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What Is the Shape Of This Cycle As A Letter: V, L, W, J, U, Or Maybe A Lazy J or Wiggly W?

What Is the Shape Of This Cycle As A Letter: V, L, W, J, U, Or Maybe A Lazy J or Wiggly W?

For some time now it has become commonplace for people to describe business cycles by how they resemble one letter or another, although obviously this amounts to a lot of hand waving. But it does provide bright images.  Thus Trump and crew seem to believe that the US will experience a V recovery, one that will boom up as rapidly as it fell down, so the sooner we can reopen America the sooner he can get that boomy upturn to guarantee his reelection. Somehow he fails to understand that if he gets it going too soon, the uptrun is more likely to get sideswiped by a serious Second Wave of the coronovirus that would turn the upturn back into a downturn, making it into a W, or if, as I suspect, given that the downturn we have just seen pushing the unemployment rate upo 10% in two months is truly unprecedented so that the upturn will not be all that fast, the outcome will not be a neat W, but a Wiggly W.

Use of letters is recent, but debates on the shapes of macro fluctuations is very old, dating back into the 19th century.  Up until the 1930s, nearly all the discussion focused on “commercial crises” generating sharp downturns that then were asymmetrically followed by slower upturns.  This was still the view in 1913 when Wesley Clair Mitchell of the NBER and Columbia published his Business Cycles, coining that term.  I have been recently over on Econbrowser taken to describing such a pattern as a “Lazy J.”  Think of a J but then tilt it to the right so its upslope gets flatter until it is flatter than the downturn.  I think this is what we are going to see now in the US, although it could turn into a Wiggly W.

In the 1930s, driven by Mitchell associated at the NBER, it became common to use sine curves to describe business cycles, so symmetric, and if one cuts one off at the inflection points going down and up, something that looks like a U.  Over on Econbrowser, Jeffrey Frankel recently posed that the current situation might end up looking like a U, although I doubt it.

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RIP John Horton Conway

RIP John Horton Conway

I am late to issue this RIP as John Horton Conway died on April 11, 2020, having been born in England, Dec. 26, 1937. He died of coovid-19.  I was aware of his death when it happened, but have since become aware of things he did that I did not know about that have pushed me to post this.

Conway was one of the world’s best known mathematicians, most famous for creating the Game of Life a half century ago in 1970, which was publicized by Martin Gardner in Scientific American.  It is what I knew of him mostly about, as the canonical cellular automata model that generated simulation models capable of generating chaotic and unpredictable emergent outcomes within a Turing complete framework, the sort of thing that goofy complexity theorists like me salivate over.  However, it inspired similar models that have been used in nearly every science, and I am quite sure that such models are being used in the current research push to find a vaccine for the disease that did Conway in.  It was an enormous achievement and enormously useful.  He deserves  recognition for this alone.

I never met him or even saw him speak, but by all accounts he was highly extroverted and lively to the point of becoming at least for awhile “the rock star of mathematics.”  Not unrelated with that he invented an enormous array of games, none of which I have ever played, but apparently he would invent them on the spot as he  interacted with people he met.  Of course in some sense the Game of Life is a kind of game, and Conway himself on more than one occasion claimed that doing mathematics is fundamentally a game.

I had known that he did a lot of work in other areas of math, but had not really checked it out in details, but have recently become more aware of just how widely across math his work varied and how important and innovative so much of it was.  I shall not list all these areas and theorems and discoveries as it is a long list that will probably be meaningless to most of you if it is just put out here, but anybody who wants to see a pretty complete version of it, well, his Wikipedia entry provides a pretty thorough one.

Anyway, I shall talk a bit more about a couple of the more out there high level stuff that relates to things that my father and I have long been interested in.  My late father was a friend of the late Abraham Robinson and someone Robinson consulted with at length when he developed non-standard analysis, presented in a book of that title in 1966.  Non-standard analysis allows for the existence of superreal numbers that have infinite values, real numbers larger than any finite real number.  The reciprocals of these numbers are infinitesimals, numbers not equal to zero but smaller than any positive real number.  These are ideas originated by Leibniz when he independently invented calculus, and allowed for viewing derivatives as ratios of such infinitesimals, an essentially more intuitive way of doing calculus.

This extension of real numbers into transfinite and infinitesimal values led to further expansions of what might be numbers, with a further extension being hyperreal numbers that can be constructed out of the superreals.

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A Very Grey Swan

A Very Grey Swan

Keynes and Knight famously simultaneously in 1921 identified the concept of fundamental uncertainty as a situation not understandable by using a probability distribution, an idea popularized by Nassim Taleb just as the 2008 crash happened as a “black swan.”  Taleb defined white swans as situations describable by Gaussian normal distributions.  For situations not full uncertainty or white swans Taleb coined the idea of “grey swans,” situations exhibiting “fat tails” and more generally lots of extreme outcomes, but yet possibly describable by probability distributions allowing more readily extreme outcomes.

I think this is what we are dealing with, although I claim no special expertise here.  Indeed, for me the issue is whether or not this current pandemic actually a black swan of fundamental uncertainty rather than “just” a very grey swan.  The reason it is the latter, despite the highly unusual outcomes on both health and economic outcomes, is that large numbers of experts have been warning for several years that we were facing with high probability a serious pandemic.  The current administration has in fact been officially faced scenarios not all that different from what has happened.  Among those is a largely ignored study in the president’s own Economic Report for last year, where economists at the largely ignored CEA made such a study.  But, heck, who in this administration reads the Economic Report of the President, hahhahah!?

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Donald Trump Goes Absolutely Bonkers Over China

Donald Trump Goes Absolutely Bonkers Over China

(Last Thursday) President Trump erupted with a series of demands and threats against China, focusing on various claims about its role in the current pandemic.  I have here noted some issues with China’s conduct, but Trump makes it completely impossible that there will be any of the much-needed cooperation between the US and China to overcome this virus.  He has gone absolutely bonkers.

He has now threatened to remove China’s sovereign immunity so people can sue it, with a former lawyer of his organization, George Sorial, now of Berman and Associates, cooking up a class action suit against China; a threat to stop paying interest on US bonds held by China, which he probably will not do because it occurs to him that this default on the US national debt might “damage the sacred standing of the dollar” duh; and finally to impose yet more tariffs on China, a threat that promptly sent the stock market plunging after several days of rising, although we know he really likes putting tariffs on China. Probably the first of these would be the least harmful and the most likely he will do, very noisy but not amounting to too much in the end as China will just ignore it.

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 Which Nations Have Most Rapid Rate Of Increase In Deaths Per Million from SARS-Cov-2?

The Wide Open Origin Question Regarding SAR-Cov-2

The Wide Open Origin Question Regarding SAR-Cov-2

More than a century later, we still do not  know the origin of the Spanish flu, with at least three currently scientifically supported origins out there: North America (possibly Kansas), China, and British soldiers in France. This will not be resolved.  I suspect that this may become the outcome of the current debate over the origin of our current pandemic.  While mostly this seems to have become a matter of random infection from animals versus an accident in a lab in Wuhan, upon further study this seems more complicated on all sides of this, with crucial data missing forever.  I fear the outcome of this debate will be no more resolved a century from now than the matter of the Spanish flu is now.

I also note before proceeding further that this discussion has become highly politically charged, with some regular readers here having strong views on this.  I want to be as careful and clear in my further discussion here as possible, withot getting dragged into the hot politics that indeed are adhering to this matter.

Upfront I shall take off from two columns in the Washington Post, 4/24/20, one by David Ignatius and the other, just below it, by Josh Rogin, both on this issue.  Given firewalls and all that, I shall indulge by quoting extensively from both of their columns:

Ignatius’s is titled, “China puts even the truth on lock down.” I follow with selected quotes:

“Top scientists I contacted over the past week were skeptical about theories that are spinning about deliberate Chinese attempts to engineer the toxic virus. But many said it’s possible that a pathogen that was being studied by researchers in Wuhan could have leaked accidentally from two virology labs  there, setting off the chain of infection.”

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Where Are People Dying Most Intensively Now of SARS-Cov-2?

Where Are People Dying Most Intensively Now of SARS-Cov-2?
I am putting this up because I have been hearing seeing people making claims about this that do not agree with what I have just seen at Statista for today, the 50th anniversary of the first Earth Day, for deaths per million according to the pandemic virus. I am not going to comment on the list further, although I am tempted, but the situation is changing so fast.

Belgium
Spain
Italy
France
United Kingdom
Netherlands
Switzerland
Sweden
Ireland
USA

Oh, I suppose I should provide the same list for infections per capita, a less definite number due to testing variations, than the former.  Best I could do was a three day old list from Statista, but here it is:

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Happy Sesquicentennial Birthday, Vladimir Lenin! (Oh, And Happy Half Century Earth Day)

(Dan here…a day late to AB better than not)

Happy Sesquicentennial Birthday, Vladimir Lenin! (Oh, And Happy Half Century Earth Day)

A half century ago today was the first Earth Day, which I paerticipated in while at the University of Wisconsin-Madison.  Although I did not know him well, I even met the founder of the event, then Senator Gaylord Nelson of Wisconsin.  While it is easy to be discouraged by the ongoing failure to deal with the global warming issue as well as the large amount of rollbacks of reasonable environmental regulations in the US by Donald Trump, with several happening very recently under cover of the SARS-Cov-2 pandemic, much has also been achieved, with vastly reduced air and water pollution of many types over the last half century in most nations.

It is easy to forget that in 1970 there was no Enviromental Protection Agency and that most of the most basic laws regulating most air and water pollutants were not in place almost anywhere in the world. I remember seeing the Cuyahoga River in Cleveland in 1965, a year it caught fire, when it not only stank but had an unpleasant pinkish hue to it. Today it looks like regular water and fern bars and restaurants stand beside it where in good weather (and no pandemics) people sit outside to eat and drink beside it.

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Prairie du Chien Selects Jill Karofsky Over David Kelly!

Prairie du Chien Selects Jill Karofsky Over David Kelly!

I have previously posted on the highly swingy politicsal nature of southwestern Wisconsin, symbolized by the town there at the mouth of the Wisconsin River, French-founded Prairie du Chien (named for an Indian cheif, it turns out, who was “Dog of the Prairie” in English).  It seems that how SW Wixsonsin goes, so goes the whole state, at least in 2012, 2016, and 2018.

Now we can add an election in 2020, that for a seat on the state Supreme Court, where liberal Dem Jill Karofsky from Madison clobbered incumbent super conservative Justic David Kelly by 11%.  And, yes, SW Wisconsin went for her, along with some areas not expected, such as traditionally conservative counties in the Northeast that contain Green Bay, Appleton, and Oshkosh.  Milwaukee suburbs still went for Kelly, bur Karofsky made gains there.

Of course this election was marked by major GOP efforts to suppress voting, restricting absentee ballots (a move backed 5-4 by the SCOTUS)  and with only 5 out of 180 polls open for voting in Milwaukee, source of the largest Dem voting base in the state.  But even with covid-19, long lines formed there, and many observers think the GOP shot itself in the foot with its restriictive moves, angering Dem-leaning voters who turned out indroves, despite the health danger.

An amusing tidbit is that now GOPs are saying it was all a plot by Dems (probably Obama in the background) urging Bernie Sanders to stay in the race through Wisconsin, something many observers had long predicted since his losses on Super Tuesday.  Maybe that made some difference, although personally I think it is the Prairie du Chien Effect.

Barkley Rosser

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Trump Defunds WHO and USPS: Will Motherhood and Apple Pie Be Next?

Trump Defunds WHO and USPS: Will Motherhood and Apple Pie Be Next?

Yes, Trump is out to cut the roughly half a billion $ US contribution to the $6 billion budget of the World Health Organization (WHO).  It seems that he now sees his path to reelection to be based on blaming China for the coronavirus and the WHO for supposedly supporting China in their supposedly nefarious conduct, alloeing hin to wallow in  fit of xenophobia as well as accusations against Joe Biden for being “soft on China.”  Certainly China was slow to act against the virus, although not as slow as Trump and his team here in the US, and the WHO may well have been too soliciitous of China and its interests. But the WHo remains the central organization for  coordination the global response to thie situation.  This is simply stupid in terms of fighting the virus.

And then we have him going out of his way to demand that funds for the nearly bankrupt US Postal Service (USPS) be removed from the recent stimulus bill. GOPs in Congress have burdened them with having to fund future pensions at a level no other entity in the nation has to do, and, of course their business is in long term decline.  But apparently the USPS is the single most popular federal agencyy there is, with a 90% popularity rating, putting it ahead of even NASA and the National Park Service.  But, hey, it delivers packages for Amazon, whose owner owns the Washington Post, which says bad things about him, not to mention if USPS can be shut  down, then all these Dem proposals to have people mail in their votes can be quashed, and as we have seen in Wisconsin, making it hard for people to submit ballots by mail is really popular.

Anyway, at this rate, I expect Trump’s next move to be to defund entities supporting motherhood and apple pie.

Barkley Rosser

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