the dismal science

finally watched a fantastic movie the other day: inside job, the oscar-winning best documentary of 2010, about the financial system crash that led to our recent great recession.

let's face it, most of the time beating up on economics or economists - even when i do it - feels a bit like kicking some poor old guy collapsed on the street. it's too damn easy, right? there are so many things wrong with economics and with the way it's used.

but economics survives as a discipline in large part because it is, ultimately, really freaking useful. not just the supply and demand, invisible hand type of things. these are just some applications of economic thought that, as they were being developed, were shaped by the personalities and the times of the people who developed them. sometimes these ideas stand the test of time, sometimes they don't. but that's not what economics is.

at it's very core, economics is a framework for understanding decision making, that works best on an individual level. and decision making is all about incentives. that's what was so great about the movie inside job. although in many ways the movie spent a fair bit of time bashing economists - particularly academic economists - they (we?) were redeemed by the presence of a few who never forgot what the discipline is all about: incentives.

markets are not systems that inherently drive themselves towards stability - something that people often forget. it's part of the base theory of economics that, over time, actors acting in their own interest will produce some outcomes that are stable - in the sense that, say, supply and demand will intersect at an appropriate price. but that is only if the incentives are correct and the actors are bit players. in the late 2000s, while most analysts and academics were all blinded by their own bed-sharing interests, a few clear-headed people looked at the system in place and could see where it was headed. could see that the rhetoric defending derivatives markets and other shady, unregulated financial services industry concepts was flawed.

for example, in 2005, raghuram rajan, the chief economist for IMF at the time, delivered a paper that clearly predicted that the crash would happen. he could see that the short-term incentives at play for the agents controlling the system were such that a crash was inevitable - and that, in fact, there was nothing that would stop it from happening.

or nouriel roubini, an economics professor who predicted a crisis as early as 2006, and was disparagingly referred to as 'Dr. Doom' for it. 

or charles morris, who delivered a book about an impending crisis to his publisher in late 2007. published in 2008, the trillion dollar meltdown erred only in underestimating the final cost we'd bear thanks to the financial market shenanigans then occurring.

anyway. a long time ago i had a post in mind bashing micro-economics to follow my earlier macro-economics bashing. it was one of those posts that formed in my head in the middle of the night and was dazzlingly clear and brilliant then that faded away come morning, but nonetheless, it's been sort of sitting on the back burner since then. i've been feeling very grouchy for the past two years about economics - seeing all that was wrong in it, seeing all that is flawed in the fundamentals of it.

oddly enough, watching inside job re-energized me slightly. because, while economics gave us the justification for actions that completely fucked a previously stable system, it also gave us - well, gave some people, anyway - the tools to be able to clearly see where we were headed. it's a powerful field, if we just remember to remove ourselves and our own incentives from our analysis of it. easier said than done, i realize that, but essential, if we want to recapture what's good about economics from what's dismal.

in other news, it would appear that i am the deloach distinguished graduate fellow in economics this coming year. which means, yep, they failed to kick me out of the program, again. oh well. they will surely wise up soon enough and send me packing. until then, it's good to head into the new year feeling slightly warmer towards my chosen field of study.

and so goes twenty years...

i just got back from my 20-year high school reunion.

what an adventure.

i was a bit nervous - and worried - i admit it. i've changed somewhat, in what people see. i'm not nearly as skinny as i used to be, for starters. i was worried that people wouldn't recognize me, and i'd see it in their eyes as they searched for my name: "...(ohmygod-she's gained so much weight-who was she when she was thin)...oh hi, yes, of course!" but that didn't happen. or at least, not that i noticed. (i did, of course, go straight to bed and dream that it happened, that i showed up in my old black leather motorcycle jacket that i used to stomp around the halls in and someone grabbed my arm, saying 'boy, you've filled out, haven't you?' seriously, what a waste of a perfectly good dream-time, right?)

but at the reunion, one of the first conversations i had with old friends - and i mean OLD friends, like this was a group of people that i went to kindergarten with and went on family vacations with and went to junior high dances with and skipped class with in high school and saw again on our kids' first day of kindergarten - was somehow sort of telling.

"we're all sort of the same, you know?" said one friend.

i said, "you mean, deep down inside, we all have the same dreams and goals as each other?"

the group around the table laughed. "no," said the speaker, "i mean we're all the same, at the core, as we were back then."

the beauty of that few hours, for me, is that both interpretations of that were true. we were all the same - in our deepest core - as we once were. which means that all that striving and trying during those angst-filled years was for naught - and that we are nothing more or less than we always have been, for better or for worse.

but also, the other - at the end of the day, we are all the same. we were all there laughing together and remembering things and talking about struggles with kids and some of us divorced and some of us never married and some with many kids and some with no kids but there was a piece of us that was all the same - this piece that is the product of our place, our time, ourselves and each other - a mysterious alchemy of personality and environment that affected us all.

when i got home today, i dug out my senior yearbook. in one section we had been asked the standard sort of cheesy yearbook sound-bite question: where will you be in five years? and i didn't really have to look up my answer - i remember its general gist quite clearly - but i did anyway, and was struck for the first time just how still completely true it still was (note in particular the misuse of the word "hopefully"):

"MINDY CRANDALL: 'Hopefully I will be driving around the U.S. looking at everything and listening to everyone.' "

well, for fuck's sake. that's just who i am. i have no real higher goal, no loftier aspirations now, no matter what i dabbled with or proclaimed over the past 20 years. i am who i am, and always have been, no matter what shell i'm wrapped in, no matter where i am or what i'm doing, i'm still the same person that these people knew - and somewhat grudgingly accepted - all those years ago.

and that, my friends, is a pretty fucking sweet feeling. it is, in fact, what going home is all about.

so, was it good for you?

well. it's july 31st. which means i've sort of survived my post-a-day-july. i say sort of survived, not conquered, because i certainly faltered. there were at least two, maybe three, days in which i failed to post, including yesterday! oh, to flail and falter at the very end of the race!

still, it was a good exercise. what did i learn?

- if i want to write more frequently, i've got to somehow let go of the need to write only complete, well-researched and thought out entire essays. that's essay writing, not blogging. all the 'tips' i read of blogging say the same thing: keep it short. which is very, very hard for me to do. so, trying to post every day has forced me, more often that not, to shorten the damn thing up, just because i don't have any choice.

- it's perfectly OK to post something not complete, not 100% perfect. that's the beauty of posting daily: necessity forces one to occasionally post crap. and you know what? the world keeps on freaking turning. this is a good lesson for those of us who don't want to do anything not perfect. or at least: nothing not completely vetted, proofread, and double or triple checked.

- if you  want to do something, just freaking do it. this is something i've learned before, and apparently i had to learn it again. back in the day, when i wanted to be an artist, i somehow knew that to draw i just had to draw - i had to draw every day, at every opportune moment. the same is really true for writing, although it's easy to overlook. if i want to write more, i just have to...write. more. that's it. just write, every day. doesn't matter what it's about, really - the focus should be on the activity, not necessarily the output.

so, was it good for me? yes, i think it was. it did get me out of my rut, and it did force me to expand myself a little bit; to post things that i wouldn't normally post. to force myself to write, even if normally i would have made excuses not to do it.

still, i do look forward to the upcoming months, where the expiration of post-a-day-july will mean that i don't have to post. i still plan to write every day, but i hope to spare folks the crap postings that such an arbitrary goal forces.

oh, what else did i learn? this whole facebook networked-blog things is a blessing and a curse. i think there's lots of people who read, but few comment. the funny thing about writing a blog is that you sort of live for comments, no matter WHAT they are. so, readers, don't be afraid to comment! otherwise, i don't know you're reading. and that's what really keeps me going, apart from random self-imposed goals.

and, whew. july is over. thanks, y'all. see you next month...sometime.

homesick

it's true, i started this post an entire 18 months ago. in all honesty i couldn't change the date. so i'll just finish it off - and finally post it, for better or for worse.

it's january first, 2010. the first day of a new year, a new decade. and i'm sick, sick, sick right through and through. homesick.

which sounds ludicrous when you realize that i'm in my home state, living in a town i've lived in for something like 9 of the last 13 years, in a similar environment to what i'm used to, and only 70 miles from my actual home town. how can i be overwhelmed with homesickness, this close to home? how can the very marrow of my bones long for the salt air, the drops of rain falling through the conifer needles, the rush of coastal creeks riding high on winter rains?

i have a confession to make. i want to go home. i'm like a whiny child, looking for their mother!

and yet, to admit this - to acknowledge it - is a huge step for me. i want to go there. it's like i've been circling around it, avoiding it, for the past 18 years. but wanting to go home, i now realize, does not mean that i'm afraid of failure. it does not mean taking the easy way out. in fact, it might just be the hardest thing i could do.

because it's easy to be anonymous. it's easy not to have to invest in people you meet and places you see. it's easy to be the stranger.

that's the great secret to moving around all the time, i think - that it's so easy to be the stranger. if you don't mind being alone, then being the new person in town simply means not having any obligations, not having any ties, not having a whole lot of responsibility.

what's hard? facing who you were before, whether you liked it or not. facing people's impressions of you that they carved decades ago, and being strong enough to tell them how you've changed and how you want to be seen. working to change, for the better, an imperfect but beloved place rather than searching for a perfect but unknown one.

for me, leaving is easy. going home - that's hard.

"the ball is round, the game lasts ninety minutes, everything else - is pure theory."

we were fortunate enough to live in germany in 2006, when they hosted the men's world cup.

the first time germany won, i admit, i had already gone to bed. we lived on the middle floor of an old building, right on a very busy street, in a small, unknown town. suddenly, there was noise everywhere. yells and cars honking. i ran out to the front windows - long picture windows that overlooked the street - and the street was flooded with cars, cars with people hanging all over them, all of them waving flags, cheering, blowing horns, celebrating.

you might remember the 2006 world cup - or maybe not. regardless, germany made a little bit of a cinderella run deep into the tournament that no one was expecting. except they weren't a cinderella team at all, because they are one of the top most successful national football teams in FIFA. but that year, at least, no one expected them to do very well - not even the most loyal german.  in fact in 2006, their FIFA ranking was an abysmal 22nd.

they won their group. they won their game in the round of 16. they won in the quarter-finals, defeating no less an opponent than argentina. and these were the games when, post-match, the entire country went nuts. we were coming back from the train station one day in a cab, carrying friends who had just arrived for a visit, when suddenly everything in town - including our taxi - came to a screeching halt. people began mobbing the streets, cars honking, beer bottles in hands everywhere, songs and chants ringing. "what happened?" and our friends, completely bewildered.

"germany must have won again", i said, grinning. you have to enjoy it at that point in time, because you're not going to get anywhere very fast.

sometime in there i realized that there's no comparison to any event in the united states. there is no one sporting event, no one team, that galvanizes the entire country behind it. the most popular sports in the US - [american] football, basketball, and baseball - are sports where the pinnacle of the sport is, in fact, basically an intra-national competition (for the most part - claims of world champions notwithstanding). loyalties are at the state or region or, occasionally, sub-state level. if it's not your state, you may not even care about the outcome, unless there's some super villain (yankees or lakers, say) to root against.

the olympics are a time for rallying behind the american team to some extent - but there are so many events and so many athletes that there's not really one thing to follow.

there's no one sport - the most popular sport - where the title win is at the national level.

my friends and i went to frankfurt for later games in the series. because the country is so soccer crazed, and the tickets were so hard to get, fan viewing sites had been set up all over the country. the nearest one to us was a giant screen - bigger than anything i've ever seen - plopped right in the middle of the Main river. people lined both banks, drinking, partying, laughing, cheering.

in frankfurt, the town was turned out to welcome internationals from all over the world. even ghana, who also made a surprise run in the tournament, advancing out of the group round with a victory over the hapless united states, was represented by fans on the street.

in germany, everything else is theory. in the united states, we're still just some kind of amateur sports fans.

and p.s.: why on god's green earth, for all our stubborn continued usage of the word soccer, did we retain the name fussball when referring to a plastic table game played in bars?

on being lost

my son is looking for his dinosaurs

all twenty-four of the one-inch figures

bought two years and 3000 miles ago.

he still remembers, and says to

me: there used to be two like this,

where is the other one?

oh, i say, we always seem to lose track

of these small things, checking under

the bed, as if it might possibly be so easy.

it all comes from somewhere

"The romantic movement gave the forests a new meaning for some people, and this admiration for what had once been rejected was bolstered by yet another change of attitude, which can best be called the ‘patriotic’. After the War of Independence the question was continually asked, ‘What was it in this new country that was distinctively American?’ The continent, with its short history and ill-formed traditions, could not produce anything like the rich cultural heritage and the antiquities of Europe. One thing that America had, however, was vast areas of untouched land – forest, prairie, and mountain – and these seemingly unending wild areas were perceived by nineteenth-century naturalists, poets, writers and artists as something uniquely American and something about which to be proud. Chateaubriand touched upon this feeling when he said, ‘There is nothing old in America excepting the woods…they are certainly the equivalent for monuments and ancestors’."


From Americans and Their Forests: A Historical Geography, By Michael Williams. 1989.