Sandy (2)

Looking at the photos and videos of the destruction done by Sandy, it’s clear that it will take months to fix the physical damage, and years to fix the psychological damage. The stories of rescues and help are moving; the expressions of hope for the future in the face of such massive disaster are touching. The sadness I feel when reading of the deaths, so impersonally random, is hard to express.

Sandy, losses, and GDP

From a story in the New York Times, 31 October 2012:
“Even as businesses struggled on Monday to gauge and contain the damage from Hurricane Sandy’s slow move up the East Coast, economists played down the likely long-term effects. The recovery after the storm, they said, could actually pump up growth temporarily in a few sectors, like construction and retail sales, when cleanup begins in earnest in a few days.”

The last sentence of the story:
“It’s a problematic aspect of how we account for economic output,” said Mr. Carroll. “Of course, it’s terrible when something is destroyed. That doesn’t show up in the calculation of gross domestic product. However, the rebuilt house does.”

The above illustrates the craziness of economic “theory” these days. There’s no reason that the loss of the house should not be included in the GDP calculation: just include the cost of rebuilding it as a debit. This would show the loss of the house as net decrease in GDP, which it surely is. That is if we want to think of GDP as a measure of wealth-creation, as most people seem to do.

In fact, as shown by the above comments, GDP is the aggregate value of money transactions. It tells us nothing about the net increase in wealth. The $20 billion or more in storm damage will be shown as a $20 billion increase in GDP, but I don’t think wealth will increase by 20 billion dollars. Most people I think would see those losses as exactly what they are: a reduction wealth. We can reasonably expect to replace those losses. If we are cunning, politically savvy, and lucky, we may be able to replace those losses with more wealth at the same or even less cost: technology does offer that possibility.

Some transactions obviously increase wealth, such as building a house or educating a child. Others just as obviously decrease wealth, such as tearing down a block of derelict buildings, or shutting down a research project. If the buildings are replaced, there may be a net increase in wealth, but that doesn’t always happen. Some transactions are iffy: does a loan to a business build wealth, or not? Depends on how well the business does, I suppose. Some do both: a fighter plane is a waste of resources, thus a reduction in wealth; but the people who build it spend their wages on wealth that other people produce. There may or may not be a net increase in wealth.
           
In short, many transactions that the GDP calculation shows as increasing the GDP ought to show as debits. In general, it’s obvious what the debits are. When it’s not obvious, more careful analysis is needed, beginning with a clear definition of wealth. Too many people think of money as wealth. It’s not. What you get in exchange for money is wealth. But not everything you can buy is wealth: cigarettes destroy your health, so they are a debit.

All that being said, there’s a lot more to wealth-creation and sharing than is captured by GDP. Last night, one of the CBC reporters in Atlantic City told how they had helped rescue a few people, because their SUV had high enough ground clearance to get through the flood at that time. This will not show in the costs of the storm. But that CBC crew may have saved those people’s lives. Great wealth, given in exchange for nothing at all

Miss Pym Disposes (Book review)

     

Josephine Tey Miss Pym Disposes (1947) Miss Lucy Pym, suddenly famous for her book on psychology, has been invited to her friend Henrietta’s Leys Physical Training College as a Friday lecturer. Despite herself, she agrees to stay on, initially to help  out as a substitute teacher. When Henrietta chooses Rouse, the least popular student (and exam cheat), for a post at a prestigious girls’s prep school, the whole College is seriously annoyed, and Lucy too. Rouse is  hurt when a boom falls on her when she starts an early morning solo practice; she later dies. Lucy Pym has a crucial clue, which points towards Innes, the girl who should have had the post, and is awarded it in place of Rouse. Instead of giving the clue to the police, Lucy confronts Innes, who promises to atone for the crime by burying herself in the West Country, which she had worked all her life to escape. But on the second last page of the book we find out that another student is the culprit.
     On this bare bones of a plot, Tey has constructed an astonishingly engaging book. Wikipedia informs us that Tey loved gymnastics, and trained at Anstey Physical Training College near Birmingham (more here). This experience no doubt informs the portrait of the college and its students. I have no doubt that the characters are based on Tey’s recollections of her fellow students and the Staff. I thoroughly enjoyed these portraits, and the reminders of what communal life in a boarding school is like. I think the plot is merely an excuse for Tey to write a semi-fictitious reminiscence of her school days. It’s also an opportunity to examine the ethical issues surrounding the death penalty.
     The style is somewhat breathless, with italics scattered here and there. We experience the whole story from Lucy Pym’s point of view. She thinks of herself as a very ordinary person, at least in comparison to the intellectuals whom she has criticised in her book (a rebuttal of current Psychology as understood from reading 37 books on the subject). But that very ordinariness makes her extraordinary. She is an essentially and instinctively good person. She has an acute sense of other people’s personality and character, even though she cannot always put her intuitions into words. But the dialogue, the little asides, the girls’ comments on each other, Lucy’s sensitivity to mood and atmosphere, all combine to give us a lively sense of being present in her world. One cannot ask more than that from any story teller.
     I’ve read Tey’s The Daughter of Time, a much more carefully plotted tale of detection, in which  Inspector Grant, convalescing, reads up on Richard III and the Princes in the Tower, and solves that mystery, at least to my satisfaction. It’s a very, very good detective yarn. But Miss Pym Disposes is the better work of art. ****

Julia Potts (Link)

Courtesy of one my RSS feeds, I came across Julia Potts. Here's a link to her Vimeo site. Check out the other videos. They're charmingly oddball.

Tough Politicians (1)

“In These Tough Economic Times,” politicians claim, “We Have to Make Tough Decisions.”

Funny how tough it is to reduce unemployment benefits, assistance for poor families, disability pensions, housing subsidies, programs for homeless, and so on. Tough to cut staff for parks, environmental monitoring, basic research, community recreation programs, food inspection, drug testing, and so on.

I guess it must really hurt those politicians to make these tough decisions. I mean, the pain of having to say no to people who need help. The ghastliness of having to deny essential services. Doesn’t bear thinking about. The poor devils must be lining up for treatment for PTSD - Post Tough-decision Stress Disorder. We really should be feel more kindly towards these politicians.

After all, they do our dirty work.

The really tough decision would be to raise taxes, of course. Especially at the top end of the income pyramid.

If Ever I Return, Peggy-O (Book Review)

Sharyn McCrumb If Ever I Return, Pretty Peggy-O (1990) I bought this for 25 cents as a time-filler. It’s a bit better than that. McCrumb interleaves several stories, all of which at least illuminate the main plot: an ex-hippie folk singer trying to rebuild her career buys a house in Hamelin. She receives a postcard with a veiled threat, then her dog is killed and mutilated. A high school girl who looks like her younger self disappears and turns up murdered like the dog. Eventually she confronts the murderer, and shoots him.
     McCrumb is good at relationships and the reach of personal history. The story is set in the post-Vietnam era, and the effects of Vietnam on the soldiers sent to fight (and die) there figure in the plot. A high-school reunion feels like a bass-line under the main melody: these people grew up during ‘Nam, and many were drafted. McCrumb is also good at mood and ambiance, and social satire. The whole thing is more than the sum of its parts. The leisurely pace of story telling hints at The Andy Griffiths Show (alluded to a couple of times), but it has darker shadows than that sunny world. A better than average read. **-½

Outliers (Book review)

Malcolm Gladwell Outliers (2008) This is an important book. It demonstrates that individual success depends on many factors beyond the individual’s control. They all come down to the same thing: you have to be in the right place at the right time, with the right personal and material resources. If you can then exploit the opportunity presented to you, you will be successful.
     One example of a factor that you can’t control is your birth date. The selection rules for players in amateur hockey leagues specify birth dates. If you are born near the beginning of the range of dates valid for you, you will be about one year older than your team mates born near the end of that range. That makes a lot of difference for young players: for 8-year-olds it’s a difference of about 12% in physical maturity, and sometimes more, given different rates of maturation. On average, the boys born in January will be taller, heavier, stronger, and more agile than those born in December. They will outshine their younger team mates, and will be more likely to advance to the next level of play.
     The same consideration applies to children’s school experience. It applies to whole generations: the people who were born in the 1940s grew to working age just as the baby boom got under way, and a huge demand for work ensued. I belong to that generation. It was easy for us to find work because there was huge and expanding demand for it.
     I’ve recently come across a snide remark about Gladwell’s method of framing a thesis, telling an illustrative story, then drawing wide-ranging conclusions. This is certainly a danger in inherent in Gladwell’s method. However, this book includes a lot of data, too, data that support Gladwell’s conclusions.
     In any case, anyone who insists that his or her success is entirely due their own efforts has a rather limited experience of life. There are undoubtedly many other people with the same talents and skills, and the same willingness to work hard, who did not succeed, simply because at some crucial point on their career path the opportunity they needed was not available. This is not to downplay the importance of hard work: there also people of similar skill and talent who did not take advantage of similar opportunities. But all of us have had success in large part because of things we could not have foreseen, people who offered us chances simply because we were there, and factors over which we had no control whatsoever.
     A book worth reading, especially since it prompts questions about how to adjust systemic factors which penalise so many talented people. ***