Reactionaries

I do not know if I am using the political science definition of reactionaries, but my definition concerns people who think in the short-run. People who do not bother to take the time to fully think out the consequences of their opinions and decisions. People who over-react to situations and immediately call for collective action. We are all reactionaries at times.

Politics is based on reactionaries. Government is influenced and run by people who suddenly care about something that has been going on for years. Something that will work itself out given time. This country has survived years without universal health care or assisted suicide laws. But something happened, and the reactionaries made them political issues.

I could not watch the State of the Union address. I cringed thinking about it. I got sick to my stomach thinking about hearing Bush discuss Iraq, energy, and health care. I got even more sick thinking about the Democratic Congress' response to the State of the Union.

Most things do not matter. It kills people to admit this fact, but when you take a step back, it is all small stuff. Neither Bush nor Congress can do anything about energy or health care. As it has for the past thousands of years, individuals will act and face the consequences of their action.

These actions and consequences will extinguish the need for reactionaries, but I am afraid they will not go away.

Time

I started the year with the goal to write more intelligent and regular blog posts. So far, I have failed. And that is okay.

But I have been reading Thomas Jefferson. The man must have written constantly. And when he was not writing, he must have been reading. He is an excellent example of what one can do without TV. He knew about everything. He wrote about everything.

My Granddad used to buy at big fruit markets. He would get there at about 4:00AM and walk up and down the market until 9:00AM. Anyone whoever went with him used to complain that they "wore out their shoes" following him. No matter what was at the market, he would look at everything. "Walking the market" maximized profits or at least his utility (whatever the hell that means).

But my favorite professor once told me "everyone must specialize, specialize, specialize!"

Specialization scares me. It scares the Office Space generation. I grew up watching Headline News, Sportscenter, and Jeopardy. I know a lot of useless information. I cannot let it go to waste.

Now the best guys know a little about everything. But to get to be one of the best guys in academia or any professional career, you have to specialize and separate yourself. A dissertation that takes on a big subject does not get approved. A young professor who knows a little about a lot does not get any papers published.

But fuck it. I am going to keep "walking the market."

Lessons From A Mediocre Seminar

1. Most people are nice. They keep their mouths shut. Other people are not. If the not nice people refuse to shut their mouth, then the presenter should not shut his or her mouth. Or, give the not nice people a stare that reminds them that you can whip their ass.

2. Proofread your presentations. Small errors make the presenter look like an idiot.

3. Do not overwrite or overgraph. Do not do what everyone else does on slides. Too much information is worse than too little. Use the presentation to go beyond the slides.

4. Study, teach, and talk about what you know. I cannot teach an effective class on ballet, menopause, or India. I should not even try.

My Goals For The First Half Of The Year

By July 1st, 2007,

I will weigh 250 or less pounds. This means I need to drop about 15 pounds. I should be able to do this relatively quickly, but maintaining is the difficult part. It means I must change my diet. Right now, I just need to eat less.

I will bench 275 pounds three sets of eight. In October, I was doing three sets of five. Right now, I am probably at threes or fours. So I should be able to do this relatively quickly also.

I will bench 225 pounds three sets of fifteen. In October, I was doing sets of ten. This will be more of a mental challenge than anything else. I expect this will take a while.

I will be able to walk up the stairs to my office without being winded. I have been doing cardio exercise in small doses, but I must find the time to do more for more extended periods of time.

I will live an active lifestyle. I will walk up stairs instead of using the elevator. I will ride the bus or walk instead of driving. I will take walks instead of napping. I will participate in more recreational sports.

I wish myself good luck.

Gladwell and Hayek

I finally finished Hayek's The Counter-Revolution of Science. It is a great introduction to what is wrong with social sciences and social scientists. It is deep, and maybe even over researched, but Hayek admits that the only objective observer of mankind is God. A PhD does not qualify you as an objective observer of men. Most people with PhDs do not understand this point.

Bill Simmons at ESPN.com pointed me to Malcolm Gladwell's new article in the New Yorker about mysteries and puzzles. The article is also deep and a little overwritten, but it hits in a similar vein as Hayek. We cannot know everything.

Life is a mystery, so is economics.

I suggest people read Gladwell's article. I might comment more later.

Sad Men

I am trying to change in the lockeroom. I am trying to keep my eyes up as the old men parade around naked. I am so sore from squatting that I want to cry. I am afraid I am going to cramp while I am naked.

Then this guy whose skin is blood red sneaks up to this other guy who has a locker near mine. Red Guy says "I have new favorite exercise."

My Neighbor replies "Oh, what is it?" He asks it in a way that demonstrates that he is a little scared of this conversation's potential.

"Oh, the sauna. You know, last weekend, I talked to my wife. We might be able to reconcile." Red guy breaks the code of the lockeroom. If he had had sex, then this would be a fine conversation, but they just took a walk and talked.

My Neighbor placates Red Guy, and gives some words of encouragement. Red Guy could not find the courage to even say "thank you."

The story has no real point, but I am going to bullshit for another few paragraphs.

I felt sorry for Red Guy, but he also scared the hell out of me.

I know women can turn men into whipped dogs. I know love is a powerful thing. I know losing love is a devastating thing. But you cannot dump your feelings on a guy in the lockeroom when he is half-dressed. Somethings you have to discuss in private.

This is stupid. I am scared, because I do not want to be Red Guy. I am scared, because things do not always work out the way according to plans.

It is okay to be scared, but you have to find confidence in your ability to survive and adapt.

Today, I am confident in my ability to survive and adapt.

I do not know about tomorrow. But that is okay.

A Potential Health Care Study

Some colleges and high schools require "wellness" or health classes. Other colleges and high schools do not. It would be interesting to compare health data for graduates for these competing schools (controlling for other possible effects). Basically you run a dummy variable in your regression telling whether the person had a class emphasizing health or not.

My and GGM's hypothesis is those students who went through organized classes on "wellness" are no better off than those students who did not.

I am curious to hear Sam's and Jeff's thoughts about this idea and their hypotheses. I am also curious to know if someone has already done this study.

Notice I understand that measuring health is complicated. I think BMI is a poor measure. To measure health correctly, you have to look at a variety of features, but this post represents an idea not a master plan. Also everyone knows my distrust of statistics and regression equations, but I am curious.

A Conversation Between Sam And I

The conversation started with this article.

Sam starts off:

However, the more I read about the subjective theory of value the less convincing and satisfactory it seems.

While I don't mean to get engaged in too great a debate about what makes for a "good" theory this seems to punt on every aspect of market price. As James Buchanan once put, "The result of the market process is the result of the market process." What about Frank Knight's idea of all costs being opportunity costs? If with an hour's worth of effort a man can obtain one deer or two beavers, the price ratio of beavers to deer should be 2 to 1. Not because it is some whimsical happenstance but because there exists an opportunity for arbitrage. The neoclassical ideas of production cost and utility being the two edges of a pair of scissors hemming in the price makes more intuitive sense if you ask me.

Certainly there are exceptions where the Austrian story fits better, rare art work leaps to mind, but the price of nails, chicken or gasoline fits the neoclassical story much better than the subjective theory of value. I have no love for gasoline, I do however enjoy seeing my family during the holidays.

--Sam

The scissors of demand and supply is a great teaching tool. Most people think prices are given by God or decided by evil corporations. Demand and supply is a much better explanation than these mystical interpretations of price, but demand and supply functions do not exist in any tractable form.

The Buchanan example works better when you only have beavers and deer and identical consumers, but add microwaves, toasters, prostitutes, and people with varying preferences. This is why Buchanan could not get his point across. I have no idea my value for a cook until a cook exists. Neo-classicals and their prevalent methodology cannot incorporate new cooks into their models.

The real problem with objective theories of value is the paternalism and socialism they suggest. Once you say nails should cost $X, then you are suggesting that if they do not then it requires collective action.

Answer this, why do nails have different prices at the local hardware store than they do at Lowe's or Home Depot? It is not by transaction costs alone. There is a little subjective theory of value there.

You do love what gasoline can do for you. We (like the Austrians and Neo-classicals) are arguing trivialities, but that is what academics do.

~WB

I think you have asked just the right question. Why is it that nails atone store are cheaper than another?

The economist jobs is to be able to explain, and hopefully predict, the answer to questions like this. I stick by my original answer that the economists role is to help society understand trade offs between policies and look for ways to reduce transactions costs. The subjective theory of value is useless on this front. We might as well just throw our hands up in the air and say we have no idea how any of it works and aren't especially interested in figuring it out. Why might one store have cheaper nails than another. Perhaps they have economies of scale and can out compete their neighbor. Maybe its just a gimmick to get people in their store so they buy other higher margin items.

As economists I think we should be looking at our theories and working on developing new ones, game theory sounds like a good choice for modeling gimmicks, to explain and understand our world. The world will never fit neatly into any theory but that doesn't let us off the hook to continue looking.

--Sam

This is where we disagree. I agree that economists illuminate tradeoffs, but you automatically jump into policy, society, and"reducing transaction costs."

The subjective theory of value tells economists exactly what to do. Let people do whatever the hell they please. I listened to Walter Williams for three hours going down to Raleigh, and he kept saying the same thing over and over again, limited government, limited government. I think it is a worthy claim to make.

You go to Small Town Hardware Store and ask Rick why he prices the nails the way he does, and then go to Medium Sized Hardware and ask Bob why he prices nails the way he does. I am sure they both have reasons, but they are different and based on competing rationales. And you will never be able to formalize these differences. And it would be foolish and a waste of money to try. Now if Rick or Bob is willing to pay you to figure out the optimal price for nails then that is okay. But if Senator Joe pays with my Dad's tax dollars, then I have a problem.

~WB

Morning Slumps Turn Into Afternoon Slumps Turn Into Day Slumps Turn Into Week Slumps Turn Into Year Slumps

I had a football coach who said their were three stages of football programs. First, programs hoped to win. Second, programs wanted to win. Third, programs expected to win.

I have a colleague who talks about loneliness and how intelligence makes you lonely. She says you have to shut up and stop paying attention to the voices in your head. You have to work. You have to make yourself not lonely.

The Filipinos say you can make yourself happy. Happiness is a state of mind. If you want to be happy, just make yourself happy.

Like I said in a previous post, I focus on unimportant things. I get caught up in something and, I fall into a depression. I am unable to make myself happy. I am unable to make myself not lonely. I am unable to work. These are issues I will have to work through for the rest of my life. But the important thing is to keep expecting to win.

The biggest problem I have with my Dad is when he slips into depression, he forgets that he has been there before and gotten through it, and he will get through it again.

I will get through it. I might be crazy. I might have to admit my weaknesses. I might have to work all night, but I will get through. I expect to win.

Great Sentences I Read In The Past 24 Hours

From J.K. Galbraith's "The Proper Purpose of Economic Development" in Economics, Peace and Laughter:

"One of the generally amiable idiosyncrasies of man is his ability to expend a great deal of effort without much inquiry as to why. Most of the descriptions and pictures of the moon I have seen make it out to be a rather questionable piece of property. The absence of atmosphere would seem to be a real handicap. Likewise of water. The climate is predictable, if poor. In northern Canada and Alaska, agriculture suffers from a very short growing season. The moon presents the limiting case of none. Settlement will almost be certainly be slow. Yet these and similar shortcomings show no signs of deterring man in his enthusiasm to get there..."

Galbraith was no fool. He could write, and he understood human nature. His conclusions were wrongheaded and shortsighted, but he needs to be read.


From F.A. Hayek's The Counter-Revolution of Science:

"...But in the general atmosphere in which Quetelet's work became known the belief was bound to arise that the statistical methods, which he had so successfully applied to some problems of social life, were destined to become the the sole method of study. And Quetelet himself contributed not a little to create that belief."

Economics has been dealing with the same problems for fifty years. The question all young economists must ask, what do I have to contribute? I am not talking about meaningless papers or conference presentations. I am talking about what can we say about the big questions early economists set out to answer.

This begs the question, what are the big questions. I think "how do we enrich Africa and the world's poor?" is still relevant. I also think "how do we balance the incentives to innovate (in health care) with providing these new innovations to people (everyone) who can benefit from these innovations (the uninsured poor)?" is relevant.

What I am trying to say is that Hayek and Galbraith are still relevant. How do I remain relevant?

New Year's Resolutions

My Mom (Santa) gave me a pair of jeans for Christmas. For the first time since I was twelve, the jeans are not "loose fit" but regular fit. They are tight and my balls fill compressed, but these jeans feel the same way jeans felt when I was twelve. It makes me nostalgic. It makes me ask where my life is going. And it is almost a New Year so...

My dream is to write a book concerning my economic experiments throughout the world. Each chapter could explain something learned that had nothing to do with the experiment. The book could teach economics without boring people. My first chapter could tell the story of being hit on by both a Filipina and a Filipino during my first experiment in the Philippines. This book would require me conducting economic experiments throughout the world and learning how to write, but we have to have dreams.

I want to become more professional. This resolution requires me to care about what I am doing or quitting. It also requires not doing anything menial until 2:00PM. Take care of my the duties I am getting paid for, then worry about the little things that need attention. It also requires not overthinking things. I have to learn how to distinguish between what is important and what is not important. I have been trying to do this for two years, but it is something I cannot learn from books or other people. It is something I have to figure out for myself.

Also part of being more professional is getting in decent shape. I am fat and will soon lose my ability to beat my younger cousins in sports. Losing is unacceptable. I should try and do something physical everyday. If that means push-ups, sit-ups, walking, running, or lifting weights. I should do something physical.

I have to keep expressing my ideas in written form. This blog is part of this process. I also need to a better job of writing for my job.

I might add, adjust, or give more details before the actual New Year, but I think this post is a good start at creating a better WB.

(Yeah, I am full of shit. My sister, GGM, ML, Jeff, Sam and others remind me of this continuously. At least I know it.)

People Disappoint

Yesterday the preacher discussed how unfulfilled expectations can ruin a person's zest for life. Bono once wrote "when you want something so badly, you have already lost it." I do not know what the preacher or Bono's point was, but the old saying "when you don't expect much, you don't get disappointed" comes to mind.

People disappoint. Life disappoints. When I was a kid I wanted to be a professional ball player. Now I want to be a professor who does not have to work. I have spent half my life redefining greatness. I have spent half of my life wanting a reality that cannot exist.

There are two ways to approach this problem. I can either not expect much and be a perfect stoic. I can take what life gives. Or I can make my own reality.

Of course, making reality sounds good, but the truth is most people who make reality are crazy or spend most of their days in their own mind. Unfortunately or fortunately, we have to work with other people. We are social beings.

The trick is learning how to deal with the bullshit. People will disappoint, but you cannot pay much attention to them. Sometimes you have stick with your definition of success. Other times you have to compromise. Like most everything else it is an in-between.

Rich Rodriguez, What The Hell Are You Doing?

You are going to leave your Division I alma mater where you have a lifetime contract, not to go to the NFL, but to take over an Alabama program doomed to mediocrity where you will be fired within five years.

You are going to leave the Big East and its guaranteed 7 wins to go to the SEC and its guaranteed 4 losses. Haven't you learned anything from Frank Beamer? Get your 7 or 8 wins, get your bowls, and every four or five years finish in the top ten.

You cannot do that in the SEC, especially at Alabama. You think Pennsylvania or Ohio boys are going to come down to 'Bama. Do you think Florida boys are going to pick Alabama over any other SEC school or ACC or Big East school for that matter.

Do you think you are going to be the next Bear Bryant? Nothing short of Bear and national championships will make them 'Bama boys happy.

Quite frankly, you have never won anything at West Virginia. You flubbed the Big East and chance at the national championship this season. Last year, the best team in the ACC (not the champions but the best team), Virginia Tech, beat you in Moutaineer Stadium. I know you jumped a Georgia team in a BCS bowl, but they would have beat you seven out of ten times. Really, West Virginia has become the Notre Dame of the east, always overrated and always beatable.

Really Rich, that is the kind of coach you have become, overrated and very beatable. I just hope you do not get fired in the first year. I just hope the next coach at West Virginia will be willing to hire you as an offensive coordinator.

I Am Not Trying To Explain Behavior

I am trying to better observe it.

This is my new motto. Economics is about human action. You cannot truly observe human action ex post. We cannot make inferences from, "he told us his income is $X and he bought a TV." Much less from, "Best Buy sold a thousand TVs at $X, and the county's average income is $Y." You just ignore too much.

Rainy Days Before Thanksgiving Which Happens To Be My Sister's Birthday This Year

My first year of graduate school I separated graduate students into two classes, professionals and glorified undergraduates.

The professionals treated school like their job. They used their offices. They conversed with their colleagues. They studied hard. They put maximum effort into every assignment. Many could balance being a professional with their non-professional life. Some could not.

The glorified undergraduates acted like undergraduates. They were not professional.

But now I realized a major part of being professional is dealing with bullshit. A professional works when it is raining. A professional works no matter how stupid the assignment. A professional asks 'why' only after an assignment is finished.

I talked to this professor on the bus last night. He was getting back from San Antonio. He said it was 40 degrees warmer in San Antonio. He had his suit, his traveling bag, and his computer. His friend's flight was delayed by four hours, so he had to ride the bus.

I do not know if he thinks his life is hard. I do not know if he thinks his work is important. I do not know if he is happy. I do not know if he cares.

But I know I have to find out for myself.

Balancing

I waste a lot of time. This fact does not make me a bad person. But I just wanted it out in the open.

Life is about balancing. It is about dealing with bullshit. People who fail cannot balance. They get caught up in the bullshit. People who are successful seem to "do everything" and find ways to either ignore or get around the bullshit.

Tyler Cowen at MarginalRevolution.com seems to always be reading five or six books at a time. His ability to read so many books has driven me crazy. Where does he find the time? Is he a genius or what? Does he really read them?

I have been reading the same three books for two months.

I read Hayek's The Counter-Revolution of Science in the shitter. I really think this is an important book that delves into a critical issue most economists ignore. Are we a science? Or, are we something entirely different? Hayek recites the history of how we got to where we are now.

I read Galbraith's Economics, Peace, and Laughter on the bus. Galbraith was not a great economist, but he was a great writer. His influence is more widespread than most economists would like to admit.

I read Joyce's The Portrait of an Artist as a Young Man before I go to bed. I did not understand this book in high school. I understand it better now, but I prefer The Dubliners. Joyce captures the angst children and young adults who never exactly fit in feel.

When I really read something, it consumes me, and I finish it in a short period. I think these books are important, but I balance and decide I must come back to them in time. But will I ever get time? I guess that is another balancing question.

What Do I Want Them To Say About Me?

Milton Friedman died today. He was a great defender of freedom. A great man who stood against popular opinion for Truth. A man who would not give up on the world, even though the world repeatedly failed to meet his expectations.

I wrote "What do I want them to say about me?" in a book. Under it I had written, "Honest,". I wrote it like I had more things to write, but you know what, "honest" is enough.

Friedman was honest.

"Hey Big Man, Let Me Hold A Dollar"*

I went to a luncheon with the President of the University. It reminded me why I dislike politics. But it reminded that powerful men got that power for some reason. They might not be the best men for the job, but they did get the job.

The luncheon was filled with undergraduates so I remember a paragraph from James Buchanan's What Should Economists Do? while he was at this university:

"...If you allow me, for a moment, to strip the academic regalia and express myself solely and exclusively as a member of the general taxpaying public, I should argue the "product" now issuing from many tax-supported liberal arts colleges and universities does not measure up to my standards of human quality improvement. Instead of turning out "better" men and women, some of these institutions seem to me to be producing at least some young men and women who are demonstrably "worse" than their counterparts who did not enjoy the benefits of my tax dollars. I have on several occasions, along with others, called some of these products the "new barbarians," a term which seems descriptive in several respects and for which I find no need to apologize."

Most kids are not bad, but I think some do not learn the discpline and proper behavior until after college.

*I think this is from the John Boy and Billy show.

Graduate School Applications To Places I Did Not Get Into

After pursuing education for the last eighteen years, I have decided that I really enjoy learning. For the last five years while I have been in college from August to May, my favorite subject has been textbook economics. Then in the summer, I would go home and work with my father. He called my summer session, “learning economics the hard (or real) way.” After my first year of graduate school, I tried to explain to him that when you add calculus to economics it becomes extremely difficult. He wisely laughed at me.

After returning for my second year of graduate school, I finally realized that my father was right. Textbook economics is wonderfully interesting, as one of my former professors said, “microeconomics is the most fun you can have with your clothes on.” It has allowed me to generate ideas that have helped my father’s businesses. It has allowed me to evaluate my surroundings and see order and disorder that the vast majority does not or refuses to see. Knowing the whys and hows behind the everyday world is an addicting drug that is hard to quit; you understand that knowing everything is impossible, but you just keep striving for more knowledge. But the fact of the matter is my father is the real economist. He is the entrepreneur. He is the innovator that tears down the current constraints of society and pushes its limits to truthfully ‘make the world a better place.’ No matter how many years that I spend in school, he will always know more real economics than me.

Towards the end of my last semester at Bridgewater College, a future medical doctor disdainfully asked me “why do you want to be an economist?” I replied, “I want to really help people.” With this attitude, I went into an agricultural and applied economics’ program. I have since found out that agricultural economics’ does help people, but I am not convinced that they help people in the right way. Their idea that the impoverished need government programs, concentrated on agriculture, and paralyzed by bureaucratic red tape does not sit well with me. Many practitioners of agricultural economics have taken a ‘Robin Hood’ approach, stealing money from the rich, developed world taxpayers, and giving to a sub-sample of the poor, developing world and domestic farmers, while taking their middle man’s cut and allowing bureaucratic inefficiency to seize its share. Again, many of these programs do help people, but faith in the market and individuals have given way to faith in the ‘good intentions’ of self-interested bureaucrats.

These three poorly linked paragraphs tell the story of where I stand today. I am still thrilled to pursue knowledge. I still believe in the study of economics and its ability to unlock innovation and increase global welfare. But I cannot continue to study mainstream economics. I cannot continue to put blinders on and accept the flawed world that surrounds me, while I sit in my office creating intellectually stimulating but useless models. I cannot allow my father to be treated with indifference while agriculturalists and other special interests receive special attention that my father is forced to financially support. I still want to be an economist, but I want to do it the right way. I want to champion the market as the ultimate problem solver, not find ways to circumscribe it. I want to teach people to truly understand the beauty within the mutual benefit of exchange, and I want to enact policies that insure free exchange.

Simply, the economics department at George Mason offers me the best opportunity to find myself and meet my goals. It offers me the chance to continue to learn while being true to my father and myself.

Things I Thought While In Church

This whole chain of thoughts was stimulated by sitting next to a newlywed couple.

1. The spread of AIDS and population increases really show that there is a lot of sex in the world. I just read about the probabilities of spreading AIDS by any single encounter. All I can say is "a lot of sex."

2. Women's hands are much smaller than men's hands. This makes me feel better for some reason.

3. I would rather be around individuals who love people than to be around someone who has been baptized and goes to church every Sunday. These two are not mutually exclusive, but loving people is much more important than baptism.

4. Being honest, especially with oneself, is also more important than baptism.

5. Most people are afraid to say they are afraid. Most people will do anything to cover their fear.