Dominating The News Cycle

It's Not As Sexy As You Think

It seems like the conventional wisdom surrounding Zen Buddhism is that it's a remarkably complicated, confusing, and incomprehensible philosophical system.  I can't really say anything about the history or traditions associated with it, but looking just at the philosophical system it's much more straightforward than I expected.  Here it is: Zen Buddhism is a system of belief that is opposed to any sort of simplification.  It's just holism taken to it's extreme.  According to Zen, any attempt to simplify reality through dualism, or breaking the world into categories, creates a flawed model of the world.  This applies to humans also: even basic logical principles (like non-contradiction) are foolish because our brains are highly dualistic.  In the same way, words are the worst sort of dualism, so Zen seeks to abuse them completely with goofy contradictions and silly questions.

After reading this, somebody might respond in the manner I've come to expect: try to jump up a level and use Zen to criticize my own description of it.  It's impossible to constrain Zen by characterizing it with a simple blog post, right?  Wrong.  Zen is merely a system, which means it cannot be its own meta-system.  As a human, I can always take a step back and reflect on stuff, even Zen Buddhism.  I think people get confused by Zen's admittedly bizarre use of language and mistake it as something deeper than it really is.  For more, read Gödel, Escher, Bach: An Eternal Golden Braid by Douglas Hofstadter.

Policy Quagmire

Ezra Klein explains the problem in a great Newsweek story:

"And here is the system's problem: the minority wins when the majority fails, and the minority has the power to make the majority fail. Since the rules work no matter which party is in the minority, it means no one can ever govern."

And the cause:

"Congress used to function despite its extraordinary minority protections because the two parties were ideologically diverse. Democrats used to provide a home to the Southern conservatives known as the Dixiecrats. The GOP used to include a bloc of liberals from the Northeast. With the parties internally divided and different blocs arising in shifting coalitions, it wasn't possible for one party to pursue a strategy of perpetual obstruction. But the parties have become ideologically coherent, leaving little room for cooperation and creating new incentives for minority obstruction."

And a potential solution:

"So how to change Congress? Well, carefully. Reform may be impossible in the day-to-day context, as the minority cannot unilaterally disarm itself. But the day-to-day context isn't the only possible context. 'You have to do the John Rawls thing,' says John Sides, a political scientist at George Washington University. 'Go behind the veil of ignorance. Figure out the system we'd want without knowing who will be in charge or what they will be doing.' "

Information Nexus

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Governor Moonbeam

Former California governor Jerry Brown is running to reclaim his old office in 2010.  This should be an interesting race because Mr. Brown has a well-known penchant for abstract philosophy.  Some select quotes:

"Adaptation is the essence of evolution.  And those who don't adapt go extinct"

“Action and contemplation joined together, is what I would call the highest path that we can follow.”

"Inaction may be the biggest form of inaction."

“The reason that everybody likes planning is that nobody has to do anything.”

“This lawsuit is part of a broader effort to realign economic and industrial activity with ecological constraints,”

"I like computers. I like the Internet. It's a tool that can be used. But don't be misled into thinking that these technologies are anything other than aspects of a degenerate economic system."

Excerpt from a recent interview:

Over the years, you have moved from being a fabled liberal to a centrist position.
Brown: I don’t know. I don’t use that spatial metaphor.
Then how would you describe yourself politically?
Brown: I’m very independent. There’s a great line from Friedrich Nietzsche: A thinking man can never be a party man.

And yes, he's the front-runner.

Thoughts On Global Heating, Ctd.

Last week The Economist did a comprehensive briefing about climate change science and conflict that got me thinking about an economics talk I saw last year.  Much of the debate over climate change pits those who believe it is real against those who do not.  The only way to completely settle this issue to just wait and see what happens, a risky proposition.  To transcend this stagnant debate, we should simply stop talking about probabilities altogether and just look at the different possible scenarios.  

For the sake of argument let's say there is a trade-off between fighting climate change and potential economic output: if the world acts to stop the worst environmental effects, then it loses potential GDP growth.  If the world does not act, then it realizes this potential GDP growth.  With no thought to probability, climate change is either real or not real.   In this model there would be four scenarios:

• Scenario 1: The world acts, climate change is real.  The world loses potential GDP growth but the maximum negative effects from climate change are mitigated.
• Scenario 2: The world acts, climate change is not real.  The world loses potential GDP growth and experiences minimal environmental effects.
• Scenario 3: The world does not act, climate change is real.  The world realizes potential GDP growth but the maximum negative effects from climate change are unmitigated.
• Scenario 4: The world does not act, climate change is not real.  The world realizes potential GDP growth and experiences minimal environmental effects.

Scenarios 1 and 4 are good "fits": given what happens with climate change, wealth is maximized.  These can't tell us very much about whether we should act or not act.  Scenarios 2 and 3, however, result in big losses and are pivotal in determining the best strategy.  It's immediately apparent that what really matters in these scenarios is the difference in magnitude between potential GDP output and potential negative environmental effects on GDP caused by climate change.  By environmental effects I mean destruction that can be measured in dollar terms, like droughts.  Without considering probabilities, if environmental effects on GDP outweigh potential GDP growth, then net welfare losses in scenario 3 are greater than net welfare losses in scenario 2.  Conversely, if potential GDP growth is greater than environmental effects, scenario 2 is worse.  This is important because it shows how to make informed decisions based purely on minimizing the impact of the worst-case scenario, even if we don't know how likely each scenario is to occur.  Say what you will about climate change doomsayers; few will deny that their worst-case story packs more horror than does their oppositions', signaling that scenario 3 is worse than scenario 2.  If we can't decide on the probabilities, then we must agree to put them aside and make decisions based on potential outcomes.

Health Care Insanity Reaches Minnesota

A new states' rights constitutional amendment proposed in Minnesota is morbidly fascinating.  Read it here.

Economics And Models

David Brooks has an incoherent column today about the death of economics.  All approaches and methodologies for generating knowledge have strengths and limitations, yet Brooks seems unwilling to view economics through a context of trade-offs.  He observes that economics has been trending towards more complexity and asserts that this process will continue until the field of study becomes something akin to Zen Buddhism in eschewing all forms of simplification.  Just kidding.

Economics is best understood as a model-building discipline.  Models are essentially simplified versions of reality: their goal is to make sense of the world by sorting important details from unimportant ones.  They should be simple, fit well with reality, and identify some sort of causal mechanism.  There tends to exist a trade-off between a model's simplicity and its ability to fit well with reality (what we observe in the real world), and this is often the source of conflict: what is the optimal balance between simplicity and empirical validity?  At one extreme, if we add too much complexity into our model, it may become nearly as complex as the reality it seeks to model, telling us very little about any causal relationships.  Conversely, too much simplification might leave out important elements.

Brooks praises the study of history, viewing it as economics' final evolutionary destination.  This prediction betrays a serious lack of understanding about each discipline's goals.  History, for the most part, is not interested in model-building.  It is all about context and details; there is no rigorous attempt to simplify things down into a causal mechanism.  Of course the best description of a rare and influential event must include idiosyncratic details, but that sort of "rich, thick" description of a single case necessarily limits the ability to generalize, compare, and most of all predict. 

The addition of new complexities into economics is indeed a positive change---incorporating psychology better aligns assumptions with real-world observations---yet we must recognize that its models have reduced strength and analytical precision.  The addition and subtraction of complexity should be a careful, incremental process governed by empirical testing and changing methodological constraints.  The idea that economics will wildly careen towards history and philosophy, its simplifying assumptions flying off into the abyss, is foolish and misunderstands the purpose of social science.

Republican Health Care Reaction

At the risk of stating the obvious, Republican talk of repealing health care reform is unrealistic political posturing.  Firstly, Republicans would need either both chambers of Congress and the Presidency, or massive veto-override majorities, which will never happen.  Besides that, repealing the law would now increase the deficit, forcing fiscal hawks to either raise new revenue or bypass PAYGO rules.  Some parts of the bill are widely popular, like eliminating pre-existing conditions, and it's simply politically impossible for Republicans to kill them.  Most recently, talk of a Republican Congress not funding HCR seems insane, especially considering who's trumpeting this course of action.

Another bizarre response to health care reform is the legal push-back by many states.  The bill is clearly constitutional, and opposing HCR on the basis of states' rights is futile; the courts have long upheld the primacy of the federal government.  This is not principled opposition to federal power, but pure political theater.  'States' rights' has become a method to achieve political and policy objectives, nothing more.  George W. Bush's big expansions of federal power (NCLB, prescription drug act, federal abortion restrictions) didn't spark much action among conservatives, and liberals (medical marijuana, gay marriage, environmental regulation) aren't complaining now.

Republicans have failed (or will fail) to block HCR at virtually every level of the policy process: agenda-setting, congressional committees, drafting legislation, passing legislation, funding legislation, and constitutionality and states' rights legal challenges.  According to public policy 101 Republicans have only one avenue left: stop HCR in its implementation phase.  Given its high-profile and national scale, that seems unlikely.  While there is uncertainty about how the law will evolve, one thing seems obvious: Democrats won, health care reform is here to stay.

Mike Luckovich

Food Stamps Are... Hip?

Salon.com has an interesting article this week about the large numbers of cool unemployed college grads receiving food stamps.  More commentary here.  Looking at our sickly economy, it seems overly harsh to criticize any individual for using every available tool at their disposal to save money.  On a policy note, however, there should be better methods for distinguishing between those who truly need nutritional assistance and those who don't.  I won't make any judgments, but an unemployed middle-class college graduate is in a much different long-term socioeconomic category than those living in poverty.  My main problem with food stamps is that they don't discriminate against unhealthy foods.  Obesity, diabetes, and other health problems hit the food stamp demographics hard, and the government could reduce its health care costs by making nutritionally worthless foods like soda more expensive.

Culture And Social Science

Michael Keating says it all:

The social sciences face four enduring problems in understanding and explaining behavior.  First is how to account for both continuities and change over time within societies.  Second is to explain the connection between micro-level changes and the larger, macro level.  Third, and related, is how to explain the connection between individual decisions and the aggregate behavior of a society as a whole.  Fourth is the relationship between the hard facts of the social world and the way in which these are interpreted by people.

Cultural explanations of social phenomena go directly to the collective level, they are essentially social and in many respects (but not quite all) they represent a challenge to methodological individualism.  They also seek to bridge external explanation, by reference to a social world, and internalist explanations, which rely on individual interpretation and decision.  Yet if culture allows us to identify and explain differences in behavior among groups -- be these nations, classes, genders or localities -- it is an extremely elusive and slippery idea, prone to all manner of abuse

[Culture] can help to understand and explain social and political institutions and behavior, but only if it is understood in a sophisticated way.  Although there are numerous difficulties in operationalizing and measuring it, these are not totally insurmountable. . . . insight into the complexity of culture can be gained through triangulation and combining different methods.  Thus surveys can tell us a lot about popular attitudes, while ethnographic work may be needed to explore their meaning.

Nutshell Economics

From Greg Mankiw's blog:

Earth to Pro-Lifers: Money Is Fungible, Get Over It

As health care reform enters its final stages before the big House vote, the issue of abortion is back with a vengeance (it never really left).  Abortion opponents in Congress claim that current reform proposals break the legislative "truce" of the Hyde amendment, which bars most federal funding for abortion.  Most Democrats disagree.  The Economist lays out the facts:

"Under [Obama's] plan, many individuals and small businesses will buy subsidized health insurance through state-sponsored exchanges.  Under the Senate bill, they would only be able to obtain abortion coverage through these exchanges if they paid for it with a separate, unsubsidised, cheque.  Thus, federal dollars would be kept out of abortion clinics, say the bill's supporters.  But many pro-lifers are not convinced."

Economists know that money is fungible, meaning any dollar can replace or be replaced by any other dollar.  Most politicians pretend otherwise, because it's politically convenient; people like to think their tax dollars have purpose and direction, instead of just contributing to the government pile.  A good example of this fungibility bias occurred during the 2000 election when people got angry at Nader for spoiling Gore's victory.  In reality, the margins were so close that almost any trivial factor can be said to have caused Gore's defeat.  Gore's margin of defeat was fungible, but everybody blamed Nader anyways.

So what does this have to do with federal funding for abortion?  Staunch pro-lifers like Michigan Democrat Bart Stupak are breaking the fungibility illusion by arguing that any federal dollars that are connected in any way to abortion constitutes an abortion subsidy.  This logic is true, yet meaningless: any income from the government (like food stamps, for example) could be considered as subsidizing abortion.  The pro-life objections to health reform are insincere; the real goal is probably to entrench a new, more restrictive abortion status-quo.  Unless pro-life lawmakers are willing to tell their constituents the truth about the fungibility of money, they should keep their mouths shut.

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