Take that, economists!

Brownlee’s mistake was to put into practice something that worked only in theory.

Meet the economists who know why we buy what we buy | Money | The Guardian

Buried in an excellent article introducing the field of behavioural economics to a wider audience is that one line takedown of economics theory! I happen to believe that economists just aren’t scientific enough to understand how modeling works. A well behaved, rational human being who makes every decision independently of other decisions based solely on maximizing her economic utility is like (warning, quantum theory reference) a physicist reading about the particle in a box model and deciding to predict the behavior of all subatomic particles. Yes, it is a neat theory with some neat math, but it’s only the first step!

Scientists try to be a little more humble with their modeling. They seem to know that the chaos and probability driven events in even the simplest of real world settings make models/simulation mostly exercises in trend seeking, not deterministic end points.

To predict the economic behavior of people, you have to include the variables that make them people! Not assume that all people will follow all your assumptions of their behavior strictly, and to not call them names when they don’t act to maximize their short term utility!

Anyway, apropos nothing, I like to rant about economists! The article also notes that Barack Obama is a follower of behavioral economics, good for him. I wonder if McCain even knows what that phrase means.

Similar Posts

  • It’s not the policy, it’s the racism

    Articles on people of colour and voting patterns in the recent US election don’t touch on the racist rhetoric that the right has used for years. People of colour are frequent recipients of racist actions against them and the right’s use of racist language is completely internalized into their discourse and worldview. Just look at what Bill O’Reilly said post election:

    “Obama wins because it’s not a traditional America anymore. The white establishment is the minority. People want things.”

    The republican party thinks hispanics are not part of a traditional America. People of colour tend to notice these things. Obama has deported way more hispanic people than Bush ever did, and has not used his executive discretion to slow down enforcement till the DREAM act deferrals. But the democratic party has not been captured by the ugly racism that pervades  anti-immigrant rhetoric in the US.

    So, change positions all you want, and help pass real immigration legislation that helps the millions of Americans living a difficult undocumented life get documented. But, the right needs more than that. It needs to convince its supporters that racism is unacceptable and to punish, not reward people for saying racist things and acting in racist ways.

    The attorney general of Utah, Mark Shurtleff, a conservative Republican, said he was part of an “education campaign” to persuade Republican officials that “they need to reject the run-’em-out, deport-’em, enforcement-only approach that people think is the only voice of the Republican Party.”

    Republicans Reconsider Positions on Immigration

    Update: Mitt Romney’s post election statements where he labels everyone other than White people “special interest groups” are yet more evidence.

    Photo courtesy Lorenzolambertino photostream used under a creative commons licence.

  • Ah, Propaganda

    Hidden behind that appearance of objectivity, though, is a Pentagon information apparatus that has used those analysts in a campaign to generate favorable news coverage of the administration’s wartime performance, an examination by The New York Times has found.The effort, which began with the buildup to the Iraq war and continues to this day, has sought to exploit ideological and military allegiances, and also a powerful financial dynamic: Most of the analysts have ties to military contractors vested in the very war policies they are asked to assess on air.

    Behind TV Analysts, Pentagon’s Hidden Hand – New York Times

    Of course, the word “propaganda” is first used on page 4 of the article, long after most people stopped reading. Not that I am surprised or shocked or anything, it was clear that all those military suits on the screen were spouting propaganda from the very beginning. They said the same things, used the same words, it was always well timed and planned, but apparently, no one in the media bothered to ask them about it. The media must have thought “very patriotic folks them, they wear a lot of lapel pins!”

    I fail to see how this meticulously detailed story will have any impact on anything that happens in the States. What would John McCain’s reaction be to this news? Will anyone actually ask him if he would have done the same thing? Will there be any protests, calls for resignations, impeachments, court martials, media boycotts? Maybe a shocked letter to the editor or two, maybe a million blog posts like this one, nothing more.

    God Bless America, it has lived up to all my expectations finally!! Pravda, Xinhua and Goebbels have nothing on these guys. It looks like all the president’s people and all the mass media colluded to sell this war to the American people and make each other very rich. Wonderful! Note that a small part of every dollar spent on cable and newspapers goes to support this war effort. Note that a small part of everyone’s taxes go to support this war effort.

    Tags:

  • Harper = Bush Lite?

    Harper's economic strategy, if it can be called that, is looking more and more like George Bush's: tax cuts and military spending. While gutting our revenue by $60 billion over five years, Harper laid out a plan to spend $490 billion in addition to the annual defence budget over 20 years to build up the Canadian military. This economic policy is well on its way to bankrupting the U.S. and could do the same to Canada.

    We could instead bring together unions, capital, universities and provincial governments and make Canada a leader in green technologies, potentially providing hundreds of thousands of high-paying jobs and literally thousands of profitable companies. But under Stephen Harper, Canada's economic ship of state just drifts.

    Our economy is completely on its own, pulled this way and that, and ultimately down, by faltering corporate globalization and the catastrophic collapse of American casino capitalism.

    Six Ways Harper Is Wrecking the Economy :: Views :: thetyee.ca.

    The Tyee makes a compelling argument, not in the sense that Harper is a bumbling incompetent know nothing like Bush, but that the ideology of continuous tax cuts + deficit spending + cutting government programs will eventually lead us to where the U.S is at this point in time, and I don’t think too many Canadians want to be Americans at any time, especially the present.

    That and his impotent and irresponsible approach to climate change make him a dangerous choice. Canada is where the US was in 2004, at the cusp of choosing a leader whose optics are better than his performance.

  • |

    What's the matter with Canada?

    But beneath the calm exterior, Canada’s political system is in turmoil. Since 2004, a succession of unstable minority governments has led to a constant campaign frenzy, brutalizing Canada’s once-broad political consensus and producing a series of policies at odds with the country’s socially liberal, fiscally conservative identity. Canada is quietly becoming a political basket case, and this latest election may make things even worse.

    What’s the matter with Canada? – By Christopher Flavelle – Slate Magazine

    I don’t necessarily agree with the whole “basket case” assertion, it is a fundamentally strong country with a broad consensus on what the country should be.

    The current set of political parties is rewarding a minority set of policies (the conservatives) by fragmenting the majority centre-left of centre consensus between 4 different political parties, none of which will talk to each other. This is not exactly new, the conservatives only merged their parties a few years back.

    The liberals suffer from Dion’s non Englishness, he gets little traction from the English media (no idea about the French, I don’t know any). He’s not that charismatic, nor does he orate well in English, and so like the American election, it is all optics. The liberals also seem to have no understanding of what it takes to win a modern election. The conservatives get in the news all the time, their ads are all over TV, the liberals seem to be MIA.

    Harper on the other hand is “strong”, strength of course being defined as sounding decisive and declaratory, even though he usually just sounds alarmist and hyperbolic all the time. Somehow, this is interpreted as leadership. I guess the only good quality of leadership is being loud.

    Dion also made a gamble by selling something called the Green Shift, a carbon tax, to increase efficiency in energy consumption and reduce greenhouse gas emissions. Even though the tax is designed to increase efficiency in a country notorious for its very poor efficiency (27th among the 29 OECD countries in energy use/capita), it is being demonized as a tax that will destroy the country (just like every other environmental regulation destroyed every other country). It is also bad timing, as energy prices have soared recently, and Canada’s economy sputters to a halt due to falling resource prices and the American housing market bust (destroyed the BC lumber industry). The last thing people want to hear is “tax”, even though the middle class will get more than sufficient rebates to cover any tax increases. The liberals seem to have overplayed this hand. Elections are never won on environmental issues, too easy to attack.

    The conservative pitch thus far has only been to attack Dion while offering some incremental changes. But as Harper is flirting with a majority, this Toronto Star editorial asks the right questions.

    While Harper is presenting himself as a kinder, gentler Conservative these days, in the past, as a Reform MP, head of the National Citizens’ Coalition and leader of the Canadian Alliance (successor party to Reform), he staked out quite radical positions. He has called Canada “a northern European welfare state in the worst sense of the term,” has denounced the “moral nihilism” of the Liberals and the left for opposing the Iraq war, has suggested building a “firewall” around Alberta, and has called for “market reforms” for health care, “further deregulation and privatization,” and “elimination of corporate subsidies.”

    With a Conservative majority in sight, it is fair for Canadians to ask Harper whether he still holds these views and would implement them once in office. And if the answer is No, Harper should use the remaining four weeks of this election campaign to tell voters just what he would do with a majority.

    The media lets Harper get away with sounding “presidential”, his proposals are very vague, and that is worrying. It is clear, however, that from an environmental standpoint, he will be a disaster. A combination of a slowing economy and reduced social support programs (conservatives hate safety nets for regular people) will be bad for the not so well off Canadians. We shall see what happens in a few weeks.

  • Obama and the race/identity vote

    I support Obama because he’s skinny, brown, liberal, young, and of course, the whole name thing. He’s the closest in American politics to me, and I identify with him quite a bit. By the same token, how the hell is he going to win a general election?

    It’s the first US election in which a white person is going to have to choose between someone of her race and someone who does not look like her, talk like him, has a funny name and is most definitely African American in identity and behavior. Call me the cynical product of an Indian upbringing where caste/religion/community plays such a vital and unsubtle part in politics, but when faced with this kind of choice where one of the choices is not someone you can identify with at all, I don’t see it happening. There’s a reason why the undecided vote’s always flipping to Clinton at the eve of every primary, it’s all about racial identity, I’m afraid.

    Many white people see in McCain their ornery grandfather (the one who always talks about the war – McCain reminds me of Abe Simpson, the resemblance is uncanny) or uncle, or something like that, someone they can identify with. What is Obama, but an outsider? The undecideds will tend to flip to the known quantity (vaguely senile and ill tempered older relative who used to be something) as opposed to the unknown (urbane, educated, intelligent, yet vaguely threatening black man).

    Younger people, especially the college educated young can identify more with Obama because they have at least a couple of black friends, and see plenty of intelligent young black men in their peer circles. It’s all about identity and what you base it on. The idealism and energy he brings is also much better received by a younger audience. The older you get, the less likely it is that you’ve interacted with someone whom Obama can represent in racial/identity demographic. Which is why Clinton’s performance is always better among the older voters.

    There, my pessimism is on record, McCain in a squeaker in November, though I’d love to be proved wrong.

    Note: I am assuming that this silly extended primary will eventually go to Obama, Clinton has no shot, sorry.

    Probably my first ever link free post, but hey, isn’t that what blogging’s all about? This was written in the aftermath of the Pennsylvania primary where everything that was predicted happened: Obama won the “urban” and young vote, Clinton won the rural and white vote, this just presages the general election.

    PS: Obama’s at least 5 inches taller than McCain and quite a bit better looking. The taller, better looking man usually wins the election. But both choices have always been white, so what happens now? I think identity still triumphs.

  • |

    Power to Build Border Fence Is Above U.S. Law

    Banana Republic Alert…

    Securing the nation’s borders is so important, Congress says, that Michael Chertoff, the homeland security secretary, must have the power to ignore any laws that stand in the way of building a border fence. Any laws at all.

    Last week, Mr. Chertoff issued waivers suspending more than 30 laws he said could interfere with “the expeditious construction of barriers” in Arizona, California, New Mexico and Texas. The list included laws protecting the environment, endangered species, migratory birds, the bald eagle, antiquities, farms, deserts, forests, Native American graves and religious freedom.

    Power to Build Border Fence Is Above U.S. Law – New York Times

    I don’t know what to say, rule of law, so quaint, so pre 9/11…

One Comment

Comments are closed.