Physicist, Startup Founder, Blogger, Dad

Friday, October 14, 2011

Links 10.14.2011

New Yorker: in search of bitcoin creator Satoshi Nakamoto.

BBC In Our Time: the Ming voyages.

Financial Times: "The reputation of economists, never high, has been a casualty of the global crisis ..." See also here.

Steve Weinberg on his work as a JASON

BusinessInsider: 15 charts on US wealth and income inequality (the ugly truth).

NYTimes: "... participants judged women made up in varying intensities of luminance contrast (fancy words for how much eyes and lips stand out compared with skin) as more competent than barefaced women, whether they had a quick glance or a longer inspection."


Jean Huiskamps said...

Thanks for the economics article. Fascinating. It confirms all my prejudices about economic models - and about string theory models too: over-reliance on theoretically elegant models. Fortunately I'm almost ignorant of both areas of research :-)
Although I cannot judge their correctness, here are some economics blogs that I follow. I don't know if they're right, but the have a pleasant "feet on the ground" feel:

Justin Loe said...

I was doing a bit of family genealogy a couple years ago and came across a presentation by a cousin  on the muon magnetic moment at LANL in 1963. That would be basic physics research and not defense related, of course. As far as I know he was not involved in defense research.

Steve Sailer said...

Those four pictures certainly make the case that the more make-up (within limits, of course), the more competent looking.

LondonYoung said...

Why is growing wealth inequality within the U.S. an ugly truth?  Would everyone being equally wealthy be a good thing?

As for the make-up: http://www.youtube.com/watch?v=OYpwAtnywTk  if you don't know Jenna, meet her!

asehelene said...

That last is interesting.  Now I want to see if I can get some of my students to replicate it here in Sweden.  

5371 said...

Would inequality be just as great if you weren't so equal?

yulva said...

Every teenage girl should see this...


LondonYoung said...

Possibly.  I would rather be at the 25th percentile from the the bottom in the U.S. than at that percentile in Bangladesh.  If the U.S. were more equal, how would that affect each percentile in an absolute way?  IMSAO, more inequality tends to improve the lot of almost every percentile from the perspective of absolute ability to consume.  However, I grant that it is a legit problem that people who have way more than a human being really needs (e.g. an american earning $50k) are feeling bad about themselves because they see other humans with way, way, way more than a human being really needs (e.g. an american earning $500k).  

To answer your question, I would preferred to be scored as Benjamin the donkey rather than as one of the pigs.  Good luck trying to create a more equal society without just chopping off everyone at the top, cf. the cultural revolution.

5371 said...

I'm not sure that cosmopolitan utilitarianism makes better sense than the alternatives, but glad you agree that the possibility to make a lot of money and keep it shouldn't be defended as a "human right" or taken as an axiom.

LondonYoung said...

"Wealth" as we see it in the west, is a "contractual ownership" of property.  If the "99 pct" decides those contracts are invalid, then all wealth evaporates.  Compacts among human beings must be of benefit to most, or they will not last long.  What a "right" is, I dunno.  I understand stable and unstable systems.  I don't understand rights.

5371 said...

Nor do I.

Justin Loe said...

There's a rather straightforward observation about income inequality (as measured by the gini ratio etc) and that is that in a consumption driven economy, the absence of purchasing power in the majority of the population results in debt financing (if available) of consumption to maintain living standards, which is what has been observed recently. When the debt bubble bursts, consumption of course falls, and manufacturers find that the market for their goods has declined. The incentive for individual profit and advancement at the extreme end does not result in sufficient consumption to support the economy overall.

Likewise, when the debt bubble and speculation burst in the 1920s, another high point of income inequality, businesses found that the market for their goods had substantially declined. In both the 1930s and post 2008, debt financing was assumed by the government to bridge the consumption gap left when middle and working class consumers were no longer able to support the economy. It is arguable that the failure to maintain rising wages with increased productivity (recently we've flat wages and increasing productivity) is unsustainable and represents a systemic failure of the economic model that recurs occasionally. Government transfer payments are then employed to provide income to these workers who can then consume the goods produced by the businesses in question. In the long run, excessive income inequality runs counter to the interest of business because they are unable to sell their goods. Even WalMart has recently observed strains among its consumers.

WWII was of course the ultimate case in the US in government debt financed spending that restored consumption and output left underutilized during the Depression. During that time, income inequality dramatically decreased as well. 

If income inequality has a cyclical component, it is possible that we'll see a reversal of the general upward trend with the contractions in the banking sector or cultural blowback such as the recent movements in the news. I'm not sure about that, since the mass movements of the 1930s (labor strikes, sit-ins, marches, etc) are only weakly paralleled by modern day movements, and thus far it is still culturally acceptable and laudable to become the millionaire or multimillionaire banker etc over other competing possible life goals.

As a counterexample to our own situation, Germany has lower income inequality, greater productivity of high-quality manufactured goods, a cheaper health care system, and a lower ratio of CEO to worker pay. None of these are mandated specifically by particular laws to my knowledge. 

Alternatively, the best explanation for income inequality is likely the cultural and social setting involved. In that case, the pattern is systemically embedded into the society and will likely only change over decades with different attitudes to lifestyle or personal goals. 

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