Thursday, May 28, 2009

Humans Can Multi-task!

Lifestyle gurus these days love talking about how multi-tasking is a myth, that people can't multi-task, but instead, just switch their attention rapidly between different tasks. And therefore we should do only one thing at a time.


That is multi-tasking. At least that's how computers do multi-tasking. (ok, there are exceptions, especially as computers take advantage of multiple processors) but that is by and large how all personal computers have handled multi-tasking. (that was one of the first lessons I learned about computers back when we were first upgrading from DOS to Windows 3.0... not even 3.1).

And if that kind of multi-tasking has worked for computers, I don't see why that's an argument that humans can't do the same.

Sunday, May 24, 2009

A very dumb idea: make b-school like law/med school

The idea that we should "professionalize" business school so that it is more like med school or law school has been making the rounds recently (e.g. Time, NY Times, NPR, etc.). Whereas a true profession like law or medicine has a code of ethics designed to serve the greater good, business school is different because no such code exist.

Very large red alarms goes off for the economist in me at this idea. Because whereas others see professions as something noble, the economist sees a cartel. The standard view of professional societies (stemming from the medieval guilds) is that by regulating who can enter the market, they create a cartel that keep prices high by keeping people out. As Time noted, professionalization implies "a professional exam, a licensing board and exposure to malpractice," as institutions quickly become cooped by government. Economically, these institutions use government's coercive power to maintain their high prices. Some of the largest sources of dead weight loss and inefficiences in the economy are associated with the legal and medical industries.

That said, I am sympathetic to the benefits of monopolies. Like a benevolent dictator, a benevolent monopoly can often do the right thing, where a competitive market cannot (see Google for example). So maybe the lawyer and the medical cartel is justified, but the idea of professionalizing business so that you would need government approval to run any company is more than a little scary.

Thursday, May 21, 2009

Star Trek Reviewlet

Saw it the other night. Sort of had to with a 98% on Rotten Tomatoes. I normally don't like movies with that time travel premise (perhaps the only exceptions are Harry Potter and 12 Monkeys) but aside from that I enjoyed it. It was a satisfying experience though the plot had much of the same campiness as the original show. The casting was pretty spot on. They are indeed trying to create a new franchise though it that might be weird having a series of movies where the actors are all doing impressions of the previous crew. This one was fine as an homage and I enjoyed the plentiful references, but not sure if they can do it again. Good special effects which is a first for star trek. Still lame a$$ fight choreography. Sulu's (played by Harold sans Kumar) allusion to fencing (see Naked Time from the original series) could have been awesome but was poorly executed.

An easily likable (hence the 98% rotten tomatoes score) but not a great movie.

Final Grade: B

Tuesday, May 19, 2009

When politicians argue, what they really believe rarely matters, all that matters is what they want.

Obama announced the intention to raise the requirements for average fuel economy standards.

Note this is much the same as the plan I helped develop for the Bush administration that got pooh poohed by the press. Obama wants 35mpg by 2016 and its get called historic, (we proposed a similar level by 2017, and the compromise with Congress came to 35 mpg by 2020).

The frustrating thing is that part of the defense for the increase that Obama and pundits have been using is that they are merely homogenizing standards since allowing different states to have different standards is highly inefficient.

Of course when Bush used that reasoning to block California from setting their own standards, this was roundly bashed by Obama and the media as impeding progress. The only reason different standards exist is because Obama overturned the Bush ruling.

Thursday, May 14, 2009

How to fix the economy: On Transparency

When people ask my opinion as to what to do about the economy, I mostly punt the question. Arguing that is a macro question, and I gave up on studying it, because I think it is too hard a problem, not only for me to figure out, but even for the profession. I'm not sure anyone knows. But if pressed, one reform that does seem to be pretty easy to advocate is to increase transparency (this is a favorite prescription proposed by my students). Or perhaps not. As Truman famously lamented, there's no such thing as a one handed economist.

On the surface, transparency is good. It increases the free flow of information, and economic theory has told us that more information is almost always good, theory says that perfectly efficient markets depend on perfect information. And when information is hidden (i.e. when there is asymmetric information) you get market failures and inefficiencies. A practical implemenation of this idea in the financial sector that is often tossed around is to make more securities traded openly on exchanges rather than over the counter.

Of course thinking a little more deeply, there are problems with transparency. Partly, is the practical matter of standardizing incredibly complicated securities to put on an exchange. But more fundamentally there is the problem that transparency impedes the firms abilities to maintain trade secrets. Trade secrets, like patents, are another form of intellectual property protection (some argue they are the primary form of intellectual property protection given that the patent system is so broken), and though all intellectual property protection is bad for competition because it creates monopoly power and higher prices, it is good for innovation. So a byproduct of greater transparency could well be less innovation.

Thursday, May 07, 2009

Two novel reasons for the industrial revolution: no sex and coffee

I listen to a lot of podcasts on my commutes. One that is not particularly good, but fills the time is a BBC podcast on recent pop-sociology called Thinking Allowed.

A couple recent episodes though postulated two novel reasons for the industrial revolution.

This is an oft studied question, since it seems to be a key piece of economic development. China led the world in economic development up until as late as 1800 when the industrial revolution allowed the UK and the Anglo- world to take a commanding lead, which it has yet to give up.

Donald (now Deirdre) McCloskey argues that it was the enclosure movement, the idea that whereas before fields were all public land, changes in law that made land private created the incentives for investment, and thus the revolution.

The two that were thrown out in recent episodes of Thinking Allowed:

1) No sex. The Victorian ethos that led to sexual repression created a torrent of creative energy that had no other outlet for release except in productivity. As Newton aprocryphally said on his deathbed that his greatest achievement was dying a virgin.

2) Coffee. The arrival of coffee from the New World and the spread of coffeehouses which replaced wine as the drink dujour was responsible for the great gains in productivity.

Sunday, May 03, 2009

More reason to abolish the words billion and trillion from policy: Or why Gingrich and Waxman are morons.

I multi-task whenever I can, so at the gym, I normally do the elliptical with something to read, and then have tv on in the background, often c-span. So on a recent house hearing about climate change the following debate came up between Gingrich (uber-Republican) and Waxman (the Democratic sponsor of the climate change bill), I got more evidence why million, billion and trillion should be abolished from policy (see also here and here).

Gingrich: Your bill is going to cost Americans, half a trillion dollars over 10 years
Waxman: You are misinformed it is going to cost each person 40 cents per day
Gingrich: No, it's half a trillion!
Waxman: No it is 40 cents!
Gingrich: Poopy face
Waxman: Stupid Head
Ok, so they didn't use those words exactly, but that's what it sounded like. Of course 40 cents per American per day over 10 years is [drumroll please...] half a trillion dollars, but of course.