I picked up a print edition of the New York Times today. It was a refreshing change from reading the Internet version. Its flimsy, cumbersome pages so tactile, so present in my hands. Needless to say, browsing a print edition is decidedly different from browsing a web page. With a hard copy, you are forced to see an article in visual context, which in turn directs your attention to articles you wouldn't otherwise notice, whereas you are only able to read a full article online in isolation of other stories. The experience is substantively different.
It got me thinking, though. Ever since graduating from college, I have spent a ton more time online than ever before. Why?
1) Community. At a small residential college like Swarthmore, you are much more a member of your immediate community. Now, deprived of that tight-knit and physically-bounded community, I use the Internet to leapfrog my more immediate physical surroundings. I don't know the names of any of my neighbors sadly enough.
2) Information consumption. In an academic setting, information tends to flow in the context of human-to-human interactions. In the classroom. In the dormitory lounge or hallway. Now, information streams to me overwhelmingly via digital signal. Online periodicals. Recorded lectures. Blogs.
3) Increasingly sedentary life. If you are working any kind of white-collar, entry-level job, then your circumstances almost certainly dictate that you spend more time sitting in one place than ever before. The Internet provides a convenient way to feign hard work.
I can't quite pinpoint what I want to say in this entry, but I think I am beginning to see the Internet and connectivity in a different way. Web 2.0?
---
I spend a lot of time on NYTimes.com. I used to be a big fan of their feature that allowed you to save a page under "My Saved Pages." It was like a scrapbook of my favorite news clippings, making it super easy to pull up old articles and also to see what other people had deemed worthy of saving. Recently, the website eliminated this feature. WHY? How do other people archive or flag articles that they want to store away for some reason or another? (Seriously, I want to hear answers.)
The other feature I really like on NYTimes.com is looking at the articles under their "Most E-mailed" or "Most Discussed" tabs. These tabs help differentiate the overwhelming amount of information in a self-sorting way. Essentially, they crowd-source the arbitration of quality, which is no easy task. Not really a novel thing at all, but when I think critically about the way I surf the Internet, I think that my methods are lacking. I don't think I use the Internet to its full potential. E-mail. Online Banking. NYTimes.com. Wikipedia. Amazon. Various blogs. Pretty much, that is the extent of my Internet use.
It seems like differentiating quality through a crowd-sourcing mechanism is exactly what Digg does. Cool idea that I am currently looking into. Seriously, I need to reconsider my surfing methods and bring my connectivity to a new level. Especially considering the amount of time I spend online. Yeah, I'm ready to elevate things.
Friday, January 30, 2009
Tuesday, January 27, 2009
Going Kerouac on Everybody's Ass
I watched "Step Brothers" the other day. Funny movie. Made me laugh.
There is a job interview scene in the movie where Dale, the character played by John C. Reilly, explains twenty some years of unemployment by saying that he had "gone Kerouac on everybody's ass." Yeah, I thought that was pretty funny.
So, you know, I've been wrestling with the idea of responsibility recently. Especially after Obama talked about "a new era of responsibility" being required of us. Big important questions like, you know, what does responsibility even mean? Or: did Sal Paradise live responsibly?
Because, don't you see, maybe Sal was living more responsibly than any of us. Maybe he was just being responsible to the gift of life, and that's why he gripped life so hard and then ripped it again so hard.
This column about institutional thinking helps me understand what I think is an important piece of the puzzle. So often we frame questions about important decisions in terms of ourselves. This is the way we are trained to think. What am I passionate about? What will make me happiest? Thus, the archetypal journey of self-discovery makes intuitive sense to us. Kerouac occupies a prominent place in our collective conscious. We aspire to live passionately, to dig life right alongside Dean Moriarty.
I guess Kennedy's famous exhortation to "ask not" hinges upon the distinction between individual and institutional thinking. When thinking about responsibility, the important question is, What are we responsible to? Ourselves? Or to the various groups to which we belong? Nation? Family? Or here are a couple of old possibilities that might appear extremely novel: History? Our forebears? What responsibility do I have towards George Washington and his men on that bleak winter night?
There is a job interview scene in the movie where Dale, the character played by John C. Reilly, explains twenty some years of unemployment by saying that he had "gone Kerouac on everybody's ass." Yeah, I thought that was pretty funny.
So, you know, I've been wrestling with the idea of responsibility recently. Especially after Obama talked about "a new era of responsibility" being required of us. Big important questions like, you know, what does responsibility even mean? Or: did Sal Paradise live responsibly?
Because, don't you see, maybe Sal was living more responsibly than any of us. Maybe he was just being responsible to the gift of life, and that's why he gripped life so hard and then ripped it again so hard.
This column about institutional thinking helps me understand what I think is an important piece of the puzzle. So often we frame questions about important decisions in terms of ourselves. This is the way we are trained to think. What am I passionate about? What will make me happiest? Thus, the archetypal journey of self-discovery makes intuitive sense to us. Kerouac occupies a prominent place in our collective conscious. We aspire to live passionately, to dig life right alongside Dean Moriarty.
I guess Kennedy's famous exhortation to "ask not" hinges upon the distinction between individual and institutional thinking. When thinking about responsibility, the important question is, What are we responsible to? Ourselves? Or to the various groups to which we belong? Nation? Family? Or here are a couple of old possibilities that might appear extremely novel: History? Our forebears? What responsibility do I have towards George Washington and his men on that bleak winter night?
Saturday, January 24, 2009
Deficit Spending
In November 2008, Thomas Friedman wrote a column urging young people to save more:
Is Thomas Friedman offering sound economic advice here? Certainly, the importance of saving seems to be the new mantra these days. Lots of emphasis on "bargain meals" and such. But, really, should everybody be saving? Should we all be hoarding money in preparation for financial endtimes?
Steven Levitt puts the question nicely in his blog entry, titled, "When it Comes to Saving, Who Would You Listen to: My Wife or Milton Friedman?" (Note that Levitt is speaking of Milton Friedman, the Nobel Prize-winning economist, and not Thomas Friedman, economic layperson and obviously in cahoots with Levitt's wife.)
A lot of people blame today's economic crisis on excessive borrowing. Loans were too often extended to people not worthy of the credit. A fair assessment. But does this mean that borrowing is necessarily a bad thing? No.
Enter probabilistic thinking. The US government currently operates at a deficit and all signs point towards this deficit increasing dramatically during Obama's first years as president. This is not a bad thing. Economists are generally in consensus that large fiscal stimulus (read: deficit spending) is required to get the economy back on its feet. But there is an important distinction to be made when talking about the deficit, the difference between structural deficit and actual deficit. The structural deficit can be thought of as a probabilistic deficit: do spending programs exceed expected tax revenues (which can be calculated using the economy's long-run probabilistic unemployment rate). So Obama's challenge is this: to simultaneously increase current actual deficit spending while eliminating Bush-era structural deficits.
How does this all relate to the initial question about the prudence of saving? Well, the same principles that apply to government deficit spending apply to personal finance, especially for young people with long time horizons to consider. It is okay to borrow and to spend so long as you are probabilistically-structurally sound. In fact, your spending patterns need change from what they were a year ago only if there has been an underlying, probabilistic shift in your expected, life-time income stream. Consumption-smoothing, after all, is one of the primary functions of financial markets.
As for Thomas Friedman's advice? He with his words is single-handedly responsible for a statistically significant drop in consumer confidence, and we should blame him at least partially for our current woes.
Of course, probabilistic thinking sometimes or oftentimes runs counter to emotional thinking. Thus the conflict between the coldly rational Milton Friedman and the surely sentimental wife of Steven Levitt (why she must surely be sentimental I have no idea).
Maybe I am just trying to rationalize my current spending habits.
I go into restaurants these days, look around at the tables often still crowded with young people, and I have this urge to go from table to table and say: "You don't know me, but I have to tell you that you shouldn't be here. You should be saving your money. You should be home eating tuna fish. This financial crisis is far from over. We are just at the end of the beginning. Please, wrap up that steak in a doggy bag and go home.
Is Thomas Friedman offering sound economic advice here? Certainly, the importance of saving seems to be the new mantra these days. Lots of emphasis on "bargain meals" and such. But, really, should everybody be saving? Should we all be hoarding money in preparation for financial endtimes?
Steven Levitt puts the question nicely in his blog entry, titled, "When it Comes to Saving, Who Would You Listen to: My Wife or Milton Friedman?" (Note that Levitt is speaking of Milton Friedman, the Nobel Prize-winning economist, and not Thomas Friedman, economic layperson and obviously in cahoots with Levitt's wife.)
A lot of people blame today's economic crisis on excessive borrowing. Loans were too often extended to people not worthy of the credit. A fair assessment. But does this mean that borrowing is necessarily a bad thing? No.
Enter probabilistic thinking. The US government currently operates at a deficit and all signs point towards this deficit increasing dramatically during Obama's first years as president. This is not a bad thing. Economists are generally in consensus that large fiscal stimulus (read: deficit spending) is required to get the economy back on its feet. But there is an important distinction to be made when talking about the deficit, the difference between structural deficit and actual deficit. The structural deficit can be thought of as a probabilistic deficit: do spending programs exceed expected tax revenues (which can be calculated using the economy's long-run probabilistic unemployment rate). So Obama's challenge is this: to simultaneously increase current actual deficit spending while eliminating Bush-era structural deficits.
How does this all relate to the initial question about the prudence of saving? Well, the same principles that apply to government deficit spending apply to personal finance, especially for young people with long time horizons to consider. It is okay to borrow and to spend so long as you are probabilistically-structurally sound. In fact, your spending patterns need change from what they were a year ago only if there has been an underlying, probabilistic shift in your expected, life-time income stream. Consumption-smoothing, after all, is one of the primary functions of financial markets.
As for Thomas Friedman's advice? He with his words is single-handedly responsible for a statistically significant drop in consumer confidence, and we should blame him at least partially for our current woes.
Of course, probabilistic thinking sometimes or oftentimes runs counter to emotional thinking. Thus the conflict between the coldly rational Milton Friedman and the surely sentimental wife of Steven Levitt (why she must surely be sentimental I have no idea).
Maybe I am just trying to rationalize my current spending habits.
Monday, January 19, 2009
Is Wall Street One Big Casino?
If you are a student of economics, then conversations with other students of economics about the economy generally go relatively smoothly. But if you are a student of economics and you engage someone without a background in economics, then conversations about the economy can get messy very quickly. This is because economists take things for granted. And a lot of times, economists have a hard time explaining why they take certain things for granted.
A colleague of mine once told me that the stock market is like a casino and investing in the stock market is no different from gambling. This comment annoyed me, but I had trouble articulating why this perception was so misguided.
Well, now, as "Wall Street" is demonized in the press and described as being fundamentally separate and in opposition to "Main Street," I feel the need to go back and reconsider that statement about the stock market being like a casino. The relevant question is, Why do financial markets exist? It is a daunting question, and I won't pretend to answer it thoroughly. But off the top of my head, I come up with the following reasons:
1) To provide liquidity. What is this thing, "liquidity," and why is it important? Another daunting question, but I will try to answer it as simply as possible. Liquidity allows companies to raise funds for the expansion of their activities. Fundraising can take many forms, including but not limited to initial public offerings, issuance of bonds (debt), or borrowing from banks.
2) To allow for the smoothing of consumption. Nobody wants to have to save $500,000 before buying a $500,000 house. Mortgages and the credit market allow people to smooth their consumption and savings over time so that the $500,000 can be paid incrementally over time.
3) To allow public ownership of equity. When Karl Marx looked at the economy and its organization, he separated society into two broad categories: capitalists and laborers. The existence of Wall Street, in theory at least, fundamentally blurs this distinction as laborers can increasingly become owners of capital.
These reasons that I have listed, I am sure, are crude and full of holes. And I am sure that other reasons exist as well. But my hope is that they show at the very least that "Wall Street" and "Main Street" are not in antagonistic relation to one another. Also, despite what might appear in the press, Wall Street does not exist solely to feed the greed of super wealthy individuals and corporations. In fact, Robert Shiller, a Yale economist, argues that further expansion and democratization of financial infrastructure is required to prevent crises like the one that we find ourselves in today. To people who regard Wall Street as one big casino, that kind of proposal sounds particularly counterintuitive.
In the past, when I have been confronted with statements or questions about the economy from people without a background in economics, I have often felt frustrated over my inability to respond intelligently or intelligibly. I ascribed my failures to explain economic thinking to the failings of my own intelligence or alternatively to pitfalls in my education. I don't discount the former possibility, but I am as well increasingly convinced that more attention needs to be paid in education to the issue of communication. Economists must learn to communicate economic thinking. I think the political process in the United States would benefit at the very least as economics takes a more central role in the public conscious.
A colleague of mine once told me that the stock market is like a casino and investing in the stock market is no different from gambling. This comment annoyed me, but I had trouble articulating why this perception was so misguided.
Well, now, as "Wall Street" is demonized in the press and described as being fundamentally separate and in opposition to "Main Street," I feel the need to go back and reconsider that statement about the stock market being like a casino. The relevant question is, Why do financial markets exist? It is a daunting question, and I won't pretend to answer it thoroughly. But off the top of my head, I come up with the following reasons:
1) To provide liquidity. What is this thing, "liquidity," and why is it important? Another daunting question, but I will try to answer it as simply as possible. Liquidity allows companies to raise funds for the expansion of their activities. Fundraising can take many forms, including but not limited to initial public offerings, issuance of bonds (debt), or borrowing from banks.
2) To allow for the smoothing of consumption. Nobody wants to have to save $500,000 before buying a $500,000 house. Mortgages and the credit market allow people to smooth their consumption and savings over time so that the $500,000 can be paid incrementally over time.
3) To allow public ownership of equity. When Karl Marx looked at the economy and its organization, he separated society into two broad categories: capitalists and laborers. The existence of Wall Street, in theory at least, fundamentally blurs this distinction as laborers can increasingly become owners of capital.
These reasons that I have listed, I am sure, are crude and full of holes. And I am sure that other reasons exist as well. But my hope is that they show at the very least that "Wall Street" and "Main Street" are not in antagonistic relation to one another. Also, despite what might appear in the press, Wall Street does not exist solely to feed the greed of super wealthy individuals and corporations. In fact, Robert Shiller, a Yale economist, argues that further expansion and democratization of financial infrastructure is required to prevent crises like the one that we find ourselves in today. To people who regard Wall Street as one big casino, that kind of proposal sounds particularly counterintuitive.
In the past, when I have been confronted with statements or questions about the economy from people without a background in economics, I have often felt frustrated over my inability to respond intelligently or intelligibly. I ascribed my failures to explain economic thinking to the failings of my own intelligence or alternatively to pitfalls in my education. I don't discount the former possibility, but I am as well increasingly convinced that more attention needs to be paid in education to the issue of communication. Economists must learn to communicate economic thinking. I think the political process in the United States would benefit at the very least as economics takes a more central role in the public conscious.
Thursday, January 15, 2009
Zen Thought of the Day
Maybe it's just the usual late afternoon letdown, but after all I've said about all these things today I just have a feeling that I've somehow talked around the point. Some could ask, "Well, if I get around all those gumption traps, then will I have the thing licked?"
The answer, of course, is no, you still haven't got anything licked. You've got to live right too. It's the way you live that predisposes you to avoid the traps and see the right facts. You want to know how to paint a perfect painting? It's easy. Make yourself perfect and then just paint naturally. That's the way all the experts do it. The making of a painting or the fixing of a motorcycle isn't separate from the rest of your existence...
...The real cycle you're working on is a cycle called yourself. The machine that appears to be "out there" and the person that appears to be "in here" are not two separate things. (Zen and the Art of Motorcycle Maintenance [Pirsig] 332)
Wednesday, January 14, 2009
Game-Changer
When it comes to pub quizzes, the iPhone (or the Blackberry or the Google Phone) is a serious game-changer. Cheaters!
Monday, January 12, 2009
Union Square
Walking from my apartment to Union Square...
past the sound of change rattling in a paper cup.
from a distance, a street performer blows lugubrious tunes from his tuba into the night.
Macy's, Neiman Marcus, The Cheesecake Factory, Victoria's Secret, Saks Fifth Avenue.
a crowd of professional-looking people gathered at the Weinstein Gallery, sipping on Sauvignon Blanc probably.
outside a hostel, two Japanese girls meet two Spaniards and are caught off guard by the besos laid on their cheeks.
past the sound of change rattling in a paper cup.
from a distance, a street performer blows lugubrious tunes from his tuba into the night.
Macy's, Neiman Marcus, The Cheesecake Factory, Victoria's Secret, Saks Fifth Avenue.
a crowd of professional-looking people gathered at the Weinstein Gallery, sipping on Sauvignon Blanc probably.
outside a hostel, two Japanese girls meet two Spaniards and are caught off guard by the besos laid on their cheeks.
Wednesday, January 7, 2009
Optimal Trajectory
I was in Ecuador sitting at Mister Bagel with my sister, who was on vacation and visiting me at the time. We engaged in desultory conversation. The kind that picks up effortlessly on old themes but also wanders to new places, the kind that includes long unsolicited pauses but is also punctuated by random bursts of energy.
My sister mentioned a script that she had recently read, a forgettable, mediocre piece with a single phrase that had caught her attention. Optimal Trajectory. The idea is that for every person, given his/her beginning circumstances and innate ability, there exists an ideal path for that person's life. Divergence from this ideal path could be caused either exogenously or endogenously, but the idea is that the path exists.
An acquaintance of mine from the school I taught at walked into Mister Bagel, said hi to me, ordered a coffee to go and promptly left. I explained to my sister that he worked in the copy room at school, had been educated in Ecuador but spoke very good English. "Take that guy for example," my sister mused, "what do you think his optimal trajectory is?"
I did not respond kindly to the question, or for that matter, to the idea of "optimal trajectory," which so captivated my sister's imagination. The question, in my mind, presumed limitations on the poor guy's life. That the infinite possibilities of his life could be succinctly captured in as crude a concept as optimal trajectory...the whole idea really rubbed me the wrong way. In my mind, I recoiled at the terminology, denounced it as dehumanizing and reductive. I told my sister as much. Surprised at this reaction, she prodded me to further explain.
When I hear the word "optimal," I think of calculus and optimization. When I hear the word "trajectory," I think of projectile motion and mechanical physics. Put together, the phrase "optimal trajectory," borrows from mathematical and physical models to describe human life. Human life! The irreducible beauty, the most precious of all things...human life! Reduced! Abstracted! Poor guy! (Needless to say, I received a liberal arts education.)
---
Thuon, our Vietnamese guide from Hanoi on this family trip of ours, is 26 years old. By my calculation, that puts his birth in the year 1982, only six years after the conclusion of Vietnam's prolonged civil war. Only three years after the brief Sino-Vietnamese War in 1979. Thuon is college-educated and therefore among the elite in his country. By his estimate, about ten to twenty percent of all high school graduates continue onto higher education. At University, he studied tourism and English, but his English, while respectable, is rudimentary at best. I have to strain to understand his tour guide explanations, nodding only to be polite.
Occasionally, though, I ask him some questions in hopes of gaining the Vietnamese perspective on things. "What stereotypes do the Vietnamese have of Americans?" "Yaas," he replies. "No, no. I mean...hmm. Do the Vietnamese have bad feelings towards American tourists?" "Yaas."
I give up. Thuon is among the elite in his country, and yet in the frustrations of our communication, it dawns on me just how different my world of opportunities is from his. Here he is, with a university degree, catering to the whims of a Taiwanese family on vacation, making about $300 a month. Even were he transplanted to the United States and given citizenship, he would see such a different country from the one that I have called my own.
---
Optimal trajectory? While I see in the phrase the unforgivable crime of dehumanization, my sister explains to me, she sees the world through the lens of policy, and the idea of optimal trajectory serves as a tool for thinking about policymaking. While the terminology might be imperfect, the unfortunate truth is that there are real limitations on the potential of individual lives.
Traveling over the last few weeks across the development gradient from the United States to Taiwan to Vietnam, I've realized just how unique and privileged my unique world of opportunities is, and I see the historical sacrifices that have been necessary to put me in this position. The feeling, more than ever, is not of guilt but of responsibility.
My sister mentioned a script that she had recently read, a forgettable, mediocre piece with a single phrase that had caught her attention. Optimal Trajectory. The idea is that for every person, given his/her beginning circumstances and innate ability, there exists an ideal path for that person's life. Divergence from this ideal path could be caused either exogenously or endogenously, but the idea is that the path exists.
An acquaintance of mine from the school I taught at walked into Mister Bagel, said hi to me, ordered a coffee to go and promptly left. I explained to my sister that he worked in the copy room at school, had been educated in Ecuador but spoke very good English. "Take that guy for example," my sister mused, "what do you think his optimal trajectory is?"
I did not respond kindly to the question, or for that matter, to the idea of "optimal trajectory," which so captivated my sister's imagination. The question, in my mind, presumed limitations on the poor guy's life. That the infinite possibilities of his life could be succinctly captured in as crude a concept as optimal trajectory...the whole idea really rubbed me the wrong way. In my mind, I recoiled at the terminology, denounced it as dehumanizing and reductive. I told my sister as much. Surprised at this reaction, she prodded me to further explain.
When I hear the word "optimal," I think of calculus and optimization. When I hear the word "trajectory," I think of projectile motion and mechanical physics. Put together, the phrase "optimal trajectory," borrows from mathematical and physical models to describe human life. Human life! The irreducible beauty, the most precious of all things...human life! Reduced! Abstracted! Poor guy! (Needless to say, I received a liberal arts education.)
---
Thuon, our Vietnamese guide from Hanoi on this family trip of ours, is 26 years old. By my calculation, that puts his birth in the year 1982, only six years after the conclusion of Vietnam's prolonged civil war. Only three years after the brief Sino-Vietnamese War in 1979. Thuon is college-educated and therefore among the elite in his country. By his estimate, about ten to twenty percent of all high school graduates continue onto higher education. At University, he studied tourism and English, but his English, while respectable, is rudimentary at best. I have to strain to understand his tour guide explanations, nodding only to be polite.
Occasionally, though, I ask him some questions in hopes of gaining the Vietnamese perspective on things. "What stereotypes do the Vietnamese have of Americans?" "Yaas," he replies. "No, no. I mean...hmm. Do the Vietnamese have bad feelings towards American tourists?" "Yaas."
I give up. Thuon is among the elite in his country, and yet in the frustrations of our communication, it dawns on me just how different my world of opportunities is from his. Here he is, with a university degree, catering to the whims of a Taiwanese family on vacation, making about $300 a month. Even were he transplanted to the United States and given citizenship, he would see such a different country from the one that I have called my own.
---
Optimal trajectory? While I see in the phrase the unforgivable crime of dehumanization, my sister explains to me, she sees the world through the lens of policy, and the idea of optimal trajectory serves as a tool for thinking about policymaking. While the terminology might be imperfect, the unfortunate truth is that there are real limitations on the potential of individual lives.
Traveling over the last few weeks across the development gradient from the United States to Taiwan to Vietnam, I've realized just how unique and privileged my unique world of opportunities is, and I see the historical sacrifices that have been necessary to put me in this position. The feeling, more than ever, is not of guilt but of responsibility.
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