Sparring Mustachioed Economists

I was listening to NPR's Planet Money in my car about 4 months ago and the host was talking to author Nicholas Wapshott about his most recent book, Keynes Hayek: The Clash that Defined Modern Economics.

He didn't go into too much depth about the substance of the differing theories presented by the two economists, but he did expound upon the debate that went through England's prominent universities with the two sides divided between John Maynard Keynes and Friedrich Hayek.

But it wasn't just a debate, it was a ink based version of a tooth and nail fight between the two economists with sarcasm and acerbic wit dripping off the columns they would take out in newspapers to annoy and make fun of the other.

And something about the thought of two highly regarded economic thinkers who'd been awarded Nobel Prizes resorting to base name calling struck a funny chord with me. I had to read the book.

Ultimately the differing viewpoints and ideas boiled down into a distinct debate of high unemployment versus high inflation. Keynes was all for keeping unemployment low, while Hayek thought interference by the government could possible make things worse and generate an "artificial" inflation.

Though the two came from different Economic schools, I can't help but notice that their environments certainly had something to do with their ideas. Hayek witnessed firsthand in Austria the enormous inflation and instability caused by the war reparations the Axis powers had to pay after World War I. Keynes argued against the reparations, accurately predicting the effects if they were put into place, and witnessed politicians and economists attempting to return the pound sterling to prewar levels which resulted in unemployment coupled with the 1929 Stock Market crash. Each man had their own ideas of how to generate stability, even though they were fundamentally different.

But Mr. Wapshott doesn't finish the book with the concrete formation of the different economic theories by the two economists. Instead he continues to follow into the present while showing the different problems the theories encountered and how new theories and ideas were postulated to overcome each difficulty.

Hayek's views and theories were taken to heart by Milton Friedman who developed monetarism which is controlling the money supply through a central bank to generate price stability. Keynes's views and theories supposedly led to the boom of the 50's and 60's and then to high inflation and slow growth in the 70's, dubbed "stagflation" (a portmanteau of stagnate and inflation), and were then extrapolated into supply side economics and other sorts of ideas that caused my brain to start sputtering and smoking.

But because this book had a debate feel, constantly juxtaposing Keynes's theories against Hayek's, towards the end I found myself asking, "So who's the winner?"

As it turns out, they're both winners. Both of their ideas or at the least extrapolations of their ideas are used. The Federal Reserve raising interest rates try to get people to save more while borrowing less is one way of curbing inflation by making money less available, or by raising the reserve requirement for banks.

Stimulus packages to combat unemployment, and deficit spending to generate more jobs are both examples of Keynes's principles ("But Prof. Keynes! This will lead to enormous debts and inflation in the long run!" "In the long run we are all dead," quipped Keynes).

So although the book is a dense read, it certainly answers the questions "why" and "how" our economic institutions do what they do. And it's just plain fun to read the back and forth name calling.

A Simple Stool

I'd had a couple of pieces of red oak that I'd bought out of the assumption that I'd attempt to make some sort of furniture out of it. That assumption lasted for about an entire year until during my honeymoon I got the itch to be productive and start working with my hands again. I settled on building a stool out of it, simply because it's a lot easier to make than a chair, it's good practice for cutting mortises and tenons, and it's not going to take up as much space as a chair wood.
So I cut the stock to length, prepped it, squared it, and successfully cut the mortises and tenons over the course of two days. That's probably the fastest I've worked, and it's a nice change of pace from my agonizingly slow work habits of old. However, like all problems I've encountered, everything went to h when I attempted to glue it up. I sliced my palm and the entire thing's slightly out of square.
At least I'm learning. I'd done a dry fit of each individual tenon and mortise, but I didn't do a dry fit with all the mortises and tenons assembled together to see if it was out of square or if one tenon was too long, etc.
Still, it fit together flawlessly with the exception of one post and now I know to assemble the whole thing to ensure all components mesh as they should.
Right now I'm weaving the jute seat for it. I would've liked using Shaker tape for it, but I'm afraid that I haven't been able to find that anywhere.
What's next on the agenda? Well, I'll try building another stool, but this one will be three legged with none of the mistakes repeated.

If Youtube Comments Were Truthful.

 

Deep Thoughts

Whenever I attempt to grow facial hair, I want it to define my manliness and highlight my testosterone-laden fantasies I've hatched while confined to a soulless, windowless drone-like environment. Something that'll make people think of Captain Nemo sticking it to a giant, tentacled Kraken while screaming "I've got dinner reservations for two at 8 o'clock and I'll be damned if a slimy sea beast makes me late!"
But the reality is that between the five o'clock shadow phase and the Captain Nemo phase, there's an awkward teenage-beard/facial hair phase that makes people think of vans with tinted windows and John Waters.
Maybe if I forced my facial hair to go out and get a job it would grow up. But until then, I wait.

The Merger

The setting is conference room with five people hunched over a telephone in the center. A man in a charcoal gray suit is punching in numbers on the phone and glances nervously at the other people.
Comptroller: [whispering] "Where's Siegel? He knows this is an important teleconference meeting"
Analyst: "I saw him in the parking lot screaming his head off, 'Why God, WHY?!'"
Comptroller: "Ah, great, that's just what we n-"
Phone: "Dan, are you there?"
Comptroller: "Yes, I'm here, we're all here. I have my three financial analysts sitting with me here, and my operations analyst, and we're just waiting on our lead project manager who should be with us shortly."
Phone: "Oh. Having trouble tracking your people, huh Dan?"
Comptroller: "That's...not it at all [whispering] you lousy, no good, rotten-"
Siegel: "Hey! I'm here! Sorry I'm late! I got tied up with something."
Comptroller: [whispering] "Where the hell have you been?!"
Siegel: [whispering back] "I had to confront my fears in the parking lot! This merger is a bad idea! A BAD IDEA!"
Phone: "Ok, I thought I heard your project manager's voice. Can we please start now?"
Comptroller: "Yes, of course. Alright we're here to discuss some of the final details of the merger and prospectus for this. My regards for our CFO he couldn't make it here today."
Financial Analyst 1: [whispers] "Where is he?"
Financial Analyst 2: [whispers, points to his head] "Hospital pysch ward."
Comptroller: "The merger is still planned to take place next Friday the 28th at 10:00 AM EST. We've inventoried our product lines and bought back 20,000 shares of common stock with the expectation of selling them back once we get our new business plan implemented and in operation which should take approximately 8 months."
Siegel: [whimpers]
Comptroller: "In the mean time, my financial analysts have determined our stocks are still retaining their value and are still being traded at approximately 10% above their sticker price despite, I mean, even after the news of the proposed merger broke. Um, Ms. Longfellow do you have anything to add?"
Financial Analyst 1 holds up a picture of people jumping out of a high rise building: "No, I have nothing to add."
Comptroller: "Alright, McJames anything with regards to corporate bonds or commercial paper?"
Financial Analyst 2 holds up a picture of a smiley face with tongue hanging out and x's for the eyes.
Comptroller: "Ok! He's looking at me right now and giving me the thumbs up! Our rating's still good! Fantastic!"
Phone: "Yeah, we got their reports and looked through them and it's definitely good work. I passed them on to my team and we've decided our best plan once the merger is finalized to maximize profits on a smaller budget for your area."
Comptroller: "Ok, care to share with the rest of the class?"
Phone: "Not until the merger's complete, Dan."
Comptroller pounds the table with his fist which causes the phone receiver to jump off the hook. He scrambles to get it back on its cradle.
Phone: "What was that? Did you just drop out?"
Comptroller: "No idea. So we don't have anything to talk about the investment and debt of the company, correct?"
Phone: "Right, let's move on to operations."
Comptroller: "Right, our senior analyst has been working with your senior analyst and he's drafted up a report that's still being hashed out between the two parties, but it brings up several valid points. Peabody the floor is yours."
Operations Analyst: "Yes, thank you, we looked at the possibilities of expanding our old line to accommodate a new customer base that would come with the merger, opening up a new line, or retooling the entire factory for the new products we have scheduled to roll out with the expectation that they'll be the next generation and the old generation will be obsolete, although we still have close to three months' worth of parts which we will be distributing to help ease the transition to the next generation. Expanding our old line would require us to purchase new machinery, employ more people, and the needed rewiring to accommodate another production unit. The only way the finance team and I could determine to implement this is to issue commercial paper for the first year and corporate bonds for the next five years in order to raise the cash for-"
Phone: "Not happening. Next scenario."
Operations Analyst: "Ok, we could open up a new line and have our old one operate at about 50% with the expectation that we would have a slightly reduced demand for our old product, and we would raise the prices on our old product to try and get people to switch over to our newer offering."
Phone: "Ok, that sounds good. I like that. How are you going to pay for the new line?"
Operations Analyst: "Well, we would issue commercial paper for the first year and corporate bonds for the-"
Phone: "EHHH! WRONG! Try again!"
Operations Analyst: "Well the final scenario is that we shut the factory down and begin retooling and replacing worn equipment and get everything set up so that we can start producing in approximately 8 months to coincide with us selling back the common stock that we bought back. We would finance this by issuing-"
Phone: "Ok, I get it. I like the idea of shutting the factory down. For retooling. Let's go with that scenario. What's your predicted growth with that scenario?"
Operations Analyst: "We expect growth to remain flat because of market saturation."
Comptroller spills his coffee all over his shirt while Siegel shakes his head and begins rocking back and forth.
Phone: "Ok. That's not really what I wanted to hear. Dan, is your operations officer on the line?"
Comptroller: "He should be, let me see if I can raise him. Mr. McGillicutty, are you there?"
Operations Officer: "Oh no Ms. Penny. My stapler seems to be out of staples. Can you recharge it for me?"
Secretary: "*giggle* Why of course Mr. McGillicutty, oh darling, why do we play these silly games?"
Operations Officer: "So that we can escape in each others' arms, away from this weary drudgery and cruel, cruel world. Now, take me to the moon and back!"
Secretary: "Oh, you animal! I have to have you! [kissing noises over the phone]"
Comptroller punches out of the line and is grating his teeth.
Phone: "So I can assume your COO is busy right now? All tied up? Has his hands full?"
Comptroller: "Yep. Yep. Yep."
Siegel: "I just have to break in and say something. You thieves think you can just come in here and hand our asses to us!"
Phone: "Well, unlike your company, ours can actually afford to hand you your ass on a silver platter. Anything else to say?"
Siegel looks around and walks out.
Comptroller: "Um, I think we're all done here. Sorry, tensions are little bit high."
Phone: "That's understandable considering the personnel cuts we'll have to make for this merger to be successful."
Comptroller: [whispering] "WHAT?!"
Financial Analyst 1: [whispering] "Hey guys, I'm planning on having a severance pay party tonight at Poor Yorick's. Shots are on me."
Financial Analyst 2: "Count me in."
Operations Analyst: "I'm 78% certain I can make it."
Phone: "Dan, are you still there?"
Comptroller: "Yes, I'm still here. What do you need?"
Phone: "I still really need to talk to your Operations Officer."
Comptroller pushes the button for the COO and only heavy panting is heard.
Phone: "You guys are going to the dogs. I have all the ammo I need. Thanks Dan."
Comptroller: "Thank you too, you [phone hangs up] @!#!@#$%!"
Comptroller looks around for a second and sees the Operation Analyst has drawn a picture of a ship with a bunch of rats leaping off it.
Comptroller: "Well, that went better than I thought."

I've hit the motherlode!

In terms of tea. Good Foods Grocery in Richmond recently renovated their Stonypoint center and one of the main benefits is that they still carry the nutritional yeast that smells like locker rooms. But, they also have loose leaf tea that's selling for rock bottom prices. I stocked up on Assam, rooibos, and an oolong that I think is Dan Cong or some other sort of high fired type oolong.
On a personal note my life is just plain getting weirder and weirder. I had the most surreal and bizarre job interview today that consisted of me misunderstanding every single thing my interviewer was asking because I couldn't understand him through his thick foreign accent. When it was over, I was frustrated and angry, but at the same time I couldn't help but think, "This utterly hilarious."
Sometimes I wonder if my life were turned into a movie everyone one would be laughing, but I'd be watching it, grinding my teeth, and grimacing.

Deep Thoughts

Last night I had a dream that I was riding my bike around Richmond and knocking people over with it, left and right, and every time I would knock someone over I'd yell "YES! 10 points for Slytherin!"