Yo dude,

hope there are no hard feelings, I woke up with a cheap vodka hangover... which is one of the few things that make me aggro. You made valid points to my comments, sorry if I was a dick.

werd.
sean

That makes sense. I have a friend who is unwilling (at least right now) to do the Tough Mudder, but he did a Warrior Dash this summer and said it was "easy."

Don't get me wrong, I'd like to do a TM at some point... =)

>> ^garmachi:

>> ^carneval:
I've been thinking about doing one in VT next year, if other athletic pursuits don't interfere.
It seems like a pretty cool thing; though coming from the viewpoint of a traditional runner it's hard not to see it as a bit gimmicky (ike I said, I'd still like to do it)...
Not as gimmicky as this, though: http://runforyourlives.com/

On the surface, it DOES seem a bit gimmicky to me as well. The zombie one looks fun, and there seems to be a rash of these things popping up all over the place just this year. I wonder if it's really a new trend, or "blue car syndrome..." Either way, everyone I've talked to who's done it says that it's incredibly challenging and not for the faint of heart.
We ran a Warrior Dash (3 mile version of the Tough Mudder) earlier this year and were a bit disappointed - it was fun, don't get me wrong, but it felt like a frat party which happened to have a mud pit and some joggers. I forget who said it, but the summed up the difference as "you can do the Warrior Dash with a hangover, but to do the Tough Mudder you have to sign a Death Waiver first."

>> ^carneval:

I've been thinking about doing one in VT next year, if other athletic pursuits don't interfere.
It seems like a pretty cool thing; though coming from the viewpoint of a traditional runner it's hard not to see it as a bit gimmicky (ike I said, I'd still like to do it)...
Not as gimmicky as this, though: http://runforyourlives.com/


On the surface, it DOES seem a bit gimmicky to me as well. The zombie one looks fun, and there seems to be a rash of these things popping up all over the place just this year. I wonder if it's really a new trend, or "blue car syndrome..." Either way, everyone I've talked to who's done it says that it's incredibly challenging and not for the faint of heart.

We ran a Warrior Dash (3 mile version of the Tough Mudder) earlier this year and were a bit disappointed - it was fun, don't get me wrong, but it felt like a frat party which happened to have a mud pit and some joggers. I forget who said it, but the summed up the difference as "you can do the Warrior Dash with a hangover, but to do the Tough Mudder you have to sign a Death Waiver first."

This trailer has ALL of the funny parts. There, I just saved you 2 hours of your life. I thought it would be like the female version of hangover... but it definatley isn't.

That's not how we Norwegians roll.
>> ^garmachi:

Wow... imagine how much worse it would have been if he'd invited some friends over.

>> ^pyloricvalve:

Thanks for the reply. There were things I really didn't understand about Krugman's Hangover Theory article, especially that very point that you quote. In fact I tried to ask in a post above about this but maybe you missed it. To me it seems only natural that there is no unemployment in the boom and there is some in the bust. Both are big reorganisations of labour, it is true. However, to start with the boom is much slower and longer so adaptation is easier. Also the booming industry can afford to pay slightly above average wages so will easily attract unemployed or 'loose' labour. As it is paying above average, there will be little resistance to people changing work to it. The boom is persistent enough that people will train and invest to enter the work created by it. The information for entering the boom industry is clear and the pay rise makes the work change smooth. I see no reason for unemployment.
The bust however is short and sudden. There is no other obvious work to return to. That information of what the worker should do is much less clear. The answer may involve taking a small pay cut or on giving up things in which people have invested time and money. Many people wait and resist doing this. They may well not know what to do or try to wait for opportunities to return. Thus there is plenty of reason for unemployment to be generated by the bust.
If I hire 100 people it can probably be done in a month or two. If I fire 100 people it may be a long time before they are all employed again. For me this difference seems so obvious I have a real trouble to understand Krugman's point. I know he's a very smart guy but I can't make head nor tail of his argument here. Can you explain it to me?


I'm trying to think how to connect what you're saying to the point Krugman's making (at least as I understand it).

At a minimum, he're Caplan making the same point in less space:

The Austrian theory also suffers from serious internal inconsistencies. If, as in the Austrian theory, initial consumption/investment preferences "re-assert themselves," why don't the consumption goods industries enjoy a huge boom during depressions? After all, if the prices of the capital goods factors are too high, are not the prices of the consumption goods factors too low? Wage workers in capital goods industries are unhappy when old time preferences re-assert themselves. But wage workers in consumer goods industries should be overjoyed. The Austrian theory predicts a decline in employment in some sectors, but an increase in others; thus, it does nothing to explain why unemployment is high during the "bust" and low during the "boom."

Krugman saying the same thing in more accessible language:

Here's the problem: As a matter of simple arithmetic, total spending in the economy is necessarily equal to total income (every sale is also a purchase, and vice versa). So if people decide to spend less on investment goods, doesn't that mean that they must be deciding to spend more on consumption goods—implying that an investment slump should always be accompanied by a corresponding consumption boom? And if so why should there be a rise in unemployment?

And as a bonus, here's Brad DeLong making a similar case.

My real handicap here is that I'm not familiar enough with the fine details of the Austrian theory to say with authority what they believe. So if I misrepresent their position, it's out of ignorance.

What I gather is that ultimately the Austrian theory of boom and bust is that central banks are messing with the "natural" balance of investment and consumption goods, with a boom happening when investment is being artificially stimulated (by low interest rates), and a bust happens when interest rates eventually go back up (due to inflation, or expectations thereof).

The response from people like Caplan and Krugman is to point out that since aggregate income has to equal aggregate expenditure (because everyone's income is someone else's expenditure, and vice versa), a fall in investment should mean a rise in consumption, and a rise in investment should mean a fall in consumption. Which means we should never see an overall boom or an overall bust, just periods of transition from a rise in consumer goods and a fall in investment, to a fall in consumer goods and a rise in investment. We should never see a situation where they both fall at the same time.

But we do see a fall in both during the bust. Why?

Keynes's answer was that it happens because people are hoarding cash. Either people are themselves stuffing mattresses with it, or more likely, banks start sitting on reserves and refusing to lend out, either out of a fear of their own solvency (Great Depression), or because a deflationary cycle with high unemployment makes sitting on cash look like a good, safe investment for them (Great Depression, and now). Put simply, depressions are the result of an excess demand for money. And since money is an arbitrary thing, it doesn't have to be a scarce resource, we can always just make more...

@NetRunner
Thanks for the reply. There were things I really didn't understand about Krugman's Hangover Theory article, especially that very point that you quote. In fact I tried to ask in a post above about this but maybe you missed it. To me it seems only natural that there is no unemployment in the boom and there is some in the bust. Both are big reorganisations of labour, it is true. However, to start with the boom is much slower and longer so adaptation is easier. Also the booming industry can afford to pay slightly above average wages so will easily attract unemployed or 'loose' labour. As it is paying above average, there will be little resistance to people changing work to it. The boom is persistent enough that people will train and invest to enter the work created by it. The information for entering the boom industry is clear and the pay rise makes the work change smooth. I see no reason for unemployment.

The bust however is short and sudden. There is no other obvious work to return to. That information of what the worker should do is much less clear. The answer may involve taking a small pay cut or on giving up things in which people have invested time and money. Many people wait and resist doing this. They may well not know what to do or try to wait for opportunities to return. Thus there is plenty of reason for unemployment to be generated by the bust.

If I hire 100 people it can probably be done in a month or two. If I fire 100 people it may be a long time before they are all employed again. For me this difference seems so obvious I have a real trouble to understand Krugman's point. I know he's a very smart guy but I can't make head nor tail of his argument here. Can you explain it to me?

>> ^pyloricvalve:

@NetRunner, On reflection I would be interested in your criticism of the Austrian School. Probably to long too go into here but could you recommend any links? (If it's just Bryan Caplan's criticisms I would accept those already)


I had to look up Bryan Caplan's criticisms, I assume you mean this? If so, that's a much more exhaustive dismantling than I was going to link to.

Since this is a Krugmania thread, I was going to dust off Hangover Theory, and add to it Tyler Cowen's thin skull criticism.

But returning to Caplan, he seems to incorporate both of those criticisms, and a raft of others. Let me mine out what I think is essentially the money quote:

What I deny is that the artificially stimulated investments have any tendency to become malinvestments.

To my reckoning, that destroys the keystone that supports the Ron Paul-style assertions that the Fed causes the boom/bust cycle, and undermines much of their case for things like the gold standard or decentralized currencies.

Here he is making Krugman's own point on Austrian theories of unemployment:

The Austrian theory predicts a decline in employment in some sectors, but an increase in others; thus, it does nothing to explain why unemployment is high during the "bust" and low during the "boom."

Which pretty much tells me that Austrians have no business telling anyone what will or won't improve employment, because their their theory doesn't even predict the rise and fall of unemployment we see in every business cycle, much less provide some superior insight into what the right policy response would be.

So to add some nuance back into my blanket statement about Austrian economics and echo Caplan a little. There's work self-identified Austrian economists have done that I think is beneficial to the field of economics. What's not been beneficial is the broken ACBT itself, especially when it's been dug up and injected into 21st Century political conversations as gospel by people who seem unaware how broken it is.

We may be getting distracted by the name Austrian which may mean different things to different people. I think there are views skeptical of stimulus held by respectable economists. I put forward Russ Roberts as one example. You seemed to say earlier that these kind of views don't constitute a continuing argument against stimulus-type policy. If that's right, could you explain why? They seem very reasonable to me.

I would also be curious if you have a criticism of the Hangover theory of this recession (that it was caused by malinvestment due to artificially low interest rates.) Krugman criticised it by saying that if unemployment results from frictional problems reallocating workers to new industries, "why doesn't the investment boom—which presumably requires a transfer of workers in the opposite direction—also generate mass unemployment?"

Krugman seems to think that's a slam-dunk against the theory but surely there are simple explanations for why friction could happen one way and not the other. When an industry booms it takes place over a long period and is a beacon attracting loose labour to it. When the collapse comes it is much faster than the boom and there are no obvious beacons for where the misplaced labour is to go. It seems normal to me that the reverse process is more difficult and leads to more unemployment. If you've an answer to that I'd be interested to hear it.>> ^NetRunner: Honestly, I'm happy to litigate out the actual reasons why I think Austrian economics is wrong, but I don't really care to get into a contest of who's got the bigger expert parroting their pet theory.

1. Hangover 2
2. Empire Strikes Back
3. Fight Club
4. Scarface
5. Dazed & Confused
6. American Beauty
7. Superbad
8. The Godfather
9. Are We There Yet?
10. There Will Be Blood
11. Road to Perdition
12. Coming To America
13. Airplane
14. Borat
15. Pee Wee's Big Adventure
16. American Pie
17. Ghost
18. The Graduate
19. The Karate Kid
20. Hangover
21. Death To Smoochy
22. Wedding Crashers
23. Half Baked
24. Fatal Attraction
25. Jerry Maguire
26. Little Shop of Horror
27. Tron
28. A Christmas Story
30. The Last Starfighter
31. The Dark Knight
32. Anchorman
33. E.T.
33. Along Came Polly
34. Wanye's World
35. Devils Advocate
36. 40 Year Old Virgin
37. Jaws
38. GoldFinger
39. Delirious
40. Full Metal Jacket
41. The Cooler
42. Ferris Bullers Day Off
43. Men In Tights
44. Men In Black
45. Blazing Saddles
46. Cable Guy
47. My Girl
48. Napolean Dynamite

>> ^MrFisk:

Never buy an American hooker.


Ha! That reminds me of a story from the Navy days... although I did change the names. Out of habit, I guess?

We were down in Curacao (beautiful place!) for a couple of days. We had a great time. One of the days, around 6 of us spent most of the day at the blackjack table with the casino politely paying us to continue to play. Of course they were not so happy with us. After having them pay us for 6 to 8 hours, we called it quits. I was ready to go to bed after smoking and drinking all day long, but a couple guys decided to head out. In the morning, we heard they stopped off at the whorehouse. (Prostitution is legal in Curacao.) After finding this out, my good buddy Sam, who didn't go out after the casino either, looked at Danny, "Tell me that you didn't buy a woman last night!" Danny looked up with pained expression of a hangover doing its work, "No. No, I didn't buy a woman last night... but I rented two!"

http://videosift.com/video/Rambo-the-Puppy-is-gonna-have-a-heck-of-a-hangover

The further adventures of Rambo....

Could be that "gueule de bois" which I translated from hangover in English on google translate when broken down translates to wood of mouth. Which in turn refers to dry mouth which is used to describe a hangover so I am assuming that they don't really have a word for hangover just the term wood mouth. Could be wrong.

http://videosift.com/video/Rambo-the-Puppy-is-gonna-have-a-heck-of-a-hangover

I know that there is alcohol involved, but I think you might forgive it under the circumstances....

you can't be hungover if you're always drunk...>> ^bareboards2:

True Fact -- the title of Hangover 2 in France is "Very Bad Trip 2." Is it because the French don't know what a hangover is?