Practice Good Theory

The NBER says the current recession ended over a year ago, in June 2009. This might seem odd: the economy does not appear that great, and voters say the economy is issue # 1, unemployment is high, house equity and sales are low, wages are stagnant, retail sales are flat, and credit is down. How can they say the recession ended? A current poll shows that people disagree with the economists: 70% of people polled say the recession has not ended. I've heard some angry commentary from people, accusing the NBER of being out-of-touch. However, the NBER's approach is fairly algorithmic. The apparent dichotomy flows from this: the typical economist's concept of a recession is different from the concept of many lay-people. Economists usually consider the rate of change and turning points to mark a recession, while non-economists tend to think in terms of the level at which the economy is running. Therein lies the mismatch. Consider this graph, showing a downturn. To an economi...

Many are rightly wary of "effortless-success" schemes, but it's also important to be wary of "high-effort success" schemes. Through experience, we often develop a heuristic that puts an extra sheen of value around high-effort schemes, even while we might reject them for their "cost". Now and then, remind yourself of the person who tries earnestly and hard, while another whizzes past. It ain't the effort alone but the process to which it is applied: a press of a finger can grind something that took my granny 5 minutes of hard labor with the mortar. Of course we know this intellectually; but I think we need to remind ourselves of it every now and then. Every now and then, one ought to ask: "is this not working because I'm not putting in the required effort, don't have the patience, cheat with some 'indulgence', etc. Or, am I just doing the wrong thing?" Alternatively: "How can I do this in a way that is a little more e...