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[stocks]

Educated incapacity often refers to an acquired or learned inability to understand or even perceive a problem, much less a solution. The original phrase, "trained incapacity," comes from the economist Thorstein Veblen, who used it to refer, among other things, to the inability of those with engineering or sociology training to understand certain issues which they would have been able to understand if they had not had this training. The training is essential to gain the skill, and society wants these people to have the skills, so I am not objecting to the training. But the training does come at some costs by narrowing the perspectives of the individuals concerned.

I also often use the phrase to describe the limitations of the expert—or even of just the "well educated." The more expert—or at least the more educated—a person is, the less likely that person is to see a solution when it is not within the framework in which he or she was taught to think. When a possibility comes up that is ruled out by the accepted framework, an expert—or well-educated individual—is often less likely to see it than an amateur without the confining framework. For example, one naturally prefers to consult a trained doctor than an untrained person about matters of health. But if a new cure happens to be developed that is at variance with accepted concepts, the medical profession is often the last to accept it. This problem has always existed in all professions, but it tends to be accentuated under modern conditions.

Large organizations have the tendency to proliferate new forms of expertise and specialists who are drawn largely from a very special social and cultural milieu. Bureaucracies in our technological society depend heavily upon members of the New Class—or at least recruits from graduates of universities that emphasize liberal and progressive ideologies and viewpoints, almost to the exclusion of hard or tough perspectives.


http://www.hudson.or...n...ils&id=2219

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Inventor's 2020 Vision: to Help 1 billion of the World's Poorest See Better

Silver has devised a pair of glasses which rely on the principle that the fatter a lens the more powerful it becomes. Inside the device's tough plastic lenses are two clear circular sacs filled with fluid, each of which is connected to a small syringe attached to either arm of the spectacles.

The wearer adjusts a dial on the syringe to add or reduce amount of fluid in the membrane, thus changing the power of the lens. When the wearer is happy with the strength of each lens the membrane is sealed by twisting a small screw, and the syringes removed. The principle is so simple, the team has discovered, that with very little guidance people are perfectly capable of creating glasses to their own prescription.

Silver calls his flash of insight a "tremendous glimpse of the obvious" - namely that opticians weren't necessary to provide glasses. This is a crucial factor in the developing world where trained specialists are desperately in demand: in Britain there is one optometrist for every 4,500 people, in sub-Saharan Africa the ratio is 1:1,000,000.

The implications of bringing glasses within the reach of poor communities are enormous, says the scientist. Literacy rates improve hugely, fishermen are able to mend their nets, women to weave clothing. During an early field trial, funded by the British government, in Ghana, Silver met a man called Henry Adjei-Mensah, whose sight had deteriorated with age, as all human sight does, and who had been forced to retire as a tailor because he could no longer see to thread the needle of his sewing machine. "So he retires. He was about 35. He could have worked for at least another 20 years. We put these specs on him, and he smiled, and threaded his needle, and sped up with this sewing machine. He can work now. He can see."


http://www.buzzle.co...les/242220.html

[stocks]

Here is a recent example of Krugman trapped in academic wonderland: European macro algebra (wonkish).

I’ve been on the warpath over Germany’s refusal to play a constructive role in European fiscal stimulus. But what does the math look like? Here’s a simple analysis — well, simple by economists’ standards — of the reason coordination is so important for the EU. ....

Consider the effects of an increase in government purchases dG. This will raise GDP directly, to the extent that it falls on domestic goods and services, and indirectly, as the rise in GDP induces a rise in consumer spending. We have:

dY = (1-m)dG + (1-m)(1-t)c dY

or dY/dG = (1-m)/[1 - (1-m)(1-t)c]

Since governments are worried about debt, it’s also important to ask how much the budget deficit is increased by an increase in government spending. It’s not one-for-one, because higher spending leads to higher GDP and hence higher tax revenue. We have

dD = dG - tdY

A crucial number is “bang for euro”: the ratio of the increase in GDP to the increase in the deficit. After a bit of grinding, it can be shown to be

dY/dD = (1-m)/[1 - (1-t)(1-m)c - t(1-m)]


It is impossible to argue against such wonkishness except with logic that an average 8th grader would understand.

Non-Wonkish Rebuttal

The average 8th grader understands that one cannot continually spend more money than he has.
The average homeowner who has been foreclosed on understands that buying more house than he could afford vs. wages earned was a very bad idea.
The average economics professor afflicted with the K-Virus thinks that it is possible to spend one's way out of a fiscal crisis.
The average economics professor afflicted with the M-Virus thinks that it is possible to inflate one's way out of a fiscal crisis by destroying the currency.
The Congressional representative believes in the free lunch theory of spending many multiples of what is collected in taxes.

Why is it that the average 8th grader has a better grasp of economics and fiscal sanity than the average economist and the average member of Congress?



http://globaleconomi...-spreading.html