(Roughly) Daily

Posts Tagged ‘uncertainty

“The only function of economic forecasting is to make astrology look respectable”*…

The pandemic economy has been strange and unpredictable from the get-go.

Throughout the past 14 months, the twists and turns have been surprising: The housing market boomedthe stock market soaredpeople got into day tradingeveryone hoarded toilet paper, and lumber became a must-have. There’s been widespread disagreement about how much support from the government was needed, whether the country was doing too much or not enough, or whether help would come at all. We won’t know whether the country overshot or undershot the response for years, and there’s still uncertainty about what’s happening in the labor marketprices, and other areas. And the prevailing theme has been one that has nothing to do with the economy directly: As long as Covid-19 isn’t under control, the economy isn’t either.

“Having been a forecaster for 10 years, we were surprised all the time, because nobody has a crystal ball and particularly if you just pull out one data series, one month, there’s just no way,” said Claudia Sahm, a former Federal Reserve economist and now a senior fellow at the Jain Family Institute. “It’s going to be a wild ride; the data through the end of this year, they’re going to be tough.”

The country and the world are staring into a black box of uncertainty on the economy. It’s frustrating, but it’s also inevitable. Anyone who says they know exactly what is going on in the economy right now is lying. The same goes for anyone who says they know what’s going to happen next.

“Because of the unique nature of this crisis, there are going to be some swings,” said Mike Konczal, director of macroeconomic analysis at the Roosevelt Institute. “In a year, they’re going to be trivia questions, but right now we’re obsessing about them.”

Few people will probably remember two years from now that the price of used cars and trucks went up by 10 percent in April. 

We know that the economy is different now than it was a year ago and that it will be different a year from now. What’s not clear is exactly how. And what we need now — including economists, experts, and policymakers — is the intellectual humility to recognize that’s the case.

“At this point, most things should be presumed temporary until proven permanent,” said Jed Kolko, chief economist at the jobs website Indeed.

It’s unnerving to admit what we don’t know, and the pandemic has been a real exercise in that. But after so long of staring into the abyss, maybe it’s time we embrace it…

Anyone who says they know exactly what’s happening in the economy is lying. Emily Stewart (@EmilyStewartM) explores that uncertainty and what it might mean: “The black box economy.”

* John Kenneth Galbraith

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As we consult the stars, we might note that today is National Be a Millionaire Day. While many sources confirm this celebratory fact, there’s no real information on its origin. The term “millionaire” was coined in France around 1719 to describe speculators in the Mississippi Bubble who earned millions of livres in weeks before the bubble burst; it seems first to have appeared in the U.S. in 1786, when Thomas Jefferson wrote about the French… so the “holiday” surely dates from sometime after that.

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“The fool doth think he is wise, but the wise man knows himself to be a fool”*…

 

shakespeare

Naeem Hayat as Hamlet, with the Shakespeare’s Globe company, performs to migrants in the Jungle refugee camp on 3 February 2016 in Calais, France

 

William Shakespeare lived in an age of uncertainty. His society was traversing a number of unpredictable challenges that spun from the succession of the heirless queen Elizabeth to the ascent of a new class of merchants. But the biggest issue had to do with religious conflicts. In the premodern world, religion provided absolute certainty: whatever we knew was implanted in our mind by God. We didn’t have to look any further. Once that system of beliefs started to collapse, Europe was left with a yawning gap. Religion no longer seemed capable to explain the world. René Descartes and Shakespeare, who were contemporaries, gave opposite answers to the sceptical challenge: Descartes believed that our quest for knowledge could be rebuilt and founded on indubitable certainties. Shakespeare, on the other hand, made uncertainty a leitmotiv of all his works, and harnessed its creative power…

Lorenzo Zucca considers the poet as a philosopher: “Much ado about uncertainty: how Shakespeare navigates doubt.”

Of possible parallel interest: an informative review of Scott Newstok’s How to Think Like Shakespeare: Lessons from a Renaissance Education.

* Shakespeare, As You Like It, Act 5, Scene 1

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As we back the Bard, we might recall that it was on this date in 1600 that four plays, three by Shakespeare– Much Ago About NothingHenry V, and the source of today’s title quote, As You Like It— plus Ben Jonson’s Every Man in His Humour were officially entered into the Stationers’ Registry.  Readers will recall that the copyright regimen was strict in Elizabeth’s time, as is now.  But back then, copyright was literally that, the right to make a (first) copy: the Queen, concerned with sedition and determined to keep a tight rein on any and all published material in her realm, had decreed that no work could be printed in England without a license from the Stationer.  In this particular instance all four plays were “stayed”–meaning that they were specifically noted in the registry as works not to be printed.  The stay didn’t hold for long; within a few years, three of the four were published.  Only one held out: for reasons scholars still debate, As You Like It didn’t appear in print until the famed First Folio edition of 1623.

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Written by (Roughly) Daily

August 4, 2020 at 1:01 am

“Although there is no progress without change, not all change is progress”*…

 

HG Wells

Schematic from Wells’ The Outline of History (1921), showing the rise of Europe, and the “mechanical revolution” leading to, writ in huge letters along the bottom, “The Great War” [source] (See bigger version here)

 

 

H. G. Wells worried constantly about the future of humanity. While he hoped for progress in human affairs, he was only too well aware that it was not inevitable and might not be sustained. Throughout his career he celebrated the technological developments that were revolutionizing life but feared they might lead to eventual degeneration or, as came to pass in 1914, a catastrophic war. He was also aware that there were disagreements over what would actually count as progress. Providing everyone with the benefits of modern industry might not be enough, especially as continued technological innovation would require the constant remodeling of society. Progressive steps introducing entirely new functions were episodic, open-ended and unpredictable, in both biological and social evolution. These uncertainties were compounded by a realization that, where technological innovation was concerned, it was virtually impossible to predict future inventions or what their long-term consequences might be. Even if progress continued, it would be much more open-ended than advocates of the traditional idea of progress had imagined…

In addition to the numerous pioneering works of science fiction by which he made his name, H. G. Wells also published a steady stream of non-fiction meditations, mainly focused on themes salient to his stories: the effects of technology, human folly, and the idea of progress. As Peter J. Bowler explains, for Wells the notion of a better future was riddled with complexities: “H. G. Wells and the Uncertainties of Progress.”

* John Wooden

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As we ponder posterity, we might recall that it was on this date in 1687 that (not yet Sir) Isaac Newton published Philosophiæ Naturalis Principia Mathematica (AKA “Mathematical Principles of Natural Philosophy”, AKA the Principia).  In three volumes Newton laid out his laws of motion (the foundation of classical mechanics), his theory of universal gravitation, and a derivation of Kepler’s laws of planetary motion (which Kepler had obtained empirically).

As G.E. Smith wrote in the Stanford Encyclopedia of Philosophy,

Viewed retrospectively, no work was more seminal in the development of modern physics and astronomy than Newton’s Principia… no one could deny that [out of the Principia] a science had emerged that, at least in certain respects, so far exceeded anything that had ever gone before that it stood alone as the ultimate exemplar of science generally.

Title page of Principia, first edition

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Written by (Roughly) Daily

July 5, 2019 at 1:01 am

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