Arm Wrestling with the Future?

There are a number of reports floating around today about a new electronics device that holds great promise for reducing circuit size, efficiency, and reliability. It is touted as the new technology which will allow Moore's Law to be extended for another thirty years.

HP Labs reports that a memristor, a theoretical device proposed by Leon Chua of UC Berkeley in 1971 has been realized by R. Stanley Williams' lab at HP.

The memristor — short for memory resistor - could make it possible to develop far more energy-efficient computing systems with memories that retain information even after the power is off, so there's no wait for the system to boot up after turning the computer on. It may even be possible to create systems with some of the pattern-matching abilities of the human brain.

Wikipedia has a good discussion of this new device.

Now, I wonder whether this latest gee whiz device will live up to its billing. If past experience is any guide, there's maybe a 20% chance that all this hoopla is deserved. But that means there's an 80% chance that it will fizzle. Of course you expect that in a few months the fog will life and we will know the truth. In reality, the truth probably won't be clear for 3-5 years. Things always take more time than you expect! It is only in retrospect that you get that gee whiz feeling about how fast the future in on-rushing. For those of us living through "exciting times" it all feels rather banal.

Krugman on What Makes a Recession

I like Paul Krugman. He writes with clarity. Sure he's an academic and can write the math-laden, math model economics that has been so popular for the last 50 years, but at the same time, he can write something that communicates to a broader audience without the math.

Here's a blog entry by Paul Krugman that talks about what makes a modern recession "different" without all the slogging through minutiae and mathematics.

... the economy is only considered to be in a recession when everything is going down. Historically, that hasn’t been a problem, since most recessions have been “V-shaped”: everything plunges, and then everything springs back, so there isn’t much ambiguity about whether the economy is worsening or not.

But since the mid-1980s we have been having “U-shaped” recessions in which the upturn is slow and weak. As a result, things that matter to a lot of people — like the unemployment rate, shown above — keep getting worse long after the official recession period, indicated by the shaded areas. Officially, the recession of 1990-91 was long over by the 1992 election, but people were still very worried about the economy, stupid. The 2001 recession officially ended in November of that year, but the job situation kept getting worse until the middle of 2003.

The point is that the official definition of recession has become delinked from peoples’ actual experience.

What's "Modern" in a Modern Recession?

Robert E. Hall of Stanford has written "How Much Do We Understand about the Modern
Recession?" which identifies some interesting facts about modern recessions:

• A modern recession is one occurring in an economy with well-executed monetary policy and a low fraction of the labor force on the factory floor. ...
• The first important fact is that modern recessions are about as severe in terms of employment as earlier ones, leaving aside the Great Depression. ...
  
• The second important fact is that the decline in employment and rise in unemployment during a modern recession occurs without any important increase in job loss. ...
• ... third important fact: unemployment rises in a modern recession because new jobs are hard to find, not because workers have lost jobs. ...
  
• One of the most important facts about the modern recession is at all sectors of the labor market slacken at the same time.
• If unemployment in a recession were the natural, efficient result of reallocation of workers from shrinking to growing sectors, the growing sectors would open their doors wide to absorb the flow of workers leaving the shrinking sectors. Vacancies would be high in the growing sectors and low in the shrinking ones. The facts shown in Figure 6 refute that view of the most recent recession. Some force made all sectors cut back their recruiting.
• What exogenous forces cause recessions? Three forces are prominent in the accounts of the various schools of macroeconomic thought: productivity, government purchases, and monetary shocks.
• The two modern recessions occurred in the setting of fully modern monetary policy making. In that setting, the central bank responds to outside influences, with the objective of keeping inflation low in the longer run and offsetting booms and recessions in the shorter run. The central bank is not a source of disturbances to the economy.

The heart of the paper discusses esoterica of Nash equilibria and why theory of wages, productivity, and employment levels don't fit the facts. I appreciated the honesty: "We have no idea how to generate a modern recession from the MP model."

Overall the paper is interesting, but you don't walk away feeling satisfied. OK, a modern recession is different, but why do we still have them? It just isn't clear. In my ignorance, I still like the old theory of "animal spirits".

The Political Beast

Alexander Linklater writes an interesting piece about Christopher Hitchens in Prospect. I found it interesting because it provides some biographical details that shed some light on Hitchen's views and evolution. Theorists say you should be "pure" and separate the art from the artist, or in this case the politics from the incendiarist, but I don't find that to be true. Insight into a person helps in understanding the person's work.

For most of his 40-year career, Christopher Hitchens's notoriety has been confined to highbrow journalistic, literary and political circles. In the last 15 years, he has been familiar to readers of Vanity Fair and the Atlantic, and to viewers of the American current affairs shows that invite him on to say outrageous things in stylish phrases. His aptitude for the iconoclastic flourish—describing Princess Diana and Mother Teresa at their deaths, for example, as, respectively, "a simpering Bambi narcissist and a thieving fanatical Albanian dwarf"—sustained his currency as an intellectual shock troop of the left. Then, with his support for the invasions of Afghanistan and Iraq, and for George W Bush's re-election in 2004, the left itself became a target of his polemics. But whichever side he took, he continued to file what were essentially minority reports to a specialist audience. Only God was able to promote him beyond such factional interests by providing the subject of a bestseller. While Hitchens has authored 16 books, including works on Henry Kissinger, Bill Clinton, the Elgin marbles, George Orwell, Thomas Paine and Thomas Jefferson, his assault on religion in God is not Great was the first occasion for which a publisher had arranged a serious US book tour.

Drinking the Kool-Aid of the 'New' New Political Left

Bill Clinton's former US Secretary of the Treasury Lawrence Summers continues to make the case for globalization. But he now tries to present it in a way that is sensitive to the concerns of the left who are anti-trade, anti-immigration, and increasingly isolationist.

... the US is better off with than without trade agreements and that the world will be a richer, safer place with increasing economic integration. ...

But I suspect that the policy debate in the US, and probably in some other countries as well, will need to confront a deeper and broader issue: the gnawing suspicion of many that the very object of internationalist economic policy – the growing prosperity of the global economy – may not be in their interests. ...

... there are reasons to think that economic success abroad will be more problematic for American workers in the future.

First, developing countries increasingly export goods such as computers that the US produces on a significant scale, putting pressure on wages. ...

Second, the growth of countries such as China raises competition for energy and environmental resources, raising the price for Americans.

Third and most fundamentally, growth in the global economy encourages the development of stateless elites whose allegiance is to global economic success and their own prosperity rather than the interests of the nation where they are headquartered. ...

In a world where Americans can legitimately doubt whether the success of the global economy is good for them, it will be increasingly difficult to mobilise support for economic internationalism. The focus must shift from supporting internationalism as traditionally defined to designing an internationalism that more successfully aligns the interests of working people and the middle class in rich countries with the success of the global economy. This will be the subject of my next column...

The justification for free trade is sound, but many on the left decided it is a good issue to push because it is a populist appeal to nationalism, an "us versus them" view of the world, that can effectively mobilize political action. But it is a cynical, manipulative left that does this.
Traditionally the left was internationalist. The idea that free trade maximizes wealth should be a no-brainer for the left. But the "new" new left has decided to cynically ride this issue.

I, for one, and looking forward to the next column by Summers.

How to Lose an Election

The following video shows how a politician can cut his own throat...



Everybody knows that you win elections by pandering to people's greed, to the lowest common denominator. So why is Barack Obama giving a thoughtful speech? Why is he speaking about BIG IDEAS? Obviously this guy wants to throw away the election. He is obviously an "elitist" who doesn't understand his audience, the American voter, who has an attention span of thirty seconds and a vocabulary limited to a fifth grade reader. He obviously doesn't understand that nobody cares about ideas and policies and goals and calls for a "moral vision". No wonder the American voters are showing their wisdom and turning away from this in favour of an old geezer who can't distinguish Sunni from Shiite and a driven middle-aged woman who throws back a whiskey at a bar to show how "non-elitist" she really is.

I warn you... don't watch the above video. It is a waste of your time. It will demand too much from you. It will appeal to something that you don't have in you. Save your time. Instead, turn on Fox News to get a truly "fair and balanced" accounting of the day's news. Fox will make sure that you know that the "real" Obama hates America, clings to Rev. Wright, and refuses to get down on all fours with his fellow citizens!

Country & Western, Quebec Style

Annie Blanchard pleases my taste for folk music. She does a nice job on classics. I really enjoy her rendition of Evangeline, very moving.

Here's her singing "Aide-moi à passer la nuit" ("Help Me Make it Through the Night" by kris kristofferson). Very nice...