John Maynard Keynes vs. Friedrich Von Hayek

The smart money is on Hayek. Hat tip to MarginalRevolution.com.



http://www.auburn.edu/~garriro/macro.htm





Coming up next, the "economics" of coffee breaks. Are coffee breaks really "stealing time and productivity" from your employer?

Relationships, Dating, The "Butterfly Effect," and the "Tipping Point"

Okay, on Saturday I was up at 3 Am, still adjusting to the U.S. Central Time Zone. Perusing the internets (plural), my fingers happen to wander into the Yahoo! dating advice section. Sensing an opportunity to pick up a few useful pointers, I scanned the list of headlines. I'll put some of the good ones below and excerpt some of my favorite parts of each

Dating 101: How to Tell if a Guy Is Cheating

#2 is "He steps up the grooming"

Will He Ever Marry You?

You? The psychotic high-maintenance one? The odds are against you...but anyways..a few quotes

"Another major telltale sign of real love is selflessness and the ability to care. Does your man make sacrifices for you? Is he able to put your wants and needs before his? Relationships are all about give and take, but love is more about giving."

Hmmmm. That's not bad. and..

"Having unrealistic expectations makes it impossible for a man to develop a close bond. If a guy who isn’t ready starts getting too close to a woman, he’ll look for imperfections,either consciously or subconsciously, to create distance between them and, ultimately, to give him a reason to break up with her."

Not bad either. If guys start highligting the 4% of you that IS flawed and ignoring the 96% that is great--or merely tolerable---then you better pack your bags, sweetheart.

What Makes Men Fall in Love

-Ask his opinion
Because you have been 0 for 30 in your last 30 opinions
-Don his clothes
Kinda creepy, but if we like you, it's hot. Wear the dress shirts! I'll leave a few out for you the night before, k?
-Blow him off
Spot on! turn us down...we'll come after you. We want what we can't have. That includes your hot friends too.
-Let him see you primp
No! No! absolutely not! we don't want to see you agonize over what you are wearing that evening. Your indecision kills us. You are just trying all that shit on so other GIRLS notice, not other guys, or me. If I like you, you could wear a tall, white, kitchen garbage bag and I would think you look great.

4 Ways to Sweep Him Off His Feet

All four of these are horrible. This isn't bad tho
1. Suggest a Sexcapade

These are primarily aimed at women. Noticing that Yahoo! Dating collaborates with Cosmo magazine confirms this. I'm sure if i fished around, I could find the Yahoo! Dating and Men's Health oracle of dating wisdom.

It's really hard to imagine that any two people dated successfully before the advent of the "Dating Advice" industry. I mean, how did people ever fall in love before women started asking men before their opinions? Some of this crap lies in the very parochial self-interest of Cosmo magazine. Telling their readers "they suck!!!" and then advising them how to be successful daters helps them sell magazines. It's like the diamond, flower, and Hallmark card industries forming a cartel and coming up with Valentine's Day.

I began to think about my own experiences in the last few years (I have to keep the sample size fairly small and my memory is not THAT good). All of these pieces of advice are about things that we CAN control. We CAN control our grooming. We CAN proactively "play" hard to get. We CAN suggest a sexcapade (yes, to the Altoid and ice-cube suggestion).

But I believe the difference between a successful and unsuccessful relationship depends largely on VERY small factors and that are beyond our control. Consider Malcolm Gladwell's bestseller "The Tipping Point; How Little Things Can Make a Big Difference." I first became familiar with Mr. Gladwell's writings as an avid reader of the New Yorker several years ago. The general premise of book is too complex to summarize in a sentence or two. But the general premise is that there exists a theoretical "tipping point" beyond which the trend or momentum is very difficult to reverse. This could apply to the spread of ideas, a fad, or an epidemic, and he even contextualizes the word "stickiness" to mean the lasting effects of any phenomenon.

The other concept I thought of was the "butterfly effect"--the phenomenon by which a butterfly flaps its wings somewhere in North America and creates a typhoon in China. The "butterfly effect" is a subset of bigger field of mathematics called "chaos theory"---one of the most abstruse fields of mathematics--or is it economics--or physics---ever conceived by humankind. Similar to the subtitle of Gladwell's book, it refers to the idea that extremely small inputs lead to gargantuan outputs.

Now on to my theory. I believe that relationships do have a tipping point. There exists a point where a relationship goes from the casual dating stage to the point where it really has legs and picks up steam, like an epidemic of disease. You'll have to excuse the simile comparing one's feelings to a disease, but if you can envision yourself being "consumed" by love or feelings, this makes a little sense.

What could the tipping point be? Maybe for some, it's the first time a relationship gets physical. For some, it's anywhere between dates #'s 3 to #6. Maybe it's the first shared traumatic experience. Or the first shared vacation. For me its actually been a first kiss! No joke.

This is not to say--at all--that beyond this point all relationships are fail-safe. Like trends or epidemics, that can--and mostly do--die. But there is that theoretical point before which it is easy to walk away with no hard feelings, and beyond which stopping the momentum may prove to be elusive.

The "butterfly effect" corollary to my theory is the relationship's randomness component. Consider the following scenarios:

1) A couple is on their second date, dining at a Lebanese restaurant in Chicago named Maza. After a little bit of small talk, the subject of conversation turns to each other's parents. In the flow of the conversation the guy decrees, "oh, well, maybe someday you'd like to meet them!"



2) Two people, again in the early stages of dating, have gone a few days without corresponding. One of them...oh whatever...let's say the guy texts the girl, "hey there! whatcha up to today?" And after a few hours of no response, the guy texts again, "hey, I haven't heard back from you. Is everything ok?"

3) After what he thinks is a very successful first date, the guy, still basking in the first-date glow, decides to ignore the 3-day rule and call the next day to say "hi."

4) When it gets to the point in the dating relationship where the sexual tension boils over, either the guy or the girl chooses to wait---just to make sure that they are doing the right thing-- rather than give in to primitive temptations. Note: for most people I know, this is anywhere between date #2 and date #45


Have any of the readers been in situations like this before? Maybe the resolutions of these clear scenarios is clear to you. But it's not clear to me.

Take scenario #1. A casual reference to meeting someone's parents, especially in some abstract point in the future, seems like a benign observation. But a girl can react in one of two ways, and you really don't know which way she will react. She might think, "Whoa buddy! No need to bring up the parents. Let's juts try and get through dessert." Or she might think, "Wow! He actually is forward-looking! This isn't temporary for him. He is serious!"

Take scenario #2. Texting someone twice within a few hours can either seam REALLY REALLY thoughtful....or REALLY REALLY clingy and insecure. Am I right? The recipient can think, "jesus, will you leave me alone?" or "Gee, he/she really does care if I am okay! Let me get back to him/her."


The same logic can apply to scenario #3. A phone call on the day following a successful date can be kind and thoughtful, and many girls would accept it as such. But to some, not waiting the requisite 3 days mean you are dripping with desperation and eagerness. You can't wait an extra few days? What, is your life that lame? Are you that lonely?

Lastly, we ALL know how scenario #4 can break both ways. If we wait? We are shy and unsure. Or we could be considerate and patient. If we don't wait? We are CRAZY 'bout you! Or we are succumbing to carnal temptation and we can't wait to be done with you the next morning. Actually, here is some cab money. Go find your way home.

My point is simply this. Misplaying these scenarios can have MAJOR consequences on the outcome of a relationship. Wait...forget the relationship. You get one of these wrong? You may not get a next date! Or a call back!

Even the most astute judges of character cannot tell within a few dates whether the girl is the type who likes to be contacted often or who needs their space. Getting this detail right, however, will heavily influence how much she likes you. If you think you are being kind and she thinks it's too soon for you to call? It may take hypnosis to convince her you aren't desperate. If a guy has it in his head that a girl is clingy and high-maintenance...and he isn't on board? It's over, psycho! The next text message you are getting is at one in the morning after an 8-12 "top-shelf" all-you-can-drink party. If a girl gets the impression that a guy is interested only in sex, i.e. he's too eager to disrobe while the two of you are watching Love, Actually on the couch? It's over for you, Romeo. I hope your "Ho"-lodex is current.

I am anticipating a lot of feedback on this one. Have at it. Gotta go get a caffeine drink.

Drink of the Week

Price-----Seasonal, Market Price

Please End the Drug War!!!!

I have been reading too many headlines recently about escalating violence in Mexico, death squads in Thailand, and human rights abuses in South America---all because of this very feckless aspect of our foreign policy.

Wider Drug War Threatens Colombian Indians

"It is the kind of nightmarish ordeal that is an all-too-common feature of Colombia’s long war: peasants being terrorized by gunmen seeking dominance in the backlands.

But as Colombia’s war for control of the drug trade intensifies in frontiers like this one, with new combatants vying for smuggling routes and coca-growing areas where Indians eke out a meager existence, it is adding to the already grave toll on the nation’s indigenous groups. At least 27 of the groups are at risk of being eliminated because of the country’s four-decade conflict, according to the United Nations, and human rights organizations worry that the new violence is pushing even deeper into the Indians’ ancient lands."

Important Article in Yesterday's NYTimes

readers of this blog will figure out that I am no fan of the "Green Movement." Its not that I don't care about the environment or conservation--that is VERY important to me. Its that the Green Movement hasn't gotten ANYTHING RIGHT in the last 50 years! Nothing!

From John Tierney,

Use Energy, Get Rich and Save the Planet

"Those projections make it easy to assume that affluence and technology inflict more harm on the environment. But while pollution can increase when a country starts industrializing, as people get wealthier they can afford cleaner water and air. They start using sources of energy that are less carbon-intensive — and not just because they’re worried about global warming. The process of “decarbonization” started long before Al Gore was born."

Economics of Art Sales

From the book Discover Your Inner Economist by Tyler Cowen. I will quote below what he calls the "market regularities" of the value of art that is transacted (bought and sold).

"For better or for worse, most people prefer art that makes them happy, or that they think will make them happy. Look at the market prices. Paintings with light colors sell better than paintings with dark colors. Happy portrait subjects sell better than widows. Horizontal pictures are easier to hang over fireplaces and sofas."

Also,
1. Landscapes can as much as triple in value when there are horses or figures in the foreground. Evidence of industry usually lowers a picture's value.
2. A still life with flowers is worth more than one with fruit. Roses stand at the top of the flower hierarchy. Chrysanthemums and lupines (seen as working class) stand at the bottom.
3) There is a price hierarchy for animals. Purebred dogs help a picture more than mongrels do. Spaniels are worth more than collies. Racehorses are worth more than cart-horses. When it comes to game birds, the following rule of thumb holds: the more expensive it is to shoot the bird, the more it adds to the value of a painting. A grouse is worth more than a mallard, and the painter should show the animal from the front, not the back.
4) Water adds value to a picture, but only if it is calm. Shipwrecks are a no-no.
5)Round and oval works are extremely unpopular with buyers.
6. An eighteenth-century Francois Boucher nude sketch of a woman can be worth more than ten times more than a comparable sketch of a man.


Fascinating stuff, huh?



I will be quoting this book a lot in the next week or so. Simply fascinating. Ill do a full review when I am finished.

Why Obama Won

In a post below, I gave a very rudimentary analysis of why President Obama won. Professor Larry Sabato gives his take. I would trust him, if I were you..

"There were three giant demographic shifts that powered [Barack Obama's election]: The young broke more than 2-1 Democratic, and it was an intense preference unlikely to fade quickly. As this group ages and replaces older voters, Democrats will benefit even more since this group's turnout will go up. The proportion of minority voters (black, Hispanic, and Asian) shot up and is likely to climb consistently every four years (mainly because of Hispanics). Democrats get about three-quarters of the votes of minorities, taken as a collective group. Americans with post-graduate educations have begun to move firmly to the Democrats, not just because of Bush and the economy but also because of the GOP's conservative stance on social issues (abortion, gay rights, etc.) Republicans will be in the wilderness for a while, whatever they do. . . . There are many ways to increase their attractiveness, but one essential ingredient is to de-emphasize social issues -- as unhappy as that may make some fundamentalist Christians" -- Larry J. Sabato, professor at the University of Virginia, in his new book "The Year of Obama: How Barack Obama Won the White House."

Bravo to the West, Again!!!

Iran's President Slams Israel, Prompts Walkouts

"The meeting between the president of a democratic country with an infamous Holocaust-denier such as the president of Iran, who calls for Israel's destruction, does not mesh with the values that Switzerland represents and that are supposed to be represented at the U.N. conference on racism," the Israeli Foreign Ministry said in a statement.



Coming soon....the economics of art sales and a personal touch: relationships/dating and the "Butterfly Effect"

Victory for Free Speech

granted, its not in this country. But still. From today's NYTimes:

http://www.nytimes.com/2009/04/21/business/global/21blogger.html?ref=world


“South Korea may be the only country in the world where a man is tried because he criticized the government’s foreign currency policies,” Mr. Park said in a statement before the judge on April 14.

Professor Cowen Weighs in on the Opera

I go the Metropolitan Opera House roughly once a year. My father and step-mother are avid opera goers. The last opera I went to, Tristan Und Isolde by Wagner, was VERY mediocre. Yet the crowd went nuts as if the Cubs won the World Series. What gives?

Tyler Cowen

From Freakonomics blog:

Terry Teachout, meditating on a rare outburst of booing at the Metropolitan Opera in New York, wonders if classical music and theater are being diminished by a superabundance of standing ovations and a scarcity of negative feedback. What if theater and orchestra audiences behaved more like blog commenters?

What are the options? You might argue that older people are less grumpy but I'm not sure that approach will succeed.

"Signaling refined taste" comes to mind but that, taken alone, requires some negative feedback as well. Try listening to what informed viewers say to each other in art galleries. There is plenty of negative mixed in with the positive, even if you think the blend is a phony one.

I believe that the opera-going demographic wishes to signal "magnanimity." When these high-status people are slighted, as they might be by a bad performance, their privately optimal response is to ignore the slight. Reacting to the slight suggests that they have let it bother them; it is a sign of low status to be bothered by what are ultimately low status entities.

Magnanimity is an underrated concept in signaling theory, in part because it has such quiet manifestations. It is Holmes's "dog that didn't bark."

That so many people signal magnanimity in the very public opera house, but less so in the private art gallery, is a telling indication of how you should interpret much of the positive public feedback you receive.

How many of you are into signaling magnanimity?