The Blind Leading the Blind

Here is an excellent essay by Robert Shiller published by Project Synicate:

Few economists predicted the current economic crisis, and there is little agreement among them about its ultimate causes. So, not surprisingly, economists are not in a good position to forecast how quickly it will end, either.

Of course, we all know the proximate causes of an economic crisis: people are not spending, because their incomes have fallen, their jobs are insecure, or both. But we can take it a step further back: people’s income is lower and their jobs are insecure because they were not spending a short time ago – and so on, backwards in time, in a repeating feedback loop.

It is a vicious circle, but where and why did it start? Why did it worsen? What will reverse it? It is to these questions that economists have been unable to offer clear answers.

The state of economic knowledge was just as bad in the Great Depression that followed the 1929 stock market crash. Economists did not predict that event, either. In the 1920’s, some warned about an overpriced stock market, but they did not predict a decade-long depression affecting the entire economy.

Late in the Great Depression, in August 1938, an article by Ralph M. Blagden in The Christian Science Monitor reported an informal set of interviews with US “professors, banking experts, union leaders, and representatives of business associations and political factions,” all of whom were given the same question: “What causes recessions?” The multiplicity of answers seemed bewildering, and did not inspire confidence that anyone knew what was causing the deepest crisis of capitalism.

The causes given were “distributed widely among government, labor, industry, international politics and policies.” They included misguided government interference with markets, high income and capital gains taxes, mistaken monetary policy, pressures towards high wages, monopoly, overstocked inventories, uncertainty caused by the reorganization plan for the Supreme Court, rearmament in Europe and fear of war, government encouragement of labor disputes, a savings glut because of population shrinkage, the passing of the frontier, and easy credit before the depression.

Although economic theory today is much improved, if we ask people about the cause of the current crisis, we will mostly get the same answers.

...

The most important new book about the origins of the economic crisis, Carmen Reinhart’s and Kenneth Rogoff’s This Time Is Different, is essentially a summary of lessons learned from virtually every financial crisis in every country in recorded history. But the book is almost entirely non-theoretical. It merely documents recurrent patterns. Unfortunately, in 800 years of financial history, there is only one example of a really massive worldwide contraction, namely the Great Depression of the 1930’s. So it is hard to know exactly what to expect in the current contraction based on the Reinhart-Rogoff analysis.

The world has dodged a bullet. It looks like recovery has taken root around the world (at least stock markets are signaling an "all clear"). But the tragedy is that very little action has been taken to prevent a re-occurrence. The ideological fanaticism of Republicans in the US created the fertile ground for the housing bubble and speculative banking practices by their "deregulation fervor" from 1980 until 2008. Now they are blocking any attempt to fix the problems they created. I simply can't believe the audacity of the fanatical right wingers who created the problem to now block any attempt to fix the problem!

Krugman Says to Put All the Chips on the Table

Here is an excellent bit of advice from Paul Krugman's NY Times blog:

By this time next week we’ll have seen huge headlines about health care. These headlines will either read “Democrats do it!”, followed by various Republicans and their apologists complaining that what the Dems did wasn’t nice, or “Democrats — losers again”, followed by Republicans going bwahahaha.

And it’s up to a handful of Democrats to decide which headlines we get. They’re out of their minds if they don’t choose door #1.

It is sure looking like Door #1, but from a long life of watching politicians rescue defeat from the jaws of victory, I'm still afraid it might be Door #2.

Meanwhile I'm chuckling at all the caterwauling by Republicans about the "unprecedented" parliamentary tactics of the Democrats. Yep... the very same "precedented" tactics used by the Republicans. But in politics, that was then and this is now... and of course the two are incomprehensibly different, especially from a "principled" standpoint.

Federal Tax Dollars Hard at Work

I love stories about the idiocy of bureaucracies. Here's an excellent example from the Sacramento Bee by Bob Shallit. The key bit is:

IRS visits Sacramento carwash in pursuit of 4 cents

Arriving at Harv's Metro Car Wash in midtown Wednesday afternoon were two dark-suited IRS agents demanding payment of delinquent taxes. "They were deadly serious, very aggressive, very condescending," says Harv's owner, Aaron Zeff.

The really odd part of this: The letter that was hand-delivered to Zeff's on-site manager showed the amount of money owed to the feds was ... 4 cents.

Inexplicably, penalties and taxes accruing on the debt – stemming from the 2006 tax year – were listed as $202.31, leaving Harv's with an obligation of $202.35.

Go read the whole article to get the details. Oh, wait a second, there are no details because:

IRS spokesman Jesse Weller isn't commenting "due to privacy and disclosure laws."

Yeah, I'm sure Aaron Zeff is really sweating the fact that some skeletons might come out of the closet to explain those missing 4 cents.

My puzzle: Even with the lopsided tax penalty, does it make sense to send out two agents (roughly $100/hour, plus company car, plus "expenses") to collect this bill? Let's see... to collect $202 they spent at least $350. With that kind of "business sense" the federal government can run the United States into the ground in no time!

What bugs me is that under Bush enforcement backed off the ultra-rich and focused on the "little people" (the ones that the infamously Leona Helmsley so accurately point out are the only ones who really pay any taxes in the United States). Is the Obama administration following that same tactic? I thought he would put the focus back on the "big fish" who have cheated and lied for years and years. Guess I was wrong. Chalk that up as another Obama disappointment.

In Canada when you fill out your tax form, the last line is the amount owed to you or from you, and the government puts a note saying that if there is a $2 difference either way, forget it! They won't collect anything below $2 and they won't refund anything less than $2. It isn't worth the cost of collecting or refunding. Obviously this kind of "sensible government" hasn't been picked up by the more "sophisticated" big government types down south of here.

Evil is Among Us

Here's an interesting viewpoint, one that claims that the devil is real and lurks everywhere, even inside the Vatican. From an article in the UK's Telegraph newspaper:

Father Gabriele Amorth said people who are possessed by Satan vomit shards of glass and pieces of iron.
He added that the assault on Pope Benedict XVI on Christmas Eve by a mentally unstable woman and the sex abuse scandals which have engulfed the Church in the US, Ireland, Germany and other countries, were proof that the Anti-Christ was waging a war against the Holy See.

"The Devil resides in the Vatican and you can see the consequences," said Father Amorth, 85, who has been the Holy See's chief exorcist for 25 years.
"He can remain hidden, or speak in different languages, or even appear to be sympathetic. At times he makes fun of me. But I'm a man who is happy in his work."
While there was "resistance and mistrust" towards the concept of exorcism among some Catholics, Pope Benedict XVI has no such doubts, Father Amorth said. "His Holiness believes wholeheartedly in the practice of exorcism. He has encouraged and praised our work," he added.
The evil influence of Satan was evident in the highest ranks of the Catholic hierarchy, with "cardinals who do not believe in Jesus and bishops who are linked to the demon," Father Amorth said.

So I guess we now know the ultimate defense to be used by all those pederast priests: the Devil made me do it!

I think it is pathetic to live in the 21st century and have these medieval and ancient beliefs taken seriously. I can understand why ignorant peasants would believe these things, but in today's world? We now understand a great deal about myth-making and human psychology. It is clear that the Salem "witches" were burned because people -- under torture -- were willing to say whatever their torturers wanted them to say. You know, the same thing as happens day in and day out in Guantanamo, that modern day Salem set up by the Republicans to "ferret out the evil" of terrorism.

Timothy Ferris's "The Science of Liberty"

This is an excellent review of politics and science. It is a real education. The express purpose is to elaborate the interconnections between liberalism and science, but it achieves far more. It surveys the history and explains the concepts, and motivates a deeper appreciation of both science and the roots of classical liberalism.

Ferris is not an ideologue. He is willing to admit that in his political universe -- which has three poles, liberalism, progressivism, and conservatism -- each has its attractions and a role to play. He even argues that the "throw the rascal out" approach to politics is necessary from time to time because established parties lose contact with their constituents. But he is firmly in the liberal camp and sees shortcoming in progressivism (socialism, social democrats) and in conservatism. He is willing to admit that there can be blending such as neo-conservatives who take a bit from liberalism and conservatism and neo-liberalism which takes a bit from liberalism and progressivism. Chapter Two provides a wonderful political education. This chapter alone is reason enough to read this book.

Chapter Three is a wonderful review of early science and how its scientists were connected with the Whig political movement to create a more liberal society.

Chapter Four looks at philosophy and the Enlightenment. This chapter has a wonderful comment on Thomas Paine:

William Blake described Paine as a "worker of miracles," comparing him favorably to Jesus: "Is it a greater miracle to feed five thousand men with five loaves than to overthrow all the armies of Europe with a small pamphlet?"

Paine's first book, Common Sense, altered the political landscape almost overnight. Written in an accessible, unadorned style and bristling with insightful arguments for American independence, it was published on January 10, 1776, and sold over a hundred thousand copies before the year was out -- this in a colonial America with a population of under three million. "Its effects were sudden and extensive upon the American mind," wrote Dr. Benjamin Rush, a signer of the Declaration of Independence. "It was read by public men, repeated in clubs, spouted in Schools, and in one instance, delivered from the pulpit instead of a sermon by a clergyman in Connecticut." "This book was the arsenal to which colonists went for their mental weapons," wrote the nineteenth-century historian Theodore Parker. "Every living man in America in 1776, who could read, read Common Sense.... If he were a Tory, he read it, at least a little, just to find out for himself how atrocious it was; and if he were a Whig, he read it all to find the reasons why he was one."

From Chapter Five there is a nice discussion of "fundamentalism" with reference to my favourite physcist, Richard Feynman:

The physicist Richard Feynman, lecturing at the University of Washington in 1963, observed that political "fundamentalists" -- those who imagine that everything would be fine if only everyone subscribed to a putatively perfect philosophy -- make the mistake of underestimating the experimental, unpredictable nature of democratic governance. He reported talking with a group of conservatives who thought that "the Constitution was right the way it was written in the first place, and all the modifications that have come in are just the mistakes... I tried to explain that... according to the Constitution there are supposed to be votes. It isn't supposed to be automatically determinable ahead of time on each one of the items what's right and what's wrong. Otherwise there wouldn't be the bother to invent the Senate to have the votes." Speaking in his customarily rough-hewn, extemporaneous way, Feynman added a penetrating insight:

The government of the United States was developed under the idea that nobody knew how to make a government, or how to govern. The result is to invent a system to govern when you don't know how. And the way to arrange it is to permit a system, like we have, wherein new ideas can be developed and tried out and throw away. The writers of the Constitution knew of the value of doubt. In the age that they lived, for instance, science had already developed far enough to show the possibilities and potentialities that are the result of having uncertainty, the value of having the openness of possibility. The fact that you are not sure means that it is possible that there is another way some day. That openness of possibility is an opportunity. Doubt and discussion are essential to progress. The United States government, in that respect, is new, it's modern, and it is scientific. It is all messed up, too. Senators sell their votes for a dam in their state and discussions get all excited and lobbying replaces the minority's chance to represent itself, and so forth. The government of the United States is not very good, but it, with the possible exception [of] the government of England, is the greatest government on the earth today, is the most satisfactory, the most modern, but not very good.

Here is a review of the book by Gary Rosen in the NY Times.

Art for Art's Sake

There is a wonderful essay on contemporary art by Lewis Lapham. It is from the forward to Lapham's Quarterly, but is reproduced in TomDispatch.com. Here is just one of many snippets I enjoyed:

Usually I found myself on the wrong side of the critique, in some quarters regarded as an obsolete romantic, in others as a trivial bourgeois. Introduced to the modernist doctrines of alienation and despair, I took the notes but didn’t learn the lesson. The Bauhaus architecture I thought better suited for a barracks or a penitentiary; in the paintings of Mondrian and Kandinsky I could recognize little else except the surface of a decorative design. Nor in the works of Berg and Shostakovich could I identify the sound that from seventeenth-, eighteenth-, and nineteenth-century composers I’d learned to recognize as music.

The apparatchiks in the English department employed the techniques remarked upon by Billy Collins -- “tie the poem to a chair with rope / and torture a confession out of it,” beat it with a hose “to find out what it really means.” I was less interested in what it really meant than in A. E. Housman’s definition of poetry as that which raises the hair on the chin while shaving. Despite four years of being told that art was somehow sacred, divorced from all sakes other than its own, I never learned to prefer the comprehension of the theory of the thing to a naive delight in the thing itself.

The whole of Lapham's essay is worth reading. And I expect that Lapham's Quarterly is well worth a subscription. I've always enjoyed Lewis Lapham's essays in Harper's Magazine and his many books. He is an acute observer of the human scene, or culture, and of its pretensions.

You really should read the whole of Lapham's essay. This bit where he talks about US government control of "the message of American art" is both serious and seriously sad:

To the generation coming of age in the forties and fifties, the distinction was important, maybe even bearing on what was to become of the American future. It was a generation infected with the idea that the arts were serious business, sharing with the late Walker Percy his novelist’s belief that all fiction can be used as an instrument of exploration and discovery, that “the novelist or poet in the future might be able to go further, to discover or rediscover… how it is with man himself, who he is, and how it is between him and other men.”

During the years of the Eisenhower administration, the portraits of novelists decorated the covers of Time magazine, the views of Saul Bellow and Norman Mailer accorded the deference now placed at the feet of Warren Buffett. New plays on Broadway from Arthur Miller and Tennessee Williams were as eagerly received as the musicals by Rodgers and Hammerstein.

Under the aegis of the Congress of Cultural Freedom, the CIA was deploying American art as a Cold War weapon of mass instruction. Although the Allies had won the war against Hitler (won it in the name of democratic freedom and Western civilization), they appeared to be losing the peace to Stalin and the systems of totalitarian repression, and what was afoot in the 1950s was a contest for the good opinion of mankind. The communist agitprop on offer in Europe in 1947 pictured the United States as a materialist wasteland inhabited by gum-chewing shoe salesmen, lynchers of negroes ignorant of the works of Gramsci and Lukács.

The CIA undertook to suppress the rumors, directing the tactical movement of art exhibits to Venice, music festivals to Rome. Not satisfied with the wholesale distribution of wholesome texts, the agency pressed forward into the no man’s land of the avant-garde, seeking to show its prospective friends in Bremerhaven and Marseilles that American art was something more than a provincial reflection of European decadence.

No, by God, America was a great country, as rich in artists as it was in steel or corn, and here to prove it on the wall in Paris is the Abstract Expressionism of Jackson Pollock -- a real American from Cody, Wyoming, not a Hungarian refugee or a Princeton homosexual; virility incarnate, reckless and heavy-drinking, a fountain of acrylic orgasm; just the sort of fellow to represent the virtues of free enterprise, and whose paintings, nonfigurative and incoherent, embodied the antithesis of Soviet socialist realism. The aesthetic stamped with the seals of government approval matched the one embraced by the Beat poets howling in the California wilderness, marking out the road into an ecstatic future unregulated by death and taxes.

This bit ends with a bit of a tongue-in-cheek put down of the "wildness" of the beatnik rebels of the 1950s as "tools" of a CIA plot to sell America to the world. Funny because this cultural rebellion was squelched in the late 1960s (and continues to be the target of attack in the "culture wars" that have gone on ever since).

And here is the knife to the jugular vein:

America’s victories in World War II had established its military and economic predominance. In the 1950s, it was thought that a determined courting of the arts would bring forth works of genius of a match with the arriviste hegemon’s spiritual and moral grace. Other empires had done so, most notably Periclean Athens, Elizabethan England, France during the reign of Louis XIV. Surely the United States could produce something equally impressive. Was not America richer than any other country known to history? Were not its weapons more terrible, its virtues more abundant? How then could its painting not be more luminous, its literature more profound, its music more sublime?

These fond hopes and great expectations didn’t survive the epistemological shift during the 1960s to political and commercial sets of reference. The locus of advanced artistic opinion moved from the Greenwich Village bars to the pages of Women’s Wear Daily; Andy Warhol discovered a market for portraits of Campbell’s Soup cans, and the several forms of expression previously known as the “lively arts” were melted down into the alloy of the “media.” By the time President Ronald Reagan danced onto the White House stage in 1981, politics was fashion, news was entertainment, celebrity was art, literature a regional dialect spoken only in the universities.

Excellent!

Franklin M. Harold's "The Way of the Cell"

This is an excellent survey of cell biology for the general reader. It is full of state-of-the-art science tempered by judicious commentary to provide context and meaning. My only complaint is that the amount of detail is overwhelming. This book is like taking water from a fire hose. Lots of wonderful stuff but at times the reader is overwhelmed.

You can get a feel for the argument of the book by reading this posting by Harold on the Small Things Considered blog. This bit from the blog posting summarizes the thrust of the book where he reviews the science while discussing his opposition to the simple-minded reductionism, what he call "genetic fundamentalism" (think Richard Dawkins) which misses "the organism", the very key to understanding life:

The spatial organization of cells, including the arrangement of cytoplasmic elements and the cell's global form, is not explicitly mandated by the genome; there are no genes that individually encode large amounts of cytological information. Genes do, of course, specify the primary sequences of all macromolecules, and portions of those sequences often play a role in the localization of the product. Cell architecture, however, arises epigenetically from the interactions among large numbers of gene products. Many, perhaps most, of those interactions fall under the heading of self-organization, either by molecular self-assembly or by dynamic and energy-consuming self-construction. Now, when this self-organizing chemistry takes place in a living cell, it comes under constraint and guidance from the cellular system as a whole. New gene products, and also the output of biosynthetic processes, are never altogether free to diffuse at random; they are released into a milieu that is already spatially structured, and they find their places in that pattern under the influence of the existing order. These influences take various forms: cellular compartments, spatial markers and vectors, heritable membranes, the tracks and channels of intracellular transport, gradients and fields that supply positional information, and an array of physical forces including turgor pressure. The cytoskeleton is the chief instrument for imposing order on the construction site, and is itself a product of its own operations. Every cell is continuous with its progenitor, not only genetically but also structurally; and the new cell will, in turn, serve as a source of configurational instructions for its own daughters. Cells are not organized by the genome alone; they model themselves upon themselves, and therefore the smallest entity that can be truly said to organize itself is the whole cell. When you grind a cell into a pulp, something irretrievable is indeed lost: the organization that makes that cell alive.

Harold's book was refreshing after my frustrations with Dennis Bray's book Wetware. Both books make a lot of demands on their reader, but Harold provides the structure of argument that welds his material into a whole for the general reader. Both are immensely knowledgeable, but Harold's approach is more suitable for those without the detailed technical background.