My poor, oft-deserted ideas

My poor, poor ideas.

I like the idea of deliberately being inconsistent in one's ideas. People adopt an idea and make it part of their identity, siding with a team or trying to carve out a unique vision of who they are. But you don't own ideas; they exist whether you live or not.

This might be what makes ideas so powerful and so destructive. I've seen people go through the weirdest logical jumps and make the lamest assumptions to make sure their idea makes it through scrutiny unscathed. There is nothing worse than someone defending an idea and completely wrecking their integrity in the process. Theories are not, for most people, a way of making sense of the facts, or trying to find a true pattern within them. They're convenient devices which shield us from the hard job of thinking.

So this is why I constantly disagree with what I said three days ago. And why it doesn't really bother me. I'd rather be totally detached from ideas and willing to disown them at any moment when I decide they have some fatal flaw than to be obsessively holding onto them for fear of admitting I am wrong.

If I'm inconsistent in my ideas, does it make my ideas somehow weaker? If my ideas survived the scrutiny of others merely on the basis that I seem like a legitimate source for ideas, then clearly this person is not actually evaluating my ideas and is instead applying a very crude heuristic to select the ideas that sound most reasonable. If that's what people do, fine. I don't want to be right in someone else's perception, I want to be right in actuality. If I turn out conflicting ideas on a daily basis, then yay for me! I'm thinking inconsistently and producing a wide range of ideas and am much more free of an ideological influence.

Also, there is an awesome story about Africa on the intertubes today and I really think it is worth a read.

Chinese lending slumps, world watches with baited breath

PROTIP: You want the graph to have less of those big changes and more of the little ones.

From Christopher Balding:

From 2008 to 2009 new local currency loans rose from 3.48 trillion rmb to 10.32 trillion according to the PBOC for an annualized increase of nearly 300%.  If economic history tells us anything about rapid increases in credit, it implies that those loans should start going bad in the very near future. 

This is a really impressive graphic that shows the massive spike in government lending in the crisis, a result of the government ordering banks to lend more to help prop up the economy. This was taken by Western writers to be a great strength of the Chinese system, that central financial regulators had such immense power. Great quote from a Forbes editorial from 2009:

Chinese officials essentially forced the banks to lend to support the stimulus program. So state enterprises were forced to borrow. China Aviation Industry Corp., for instance, had to borrow $49.2 billion from 12 Chinese banks this spring. Its general manager, Lin Zuoming, complained in April that he did not know what to do with all the cash. 

We see now that an increase of almost 300% in one year may have had a backlash following it. Are we going to see rolling defaults coming soon as debt cannot be rolled over or extended in these tighter credit conditions? I'm excited to watch.

Dollar Shave Club - kicking in the rotten door of the dumbest oligopoly

The double-edge safety razor seemed like a humorous devolution to me. Purchasing the first pack of replacement razors for your Gillette or Schick shaving product is a coming-of-age event for any young man, when he realizes life is going to be expensive. I actually took part in this system of obvious rent-seeking for a few years before I applied my interest in economics and realized that if there was competition in shaving, prices would fall. Competition in the cartridge razor market is stymied by proprietary cartridge connections, but for my luck the safety blade market is humming at something dramatically closer to a competitive equilibrium. So I returned to the shaving technology of fifty years ago and felt, in net, quite advanced for the change.

It never once occurred to me, though, that there is a massive pile of money to be made in taking down the oligopoly that exists in shaving.

Your handsome-ass grandfather had one blade. And polio.

It seems obvious now. For how much I do like my safety razor, it's not exactly user-friendly. As my dad discovered when I got him one for Father's Day, you can cut pretty sizable gashes in your face with these things. There's sort of a trick to using one effectively. Also, you have to replace the actual razor itself - which involves taking an unbelievably sharp sliver of steel out of a little paper wrapper and dropping it into place. I haven't cut myself yet doing it, but I imagine when I do it's going to be the World Series of cursing.

However, there is absolutely nothing special about cartridge razors that would stop a competitor from jumping in. The biggest cost to switching is the original razor handle, and if a startup were to, say, sell a subscription service to help subsidize that, they could easily break in. So what is needed is a competitor to bring Schumpeter-esque destruction upon the big razor companies. They'll need to sell an effectively designed cartridge razor, be low in cost, effectively market to young men, and preferably operate outside of the normal channels of distribution.

I bring you Dollar Shave Club. I'm not sure if I'll sign up - I'm torn, as I do sort of miss cartridge shaving, but I still have a ton (tonnnn) of safety razors left. But I do like what these guys are doing. So go watch their video, it's pretty funny.

Control of the purse

A recent Times article hits on the idea of campaign finance since Citizens United becoming more diversified, ripping away control from party bosses.

The idea of quietly showing a candidate the door is an idea that harkens back to the days when the political parties were run by a handful of power brokers — before “super PACs,” the Tea Party and politics by Twitter diminished the influence of the parties.

“It was a time when the party bosses controlled the access to money and to the media,” said Doris Kearns Goodwin, a political historian. “They really could tell people to do something or other. I don’t know who those people would be today.”

The Super-PAC's have crushed the party fundraising establishment and the Internet has crushed the media establishment. Perhaps, in an ironic twist, a more democratic process has emerged from Citizens United?

For the love of math

Over the past several days (and perhaps it was building up weeks beforehand) I've really taken a liking to mathematics. 

You vill take ze mathematics and you vill like eet.

This is weird, as I failed freshman algebra in high school. I hated math. Nobody took the time to explain to me that if you want to do anything serious (read: sciency) you need to have a rigorous understanding of upper-level mathematics. It all seemed like a pointless exercise that I would willingly subject myself to in grade school when it was easy, but once it required any thought from me I rebelled against it. But then came college, and the kindling of my passion for economics.

So I set myself out to learn to love math. Nobody liked their first sip of coffee nor their first cigarette nor their first alcoholic beverage, but people are addicted to these things for a reason: they're great. I postulated that perhaps my relationship with mathematics would be the same way, that perhaps mathematics (and maybe everything) was an acquired taste. All I needed to do was immerse myself in it, force myself to face it and take a cheerful attitude about it. I needed to want to love it as well as expose myself to it.

The Man Who Loved Only Numbers is a book about Paul Erdős, a 20th century Hungarian mathematician who was extremely prolific in his publishing and extremely eccentric in his habits. The aggressive, intellectual rat-race view of mathematicians you get from movies such as A Beautiful Mind and Good Will Hunting wasn't something I could fall in love with, but this Erdős fellow was poor, weird, and happy. He really loved math, and it allowed him to live in his own little world where he didn't need the things that other people need. He is now extremely famous among mathematicians, but fame never seemed to be his goal as much as the joy of solving problems. I feel moved by a witness so fervent in his faith. 

This book not only gives the story of Erdős, but also some of the story about mathematics. From Pythagoras to Euclid to Newton to Riemann to Gödel, the evolution of mathematics and mathematical proofing takes the weirdest and most intriguing turns. So many who like mathematics use the word certainty to describe the field, but it seems to me that, again and again, so much of what we thought we knew in this perfect undertaking turns out to be an oversimplification of the case. The words "non-Euclidean geometry" are exceptional for carrying the properties of being both bizarre and cliche. And the idea that so many of the problems are the most difficult yet the most accessible - Fermat's Last Theorem, for instance, a simple conjecture which stood for 350 years before being proved - makes an interest in mathematics one which is immediately accessible.

If I'm to go to graduate school in economics, an intensive education in mathematics is going to be required. If I am to be good at my craft, which I aim to be, I must have a passion for all types of math. It will take immense sums of time and effort, and will require changes fundamental to my personality and lifestyle.

But I think it can be done.