Quotulatiousness

September 2, 2013

Macroeconomics and math

Filed under: Economics — Tags: , , , — Nicholas @ 09:06

Noah Smith on the uneasy foundations of modern macroeconomics:

In macro, most of the equations that went into the model seemed to just be assumed. In physics, each equation could be — and presumably had been — tested and verified as holding more-or-less true in the real world. In macro, no one knew if real-world budget constraints really were the things we wrote down. Or the production function. No one knew if this “utility” we assumed people maximized corresponded to what people really maximize in real life. We just assumed a bunch of equations and wrote them down. Then we threw them all together, got some kind of answer or result, and compared the result to some subset of real-world stuff that we had decided we were going to “explain”. Often, that comparison was desultory or token, as in the case of “moment matching”.

In other words, the math was no longer real. It was all made up. You could no longer trust the textbook. When the textbook told you that “Households maximize the expected value of their discounted lifetime utility of consumption”, that was not a Newton’s Law that had been proven approximately true with centuries of physics experiments. It was not even a game theory solution concept that had been proven approximately sometimes true with decades of economics experiments. Instead, it was just some random thing that someone made up and wrote down because A) it was tractable to work with, and B) it sounded plausible enough so that most other economists who looked at it tended not to make too much of a fuss.

We were told not to worry about this. We were told that although macro needed microfoundations — absolutely required them — it was not necessary for the reality of any of these microfoundations to be independently confirmed by evidence. All that was necessary is that the model “worked” after all the microfoundations were thrown together. We were told this not because of any individual failing on the part of any of our teachers, but because this belief is part of the dominant scientific culture of the macro field. It’s the paradigm.

Slate on the gender wage gap

Filed under: Business, Economics — Tags: , , , — Nicholas @ 08:56

Hanna Rosin debunks the meme that “women only get paid 77 cents for every dollar earned by men doing the same job”:

The official Bureau of Labor Department statistics show that the median earnings of full-time female workers is 77 percent of the median earnings of full-time male workers. But that is very different than “77 cents on the dollar for doing the same work as men.” The latter gives the impression that a man and a woman standing next to each other doing the same job for the same number of hours get paid different salaries. That’s not at all the case. “Full time” officially means 35 hours, but men work more hours than women. That’s the first problem: We could be comparing men working 40 hours to women working 35.

How to get a more accurate measure? First, instead of comparing annual wages, start by comparing average weekly wages. This is considered a slightly more accurate measure because it eliminates variables like time off during the year or annual bonuses (and yes, men get higher bonuses, but let’s shelve that for a moment in our quest for a pure wage gap number). By this measure, women earn 81 percent of what men earn, although it varies widely by race. African-American women, for example, earn 94 percent of what African-American men earn in a typical week. Then, when you restrict the comparison to men and women working 40 hours a week, the gap narrows to 87 percent.

[…]

Goldin and Lawrence Katz have done about as close to an apples-to-apples comparison of men’s and women’s wages as exists. (They talk about it here in a Freakonomics discussion.) They tracked male and female MBAs graduating from the University of Chicago from 1990 to 2006. First they controlled for previous job experience, GPA, chosen profession, business-school course and job title. Right out of school, they found only a tiny differential in salary between men and women, which might be because of a little bit of lingering discrimination or because women are worse at negotiating starting salaries. But 10 to 15 years later, the gap widens to 40 percent, almost all of which is due to career interruptions and fewer hours. The gap is even wider for women business school graduates who marry very high earners. (Note: Never marry a rich man).

I’ve posted similar articles on this topic before: August, 2012, June 2012, and July 2010.

South Korea decides against the F-35 and the Eurofighter Typhoon

Filed under: Asia, Military, Technology — Tags: , , , — Nicholas @ 08:40

The South Korean government is in the same situation as the Canadian government: needing to purchase replacements for Cold War era combat aircraft and having a very limited budget to do so. After analyzing their specific needs, South Korea isn’t going to buy either the F-35 or the Eurofighter Typhoon:

On August 18th South Korea selected Boeing’s F-15SE Silent Eagle as the sole candidate for Phase III of its Fighter eXperimental Project (F-X) over Lockheed Martin’s F-35A and the Eurofighter Typhoon. The decision has drawn vociferous criticism from defense experts who fear the selection of F-15SE may not provide the South Korean military with the sufficient Required Operational Capabilities (ROCs) to counterbalance Japan and China’s acquisition of 5th generation stealth fighters.

In hindsight, Zachary Keck of The Diplomat believes that Republic of Korea’s (ROK) preference for the F-15SE over two other competitors was “unsurprising.” After all, Boeing won the previous two fighter competitions with its F-15-K jet. In 2002 and 2008, South Korea bought a total of 61 F-15K jets from Boeing. South Korea’s predilection for the F-15SE is understandable given its 85% platform compatibility with the existing F-15Ks.

However, the most convincing explanation seems to be the fear of “structural disarmament” of the ROK Air Force should it choose to buy yet another batch of expensive fighters to replace the aging F-4 Phantom and F-5 Tiger fighters. Simply stated, the more advanced the fighter jet, the more costly it is. The more expensive the jet, the fewer the South Korean military can purchase. The fewer stealth fighters purchased, the smaller the ROK Air Force.

Here is a mock-up of the F-15SE, courtesy of Wikipedia:

Mockup of the F-15SE Silent Eagle

Mockup of the F-15SE Silent Eagle

September 1, 2013

Humans are both pattern-seeking and pattern-interpreting creatures

Filed under: Media, USA — Tags: , , — Nicholas @ 09:29

In the Wall Street Journal, Jesse Walker has another excerpt from his new book, this time on the phenomenon known as pareidolia:

This November will mark the 50th anniversary of two events that are of special interest to conspiracy buffs. One is the assassination of President John F. Kennedy, a killing that has spawned dozens of theories about the hidden forces that allegedly carried out the crime. The other is a lecture the historian Richard Hofstadter delivered at Oxford, which Harper’s later published under the title “The Paranoid Style in American Politics.” Half a century of scholarship has either built on or pushed back against Hofstadter’s conclusions, some of which don’t hold up very well. But it remains the most widely cited essay on American political paranoia.

Some conspiracies are real, of course, but even a conspiracy theory that is entirely false has truths to tell us about the anxieties and experiences of the people who believe it. More, it tells us something about the ways people perceive the world.

[…]

The faces are the result of apophenia, the process of projecting patterns onto data. More specifically, they are pareidolia, in which those patterns are perceived as meaningful shapes or sounds. It is pareidolia that allows us to see a man in the moon, to hear a satanic incantation when “Stairway to Heaven” is played backward, or to conjure the image of your subconscious choice while taking a Rorschach test. Indeed, pareidolia makes the whole world a Rorschach test. The Web is filled with delightful pareidolia-themed photo sets, in which unexpected forms appear in mountains, pasta, fire, clocks, clouds.

[…]

Human beings have a knack not just for finding patterns in chaos but for constructing stories to make sense of events, especially events that scare us. And a conspiracy story is especially enticing because it imagines an intelligence behind the pattern. It doesn’t just see a shape in the smoke; it sees a face in the smoke.

We will never stop finding patterns. We will always be capable of jumping to conclusions, particularly when we’re dealing with other nations, factions, subcultures or layers of the social hierarchy. And conspiracies, unlike many of the monsters that haunt our folklore, do exist sometimes, so we won’t always be wrong to fear them. As long as our species survives, so will political paranoia.

India moves government email away from US-based email services

Filed under: Government, India, Technology, USA — Tags: , , , , — Nicholas @ 09:13

Vinay Mandalia discusses the quite rational response of the Indian government to the recent discovery that the US intelligence services have had full access to all email communications hosted on US email services:

The Government of India is planning to ban the use of US based email services like Gmail for official communications and is soon going to send out a formal notification to its half a million officials across the country asking them to use official email addresses and services provided by National Informatics Centre.

The move is intended to increase the security of confidential government data and information after it was revealed earlier that NSA may be involved in widespread spying and surveillance activities across the globe.

In a statement to reporters here J. Satyanarayana, secretary in the department of electronics and information technology, said that data of Indian citizens using US based email services like Gmail is residing on servers which are located outside India and for now the government is concerned about the large amount of official and critical data that may be resident on those servers.

Expect a lot of other US “allies” to suddenly discover that their internal communications have been an open book to their “friends” for the last 10-20 years and decide to take similar measures.

H/T to Techdirt for the link.

America’s hidden (true) crime rate

Filed under: Government, Law, USA — Tags: , , — Nicholas @ 09:02

In a post from last year at n+1, Christopher Glazek explains why the official crime rate is failing to show the true level of violent crime in the United States:

According to government statistics, Americans are safer today than at any time in the last forty years. In 1990, there were 2,245 homicides in New York City. In 2010, there were 536, only 123 of which involved people who didn’t already know each other. The fear, once common, that walking around city parks late at night could get you mugged or murdered has been relegated to grandmothers; random murders, with few exceptions, simply don’t happen anymore.

When it comes to rape, the numbers look even better: from 1980 to 2005, the estimated number of sexual assaults in the US fell by 85 percent. Scholars attribute this stunning collapse to various factors, including advances in gender equality, the abortion of unwanted children, and the spread of internet pornography.

[…]

Statistics are notoriously slippery, but the figures that suggest that violence has been disappearing in the United States contain a blind spot so large that to cite them uncritically, as the major papers do, is to collude in an epic con. Uncounted in the official tallies are the hundreds of thousands of crimes that take place in the country’s prison system, a vast and growing residential network whose forsaken tenants increasingly bear the brunt of America’s propensity for anger and violence.

Crime has not fallen in the United States — it’s been shifted. Just as Wall Street connived with regulators to transfer financial risk from spendthrift banks to careless home buyers, so have federal, state, and local legislatures succeeded in rerouting criminal risk away from urban centers and concentrating it in a proliferating web of hyperhells. The statistics touting the country’s crime-reduction miracle, when juxtaposed with those documenting the quantity of rape and assault that takes place each year within the correctional system, are exposed as not merely a lie, or even a damn lie — but as the single most shameful lie in American life.

From 1980 to 2007, the number of prisoners held in the United States quadrupled to 2.3 million, with an additional 5 million on probation or parole. What Ayn Rand once called the “freest, noblest country in the history of the world” is now the most incarcerated, and the second-most incarcerated country in history, just barely edged out by Stalin’s Soviet Union. We’re used to hearing about the widening chasm between the haves and have-nots; we’re less accustomed to contemplating a more fundamental gap: the abyss that separates the fortunate majority, who control their own bodies, from the luckless minority, whose bodies are controlled, and defiled, by the state.

An amazing bit of information from the article is that the US government didn’t even bother collecting statistics about prison violence until 2011. They used the formal complaint rate as a proxy for the actual rate of crime committed behind bars. That was around 800 per year. When they actually started taking note, the more realistic number was produced:

In January, prodded in part by outrage over a series of articles in the New York Review of Books, the Justice Department finally released an estimate of the prevalence of sexual abuse in penitentiaries. The reliance on filed complaints appeared to understate the problem. For 2008, for example, the government had previously tallied 935 confirmed instances of sexual abuse. After asking around, and performing some calculations, the Justice Department came up with a new number: 216,000. That’s 216,000 victims, not instances. These victims are often assaulted multiple times over the course of the year. The Justice Department now seems to be saying that prison rape accounted for the majority of all rapes committed in the US in 2008, likely making the United States the first country in the history of the world to count more rapes for men than for women.

To some — especially on the right — prison rape is considered part of the expected punishment for crimes. Comedians have used the notion for jokes for decades. Perhaps now it’s time to consider that this is actually a state crime against humanity?

H/T to Marginal Revolution for the link.

The military tablet – appearing now in combat zones around the world

Filed under: Military, Technology — Tags: , , , , — Nicholas @ 00:01

Strategy Page talks about the US Air Force use of Windows tablet computers for aircraft pilots and the wider adoption of tablets in the rest of the military:

Air forces all over the world are catching up when it comes to iPads. These devices were soon being adopted by officers and troops after they first appeared in 2010, without waiting for official permission. The iPad mini showed up in 2012. While using PDF files to replace maps and manuals was one of the first military uses, this was quickly followed by military-specific smart phone apps.

Early on combat pilots in Afghanistan, like many businesses, discovered how useful the iPad could be on board. U.S. Marine Corps helicopter pilots found the iPad a useful way to carry hundreds of military maps, rather than the hassle of using paper versions. Marine commanders quickly realized this “field expedient” (a military “hack” that adopts something for unofficial use while in the combat zone) worked, and made it official. That meant buying iPads for this and getting to work coming up with more uses. Meanwhile, support troops that have to handle a lot of data, quickly found ways to get it done on iPads. This was pretty simple for technical troops who rely on lots of manuals. They are often already available in PDF format, and can easily be put on an iPad. But the iPads are basically hand-held computers, and can do so much more. The troops quickly began making that happen themselves.

About the same time iPad appeared the U.S. Army decided to establish an app store (the Army Marketplace) for military smart phone users. This quickly included the iPad, which soldiers were instant big fans of. The army app store included an “App Wanted” section where users could post descriptions of an app they need. If a developer (in uniform, or an army approved civilian with access to the Army Marketplace) was interested, a discussion could be started on an attached message board. The army found that many needed apps were quickly created and made available at the Army Marketplace. Developers could charge for their apps, although the army is also would pay developers to create needed apps that have been described by military smart phone users. The other services quickly adopted a similar attitude towards app development and many of the U.S. Army apps have shown on smart phones outside the country.

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