Saturday Morning Essay: Where there is no solution, there is no problem

Brought to you by Peet's nuclear fusion strength dark roast...

An old friend from the neighborhood called yesterday afternoon, out of the blue, a fellow I hadn't talked to for years.  Because of the office and the requirements of a guild I belong to (the State Bar), I'm one of those increasingly rare people with a listed land line.  So you can always find me.  Ready or not, here you come.  Anyway, an interesting conversation ensued.  This guy (a little younger than your bloggerspondent), has always somewhat overrated my, what would you call it?, my insightfulness, but I had a tendency to do that myself with certain key people in my life, and not much harm comes of it.

We talked for about an hour.  This conversation followed on the heels of an e-mail I received recently from another friend with a "life calculator" attached that allowed you to figure out certain things about yourself based on your date of birth.  For example, I had never thought of this but I was conceived in 1947, with a guesstimate of the actual night of sperm-meets-ovum of May 25, 1947. I realize that what they're doing here is assuming a couple of things, that human gestation is 280 days from commencement of last menstruation to birth, and ovulation on the 14th day, and normal full term.  Recent research, I discovered after googling around a little, indicates that "normal term" varies a lot, and tends to get longer as mothers get older.  My mom was 30 when I was born.

But May 25, 1947 is okay.  The event of most note of that day (besides the parents' get-together on a balmy spring evening in upstate Alabama) was a coal dust explosion in New Mexico's Centralia mine which killed 111 miners.  Also, Karen Valentine was born May 25, 1947.  Two of my best friends from Berkeley days were born in 1947, one in April and one in July (as you may have gathered from a recent post).  With respect to April, of course, there was no overlap, but as to July it's interesting to consider that I was a work in progress even as he emerged to view the stars (cf. Dante).  But a birth on July 12, 1947, of course, implies coital origins in the latter part of 1946.

We've all been around, in other words, somewhat longer than perhaps we commonly think.  Whether you want to date yourself from the gleam in your father's eye or the water slide event itself 266 days later (thereabouts),  a fantastic amount has changed during the lifetimes of my contemporaries.  Consider that when I was born, there were 131 million people in the United States. I read yesterday that Lagos, Nigeria has a problem with the ebola virus and the CDC is worried about contagion because 21 million people live in Lagos, and the country has a population of 170 million, which is to say, many more people than the United States on the day I was born.

The old friend and I talked about the coming inundation of the old neighborhood where we grew up, which is constructed on bay fill.  The guess is that in 40 to 50 years, it will be under about 5 feet of water.  Well, San Francisco Bay is only about two-thirds the size it once enjoyed in pre-industrial times and I guess it's going to reclaim its former extent and glory.  I imagine the steeple of old St. Timothy's church, where so many of my neighborhood friends used to attend catechism, will still be visible above the dark waters of the Bay as it rises, so I will use that as an excuse to add Debussy's piano piece about an engulfed cathedral of legend, which was always one of my favorites of Debussy's strange creations.

The power of exponents.  I sometimes wish I had paid more attention to algebra and those silly graph functions we used to draw.  You know, parabolas and stuff.  That's the story of everything now.

Cage Match Clash of the Dry Lab Titans of Economics

And yet, I can't be serious.  I can't seriously believe that simply printing money will lift the industrialized countries out of the doldrums and usher in a new era of prosperity.  This is all a variation on Yossarian & the Bomb Line, that perfectly written scene where Yossarian changes the map in the middle of the night so the squadron doesn't have to fly the dangerous mission over northern Italy.  The aviators had stared at the bomb line day after day, willing it to move beyond the danger point so they could fly another milk run, not a life-and-death battle in the sky. 

Clevinger plays the role of the rationalist:

When night fell, they congregated in the darkness with flashlights, continuing their macabre vigil at the bomb line in brooding entreaty as though hoping to move the ribbon up by the collective weight of their sullen prayers. "I really can't believe it," Clevinger exclaimed to Yossarian in a voice rising and falling in protest and wonder. "It's a complete reversion to primitive superstition. They're confusing cause and effect. It makes as much sense as knocking on wood or crossing your fingers. They really believe that we wouldn't have to fly that mission tomorrow if someone would only tiptoe up to the map in the middle of the night and move the bomb line over Bologna. Can you imagine? You and I must be the only rational ones left."

In the middle of the night Yossarian knocked on wood, crossed his fingers, and tiptoed out of his tent to move the bomb line up over Bologna.”
― Joseph Heller, Catch-22

Just to read that scene, and so many others like it, has made life worth living.  Heller was that good. 

Printing money is the monetary equivalent of Yossarian's action.  One might first ask, why are all the big central banks printing money like there's no tomorrow?  The Federal Reserve, the Bank of Japan (at Mach 3), the European Central Bank.  They are cheered on by the Keynesian true believers, such as the chief economist at the New York Times, Professor Paul Numbnuts.  Indeed, all of this hallucinated money is again blowing massive bubbles in the stock exhanges and housing markets.  Bomb lines are being moved in the dead of night.  Will morning ever come?

I watched, in an unedified way, the Economic Cage Match between Prof. Numbnuts and David Stockman, former head of the OMB under Reagan, former divinity school grad student, former Wall Street con man, on George Stephwhatever on Sunday's "This Week."  Stockman had had the unmitigated gall to publish, in the Times itself, a long screed on the many sins of the American economy over the last....80 years.   It was, in fact, a little too much.  It's true that the American economy has run out of gas, insofar as the fate of the American commoner is concerned.  (Large corporations are doing fine, because of the international nature of their business and because their current practice is to hire R2D2, not carbon-based life forms.)  Mr. Numbnuts believes that the lot of the commoner can be lifted through Keynesian monetary (money printing) and fiscal (borrowing more money) stimulus.  It's just that we won't do it.  It's so simple, it's sitting right there, and we won't do it. 

Stockman, on the other hand, is a Debt Freak.  Everything is about debt - public, private, international, whatever.  Too much of it, wherever you look.  Adding more debt to a debt-saturated economy is not going to work.

Both of these intellectual titans left out of their deliberations a factor I consider important: the real world.  Paul Krugman is convinced that this recession (which he sometimes calls a depression) can be remedied, and will be remedied, and it's only a matter of when.  It will happen sooner if we pursue the right "policy."  It will take longer (but apparently will happen anyway, despite doing everything wrong) if we keep on this "austerity" kick, meaning borrowing an insufficiently large fraction of what Numbnuts calls "potential GDP."  (Using an hypothesized number like "potential GDP," a state of affairs that does not actually exist, allows you to claim that the amounts we're borrowing are smaller than they appear to be, "as a share of GDP."  Krugman compares everything to shares of GDP - his lunch tab, his bar bill, his hat size.) 

I notice lately, however, that Krugman is beginning to show a few signs of wear and tear.  Let's face it: it was the summer of 2007 when Bush told us this sucker could go down.  The stock market tanked, millions of people lost their jobs.  We're pushing six years later.  Have we really gotten anywhere?  We have not actually created a single job.  We're stuck.  Everything the society actually needs is produced by the skeleton crew of humans and robots with actual jobs.  Numbnuts tells us that the whole problem is "insufficient demand," but that's what a Keynesian always says.  The demand matches output, and the output is sufficient.  What he's saying is that the Planning & Tanning Economy has gone away, and it needs to be revived, so that the "potential GDP" will become the actual GDP.  We must increase "aggregate demand" for Planning & Tanning.  This is, of course, utter nonsense, the result of imagining that the world conforms to an economic model that once was and now can no longer be.  Americans can't live that way anymore.  They've been reduced to basics, like filling up the tank, paying rent and getting enough to eat.

These Two Titans of Dry Lab Economics, in other words, are debating historical curiosities, the cyclical booms and busts of the past.  Analogizing forward from the irrelevant conditions that existed in 1937, or whenever, tells us nothing about a world up against the Limits to Growth, global warming and overpopulation.  It's currently Now.  But the study of Now is not what these guys were trained to do, and they can't make any money talking about it.  So they go on talk shows and prove each other wrong.  And they're both right that they're both wrong.  It's just that neither one is right about anything else.