Economics and similar, for the sleep-deprived

A subtle change has been made to the comments links, so they no longer pop up. Does this in any way help with the problem about comments not appearing on permalinked posts, readers?

Update: seemingly not

Update: Oh yeah!

Monday, June 28, 2010

The future of monetary economics

I think we can all agree that things will go better if all currently working monetary economists stop teaching their models to undergraduates and instead adopt my modelling approach:

  1. A bank is a box, with "BANK" written on it

  2. A central bank is a box with a pitched roof and lines on the front representing the fascia of the Bank of England

  3. The household sector is a stick man

  4. The industrial sector is a box with a sawtooth roof

  5. Long term savings are a stick figure with a top hat

With these basic concepts, plus sufficient scribbled arrows, more or less any problem in monetary economics can be solved, up to the level of accuracy of any other model. You can even do international monetary economics by drawing circles round one monetary system and scribbling somewhat larger arrows in and out of the circle.

Update! Lots and lots of consensus building on this one and I may yet win that Nobel Prize after all. Two big points of controversy - 1) does the box representing a bank really need "BANK" written on it? and 2) shouldn't the industrial sector also have a chimney? I think that's enough of a debate to keep the journal publishers in business.

Update! Brad DeLong shows us how it's done. Note that in this version of the model, bonds are a perfect substitute for money, hence the absence of a stick figure with a top hat.

Update! Eric Rauchway provides historical context, in a sectoral model which has three types of industry (chimney + sawtooth roof, chimney but no sawtooth roof, stylised steel mill) and an extractive sector. That's clearly Sraffian.

Update A more substantial objection in BdeL comments - we haven't got a government sector or fiscal policy in this model. I tend to draw the government as a big bag of money, but frankly this isn't satisfactory as it is tends to result in people pointing and saying "what's that? it looks like a balloon with a pound sign on it". If anyone has a bright graduate student and some crayons, I think this could make a good dissertation topic.
30 comments this item posted by the management 6/28/2010 04:20:00 AM

Thursday, June 24, 2010

Thursday music link

Psychedelic music has always been huge in Wales, basically because it rains all the fucking time, which is good for the mushrooms. Wales takes drugs in psychic defence against the weather.

10 comments this item posted by the management 6/24/2010 06:31:00 AM

Sunday, June 20, 2010

Please oh please oh please

Gahhhh, economics, my greatest pleasure but the source of all my frustrations. Today I am mostly being irritated by the theory of optimal currency areas.

Look guys. It is true that the USA has somewhat higher internal labour mobility than the Euro area. It is not true!!!!!1! that this internal labour mobility equilibrates regional economic differences to any economically significant extent. The Rust Belt happened. Michigan is how it is. The oil states have oil booms and oil busts. Florida is procyclical because of tourism. California had a tech boom and bust.

In actual fact, regional fluctuations in the USA are smoothed out by transfers from central government and by countercyclical monetary policy at the federal level. The USA is NOT an optimal currency area, or even close to being one.

Also not an optimal currency area: Canada. And Germany.
19 comments this item posted by the management 6/20/2010 11:51:00 PM

Thursday, June 17, 2010

My proposed solution to the European sovereign crisis

It is as simple as this. What needs to happen is the sending of a letter:

"Dear Germany,

We promise to let go of the Second World War, if you promise to move on from the Weimar hyperinflation. Deal? Thanks.



It really is as simple as that; read the Paul Krugman blog and see that I'm right about a) the essentially monetary nature of the problem and b) the essentially historical-psychological nature of its cause. All of Europe's monetary problems can actually be solved by simply growing up and recognising that sixty years on, we no longer really have the nineteen thirties to blame for our problems.

One day we will also no longer have the 1960s to blame, but I'll be long in the groun before then.
6 comments this item posted by the management 6/17/2010 02:39:00 PM
Thursday Music Link

Presumably the name was on my mind because of the Bloody Sunday inquiry, but unless any readers know better, I would guess that the name "Bernardette" has the highest ratio of [good (or at least decent) pop songs written] : [actual people with that name], by a mile.

Talk Talk

Leonard Cohen

Paul Simon

The Four Tops

Also, just the bass guitar part of the Four Tops version. This one, plus "Standing in the Shadows of Love" and "This Old Heart Of Mine" is basically the Bach Cello Suites of the electric bass guitar.
7 comments this item posted by the management 6/17/2010 03:29:00 AM

Tuesday, June 15, 2010


Can there be a less appealing headline than Thomas Friedman : It's Different This Time. What would readers regard as the likelihood of gaining information of positive value from such an article?
14 comments this item posted by the management 6/15/2010 02:21:00 AM

Thursday, June 10, 2010

Thursday Music Link

"You've got to know when to hold them, know when to fold them". Frankly, if I had just given away my last swallow of whiskey in exchange for some advice, I would have been hoping for something a little bit more practical, specific and actionable than a platitude like that. Also "Never count your money while you're sitting at the table" is actually incorrect even in the context of a poker game! If you don't know the size of your bankroll, you can't bet according to the Kelly criterion, and you can't adjust your strategy for being short-stacked. In fact, specifically, in a game with minimum bet sizes, if you don't count your money while you're sitting at the table then you won't know when to hold them and when to fold them. Sheesh.

Readers, what's your favourite Kenny Rogers breakbeat? If your tastes are anything like mine, it will also be your favourite Kenny Rogers song about cannabis-fuelled underage sex!

Tulsa Turnaround.

Performed with "The New Edition", a band which basically split up because they became famous in New Zealand (where Kenny is still popular apparently), and thus kept feeling compelled to tour there, despite the fact that in the days pre cheap air travel such a tour was more or less guaranteed to lose money. A band destroyed by a combination of expensive aviation fuel and social embarrassment.

Update: If you like "Tulsa Turnaround", you can learn the dance. I have no idea. No idea.
11 comments this item posted by the management 6/10/2010 12:30:00 AM

Monday, June 07, 2010

Vaccination administration publication nation

Swine flu - not really anyone's finest hour. Alternatively Swine flu - a disaster averted. Alternatively, Swine flu - who are these people anyway?.

It looks like a really hard question, but hard questions are what has to be answered when an awful lot of public money has gone up the swannee. And readers will not be surprised to learn that in terms of taking responsibility for a massive forecasting error, the doctors are about as good as the bankers were. Interpreting who's right and who's wrong is the devil's own job, there are points on both sides, but my tentative conclusions would be:

  • The Flynn report is pretty good - the New Scientist blog's description of it is a real hatchet job and the actual report is nothing like as sensational as it suggests (I think the NS writer is partly replying to the somewhat irresponsible title of the original Council of Europe proposal). I really don't think it's helpful to respond to a case where the plain facts of the matter are that a pandemic was massively misforecast by accusing people of being paranoid schizophrenics.

  • The WHO's disclosure policies are clearly all over the place - anyone with any familiarity with the financial sector will recognise the classic signs of an organisation that had historically believed itself to be above question, reacting in a panicky fashion when it does get questioned, and needs to suddenly justify all its internal and tacit processes according to an external and juridical standard. I don't actually believe there is any impropriety here, but it's clearly a right old state and needs sorting out.

  • Further to the above, I am not really happy with the way in which the NS blog deals with quite material suggestions of conflict of interest or breaches of transparency (this one, for instance) by just saying "that's the way the world works, deal with it". If it's true that every medical researcher in the world is in some way or other financially linked to a couple of large drug companies, that's an entirely proper object of critical comment, and it isn't "conspiracy theory" to say it's not a satisfactory state of affairs.

  • The practice of having "sleeper contracts" triggered by the WHO's announcement of a pandemic is clearly a problem waiting to happen, as was the misspecification of those contracts so as to allow the suppliers to use vaccines with patented adjuvants (I didn't know what an "adjuvant" was previously - now I do) which knocked up the price by a factor of two or three. Given the existence of these contracts, much more work should have been done on sharpening up the WHO criteria - the fact that they were still in development (and subject to a major change in May 2009 which had the effect of making pandemics much more likely to be declared) has to be seen as really unsatisfactory.

  • In general, I don't like the way in which the WHO global influenze framework has developed hand in hand with the patent life cycle of Tamiflu and Relenza, or the way in which the issues of antivirals and vaccinations got mixed together in all of the public health communication. Nothing beyond a spidey-sense here, but it does seem to me to be a potentially conflict-rich "business as usual" environment.

  • Finally, this was a massive great thumping failure of a vaccination campaign and a really bad piece of communication, which is particularly problematic given that the H1N1 virus hasn't gone away and might very well come back for a second tap. Having done quite a lot of my own work trying to forecast H1N1 last year I am well aware that the WHO was working with really poor quality data, but the Flynn report is absolutely correct to say that its communication of the uncertainty surrounding its estimates (and particularly, its failure to be clear about the fact that the virulence of the 2009 outbreak was very much lower than initial estimates suggested) was not good.

Really though, it's just another example of the genre - large bureaucracies are in general much too close to people they're meant to be regulating, in general prone to groupthink and in general much too prone to retreating into their shell when challenged by outsiders in the event of major failures.
10 comments this item posted by the management 6/07/2010 06:38:00 AM

Saturday, June 05, 2010

Thursday Music Link, here on a Saturday

I've mentioned in the past that there are two rules for getting away with genocide - make sure you do it to a pre-literate culture, and make sure you do them hard. That's how Buddhism retains its reputation as a peaceful religion, and it's also why Aussies are considered to be much more laid-back, decent blokey types than South Africans.

But what about Latin America? Just been reading "Semi Invisible Man", a really excellent biography of Norman Lewis. I'd never known about his work with Survival International before, and only dimly about the appalling record of basically every South American state with respect to their tribal peoples.

this is the sound of a truly genocidal culture

(not really; actually the Brazilian music community was in general of the left, and Gilberto Gil has continued to support the rights of native people into his political career. here's an article about the politics of bossa nova if you want one. But it does strike me as strange that there is absolutely nothing in the global perception of places like Brazil which even hints at their really very nasty record)
20 comments this item posted by the management 6/05/2010 06:19:00 AM
A naughty boy did it and ran away

And so Andrew Wakefield wanders off into the land of infomercials, loopholes in labelling regulation and other places where purveyors of rage-based medicine hang out. And the assorted Ben Goldacres and similar of the medical profession and skeptical hobby community use it as the occasion for yet another bout of Lisa Simpson moralising lectures on that awful media, and those dreadful gullible people who believe the media, and isn't it all so infuriating that people aren't rational, like us? I blame the media.

Except ... actually, that attitude is really a big part of the problem itself. Nothing makes people keener on medical science and evidence-based approaches than receiving compassionate, respectful, effective treatment by the medical profession. Nothing sells them quicker on woo than the kind of experience most parents of autistic kids get. Same with chronic fatigue syndrome and allergies - doctors all too often just grunt at the patients, good as call them malingerers and shunt them out the door, then wonder why it is that homeopaths sell so well. Even the dreaded chiropractors basically make their living out of poor soft skills in the treatment of back pain. The media isn't creating the demand for woo - it's responding to a demand created by the medical profession's failure to provide the kind of treatment patients need.

Nah, not worth thinking about. After all, doctors didn't go through eight years of medical school just to be nice to people! And it's certainly a waste of sacred NHS money to spend five minutes smoothing over whining patients precious ickle feelings! Fuck 'em all. If only they were rational, objective and above all well, like me, they'd be able to buck up and stop making fools of themselves. Now let's all have a good old laugh at the Daily Mail.
58 comments this item posted by the management 6/05/2010 05:10:00 AM

Wednesday, June 02, 2010

Gaza Flotilla - now what the heck's that all about?

I have a theory, based on no evidence above and beyond my usual jaundiced, cynical and generally horrifying view of human nature[1].

I take as my starting point the following - given the presence of various dodgy Gallowayite Turkish organisations[2] on that ship, and the fact that guns are not difficult to get hold of in Turkey, it seems interesting to me that not a single firearm was apparently found on board that ship. My evidence for this claim is that if there had been, christ knows we'd have heard no end of it.

And from there, I argue that this isn't Cheonan - it's "SADDAM'S WMD!!!!" mark two.

After all, would we have been having anything like this conversation if the Israeli government had opened up its press conference with a photo of its commandoes posing next to a big fuck-off pile of AK47s and RPGs? Course not.

My canny theory about what happened is that the Israelis had convinced themselves that the flotilla were gun-running, didn't bother to check, and acted accordingly, planning roughly the clustereff that actually happened, presuming that the justificatory material would be found after the event. And then it wasn't and oooerr, oh shit. This would also explain why the post facto media strategy (via Henry) was so totally incoherent - it was built around a corpus delicti that didn't arrive.

I never know whether to be relieved or distressed at the seeming fact that the power of Empire is seemingly in the hands of people who aren't up to the job of organising a simple frame-up.[3]

[1]Francois Mitterrand will always be a hero of mine despite his manifold failings, for his answer to an interviewer who once asked him what quality was necessary for success in politics. He considered the question carefully before answering "Bleakness of the soul".

[2]By "Gallowayite" in this context, I mean that IHH basically supports Hamas because they're the existing government of Gazan Palestinians and is thereby prepared to give money to them with no strings attached, something which I personally regard as a stupid thing to do, but let's be specific here. I tend to regard the Israeli government's accusation of IHH having provided anything more to Hamas than the aforementioned NSA cash as poorly sourced and accusations of Al Qaeda links as being actually laughable.

[3]My guess is that coppers are more dangerous enemies than soldiers, because they work together in units for longer and so they instinctively don't grass on each other and they have more institutional knowledge about getting their story straight. Therefore, in most circumstances, a cop can do much worse things to you than a soldier can. Most of the really nasty people of the last century worked for secret[4] police forces, even in military dictatorships.

[4] "Secret" apparently has a particular sense of "unaccountable" which I don't think is in the OED (though I don't have the OED to hand). Very few secret police organisations are "secret" in any normal meaning of the word.
33 comments this item posted by the management 6/02/2010 01:47:00 PM

This page is powered by Blogger. Isn't yours?


Bitch : Lab
Aaronovitch Watch
Brad Delong
The Robert Vienneau blog

Political and philosophical heroes

Subcomandante Marcos
Will Rogers
Boris Vian
The English Svejk

RSS Feed:
This seems to matter to a lot of people

If you liked this "Daniel Davies" website, you might be interested in

"Danux", the web developer
The martial artist (and fan of extremely annoying Flash intros) from Blackburn
The Welsh political journalist
A Scouse computer programmer who collects Soviet cameras
"Danimal", the heavy metal drummer
Canada's finest recorder of radio jingles
More of the same, at the Guardian
A tailor's in Lampeter where Jimmy Carter once bought a hat
An advertising man who has written a novel about dogging (I think we sometimes get each other's email)
An award-winning facilities manager in Dubai
The son of the guitarist from the Kinks Update: he is apparently "balls-out motherfucking shit-dicked exxxstatic" to be included on a Kerrang magazine giveaway CD of Iron Maiden covers, which is nice.
"Fritz Gretel" from the Ramones film "Rock 'n' Roll High School"
The former presenter of the leading politics talk radio show on the Isle of Man, now a business change manager in the Manx government secretary's office
An aquarium curator in Sussex who keeps on scoring home runs like this (this is the first stable link I've found, but he is constantly kicking ass in acquarial terms)

If you didn't like this "Daniel Davies" website, then don't give up on the Daniel Davies industry completely!

An American "Christian Political Analyst" who has the same name as me
A student at Patrick Henry College
these two might be the same guy ...
"Scatter", the deceased Liberian gangster
A naked man stuck in a chimney in Wigan
A thug in Barrow

This blog has been going downhill since ...

August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
November 2003
December 2003
March 2004
April 2004
May 2004
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
May 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
June 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
August 2012
September 2012
October 2012
December 2012
February 2013
April 2013
June 2013
July 2013
August 2013
March 2014
April 2014
August 2014
October 2015
March 2023