Fiscal versus Physical, and something else

Fiscal: TWO syllables. FISS-CUL

Physical: THREE syllables. FIZZ-UH-CUL

Too many football players say the word physical with only two syllables. Too many economists say the word fiscal with three syllables. These people are specialists. How can they confuse those words? How dare they!

Here's another one:

Systemic: Three syllables. To me the word means within the system.

Systematic: Four syllables. To me the word means regularly and repeatedly, as if the result of a basic misunderstanding.

If a problem is "systemic" (three syllables) it means the problem is within the system.

If a problem is "systematic" (four syllables) it means the problem is that you misunderstand the system.

In the realm of economics, the difference between "systemic" and "systematic" is particularly important: Is there a problem with the economy, or is the problem that we misunderstand the economy?

Unfortunately, economists too often use the word "systemic" when they mean (or should mean) to say "systematic".

Conveniently, their mistake leads them to think that there is a problem in the economy instead of in their thinking.

The narrative

I remember being in, I dunno, grammar school, and learning the words noun and verb and adverb and adjective and like that. Noun and verb I got, the thing and the action. As for the rest... I got the idea that you stick an extra word in there to modify the noun or modify the verb and that's cool, that makes sense, and that's as far as I got. I know that there are adverbs and I know that there are adjectives, but I'd have trouble picking them out. I bring this up because...

I don't know what a "narrative" is. Well it's a story I guess. But I don't have a feel for what the word means.

But just now I was reading Tim Duy and writing, and I read:

I have been puzzling over this from Paul Krugman:

Donald Trump won the electoral college at least in part by promising to bring coal jobs back to Appalachia and manufacturing jobs back to the Rust Belt. Neither promise can be honored – for the most part we’re talking about jobs lost, not to unfair foreign competition, but to technological change...

Is this the right narrative? ... Try to place [it] in context with this from Noah Smith:

Then, in the 1990s and 2000s, the U.S opened its markets to Chinese goods, first with Most Favored Nation trading status, and then by supporting China's accession to the WTO. The resulting competition from cheap Chinese goods contributed to vast inequality in the United States, reversing many of the employment gains of the 1990s and holding down U.S. wages...

Let me suggest this narrative: Sometime during the Clinton Administration, it was decided that an economically strong China was good for both the globe and the U.S. Fair enough. To enable that outcome, U.S. policy deliberately sacrificed manufacturing workers ...

A "narrative" is a story. I see it: Krugman is telling one story, and Tim Duy is telling another. I get it now.

Loans and Lending in the Age of Illiteracy

If you look up loan and lend you'll find some gibberish about how those words are interchangeable now, but once upon a time they were not. You can lend me money or loan me money, these days it's all the same.

I need a word for the act of lending, and a different word for the thing itself, the loan. Everybody knows what a "loan" is: I don't think anyone would call it a "lend". We're not that far down the slope of the next Dark Age, not yet. So, loan is the thing, then, and lending is the act.

I'm perfectly happy to use lending (with an "ing") and loans (with an "s") to make my distinctions. I won't insist that "loan" must be a noun and "lend" must be a verb. Obviously, there should be some backflow from "loans" as thing to "loan" as noun, and from "lending" as action to "lend" as verb. But I won't insist.

//

This is not an econ blog so maybe you don't know. But maybe you do know the difference between "debt" and "deficit". A Federal "deficit" is one year's budgetary shortfall. The Federal "debt" is the accumulation of deficits.

I need the words "loans" and "lending" so I can make a similar distinction. The act of "lending" creates an addition to the accumulation that I am calling "loans".

The difference between the words "loans" and "lending" is more obvious than that between the words "saving" and "savings". But again, the distinction of meaning is similar. Saving (without the "s") is an act. Savings (with the "s") is an accumulation. The act of saving adds to the accumulation of savings.

//

In econ much is made of "stocks" and "flows" where "stocks" (not stock-market stuff) are accumulations, and "flows" are changes to the accumulations, additions to or subtractions from stock. The example always used is a bathtub: The water in the tub is the "stock". Water coming out the faucet is a "flow". Water going down the drain is a "flow".

Debt is a stock; the deficit is the flow.
Savings are a stock; saving is the flow.
Loans are a stock; lending is the flow.

It has to do with levels and rates of change. The water in the tub is at a particular level. Water goes into the tub at a rate, which changes the level over time. The stock is the level, and the flow is the rate.

With all the focus on the Federal debt and deficits these days, these decades really, maybe everyone already knows the difference between "debt" and "deficit". Great! Loans and lending, savings and saving, these are not such prevalent concerns, but the distinctions of meaning match those of debt and deficit.

Apparently I have no ending for this post.

Oh! Happy Thanksgiving.

It just sounds better

From an ad for my senator: "... We make more than a half million guitar strings a day ..."

They say "a half million". But I hear "uh half million" and it sounds so dumb.

Anyway, the units are not half-millions. The units are millions. So you don't say "a half million". You say "half a million". That way the units are right.

Besides it just sounds better:

"... We make more than half a million guitar strings a day ..."

Easy to fix

Reading How high debt leads to income inequality by Atif Mian and Amir Sufi. I thought I'd be interested in the economics. Instead I focus on this:

Money can’t make up for the loss of one’s home, but it ensures that a family can begin rebuilding their lives during such a desperate time.

"A family" is singular. "Their lives" is plural. How can I assume that Mian and Sufi's economic logic is sound when between the two authors they cannot tell one from more than one?

It's easy to fix. Just change "a family" to "families".

Economics is all about having the best story. Good stories need good sentences. Bad sentences are distracting.

Don't ask me why it's "economics is".

Heart and Mind

Sentences in development:

I'm something of a monetarist at heart. To my mind, even if monetary balances are not the cause of recessions, they must nonetheless be evidence.

That doesn't work. Maybe this:

I'm something of a monetarist at heart. Even if monetary balances are not the cause of recessions, they must nonetheless be evidence.

Moving on.

Literacy skills

Found this in the new 70-page PDF from the Harvard Business School Survey on U.S. Competitiveness, Problems Unsolved and a Nation Divided:

Younger cohorts of U.S. workers have higher literacy scores than older cohorts in absolute terms, reflecting U.S. skills improvement over time. But workers elsewhere have improved even faster. American workers from earlier generations are more literate than their international peers of the same age, but younger U.S. workers are less literate than their peers.

Younger Americans are more literate than older Americans? That depends on your standard of literacy.

If you say you "over-exaggerated"...

If you say you "over-exaggerated" it means you still think you should have exaggerated, but not quite so much.

Not for its economics

From The Economist:

David Ricardo showed in 1817 that a country could benefit from trade even if it did everything better than its neighbours. A country that is better at everything will still be “most better”, so to speak, at something. It should concentrate on that, Ricardo showed, importing what its neighbours do “least worse”.

If bad grammar is not enough to make the point, an old analogy might...

I thought that was nicely written -- or at least a nice escape from some fairly crude terminology.

Use over time

Not quite at random, "use over time" graphs from Google:

Formatting HTML, a detail

On the econ blog I'm complaining about Martin Feldstein. Yeah you should have heard of him // I'm not gonna say who he is // It doesn't matter anyway.

I looked him up on Wikipedia. Copied the first paragraph and pasted into my blog. Pasted it in the "compose" view. That way the links and HTML formatting gets pasted in, along with the text. So I get to see how (in this case) Wikipedia had formatted the text.

The article begins with Feldstein's name. As Wikipedia has it:

Martin Stuart "Marty" Feldstein

If you look at Wikipedia's HTML for Feldstein's name, it turns out that the name is bolded but the quote marks are not.

<b>Martin Stuart</b> "<b>Marty</b>" <b>Feldstein</b>

The text is bolded, but the quote marks are not. I always wondered how to handle situations like that. I think this is a good way to do it.

That's what it's like when I write.

That is the first time in this series that I've gone from correlation to causation. And even though I've known for thirty years that debt is the problem, the move still bothers me. Because while it's obvious to me that debt is the problem, it's apparently not obvious to most people.

That is the first time in this series that I've gone from correlation to causation. Even though I've known for thirty years that debt is the problem, the move still bothers me. Because while it's obvious to me that debt is the problem, it's apparently not obvious to most people.

That is the first time in this series that I've gone from correlation to causation. The move still bothers me, even though I've known for thirty years that debt is the problem. Because while it's obvious to me that debt is the problem, it's apparently not obvious to most people.

That is the first time in this series that I've gone from correlation to causation. The move still bothers me, even though I've known for thirty years that debt is the problem. Because, while it's obvious to me that debt is the problem, it's not obvious to everybody.

That is the first time in this series that I've gone from correlation to causation. The move still bothers me, even though I've known for thirty years that debt is the problem. Because it's obvious to me, but it's not obvious to everyone.

That is the first time in this series that I've gone from correlation to causation. The move still bothers me, even though I've known for thirty years that debt is the problem.

"Literally"

From On the Mechanics of Economic Development by Robert E. Lucas, Jr:

"The diversity across countries in measured per capita income levels is literally too great to be believed."

So Lucas is saying: Yeah, we measure per capita income levels, and we get results, but our results must be no good because we cannot believe -- we literally cannot believe -- those results are right.

I literally do not believe this is what Mr. Lucas meant to say.

Le mot juste

"Simulation" maybe?

So ... if the word comes from the late 20th century or the 1980s ... how come the "use over time" graph shows more use in the 19th century and less in the 20th?

Screw it. I'll just use "sim" to mean "simulation".

One extra keystroke

Without:

Readers of this blog will be familiar with this argument. For those who are not here is a brief recap of the evidence supporting our claims.

With:

Readers of this blog will be familiar with this argument. For those who are not, here is a brief recap of the evidence supporting our claims.

Go for it.

Too many thoughts

Maybe it's different if you're writing fiction. But writing about the economy, I often find myself deleting an interesting observation, simply because it's the second observation and it detracts from the first observation.

Separately, they might be interesting. Together, they create confusion. Or so I think.

Dealing with holes in a Swiss cheese brain

I sometimes have a thought pop into my head, a one-liner that suddenly makes sense to me. It seems to be a direct quote but it must be a distillation of something I read. Reading Keynes, for example. He doesn't usually write one-liners. So I wake up one morning and say "Oh, Keynes said you can only either spend money or save it." And in my mind, the you can only either spend money or save it part is what Keynes said -- his words, not mine. And that's how I think of it.

And I've had a couple times when I went looking thru The General Theory for the particular phrase. So I could document it in my writing. Looking till my head hurts, but not finding.

Doesn't mean that the exact phrase is not in the book. But by the time my head hurts, when I give up the search, I'm convinced that the exact phrase is not in the book. At that point, I have to think that those particular words are what Keynes said, but my version of it. I don't know if that's correct, but it's what I have to think in order to proceed.

After that, I might say something like Keynes said you can only either spend money or save it. No quotes, so it looks like I'm paraphrasing him. But attributed to Keynes, so I'm not stealing the words.

It's a compromise that lets me move on to the next sentence.

No, those are the same word

It started out as a joke. I said I'm retired now and I might be going senile. But then I googled senile because it's not a word I use often and, you know, because maybe I'm senile. I googled it. The first three results were good. Here is number four:

First, they "explain English by way of Greek" (I wish I knew where that phrase came from) ... or in this case, maybe by way of Latin.

And then they say "senile" is

in other words, someone showing signs of senility.

But that's not other words. It's the same word: Senile.