Friday, October 23, 2009

Books that my Kids will definitely be reading: Gardner's AHA and Gotcha!

Well they'll definitely be getting a copy. Who knows if they will actually read them. But these were two of my favorite books as a kid. I was reminded by a recent nytimes blog post about their author Martin Gardner. They really got me excited about math (using comic strips) but using serious math, applying number theory and topological fixed point theorems and things that gave me a second Aha when I learned about them again in grad school.

One I pondered for a long time and still occasionally do was the Pop-Quiz paradox. I recall seeing a resolution in college, and recall trying to apply the epistemic game theory I learned in grad school to the problem. The neat thing is that these ideas have stayed with me throughout and my appreciation has only gotten deeper with time.

I also first encountered the Monty Hall Problem there.

Another that stays with me (which in grad school I learned is an application of a fixed point theorem) is to think about somebody hiking up a mountain. She starts a 9am and arrives at 5pm. She camps out on top, and then starts walking down the same path at 9am, and arrives at the bottom at 5pm. The interesting question: Is there a time when she is at exactly the same point on the mountain at exactly the same time of day.

The answer it is revealed is yes. And you can see this by envisioning a video of the mountain as she walks up and a video of the mountain as she walk down. And then projecting the video simulatenously onto the same screen. At some point she will have to intersect herself.

The same idea can be applied to show that if you take a piece of paper that lying flat, completely fills the bottom of a box. Then you can pick it up and crumple it up however you want. There will always be some point of the paper that is exactly above where it was before when it was lying flat. Alternatively, you also know that at any given time, there is some point on the earth that is the exact same temperature as the point directly opposite it on the other side of the planet.

I remember learning about multiple infinities, and the difference between countable and uncountable.

And the best thing was they were all done in cartoon form. I loved the stick figures and the blatant asymmetric shapes. Ah great memories.

Sunday, October 18, 2009

America owes less money than you think

It is impressive, how much more economic literacy the country has developed in the past 12 months. Just enough to be dangerous. I've often lamented that a little bit of economic knowledge (say from Econ 1) gives people a dangerously distorted view of the world. The recent education people have gotten from newspaper editorials and headlines is perhaps even more distorted. Though I have been impressed with coverage, it still worries me because it gives people a false confidence in their own economic literacy. Many times, I'm sitting in a restaurant, overhearing snippets of conversation at tables next to mine where everyone's talking about the economy with great conviction while at the same time it is quite clear that no one knows what they are talking about.

I was recently waiting at a bus stop recently, and when it came up that I'm an economist, the guy having just seen a movie about the debt starts ranting about how the US debt is unsustainable. And we are headed for doom.


So the national public debt has gone up a lot in the past few months, to around $11 trillion. Is that a lot? Sounds like a lot. On a per capita basis, that's about $110,000 per household.

So 11 trillion is a lot, maybe 80% of GDP. Is that a lot?

Let's put this another way. If your annual income is $100,000, and you take out a mortgage to buy a house that costs $80,000. That seems quite reasonable doesn't it?

There's a bit of a slight of hand there, because GDP is how much money the country as a whole makes, and public debt is just how much the federal government owes. So let's try this another way:

If the US makes about $13 trillion a year, how much does the US as a whole (including government and private companies and individuals) owe to other countries? Note (over half of the federal debt is borrowed from Americans, so when we pay back our creditors, we are giving money to our children). The answer is about $13 trillion. The thing is, the US is also owed $8 trillion by other countries. So on net, the US debt is only about 35% of GDP.

Back to our analogy, that's like someone with an annual income of $100,000 having a mortgage of $100,000 but also holding $65,000 in stocks and other assets. Doesn't sound so untenable.

You might also note that the real problem is not the current debt (as the OMB chief likes to point out) but the size of the obligations to Social Security and Medicare. Which some estimate are in the tens of trillions, most of which is medicare and medicaid. So if you look at the numbers, the deficits in Social Security can be wiped out just by raising the retirement age by a couple years, or by indexing payments to inflation, rather than to wages, meaning that retirees in the future will get as much money as retirees of today, which doesn't sound so bad. Both are still politically difficult, but quite reasonable. Medicare and medicaid costs are the far bigger looming obligation, but those obligations assume that unchecked health expenditures, and given that the US spends more or less twice as much as every other developed country on health care, it is quite plausible that health expenditures can be brought down significantly in the future.

Of course the problem with metaphors is they are always imperfect (for example, if the US really needed to, it could just print more money to pay off its creditors). But many smart people are quite worried about the current levels. But put in perspective they are not as big as people seem to believe.

Saturday, October 10, 2009

Ways of Seeing (Art)

I guess one main reason I post these publicly instead of keeping them as a private journal is that usually comments from all of you make me think about things in a new way. Recently, comments to a snobbish nytimes article I posted about art made me think about how we visit museums, and the ways of seeing (as an old art history book of mine called it).

The article laments the practice of people who jog through the Louvres, to snap their photo next to the Mona Lisa, without spending more than a few seconds in front of each work.

Nowadays, when i go to a museum, i try to go to the special exhibits, mostly because they are transient, but also because they often tell more of a story, in terms of how they were curated. (Hanging out with art historians, you realize someone puts a ton of thought on these things) I'm also actually sympathetic with the jogging (though R- didn't like the fact I made her do that for her first visit to the louvres). I guess I got that from my art history prof who did that for my first visit. Even though over the course of the 6 week course, we spent pretty much every other day in some Paris museum, we still only saw a tiny fraction, and the prof thought it would be a travesty if we didn't at least see the mona lisa, the venus de milo and the nike. You can see many reproductions, but I've learned that reproductions are always a poor substitute in terms of image fidelity, size, impact, context in terms of other paintings, but also geography, and the other people watching.

Just like watching a movie alone is different than watching it in a theater. I'm also at the end of the day, less judgmental than the article. It is true that for a lot of people, they are there because they feel it is good for them, or because it is a status symbol. saying "hey, i saw the mona lisa last weekend" is similar to driving up in a hybrid car, or giving someone a diamond ring. but maybe that's ok. Americans are more likely to go to a museum than go watch sports, and somewhere along the way, that probably leads to something good.

Sunday, October 04, 2009

I need help rewriting Op-Ed on "We talk too much about the science of climate change!"

I was asked to write an op-ed on social science and climate change. Here's a very preliminary draft. I have lots of changes in mind, but before then, you guys are good at keeping me honest:

There was too much science driving the public debate on climate change. Coming from a former economist for the Bush administration, that kind of sentiment probably immediately raise your alarms, echoing images of a closed minded administration engaged in a War on Science. That kind of sentiment reminds you of everything that you thought was wrong with the Bush administration, and the kind of thinking that the Obama administration was supposed to fix. Yet, I maintain that any administration would be well served to not let science dominate policy decisions.

Let me be clear, I have nothing against science. My parents are scientists. Some of my best friends are scientists. Let me be even more clear, there is a scientific consensus that the earth is warning, and at least part of the warming is due to human activity. We should acknowledge that there are reasonable dissenters on this finding, and that nothing in science can be guaranteed with 100% certainty especially as paradigms shift, but I as a non-scientist think it more than reasonable to go with the consensus scientific opinion and acknowledge mankind’s role in climate change.

However, what we should do about climate change is a very different question, and one which quite possibly, scientists are not the ones with the best expertise. An old adage avers that “When you’re a hammer, everything looks like a nail.” Scientists see climate change as a scientific problem to be solved with a scientific solution. However, good public policy requires many inputs, among them, scientific and engineering understanding, but crucially we also need to understand social science as well.

For far too long, expert opinion within the public debate on climate change was dominated by scientists, and that created a large blind spot when it came to thinking about public policy.

To be fair, the scientists were the ones who identified the problem and have been thinking about the problem for the longest, and up until recently, they have been the ones doing most of the research. For reporters looking for stories on global warming, science was a natural place to turn.

Those who doubted the scientific consensus are pilloried as closed minded slack-jawed yokels, yet the same people that defend science often openly flaunt economic consensus. They advocate policies that fail every conceivable cost benefit analysis test, and claim that regulating carbon will increase economic growth. I know economists may not have the best reputation these days for predicting the macro-economy, but I still think the economic evidence is quite strong that added taxes and regulation while worthy, will likely dampen economic growth.

If you read the economic findings within the same Nobel Prize winning Intergovernmental Panel on Climate Change that people cite for describing the scientific consensus on climate change, you find the prediction that the economic consequences of implementing climate action to be on the order of trillions of dollars over the next 25 years. Implementing policies to stop climate change has consequences that include increasing poverty by the millions, increasing deaths from conditions associated with the cold such as flu or hypothermia, and decreasing potential growing seasons in large parts of the world like Canada and Russia.

The film An Inconvenient Truth frustrates me because after spending two hours deriding junk science, it ends using the junk economic argument that stopping global warming can be painless and is worth any cost.

But, I do believe that the economic analysis is clear that the potential consequences of doing nothing easily justify these costs. Trillions of dollars sounds big, but accounts for only a percent or two of world output over 25 years.

Some would say that informing people of the truth about the costs of climate policy is ill advised because it will only confuse them. While I share the goals of those who advocate for strong action to address climate change, I still think the public is better served when they are better informed. Especially because a better public understanding can make those climate policies are better designed.

Economists for example are fairly certain about certain principles that should drive climate policy.
Policy should begin modest, and increase with time. Policies should use market based instruments such as taxes or cap and trade which are far more effective that heavy handed regulation. Market based policies help ensure that only actions whose benefits outweigh their costs are taken.

In an article in the NY Times about eminent physicist Freeman Dyson who advocates many of these ideas, his ideas are treated with derision and contempt when most of his ideas are in line with economic mainstream.

I should be clear that my frustration comes mostly from the public debate, and not from the experts in the field who are mostly well informed on these issues. Scientists themselves are normally well aware of all of these other issues, though whether they find these other issues interesting enough to care about is another story.

At a meeting hosted by the Cornell Center for a Sustainable Future, we were discussing why the electric power grid needs to be upgraded to handle renewable power. While the engineers were focused on the science of upgrading the grid, in terms of determining the optimal location of new power lines, and the science of power transmission, I was reminded of a study by a group of economists at Resources for the Future, who found that it wasn’t money, or technology, or government regulation that was the main impediment to upgrading our power grid, but instead, it is primarily NIMBY. The social phenomenon where locals protest any new construction in their backyard, which often means just obtaining the rights to build a single power line can take decades.

And that I have used the past tense, because in recent months as the debate has taken more center stage in congress, more nuanced debate has emerged, and economic concerns have been mooted for debate.

But public perception is slow to shift. Some concrete examples where bad economics has played a role in the public debate include a favorite politician buzzword: Green Jobs. This term frustrates economists who see it as a dishonest slight of hand. Government policy can create jobs, but in general, the net effect long term effect of government policies and regulations is effectively zero: any green jobs created comes at the expense of jobs lost elsewhere in the economy.

Another peeve of mine is the proposal by a Columbia University biologist who has proposed converting Manhattan skyscrapers into giant greenhouses. I appreciate the sentiment of wanting to reduce transportation costs, but given that land in Iowa costs about a thousand dollar an acre, and office space in Manhattan costs hundreds of millions, it is hard to imagine how growing food in Manhattan skyscrapers vs. Iowa could possibly yield hundreds of millions of dollars in environmental benefits.

Note, that we are all hammers, and while I began my discussion criticizing scientific narrow mindedness, I should be cognizant my own economic-tinged narrow minded. I just urge more humility and open-mindedness in public discourse.

Economists often dream up policies without considering the politics, without accounting for the political difficulties in securing international cooperation and navigating well established international treaties, or with balancing the checks inherent in the democratic political process.

Economists have also largely ignored the power of social movements, of social pressure and moral obligation, to effect change. By incorporating insights from sociology and psychology, behavioral economists like myself, working with some colleagues at CALS, have been working on trying to understand how social pressures, and feelings of guilt, altruism, self-expression, or pride can be marshaled toward the environment.

Thursday, October 01, 2009

Augmented Reality on iPhone

Augmented reality is another one of those technologies that I saw demoed at the Media Lab way back in 1997, and finally in 2009 it gets commercialized. (The Kindle and eInk was the other example).

But the new iphone augmented reality apps offers tremendous potential. Yelp already lets you point your iphone camera at stores or restaurants, and it will annotate the image with information about the store. I'm sure Google Earth will soon do the same with even more info including wikipedia entries and photos.

It's like those fancy head's up displays in military aircraft.

But the gaming potential is neat. This upcoming game will put invisible aliens in the world around you, visible only when peering through your iphone screen (like the special sunglasses in that old 80's movie), which you shoot by pointing your phone at them.

Taking advantage of the fact that iPhones connect to the Internet is even more impressive. The video showed shooting aliens in the world around you, but you could also shoot other people also logged in. Your screen revealing the hidden players amongst the people around you. You could play a real FPS in your office or outside in a field. Literally run over powerups, get healed at certain stations, get special weapons, shoot things in the environment like cars to make them blow up, etc. A bunch of Stanford kids tried something similar without the fancy video a year ago, that didn't catch on, and probably the tech is still too slow to really do this well, but it is not far away.