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

Monday, March 29, 2010

Wishing for a better press corps

In today's Chicago Tribune, we read:

"Manufacturing's share of the economy has dropped to 11.5 percent in 2008 from 21 percent in manufacturing declined, so have supply chains, support firms, capital investment, and, perhaps most important, research and development. "

Here's a quick quiz: By how much has manufacturing output changed in the past 30 years?
a. It's down by nearly 50%.
b. It's remained about stable, but the overall economy has grown.
c. It's increased, but only by about 10%.
d. It's increased by a little over 20%.

And the correct answer is (drum roll): D.

Manufacturing output--defined not as gross manufacturing output, but as value added in manufacturing--in the US has increased by 21% over the past 30 years. But you would never know that from the story in the Chicago Tribune. It is true that manufacturing's share of total US output (Gross Domestic Product) has declined, but (a) why is the period since 1979 such a big deal and (b) why is manufacturing output share of total output somehow special? After all, the share of finance in the economy has increased from 15% to 20% over the same time period.

And what about "supply chains"? I'm not sure what the author meant by that, but the share of the economy devoted to transportation and warehousing has declined from 3.7% in 1977 to 2.9% in 2008. Capital investment? Real capital spending has only increased by 146% since 1979 (to be sure, much of that is not in manufacturing, but, still...).

R&D? According to the OECD, R&D spending in the US rose from 2.34% of GDP in 1981 to 2.62% in real dollar terms, that's an increase of 144%. Yep, R&D spending in the US has fallen off a cliff, all right...

So an article that is essentially gloom-and-doom about manufacturing in the US economy manages to get, so far as I can tell, one fact right, the share of manufacturing in GDP, but uses that in a way designed to confuse almost all of its readers.


Tuesday, March 23, 2010

The Bureaucratic Pen At Work

From The New York Review of Books:

"A typical planning document from King's College London, explains that the institution 'must create financially viable academic activity by disinvesting from areas that are at sub-critical level with no realistic prospect of extra investment.' "
(Anthony T. Grafton, "Britain, the Disgrace of the Universities," The New York Review of Books, April 8, 2010, p. 32.)

I know that, in my days as a bureaucrat, I never wrote anything quite that bad.

Friday, March 19, 2010

Ten books

Blame this on Tyler Cowen, who started the whole thing over at Marginal Revolution. (Others have responded by posting their own lists.)

Ten books that changed my life, not necessarily in order of importance:

1) J. R. R. Tolkien, The Lord of the Rings. The ultimate book about life, the universe and everything. Good, evil, hope, struggle, redemption, and loss. What else is there to say? But no sex.

2) Michael Harrington, The Other America. I grew up in a very conservative, very conventional household. Everything was for the best in this best of all possible worlds, or so we were encouraged to believe, and damn the reality in which we lived (genteel poverty in Indianapolis). Then my second cousin pressed me to read Harrington’s analysis of contemporary American society, and things were no longer so comfortable. The book that led me to study economics—why poverty in the richest country in the world?

3) Kurt Vonnegut, Mother Night. Yes, even more than Slaughterhouse-Five (but it is on the list). A man betrays his country, escapes immediate punishment, but is brought to trial, a couple of decades later. But he didn’t. He was working for his country, and the one man who knows has sought him out, in prison as he awaits trial, to offer to testify for him. What is truth? What is loyalty? What is the worth of having suffered, having lived one’s life to hide a life people will call wicked, for the purpose of hiding one’s real life? To my mind, Vonnegut’s greatest work.

4) Raymond Chandler, The Big Sleep. Step by step into the fog and into the muck. America as an amoral wasteland long before Mario Puzo even dreamed of Don Corleone. And the importance of keeping your moral compass, however shaky the hand that holds it.

5) Dashiell Hammett, The Maltese Falcon. All of which could also be said about Hammett’s masterpiece. Together, these two books deconstruct the American Dream.

6) J. M. Keynes, The General Theory of Employment, Interest, and Money. I read this in 1972 when I should have been preparing to take my prelims in my Ph. D. program. Oh, sure, we’d been taught “Keynesian” macroeconomic theory, largely starting with John Hicks, “Mr. Keynes and the Classics.” But the depth and subtlety of The General Theory astounded me…of course, I read it just as the profession was turning away from Keynes (and toward such things as rational expectations theory). It led me to A Treatise on Money, which is also astounding. And Axel Leijonhufvud’s On Keynesian Economics and the Economics of Keynes, which led me to...

7) Thomas Kuhn, The Structure of Scientific Revolutions. Which led me to Paul Feyerabend’s Against Method (which I concluded was a detour, but no matter. What Kuhn had to say about the way scientists actually work turns out not necessarily to have been accurate, but the general point—that even scientific knowledge is socially constructed, even when it is objectively true—remains a focal point of my approach to what I do.

8) Kurt Vonnegut, Slaughterhouse-Five. “I’m a fat old fart who smokes too much…” The author’s description of himself. A searing, troubling look at America at war, something my high school (and college) history courses hadn’t bothered to tell us about (and in my recent American history course in college we spent two weeks on dropping the bombs on Japan). And the fantasies one told one’s self to avoid crumbling under the strain of feeling responsible for what had been done on our behalf.

9. Alexander Solzhenitsyn, One Day in the Life of Ivan Denisovich. And the movie was also amazing. A vivid, visceral presentation of the impact of totalitarianism and its essentially random impact on people. Even more of an impact than The Trial or Darkness at Noon.

10. J. D. Salinger, Raise High the Roof Beam, Carpenters; and Seymour: An Introduction. If I had made this list at age 18, I would almost certainly have included Catcher in the Rye. These two extended stories, however, are things I keep returning to. “Roof Beam…” takes place largely in the narrator’s apartment, with three other people, following a wedding that didn’t happen—the groom (who is narrator Buddy Glass’s brother Seymour) didn’t show up, because he was too happy to get married. I don’t know how to describe the story, though. “Seymour” pretends to be about Seymour and his importance in Buddy’s life. What it actually is, is Buddy’s going through something of a nervous breakdown (finally) as a result of Seymour’s suicide years before. (It took me a while to figure that out.) The conclusion is almost exhilarating.

Close, but no cigar:
Albert Camus, The Plague
Martin Buber, I and Thou
Soren Kierkegaard, Fear and Trembling
Franz Kafka, The Trial
Arthur Koestler, Darkness at Noon
Jane Jacobs, The Death and Life of Great American Cities
Joseph Conrad, The Heart of Darkness
John Stuart Mill, On Liberty
James Baldwin, Notes of a Native Son
John Balaban, Locusts at the Edge of Summer
Bernard Fall, Hell in a Very Small Place
Michael Casey, Obscenities (o.p., but available)
T. S. Eliot, The Wasteland and Other Poems
Langston Hughes, Montage of a Dream Deferred (available in The Collected Poems of Langston Hughes, not readily available separately)

I suppose I shouldn't be too surprised that these are almost all still in print.

Wednesday, March 17, 2010

The oldest automobile dealership in the US

A while back, it occurred to me that the oldest continuously operating automobile dealership in the US should have reached 100 years in business. But I did nothing about trying to identify what or where that dealership might be. Now I know.

According to Terry Horvath, the oldest dealership in the US is in Noblesville, Indiana, Hare Chevrolet. According to Horvath, the company got its start in 1847 building wagons, carriages, and buggies, and has been selling cars since shortly before the turn of the 20th century (its initial offerings included Hupmobiles, Studebakers, and Cadillacs). Here's the list of the ten oldest dealerships, dated by their date of original operation, which in most cases was probably not as a car dealership:

1847, W. Hare & Son, Inc., Noblesville, Indiana
1852, Schaefer & Bierlein, Inc., Frankenmuth, Michigan
Reynolds' Garage & Marine, Inc., Lyme, Connecticut
1875, Kemmann Chevrolet, Inc., Lowden, Iowa (no website that I could find)
Normandin Chrysler/Jeep, San Jose, California
Moser Motor Sales, Inc., Berne, Indiana
Ferman Motor Car Co., Inc., Tampa, Florida
Hill International Trucks, LLC, East Liverpool, Ohio
1898, Eich Motor Co., St. Cloud, Minnesota
Diehl Ford, Inc., Bellingham, Washington

This confirms something I have long believed--that Indiana was car-crazy from the beginning: Two of the 10 oldest are in Indiana. And a location in Noblesville makes some sense; it's essentially a suburb of Indianapolis (and has been for a long time). But Berne? It's about half-way between Muncie and Ft. Wayne, in the northeastern part of the state. on U.S. 27. About 4,400 population, income below the Indiana state average (which is itself below the US average). I am somewhat surprised by a car dealership surviving in Berne for more than 100 years.