the first to put them in English, that I am aware of).
Friday, March 12, 2004
Thursday, March 11, 2004
Bollettino
We don’t understand what happened in Spain.
Politics promotes a certain emotional viciousness, which consists in the immediate assimilation of an event into an intellectual scheme. And that scheme gives us, automatically, villains and victims. The scum who did it – always scum, always the name hurled after the bomb.
We don’t understand why the train station was bombed. We don’t understand why instant understanding is conveyed in the reports of the bombing, as if we already knew all about it, as if we already knew that ETA did it, as if we already knew the bombs were there, as if we already knew the number of victims and their names, as if we already knew about every wound, as if we already knew all about the shock, as if we had already read the script, as if we were already bystanders and survivors, as if we already knew all about surviving, as if we had earned any of this.
We already know so much about 9/11 that we have no interest in knowing about 9/11 – and so the story of how that happened, and what happened, and how they did it, a story that has deviated more and more from what we already knew (as in, for instance, just what weapons Mohammed Atta’s group possessed) doesn’t concern us.
And so we will already know in the weeks ahead all about the bombing in Madrid. Such endless knowing, such endless ignorance, such an endless train of ghosts.
We don’t understand what happened in Spain.
Politics promotes a certain emotional viciousness, which consists in the immediate assimilation of an event into an intellectual scheme. And that scheme gives us, automatically, villains and victims. The scum who did it – always scum, always the name hurled after the bomb.
We don’t understand why the train station was bombed. We don’t understand why instant understanding is conveyed in the reports of the bombing, as if we already knew all about it, as if we already knew that ETA did it, as if we already knew the bombs were there, as if we already knew the number of victims and their names, as if we already knew about every wound, as if we already knew all about the shock, as if we had already read the script, as if we were already bystanders and survivors, as if we already knew all about surviving, as if we had earned any of this.
We already know so much about 9/11 that we have no interest in knowing about 9/11 – and so the story of how that happened, and what happened, and how they did it, a story that has deviated more and more from what we already knew (as in, for instance, just what weapons Mohammed Atta’s group possessed) doesn’t concern us.
And so we will already know in the weeks ahead all about the bombing in Madrid. Such endless knowing, such endless ignorance, such an endless train of ghosts.
Tuesday, March 9, 2004
Bollettino
Bring back Gustavus Meyers.
When LI was a young and impressionable pup, he read an abridged version of Gustavus Myers “History of the Great American Fortunes.” It was, we believe, the Modern Library version. The book made a great impression on LI. It is always a great moment when a man finds words spelling out his obscure resentments -- it always leads to religious conversion or politics. For LI, it lead to politics. And here we are today!
This has all come back to us since finding a Myers devotee on the web – one who has actually put up whole books of Myers, such as his history of Tammany Hall. As well as the beloved, muckraking “American Fortunes.”
Gustavus Meyers was a rather unique combination of historian and muckraker. A brief bio exists his website. His great period was coincident with the great muckraking period – 1900-1917. His preferred rhetorical approach was the diatribe. Here’s a typical Meyers graf. He begins his history of Great American Fortunes with the first great American millionaire, John Jacob Astor. Astor made his money, originally, in the fur trade. Meyers provides a scoriating account of the way Astor’s company pursued the beaver pelt and the Indian in his first chapter. His second chapter begins:
“While at the outposts, and in the depths, of the Western wilderness an armed host was working and cheating for Astor, and, in turn, being cheated by their employer ; while, for Astor’s gain, they were violating all laws, debauching, demoralizing and beggaring entire tribes of Indians, slaying and often being themselves slain in retaliation, what was the beneficiary of this orgy of crime and bloodshed doing in New York ?”
Unfortunately, nobody writes like Myers any more. Nicholas Hoffman used to, but Hoffman is generally a clumsy butcher. There are times that his whacking is inspired, but compared to Myers it is as weak as is an apprentice homicide’s weekend in contrast with a night of Jack the Ripper's.
Myers was incensed that wealth had bent the American democracy to fit its oligarchic ends, and he trumpeted that belief from one end of his work to the other. He would find our current predicament, with a weak minded pawn of the malefactors of great wealth leading our country into a fiscal debauch from which the middle class is only going to escape by the skin of its teeth, grimly amusing – didn’t he tell us? Over and over again, he told us. Here is an observation about Astor’s contempt for the law that is quite contemporary:
As applied to the business and landowning class, law was notoriously a flexible, convenient, and highly adaptable function. By either the tacit permission or connivance of Government, this class was virtually, in most instances, its own law-regulator. It could consistently, and without being seriously interfered with, violate such laws as suited its interests, while calling for the enactment or enforcement of other laws which favored its designs and enhanced its profits. We see Astor ruthlessly brushing aside, like so many annoying encumbrances, even those very laws which were commonly held indispensable to a modicum of fair treatment of the Indians and to the preservation of human life. These laws happened to conflict with the amassing of profits ; and always in a civilization ruled by the trading class, laws which do this are either unceremoniously trampled upon, evaded or repealed.
For confirmation of which sentiments, go to the Biz section of today’s Times – any day’s Times since we’ve been keeping this website. Let’s see: for today, we have Martha Stewart. We have the bilking of Shell’s investors by the management. We have labor’s doldrums, which are partly the result of the labor gerontocracy’s refusal to confront the government on the laws designed to suppress unions. And we have the Tyco case, with its million dollar birthday party for Tyco’s ex-CEO.
Vernon Lewis Parrington’s Currents of American Thought has a nice little essay on the Muckrakers and Liberalism, which has been put on-line here.
Bring back Gustavus Meyers.
When LI was a young and impressionable pup, he read an abridged version of Gustavus Myers “History of the Great American Fortunes.” It was, we believe, the Modern Library version. The book made a great impression on LI. It is always a great moment when a man finds words spelling out his obscure resentments -- it always leads to religious conversion or politics. For LI, it lead to politics. And here we are today!
This has all come back to us since finding a Myers devotee on the web – one who has actually put up whole books of Myers, such as his history of Tammany Hall. As well as the beloved, muckraking “American Fortunes.”
Gustavus Meyers was a rather unique combination of historian and muckraker. A brief bio exists his website. His great period was coincident with the great muckraking period – 1900-1917. His preferred rhetorical approach was the diatribe. Here’s a typical Meyers graf. He begins his history of Great American Fortunes with the first great American millionaire, John Jacob Astor. Astor made his money, originally, in the fur trade. Meyers provides a scoriating account of the way Astor’s company pursued the beaver pelt and the Indian in his first chapter. His second chapter begins:
“While at the outposts, and in the depths, of the Western wilderness an armed host was working and cheating for Astor, and, in turn, being cheated by their employer ; while, for Astor’s gain, they were violating all laws, debauching, demoralizing and beggaring entire tribes of Indians, slaying and often being themselves slain in retaliation, what was the beneficiary of this orgy of crime and bloodshed doing in New York ?”
Unfortunately, nobody writes like Myers any more. Nicholas Hoffman used to, but Hoffman is generally a clumsy butcher. There are times that his whacking is inspired, but compared to Myers it is as weak as is an apprentice homicide’s weekend in contrast with a night of Jack the Ripper's.
Myers was incensed that wealth had bent the American democracy to fit its oligarchic ends, and he trumpeted that belief from one end of his work to the other. He would find our current predicament, with a weak minded pawn of the malefactors of great wealth leading our country into a fiscal debauch from which the middle class is only going to escape by the skin of its teeth, grimly amusing – didn’t he tell us? Over and over again, he told us. Here is an observation about Astor’s contempt for the law that is quite contemporary:
As applied to the business and landowning class, law was notoriously a flexible, convenient, and highly adaptable function. By either the tacit permission or connivance of Government, this class was virtually, in most instances, its own law-regulator. It could consistently, and without being seriously interfered with, violate such laws as suited its interests, while calling for the enactment or enforcement of other laws which favored its designs and enhanced its profits. We see Astor ruthlessly brushing aside, like so many annoying encumbrances, even those very laws which were commonly held indispensable to a modicum of fair treatment of the Indians and to the preservation of human life. These laws happened to conflict with the amassing of profits ; and always in a civilization ruled by the trading class, laws which do this are either unceremoniously trampled upon, evaded or repealed.
For confirmation of which sentiments, go to the Biz section of today’s Times – any day’s Times since we’ve been keeping this website. Let’s see: for today, we have Martha Stewart. We have the bilking of Shell’s investors by the management. We have labor’s doldrums, which are partly the result of the labor gerontocracy’s refusal to confront the government on the laws designed to suppress unions. And we have the Tyco case, with its million dollar birthday party for Tyco’s ex-CEO.
Vernon Lewis Parrington’s Currents of American Thought has a nice little essay on the Muckrakers and Liberalism, which has been put on-line here.
Sunday, March 7, 2004
Bollettino
As readers of my previous post can tell, LI is in a bit of misery right now. Free fall, hysteria, calls to my brother, walks over bridges with an eye to trajectory, fall, unconsciousness, drowning.
But let’s get away from the personal, shall we? And take up the subject of models. Economic models.
In the Summer of 2001, the Journal of Social Research published a special issue on numbers and economics. This turns out to have been a timely topic, for at the moment, we are seeing economic numbers bifurcate in an unusual manner. On the one hand, we are in the midst of a strong business recovery – on the other hand, we are in the midst of a credit bubble, a wage meltdown, and a growth in unemployment and partial employment that is effecting us all – LI’s desperation, which see.
One aspect of this disturbance in the global economy is the three year collapse of economic forecasts. Although the Bush tax cut model was really not about sustaining us in a recession, the forecasts that have emanated from the White House are not just mendacious. They are underpinned by orthodox economic models. If the economy was recovering from a post-World War II recession along regular lines (given the absence of anything like an oil shock), we shouldn’t be seeing the sluggishness in the job market, or the slowdown in income increases, that we are seeing. Everybody, I think, agrees about that. In the Outlook section of the Washington Post today, there is an amusing article that uses Neal Stephenson’s Snow Crash as a template for understanding the current anxiety about outsourcing. In Stephenson’s dystopic America, the only things that Americans produce competitively, any more, are micro-coding, t shirt slogans, and pizza delivery. As the author, an editor at U.S. News remarks, we might not be producing micro-coding competitively any more.
Read WP's article along side this thumb-sucker from the NYT. The pizza deliveryman future is no joke. The article cites Bill Gates recent campaign to get more students in IT classes:
[Gates cites] recent Bureau of Labor Statistics projections for 2002 to 2012 indicating a 57 percent increase in the number of jobs (up by 106,000) for network systems and data communications analysts and a 46 percent rise (up by 179,000) in positions for software engineers in applications.
But some economists point to those same federal forecasts to poke holes in the argument that the key to job creation is more sophisticated education and knowledge. Yes, the greatest increase is expected to be for registered nurses (an increase of 623,000 jobs) and college and university teachers (an increase of 603,000).
But according to forecasts issued last month by the Bureau of Labor Statistics, 7 of the 10 occupations with the greatest growth through 2012 will be in low-wage, service fields requiring little education: retail salesperson, customer service representative, food-service worker, cashier, janitor, waiter and nursing aide and hospital orderly. Many of these jobs pay less than $18,000 a year. Forecasting an increase of 21 million jobs from 2002 to 2012, the bureau predicted 596,000 more retail sales jobs, 454,000 more food-service jobs and 454,000 more cashier positions."
LI, when not hitting the walls, is curious about the deep structure of the theoretical problem here. What are economic models, anyway?
In Measure for Measure: How Economists Model the World into Numbers, by a Dutch economist, Marcel Boumans, the answer is: models are instruments for seeing.
Here’s how he states his argument.
“This paper will argue that in economics, models function as such instruments of observation--more specifically, as measuring instruments. In measurement theory, measurement is the mapping of a property of the empirical world into a set of numbers. This paper's view is that economic modeling is a specific kind of mapping to which the standard account on how models are obtained and assessed does not apply. Models are not easily or simply derived from theories and subsequently tested against empirical data. Instruments are constructed by integrating theoretical and empirical ideas and requirements in such a way that their performance meets a previously chosen standard.”
Boumans’ first section starts with an intriguing quote:
“…Morrison and Morgan (1999) have shown that models in economics still function as if they were physical instruments. They can function as such because they involve some form of representation. This representative power enables us to learn something about the thing it represents. But,
we do not learn much from looking at a model--we learn more from building
the model and manipulating it. Just as one needs to use or observe the use
of a hammer in order to really understand its function, similarly, models
have to be used before they will give up their secrets. In this sense, they
have the quality of a technology--the power of the model only becomes
apparent in the context of its use (Morrison and Morgan, 1999: 12).”
This is a deconstructive moment. Boumans has presented the model, in his abstract, as a way of seeing – but what he seems to be tending towards is a way of reading. The conflation of reading and seeing is at the heart of the Derridian renewal of ecriture – a renewal that seems to have been forgotten, even among Derridians. That it is forgotten is generated by its structure – the difference between seeing and reading functions, in the Derridean version of Western metaphysics, as a self-erasing concept – it emerges only to vanish. The problem with the deconstruction is that it seems impervious to historical contingency. Actually, we think that deconstruction’s a-historical structures can be usefully historicized, and that Derrida’s attention to privileged metaphors and examples reflects the way the structure is historicized. Hence, that Heideggerian hammer that turns up, unexpectedly, in Morrison and Morgan’s quote.
But let’s not go that route. Instead, let’s go to sections 4 and 5 of Boumanss paper, on calibration. Here, again, there is a dominant instrument – a familiar one – the clock. The clock is an example of what Herbert Simon, and Boumans, calls the artifact:
“To clarify this definition of an artifact, Simon uses the example of a clock. The purpose of a clock is to measure time. The inner environment of the clock is its internal construction. Simon emphasizes that whether a clock will in fact tell time is also dependent on where it is placed. The artifact is molded by the environment: a sundial performs as a clock in sunny climates, but to devise a clock that would tell time on a rolling and pitching ship it has to be endowed with "many delicate properties, some of them largely or totally irrelevant to the performance of a landlubber's clock" (6).
The designer insulates the inner system from the environment, so that an
invariant relation is maintained between inner system and goal, independent
of variations over a wide range in most parameters that characterize the
outer environment (9).
In contrast to physics, in which one is able to create stable environments for measurements, in economics one has often to take measurements in a constantly changing environment.”
If the environment keeps changing, the example of the clock suggests putting things into models that don’t change – invariants. Boumans provides a very interesting discussion of what those invariants consist of, and how they were formulated in the post War era. He touches on one set of invariants that proved very popular: Kaldor’s “stylized facts” of growth. Kaldor developed this typical pattern of growth, supposedly from comparing the paths of development in capitalist economies, and inscribed it in a template. This template then became a regulator – the parametric invariants to which models of business cyclic behavior would refer.
The problem, as Boumans acknowledges, is the deleterious effect of stylization on ‘fact.”
“Although we have seen that equilibrium business-cycle modelers aim to model from invariants, the choice to take these stylized facts as empirical facts of growth is dubious. Solow already remarked that "there is no doubt that they are stylized, though it is possible to question whether they are facts" (1970: 2). The danger is that stylized facts may turn out to be more stylized than factual. Hacche provided an account of the British-American evidence relating to Kaldor's six stylized facts and showed inconsistencies between economic history and Kaldor's stylized facts:
the data for the United Kingdom provide little support for the hypothesis
that there is some "steady trend" or "normal" growth rate of capital or
output or both running through economic history--which is what Kaldor's
stylised facts suggest--unless the interpretation of the hypothesis is so
liberal as to bear little meaning (1979: 278). “
It seems to us that we have run into a problem in the last three years – and really, a problem stretching back into the nineties. It is that the stylized facts of growth, derived from the Depression through the Reagan years, no longer give us accurate readings.
Boumans ends his paper on an excessively modest note: “To come back to the title of this paper, now put as a question--"How Do Economists Model the World into Numbers?"--my answer is that economists, after a century of mathematical modeling, now prefer very simple mechanisms with the faith that they will be calibrated in the future.”
Ourselves, we think that the essence of the problems now facing us come down to the problem of composition. That is, given the equilibrium models economists use to forecast the effect of policy, we have ignored, for too long, as an effect that can be theoretically cancelled out, shifts in the composition of an economy. These shifts, both in the relative wealth that defines the class structure and in the economy’s mechanisms for production and consumption, have been considered by economists to be secondary correlates, infinitely permeable, that derive from flows of capital that happily obey the equilibrium models economists set up.
Well, we are now seeing the revenge of composition on the models of the economists. A rare and terrible moment.
As readers of my previous post can tell, LI is in a bit of misery right now. Free fall, hysteria, calls to my brother, walks over bridges with an eye to trajectory, fall, unconsciousness, drowning.
But let’s get away from the personal, shall we? And take up the subject of models. Economic models.
In the Summer of 2001, the Journal of Social Research published a special issue on numbers and economics. This turns out to have been a timely topic, for at the moment, we are seeing economic numbers bifurcate in an unusual manner. On the one hand, we are in the midst of a strong business recovery – on the other hand, we are in the midst of a credit bubble, a wage meltdown, and a growth in unemployment and partial employment that is effecting us all – LI’s desperation, which see.
One aspect of this disturbance in the global economy is the three year collapse of economic forecasts. Although the Bush tax cut model was really not about sustaining us in a recession, the forecasts that have emanated from the White House are not just mendacious. They are underpinned by orthodox economic models. If the economy was recovering from a post-World War II recession along regular lines (given the absence of anything like an oil shock), we shouldn’t be seeing the sluggishness in the job market, or the slowdown in income increases, that we are seeing. Everybody, I think, agrees about that. In the Outlook section of the Washington Post today, there is an amusing article that uses Neal Stephenson’s Snow Crash as a template for understanding the current anxiety about outsourcing. In Stephenson’s dystopic America, the only things that Americans produce competitively, any more, are micro-coding, t shirt slogans, and pizza delivery. As the author, an editor at U.S. News remarks, we might not be producing micro-coding competitively any more.
Read WP's article along side this thumb-sucker from the NYT. The pizza deliveryman future is no joke. The article cites Bill Gates recent campaign to get more students in IT classes:
[Gates cites] recent Bureau of Labor Statistics projections for 2002 to 2012 indicating a 57 percent increase in the number of jobs (up by 106,000) for network systems and data communications analysts and a 46 percent rise (up by 179,000) in positions for software engineers in applications.
But some economists point to those same federal forecasts to poke holes in the argument that the key to job creation is more sophisticated education and knowledge. Yes, the greatest increase is expected to be for registered nurses (an increase of 623,000 jobs) and college and university teachers (an increase of 603,000).
But according to forecasts issued last month by the Bureau of Labor Statistics, 7 of the 10 occupations with the greatest growth through 2012 will be in low-wage, service fields requiring little education: retail salesperson, customer service representative, food-service worker, cashier, janitor, waiter and nursing aide and hospital orderly. Many of these jobs pay less than $18,000 a year. Forecasting an increase of 21 million jobs from 2002 to 2012, the bureau predicted 596,000 more retail sales jobs, 454,000 more food-service jobs and 454,000 more cashier positions."
LI, when not hitting the walls, is curious about the deep structure of the theoretical problem here. What are economic models, anyway?
In Measure for Measure: How Economists Model the World into Numbers, by a Dutch economist, Marcel Boumans, the answer is: models are instruments for seeing.
Here’s how he states his argument.
“This paper will argue that in economics, models function as such instruments of observation--more specifically, as measuring instruments. In measurement theory, measurement is the mapping of a property of the empirical world into a set of numbers. This paper's view is that economic modeling is a specific kind of mapping to which the standard account on how models are obtained and assessed does not apply. Models are not easily or simply derived from theories and subsequently tested against empirical data. Instruments are constructed by integrating theoretical and empirical ideas and requirements in such a way that their performance meets a previously chosen standard.”
Boumans’ first section starts with an intriguing quote:
“…Morrison and Morgan (1999) have shown that models in economics still function as if they were physical instruments. They can function as such because they involve some form of representation. This representative power enables us to learn something about the thing it represents. But,
we do not learn much from looking at a model--we learn more from building
the model and manipulating it. Just as one needs to use or observe the use
of a hammer in order to really understand its function, similarly, models
have to be used before they will give up their secrets. In this sense, they
have the quality of a technology--the power of the model only becomes
apparent in the context of its use (Morrison and Morgan, 1999: 12).”
This is a deconstructive moment. Boumans has presented the model, in his abstract, as a way of seeing – but what he seems to be tending towards is a way of reading. The conflation of reading and seeing is at the heart of the Derridian renewal of ecriture – a renewal that seems to have been forgotten, even among Derridians. That it is forgotten is generated by its structure – the difference between seeing and reading functions, in the Derridean version of Western metaphysics, as a self-erasing concept – it emerges only to vanish. The problem with the deconstruction is that it seems impervious to historical contingency. Actually, we think that deconstruction’s a-historical structures can be usefully historicized, and that Derrida’s attention to privileged metaphors and examples reflects the way the structure is historicized. Hence, that Heideggerian hammer that turns up, unexpectedly, in Morrison and Morgan’s quote.
But let’s not go that route. Instead, let’s go to sections 4 and 5 of Boumanss paper, on calibration. Here, again, there is a dominant instrument – a familiar one – the clock. The clock is an example of what Herbert Simon, and Boumans, calls the artifact:
“To clarify this definition of an artifact, Simon uses the example of a clock. The purpose of a clock is to measure time. The inner environment of the clock is its internal construction. Simon emphasizes that whether a clock will in fact tell time is also dependent on where it is placed. The artifact is molded by the environment: a sundial performs as a clock in sunny climates, but to devise a clock that would tell time on a rolling and pitching ship it has to be endowed with "many delicate properties, some of them largely or totally irrelevant to the performance of a landlubber's clock" (6).
The designer insulates the inner system from the environment, so that an
invariant relation is maintained between inner system and goal, independent
of variations over a wide range in most parameters that characterize the
outer environment (9).
In contrast to physics, in which one is able to create stable environments for measurements, in economics one has often to take measurements in a constantly changing environment.”
If the environment keeps changing, the example of the clock suggests putting things into models that don’t change – invariants. Boumans provides a very interesting discussion of what those invariants consist of, and how they were formulated in the post War era. He touches on one set of invariants that proved very popular: Kaldor’s “stylized facts” of growth. Kaldor developed this typical pattern of growth, supposedly from comparing the paths of development in capitalist economies, and inscribed it in a template. This template then became a regulator – the parametric invariants to which models of business cyclic behavior would refer.
The problem, as Boumans acknowledges, is the deleterious effect of stylization on ‘fact.”
“Although we have seen that equilibrium business-cycle modelers aim to model from invariants, the choice to take these stylized facts as empirical facts of growth is dubious. Solow already remarked that "there is no doubt that they are stylized, though it is possible to question whether they are facts" (1970: 2). The danger is that stylized facts may turn out to be more stylized than factual. Hacche provided an account of the British-American evidence relating to Kaldor's six stylized facts and showed inconsistencies between economic history and Kaldor's stylized facts:
the data for the United Kingdom provide little support for the hypothesis
that there is some "steady trend" or "normal" growth rate of capital or
output or both running through economic history--which is what Kaldor's
stylised facts suggest--unless the interpretation of the hypothesis is so
liberal as to bear little meaning (1979: 278). “
It seems to us that we have run into a problem in the last three years – and really, a problem stretching back into the nineties. It is that the stylized facts of growth, derived from the Depression through the Reagan years, no longer give us accurate readings.
Boumans ends his paper on an excessively modest note: “To come back to the title of this paper, now put as a question--"How Do Economists Model the World into Numbers?"--my answer is that economists, after a century of mathematical modeling, now prefer very simple mechanisms with the faith that they will be calibrated in the future.”
Ourselves, we think that the essence of the problems now facing us come down to the problem of composition. That is, given the equilibrium models economists use to forecast the effect of policy, we have ignored, for too long, as an effect that can be theoretically cancelled out, shifts in the composition of an economy. These shifts, both in the relative wealth that defines the class structure and in the economy’s mechanisms for production and consumption, have been considered by economists to be secondary correlates, infinitely permeable, that derive from flows of capital that happily obey the equilibrium models economists set up.
Well, we are now seeing the revenge of composition on the models of the economists. A rare and terrible moment.
Friday, March 5, 2004
Bollettino
Hysteria
So I come home.
So I come home and I am already unhappy. So I come home and I already know that once again, four weeks after I sent the invoices to these various places I’ve worked at, there will be no check in the box for me. So I come home, and I have a rash, a poison ivy rash, because I worked pulling out weeds and tangled up vines and rogue lantana and shit for my man, and there must have been poison ivy among the mix, and though a rash on my arms is take-able, I’ll lose a little sleep, yes, with the desire to scratch, the bad thing is that this poison ivy rash has somehow got on my dick, which hasn’t happened to me before, how it got there I’d rather not think, although actually, the hand to dick thing peeing at the hamburger place after pulling up the weeds must have done it, not that I am so unaware that I usually don’t wash before I pull it out when I suspect I might have been around poison ivy, but I must have. So I come home and I’m walking home wondering the usual wonder in my head, that money whisper, how am I going to make it, how am I going to make it. So I come home and there is a green notice on the door, last thing I need, very last thing. So it is from the electric company, I sent them sixty but no, the electric company has lately been putting its thumb on the deadbeats and the poor, and I have had to fight with them every month. So I come home and see this and burst into tears, because with the poison ivy on my dick and the no money in the mailbox and the no future that I can see spreading out, one more year, before me of fighting with the electric company and pulling weeds and not getting paid for my work all so that I can survive in this little efficiency like a fly dying in a bottle, I am not happy. So I am not at all happy and crying and dialing the number printed on the green ticket, and of course the number takes me to a fucking forever menu of choices, one of which, the disconnect or problems with the bill, is my choice of choices. So I’d like to disconnect. So I’d like to disconnect permanently. So I wait, and I wait, and I wait, and I’m pacing and crying and cussing the electric company, and time goes rudely by, fifteen minutes. So I finally hear a voice at the other end, coming through the receiver I’ve put down, and I take the receiver up and I get into our shit, the electric company’s and mine. So I begin by noting the rudeness of the wait, and how typical that rudeness is, and how I’ve paid sixty, and the man at the other end is how I have to pay one hundred sixty more, I have to pay the whole bill, no way I can pay the whole fucking bill, sir watch the language, this is the back and forth, this is the discourse coming out of our mouths, this is the shit we are getting into. So I am I don’t fucking care about my language, I don’t have one hundred sixty, do you want to suck my blood, do you want me to die, I can maybe come up with twenty, fucking twenty, and he is you are late on your payment plan so you have to pay the whole thing. So I am yelling now, and he is do you want to speak to my supervisor, and I am yeah, let’s do that, knowing that that was going to happen, it always happens. So I am not feeling strong, or good, or able here, and the phone gives me the disinterest and fake-y music, classical music, for another five ten minute interval, corrupting whatever that music was into the usual corporate doorstop that they stuff in my ear, if my ear was attached to a guy dumb enough to be pressing the phone for all that length of time. So the other guy finally comes on, and exhaustion has set in, and he offers me a deal – in a week, if I can come up with forty two dollars, I can actually keep my electric service until next month. So of course I’m grateful, I mean how long has it been since I’ve had any marrow whatsoever in my spine, I bend over, I kiss ass, I would kiss so much ass if ass was presented, and I say to the guy, I say, tell the gentleman I was talking to that I apologize for the language. So I say that. So tonight I feel exactly as though I’d been excreted into my worst nightmare of a world, there are acidic threads, there are balls of fat, there is a world of brown before my eyes like I'm drowning in browns down toilet crytic halls, and what I want to know is how do they do it? So how do they off themselves, these Wall Street guys, the ones that have everything and then the bad bet comes in and the stock is worthless and they fling themselves from high windows, or the gas in the garage, or maybe take out the family. So how do they get the courage to do that, and why have I never even held a serious knife to my veins, in spite of my stock having been worthless in every department in every sad sexual existential monetary human way for five to ten years at least, at least, at least...
Hysteria
So I come home.
So I come home and I am already unhappy. So I come home and I already know that once again, four weeks after I sent the invoices to these various places I’ve worked at, there will be no check in the box for me. So I come home, and I have a rash, a poison ivy rash, because I worked pulling out weeds and tangled up vines and rogue lantana and shit for my man, and there must have been poison ivy among the mix, and though a rash on my arms is take-able, I’ll lose a little sleep, yes, with the desire to scratch, the bad thing is that this poison ivy rash has somehow got on my dick, which hasn’t happened to me before, how it got there I’d rather not think, although actually, the hand to dick thing peeing at the hamburger place after pulling up the weeds must have done it, not that I am so unaware that I usually don’t wash before I pull it out when I suspect I might have been around poison ivy, but I must have. So I come home and I’m walking home wondering the usual wonder in my head, that money whisper, how am I going to make it, how am I going to make it. So I come home and there is a green notice on the door, last thing I need, very last thing. So it is from the electric company, I sent them sixty but no, the electric company has lately been putting its thumb on the deadbeats and the poor, and I have had to fight with them every month. So I come home and see this and burst into tears, because with the poison ivy on my dick and the no money in the mailbox and the no future that I can see spreading out, one more year, before me of fighting with the electric company and pulling weeds and not getting paid for my work all so that I can survive in this little efficiency like a fly dying in a bottle, I am not happy. So I am not at all happy and crying and dialing the number printed on the green ticket, and of course the number takes me to a fucking forever menu of choices, one of which, the disconnect or problems with the bill, is my choice of choices. So I’d like to disconnect. So I’d like to disconnect permanently. So I wait, and I wait, and I wait, and I’m pacing and crying and cussing the electric company, and time goes rudely by, fifteen minutes. So I finally hear a voice at the other end, coming through the receiver I’ve put down, and I take the receiver up and I get into our shit, the electric company’s and mine. So I begin by noting the rudeness of the wait, and how typical that rudeness is, and how I’ve paid sixty, and the man at the other end is how I have to pay one hundred sixty more, I have to pay the whole bill, no way I can pay the whole fucking bill, sir watch the language, this is the back and forth, this is the discourse coming out of our mouths, this is the shit we are getting into. So I am I don’t fucking care about my language, I don’t have one hundred sixty, do you want to suck my blood, do you want me to die, I can maybe come up with twenty, fucking twenty, and he is you are late on your payment plan so you have to pay the whole thing. So I am yelling now, and he is do you want to speak to my supervisor, and I am yeah, let’s do that, knowing that that was going to happen, it always happens. So I am not feeling strong, or good, or able here, and the phone gives me the disinterest and fake-y music, classical music, for another five ten minute interval, corrupting whatever that music was into the usual corporate doorstop that they stuff in my ear, if my ear was attached to a guy dumb enough to be pressing the phone for all that length of time. So the other guy finally comes on, and exhaustion has set in, and he offers me a deal – in a week, if I can come up with forty two dollars, I can actually keep my electric service until next month. So of course I’m grateful, I mean how long has it been since I’ve had any marrow whatsoever in my spine, I bend over, I kiss ass, I would kiss so much ass if ass was presented, and I say to the guy, I say, tell the gentleman I was talking to that I apologize for the language. So I say that. So tonight I feel exactly as though I’d been excreted into my worst nightmare of a world, there are acidic threads, there are balls of fat, there is a world of brown before my eyes like I'm drowning in browns down toilet crytic halls, and what I want to know is how do they do it? So how do they off themselves, these Wall Street guys, the ones that have everything and then the bad bet comes in and the stock is worthless and they fling themselves from high windows, or the gas in the garage, or maybe take out the family. So how do they get the courage to do that, and why have I never even held a serious knife to my veins, in spite of my stock having been worthless in every department in every sad sexual existential monetary human way for five to ten years at least, at least, at least...
Wednesday, March 3, 2004
Liberty and Virtue! When! oh When will your Ennemies cease to exist and or to persecute!
Our Country will be envied, our Liberty will be envied, our Virtues will be envied. Deep and subtle systems of Corruption hard to prove, impossible to detect, will be practised to sap and undermine Us and the few who penetrate them will be called suspicious, envious, restless turbulent ambitious -- will be hated unpopular and unhappy
But a Succession of these Men must be preserved, for these are the salt of the Earth. Without these the World would be worse than it is. Is not this after all the noblest Ambition. Such Ambition is Virtue. Cato will never be Consull but Catos Ambition was sublimer than Caesars, and his Glory and even his Catastrophy more desirable.
--John Adams
Well, it is Kerry in the one corner, and deep and subtle systems of Corruption hard to prove in the other. Except those systems aren’t really impossible to detect – we know all about Cheney, Bush, Rumsfeld and Wolfowitz. As for Kerry, his vote to give the Prez power to declare war on Iraq shows that he’s given his heart to Corruption before. This is the point the Dean people make, and they are right.
However, oddly enough, this election, we don’t care. We think that Bush has to be pushed out. Kerry’s the man to do it. All his vices – his pomposity, his flip flops, his vanity – have been changed into virtues in this campaign. They have made him seem serious, seem to hew to the radical center, seem presidential. It is easy for a presidential candidate to seem more presidential than a man who utters phrases like “bring it on” when asked about our war dead. Bush habitually speaks like someone’s retarded child trying to hold the picture of Jesus right side up as he reads his Sunday School book report. Contra the asinine spin purveyed by Todd Purdem in today’s NYT(“Mr. Bush has shown himself to be a sharp, disciplined, resourceful political infighter when his back is against the wall. "No more Mr. Nice Guy" may now be the phrase of the day.”), Mr. Bush has had the luck never to really campaign with his back against the wall. As a class clown, it was hard not to like him against Al Gore’s imitation of a smug class valedictorian. As Mr. Mission Accomplished, I think he will amply exploit his opportunities to look ridiculous. It is a matter of the Dems seeing through the media spin to the man. If they do, they will nail this campaign.
Behind the campaign, however, there is the sickly state of the State. The Economist published a pretty harsh article last week entitled “The Phoney Recovery.” In it, they skewered, with their conservative economic sense, the ‘biggest credit bubble in history.” In other words, our economy, circa 2001-2004.
We loved these two grafs – and by the way, the romance with Greenspan seems to be on its last legs:
“Although concerned about budget deficits, Mr Greenspan argued this week that the recent surge in household debt is relatively harmless for the very reason that it has been accompanied by big gains in household assets. According to such an interpretation, the drop in household saving, to only 1.5% of personal income in December, is no cause for alarm: households no longer need to save, because rising wealth in shares and homes will do it for them.
The snag is that the "wealth" being built up is partly phoney. In a recent report, the Bank of England argued that rising house prices do not create genuine wealth in aggregate. Those who have yet to buy a home suffer a loss of purchasing power, so rising prices redistribute wealth, they do not create it. More serious is that the price of homes or shares can fall, while debts are fixed in value. In the long run, the only way to create genuine wealth is to consume less than income, and to invest in real income-creating assets.”
In other words, like everybody’s favorite Oscar movie this year, Americans are opting for the hobbit economy. Build those hobbit houses and mortgage those hobbit houses and sing those Celtic songs, boys, cause the jobs ain’t coming back. Or something equally elvish.
The article also contrasts the most startling evidence, to our mind, for the effect of trying to maintain an economy with the most unequal distribution of wealth since the thirties with a burden of entitlements that were accrued for a very different economy from the forties through the nineties.
“Strikingly, although GDP has grown by a robust 4.3% over the past year, wage income rose by barely 1% in real terms. According to Kurt Richebacher, an independent economist who publishes a monthly newsletter, wages and salaries have, on average, increased by 9% in real terms in the first two years of previous post-war recoveries, but have been almost flat over the past two years, thanks to the sickly jobs market.”
We think the last phrase is a bit misleading. It isn’t only the sickly jobs market, it is that wages in jobs, for the employed, are pretty much at a standstill. In other periods of globablisation, the tremendous wealth amassed by the top 1 percent has been redistributed, by the force of unions and a militant working and middle class, downward. Not this time. So the reserve army of the unemployed can’t be the entire cause of the flatness of wage increases.
Our Country will be envied, our Liberty will be envied, our Virtues will be envied. Deep and subtle systems of Corruption hard to prove, impossible to detect, will be practised to sap and undermine Us and the few who penetrate them will be called suspicious, envious, restless turbulent ambitious -- will be hated unpopular and unhappy
But a Succession of these Men must be preserved, for these are the salt of the Earth. Without these the World would be worse than it is. Is not this after all the noblest Ambition. Such Ambition is Virtue. Cato will never be Consull but Catos Ambition was sublimer than Caesars, and his Glory and even his Catastrophy more desirable.
--John Adams
Well, it is Kerry in the one corner, and deep and subtle systems of Corruption hard to prove in the other. Except those systems aren’t really impossible to detect – we know all about Cheney, Bush, Rumsfeld and Wolfowitz. As for Kerry, his vote to give the Prez power to declare war on Iraq shows that he’s given his heart to Corruption before. This is the point the Dean people make, and they are right.
However, oddly enough, this election, we don’t care. We think that Bush has to be pushed out. Kerry’s the man to do it. All his vices – his pomposity, his flip flops, his vanity – have been changed into virtues in this campaign. They have made him seem serious, seem to hew to the radical center, seem presidential. It is easy for a presidential candidate to seem more presidential than a man who utters phrases like “bring it on” when asked about our war dead. Bush habitually speaks like someone’s retarded child trying to hold the picture of Jesus right side up as he reads his Sunday School book report. Contra the asinine spin purveyed by Todd Purdem in today’s NYT(“Mr. Bush has shown himself to be a sharp, disciplined, resourceful political infighter when his back is against the wall. "No more Mr. Nice Guy" may now be the phrase of the day.”), Mr. Bush has had the luck never to really campaign with his back against the wall. As a class clown, it was hard not to like him against Al Gore’s imitation of a smug class valedictorian. As Mr. Mission Accomplished, I think he will amply exploit his opportunities to look ridiculous. It is a matter of the Dems seeing through the media spin to the man. If they do, they will nail this campaign.
Behind the campaign, however, there is the sickly state of the State. The Economist published a pretty harsh article last week entitled “The Phoney Recovery.” In it, they skewered, with their conservative economic sense, the ‘biggest credit bubble in history.” In other words, our economy, circa 2001-2004.
We loved these two grafs – and by the way, the romance with Greenspan seems to be on its last legs:
“Although concerned about budget deficits, Mr Greenspan argued this week that the recent surge in household debt is relatively harmless for the very reason that it has been accompanied by big gains in household assets. According to such an interpretation, the drop in household saving, to only 1.5% of personal income in December, is no cause for alarm: households no longer need to save, because rising wealth in shares and homes will do it for them.
The snag is that the "wealth" being built up is partly phoney. In a recent report, the Bank of England argued that rising house prices do not create genuine wealth in aggregate. Those who have yet to buy a home suffer a loss of purchasing power, so rising prices redistribute wealth, they do not create it. More serious is that the price of homes or shares can fall, while debts are fixed in value. In the long run, the only way to create genuine wealth is to consume less than income, and to invest in real income-creating assets.”
In other words, like everybody’s favorite Oscar movie this year, Americans are opting for the hobbit economy. Build those hobbit houses and mortgage those hobbit houses and sing those Celtic songs, boys, cause the jobs ain’t coming back. Or something equally elvish.
The article also contrasts the most startling evidence, to our mind, for the effect of trying to maintain an economy with the most unequal distribution of wealth since the thirties with a burden of entitlements that were accrued for a very different economy from the forties through the nineties.
“Strikingly, although GDP has grown by a robust 4.3% over the past year, wage income rose by barely 1% in real terms. According to Kurt Richebacher, an independent economist who publishes a monthly newsletter, wages and salaries have, on average, increased by 9% in real terms in the first two years of previous post-war recoveries, but have been almost flat over the past two years, thanks to the sickly jobs market.”
We think the last phrase is a bit misleading. It isn’t only the sickly jobs market, it is that wages in jobs, for the employed, are pretty much at a standstill. In other periods of globablisation, the tremendous wealth amassed by the top 1 percent has been redistributed, by the force of unions and a militant working and middle class, downward. Not this time. So the reserve army of the unemployed can’t be the entire cause of the flatness of wage increases.
Bollettino
The thriller as history
The news that France is dealing with a mysterious AZF – a group or an individual – who is threatening to put ten bombs on ten train tracks resembles a less than A list Frederic Forsyth novel. Here’s a translation of Liberation’s sidebar article about one aspect of the incident:
“The mysterious group AZF that is attempting to blackmail the minister of the Interior with a bomb – with proofs at hand and an actual bomb laid on the Paris-Toulouse line on February 21, on the level of the viaduc of Rocherollers, near Limoges – put in place a system of communication with the investigators of one branch of the national police that operated uniquely with personal ads in Liberation.
The investigators have found themselves constrained to obey the instructions put into place by the blackmailers, a sort of terrorism against the commons, meaning that they had to organize their rendez-vous and contacts by way of the personals of Liberation, become the involuntary support of this merchandise since mid February. One of these personal announcements went as follows: “My big wolf, don’t take any unnecessary risks; the sooner the better. Give me your instructions, Suzy.”
Unreal.
The thriller as history
The news that France is dealing with a mysterious AZF – a group or an individual – who is threatening to put ten bombs on ten train tracks resembles a less than A list Frederic Forsyth novel. Here’s a translation of Liberation’s sidebar article about one aspect of the incident:
“The mysterious group AZF that is attempting to blackmail the minister of the Interior with a bomb – with proofs at hand and an actual bomb laid on the Paris-Toulouse line on February 21, on the level of the viaduc of Rocherollers, near Limoges – put in place a system of communication with the investigators of one branch of the national police that operated uniquely with personal ads in Liberation.
The investigators have found themselves constrained to obey the instructions put into place by the blackmailers, a sort of terrorism against the commons, meaning that they had to organize their rendez-vous and contacts by way of the personals of Liberation, become the involuntary support of this merchandise since mid February. One of these personal announcements went as follows: “My big wolf, don’t take any unnecessary risks; the sooner the better. Give me your instructions, Suzy.”
Unreal.
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