Postmodern Economics and Physics?

Mark ThomaMark Thoma highlighted a recent article, A Crisis at the Edge of Physics. You might wonder why an economist would be interested in a crisis going on in the physics world. For those who don’t follow economics, his explanation is probably not too helpful, “Seems like much the same can be said about modern macroeconomics (except perhaps the ‘given the field its credibility’ part)…” Let me discuss this for a moment, because it is really quite interesting.

As I’ve long speculated, certain kinds of physics are pushing up against the limits of knowledge. High energy physics is destroying particles with more and more energy, leading to ever more bizarre theories of the cosmos. Dark matter and dark energy are showing the cosmos to be mostly “things” we only know don’t seem to exist the way regular matter and energy does, but still interacts with it in unusual ways. Could it be that there is nothing else to know and that theoretical constructs about the universe will not be verifiable through experiment? Some physicists think so, “They criticized a newfound willingness among some scientists to explicitly set aside the need for experimental confirmation of today’s most ambitious cosmic theories — so long as those theories are ‘sufficiently elegant and explanatory.'”

This is shocking because for decades now, scientists have been beating up on postmodern literary theorists who claim that there is no objective truth. And now we have physicists (Of all scientists!) claiming that their theories don’t need to be right but instead just “elegant” and “explanatory.” This has long been the basis for supersymmetry theory. But I have to say, I’m not sure this is the wrong approach. Maybe at the extreme edges of science, experimentation will be useless. Clearly, we should still be doing it — or trying to. But it is possible that we can probe only so far when it comes to the creation of the universe.

This is really interesting, however, in how it relates to economics. Far from looking at things that call into question the universal limits of knowledge, economics deals with pedestrian issues. Economies may be very complicated, but there are no fundamental constraints on understanding them. However, many economists on the right have in fact given up worrying about real world data. They have their Real Business Cycle (RBC) models that are “sufficiently elegant and explanatory” that it doesn’t matter if they have no relationship to the real world.

In the past, I’ve written about my own experience with large scale environmental models. There is a strong urge to get lost in those models — to see them as more real the the world they supposedly model. A good example of this kind of thing in economics is the use of Dynamic Stochastic General Equilibrium (DSGE) models, of which RBC models are part. The idea with these models is to derive macroeconomic outcomes based upon microeconomics. I’m not an economist. But I can tell you that in environmental models, it is usually best to not use micro-scale models in macro-scale models. For example, it is best to model carbon respiration with one big leaf rather than with a detailed forest model. Clearly, there are times when you want a detailed forest model. But in general, macro-scale models are best when they are based on simple empirical models.

And why is that? To me, the biggest issue is that the more elements you add to a model, the more degrees of freedom you add. So you end up with a model that is entirely dependent upon calibration. And the model loses its meaning because its results are swamped by exactly how the calibration is done. What has happened in the RBC models is that economists have given up on modeling the real world and use it just to look for elegance and explanatory power. But it doesn’t matter if the person doing this calls herself a physicist or an economist. She is really just a mathematician — but a particularly useless one.

As I indicated before, this is somewhat defensible with regards to high energy physics and cosmology. These fields are already largely mystical. But in economics — a subject that is supposed to be above all useful — this is just madness.

Kissinger on Revolutionary Power

Henry KissingerFor powers long accustomed to tranquility and without experience with disaster, this is a hard lesson to come by. Lulled by a period of stability which had seemed permanent, they find it nearly impossible to take at face value the assertions of the revolutionary power that it means to smash the existing framework. The defenders of the status quo therefore tend to begin by treating the revolutionary power as if its protestations were merely tactical; as if it really accepted the existing legitimacy but overstated its case for bargaining purposes; as if it were motivated by specific grievances to be assuaged by limited concessions. Those who warn against the danger in time are considered alarmists; those who counsel adaptation to circumstance are considered balanced and sane, for they have all the good “reasons” on their side: the arguments accepted as valid in the existing framework. “Appeasement,” where it is not a device to gain time, is the result of an inability to come to grips with a policy of unlimited objectives.

But it is the essence of revolutionary power that it possesses the courage of its convictions, that it is willing, indeed eager, to push its principles to their ultimate conclusion. Whatever else a revolutionary power may achieve therefore, it tends to erode, if not the legitimacy of the international order, at least the restraint with which such an order operates. The characteristic of a stable order is its spontaneity; the essence of a revolutionary situation is its self-consciousness.

—Henry Kissinger
A World Restored

See also: Neville Chamberlain Was Right.

H/T: The Great Unraveling.

Real and Mythic Heroism and Caitlyn Jenner

Toy SoldiersThis is a picture of soldiers represented in an almost a Homeric vision of bravery — a wounded man being carried to safety as he fires at the enemy. So it shouldn’t be a surprise that it is an artistic construction made with toys. But it became a very big deal last week when a Facebook user posted it along with the caption, “As I see post after post about Bruce Jenner’s transition to a woman, and I hear words like, bravery, heroism, and courage, just thought I’d remind all of us what real American courage, heroism, and bravery looks like!” Ah yes, the fetishization of the military strikes again.

Let’s start with the fact that this is a totally cliched and limited idea of bravery. I don’t doubt that it takes great bravery to fight in a war. But for the people who fight the war, the alternative is prison and in some cases death. In many ways, standing up against the simple choice of going along and instead resisting a draft is more brave. But forget wars. There are lots of ways to be brave, and they usually involve going against the default behavior. It usually isn’t a question of doing what people will reward you for.

On the issue of Caitlyn Jenner, however, I don’t think we are talking about bravery. She is a public figure who is pimping a reality show. She has all the support that money and fame can buy. What she is doing is good for society and for the transgender community. But brave? I’m not convinced. For non-famous, non-rich people, coming out as transgender is incredibly brave. For Caitlyn Jenner — it’s at best less so.

But okay, people in the military do at times display amazing examples of bravery. But why of all the images that the poster could have picked, did he selected this one? After the post got nearly a million shares, he looked into the source of the photo. He found that it came from the documentary Marwencol. It is about Mark Hogancamp, a cross-dressing man who was beaten outside a bar — almost to death. Afterward, he got into building a model of a Belgian town during World War II. The fact that the poster had picked the work of a member of the transgender community made him rethink the whole thing. Now he thinks it was God working in mysterious ways to teach him about the importance of inclusion and love. Good for him!

But I don’t think that’s why he picked the photo. I think he picked it because it is a highly romanticize image of reality. When people talk about things like heroism, they are dealing with abstractions. What “real American courage, heroism, and bravery looks like” is dolls designed by a wounded outcast. In other words, what makes real America “real” is that it isn’t real.

This is something I’ve written about a lot in other contexts. The conservative image of “real America” is a place that never existed. And this, I think, explains why modern American conservatism is so nutty. It presents a false choice. The real choice is always between competing imperfect Americas. But in the conservative mind, it is between these imperfect choices and their idealized, perfect choice. It is no wonder that they are against compromise.

But it fills me with hope that the Facebook poster changed from slighting Jenner and defining “real” American heroism to writing, “Hate helps nothing. Love wounds no one.” It bothers me that all those people who shared the original sentiment will not land where the original poster did. But we take baby steps. And that’s good.

State Republicans Do Nothing in Preparation for Potential Obamacare Disaster

We Heart ObamacareIf you were a decent politician — one who cared about your constituents — you would plan ahead. If there was a tsunami coming, you would evacuate the coast and get clean-up crews ready for the resulting damage. But it seems that on the right in American politics, such basic actions don’t make sense. I think this is all part of the Republican Party exchanging competence for ideology. Because there are Republican governments all over the nation that are facing a major — and largely predictable — catastrophe: the ending of federal subsidies for people buying health insurance on the federal exchanges. And these governments are doing nothing to prepare.

The issue at hand is the case King v Burwell in front of the Supreme Court. If it finds for the defendants, then nothing happens. But if it finds for the plaintiffs, it’s going to be really bad — not just for the individuals who will lose their insurance, but also for the insurance companies and for the healthcare providers. So a group of healthcare researchers led by David K Jones decided to look at what is going on in five of the states that will be effected by the ruling: Florida, Michigan, New Hampshire, North Carolina, and Utah. And it looks pretty bad, What Are The States Doing To Prepare For King v Burwell?

This article is just the first of three. But it provides the overall conclusions. And there are three of them. First, none of the states have a clear plan as to what they are going to do if the Supreme Court finds for the plaintiffs. Second, the governors seem to be open to some kind of a deal, but the legislators are not. And third, the timing is bad; only Michigan will have a legislature still in session after the ruling comes. Of course, even if that weren’t the case, there still wouldn’t be time to set up a state exchange for next year.

These observations are all annoying in their own way. The fact that the states have no plan is not surprising. If the worst comes to pass, they probably figure they might do something. But as long as they don’t have to do anything — they won’t. They are, in other words, hypocrites. I’m sure that the vast majority of these Republican legislators and governors are secretly hoping that the Supreme Court finds for the defendants. And they are thinking this privately even while publicly saying it is a great and just cause.

The Republican Party is out of control. It isn’t so much that Republican politicians can’t tell the truth to their base. Rather, it is that Republican politicians know that if they act reasonably about this (or pretty much anything else), another Republican politicians will come in and demagogue the issue. They know others will do this to them because they know they would do the same thing to others if they needed to. Forget the Eleventh Commandment, the Republican Party is now at the point of snake eating its own tail. They just can’t stop themselves from destroying themselves.

Clearly, the best thing for everyone is for the Supreme Court to find for the defendants in King v Burwell. But clearly, if that doesn’t happen, the problem is the Republicans’. And that’s another thing that was found in the Jones et al analysis. The Republicans believe they are going to be blamed for this. Yet even then, they can’t manage to do anything. If they use their power for the common good, they will likely lose that power at the next election. If they don’t use their power for the common good, what is the purpose of having that kind of “power”? The choice they will make is clear.

Morning Music: The Ventures

Hawaii Five-OI think The Ventures are one of the weirdest rock bands ever. I mean that in a good way. They are an instrumental band, yet their music is so simple. It’s just an energetic rhythm section and a single melody lead guitar (most of the time). But somehow, it works. Their biggest hit is “Walk, Don’t Run,” off their first album of the same name. It’s the perfect example of this formula. It’s what The Ventures always do. And they have done it a lot. They have released in excess of 60 studio albums, which is not surprising when you consider just how much work it must take to produce a Ventures album. See, for example, The Jim Croce Songbook, which they put out just six months after Croce died. I’m not saying it’s bad. I’m just saying that they are opportunistic hacks.

Today, they are best remembered for “Hawaii Five-O” off their album Hawaii Five-O. The following performance is most likely from the late 1970s or early 1980s. It includes the main people we think of as The Ventures: Don Wilson, Nokie Edwards, Bob Bogle, and Mel Taylor. Also sitting in on drums is Max Weinberg. Anyway, they all look like they are having a good time and it is almost impossible not to follow along.

Anniversary Post: Plessy v Ferguson

Homer PlessyOn this day in 1892, Homer Plessy refused to relinquish his seat in a “whites only” train car. This led to Plessy v Ferguson — one of the most infamous Supreme Court cases ever that enshrined “separate but equal” in law for the next 58 years. It used to annoy me that Sarah Palin couldn’t even name this one case when asked to name a Supreme Court case she disagreed with other than Roe v Wade. It is a case I first learned of in high school. But I later realized that Palin probably doesn’t disagree with Plessy v Ferguson — except in the sense that it is a case that is now universally vilified. The reasoning in the case is fully consistent with modern conservative thinking.

In my previous educational encounters with this case, I never read about the specifics of it. And they are quite interesting. To start with, this was not a case of a man just happening to be in the “wrong” place and causing a ruckus. Rather it was just like it would later be with Rosa Parks. The African American civil rights group Comité des Citoyens (French: Citizens Committee) was looking for a way to challenge the recently passed Louisiana Separate Car Act, which mandated separate but equal train cars. So the Comité chose Homer Plessy.

One of the reasons that Plessy was chosen was that he was 7/8ths white — an “octoroon.” So he could “pass.” This allowed him to purchase a ticket on a “whites only” train car. When the conductor came by, Plessy told him that he was 7/8ths white that that he refused to move to the “blacks only” train car. And the rest, as they say, is literally history. According to Wikipedia, “Everything that the committee had organized occurred as planned, except for the decision of the Supreme Court in 1896.” Of course, the Comité knew it was likely to lose.

The problem was the Supreme Court as an institution is dedicated to preserving the power of the powerful. For people of my age, that sounds wrong. We saw a lot of good work by the Court over the last 60 years. But really, that was the exception. What the Court is now is more in keeping with what it has traditionally been. Even if the court were filled with Elena Kagans, it would hardly be liberal; it would be more for the status quote. As it was, the Supreme Court found against Plessy by a vote of 7-1. In Ian Millhiser’s list of The Five Worst Supreme Court Justices In American History, two of them found with the majority on Plessy v Ferguson: Stephen J Field (#1) and Melville Fuller (#4).

The lone dissenter was John Marshall Harlan who said — correctly — that Plessy v Ferguson would be remembered as infamously as Dred Scott v Sandford. But lest you think that we should consider Plessy v Ferguson as typical of the time, remember that Harlan’s argument (apart from his own ethnocentrism) is remarkably modern:

We boast of the freedom enjoyed by our people above all other peoples. But it is difficult to reconcile that boast with a state of the law which, practically, puts the brand of servitude and degradation upon a large class of our fellow-citizens, our equals before the law. The thin disguise of “equal” accommodations for passengers in railroad coaches will not mislead any one, nor atone for the wrong this day done.

What’s sad is that three current justices certainly, four probably, and five possibly would find against Plessy if this kind of explicit segregation were still an issue. That’s what’s so dangerous about this court. The conservatives are loons, but they are extremely smart and creative loons.

We mark this day when the African American community organized to protect their civil rights, but lost — to our nation’s great shame.