Comments on economics, mystery fiction, drama, and art.

Tuesday, March 25, 2008

Sound banking

I can't find a complete source for this, but John Maynard Keynes wrote it in 1931:

"A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him. "

(Found on Paul Krugman's blog.)

Monday, March 24, 2008

Is intellectual property really property?

David Warsh says, maybe not. Here's a key section:

"In the case of land, rights and responsibilities are ordinarily quite clear. Before buying a parcel of land, a purchaser typically researches the history of the title, conducts a survey of the land itself, and takes out insurance on the deed. Before erecting a structure on his property, the owner hires a lawyer, checks the boundaries and the zoning laws, contacts abutters and proceeds with caution. Hardly ever does one person unintentionally build something on another’s land.

"Yet with intellectual property, the authors note, it happens all the time. Boundaries are fuzzy and unpredictable. Would-be title-holders aren’t required to give clear notice; claims of ownership often are withheld for many years. The actual possession of an invention may not be required; often having patented the idea is enough. Search costs are high and climbing. “If you can’t tell the boundaries, then it ain’t property,” they write. And indeed most “intellectual property” really isn’t property. Instead it is an income stream, sometimes legally vouchsafed by a patent, trademark or copyright; or, far more often, secured by secrecy, skill and adaptability."

Interesting and important.

Thursday, March 20, 2008


A mini-rash of blog posts about professors and students and friendship [here (and scroll down) and here], based on this story in the New York Times (in the fashion section, of all places).

I started in academia 35 years ago (now, that's a scary thought), and, when I started, I was very nearly the same age as many of my students. I thought it was very important to create some social distance between myself and my students, and so I worked fairly hard at it. Now, I don't have to work so hard, but I maintain the social distance.

Part of my job (and the part, frankly, I like least) is to judge the performances of my students. That is sometimes not a pleasant experience for them. So friendship would get in the way. And so I avoid it. I don't have a page on Facebook or MySpace. I don't post pictures of my family or my (non-existent) pets. I don't write very much here about anything remotely personal. I don't socialize with students, mine or not. And, by now, it's standard operating procedure. It's worked pretty well for me for a long time.

Monday, March 10, 2008


In his column in Slate, the usually-reliable Dan Gross writes:

The stag? Gross domestic product rose at an annual rate of only 0.6
percent in the fourth quarter of 2007 and probably isn't doing much better
today. The flation? The
Consumer Price Index rose 4.3 percent between January 2007 and January 2008.

The numbers seem positively buoyant compared with our last serious bout
of stagflation in the
late 1970s, when inflation rates spiked to double-digit levels and mortgage rates were in the high teens. Compared with the mountain of economic woes in the late Carter years [emphasis added], the economic woes of the late Bush years are a mole hill. But that doesn't mean those fretting about stagflation are
crying wolf.

The only problem is that the late-1970s were not really a period of stagflation. Inflation, yes. The rate of inflation averaged about 7.8% per year between 1975 and 1980. But economic growth was strong, averaging more than 5% between 1975 and the spring of 1978. Only then did growth slow, and even then it remained above 1% per year until early in 1980.

We remember the late-1970s as a period of stagflation, but those memories are, essentially, wrong.