How Did He Get It So (Largely) Right?

Paul Krugman's article last week in the Times "How Did Economists Get It So Wrong" was remarkable in two ways.

First, it neatly captured the essence of how two schools of economists (which includes finance academics) differ in their approach to markets. Krugman presented this so skillfully that it can be grasped by readers without a background in economics. At the same time it was immensely useful and interesting as a recap and to put issues in perspective even for practitioners in the field.

Second, the article is fully eight pages long - much longer than his Op-Eds, and I thought it would be too "heavy" for most readers. Yet to my surprise it was the most popular and emailed article for a couple of days. That's as much of a tribute to the caliber of the Times' readership as to Krugman's writing. I strongly recommend this piece to anyone who wants to get an insightful overview (admittedly from Krugman's eyes) of the rival schools of thought and of the issues separating them.

Though I studied at Chicago, I find myself agreeing with much of what Krugman says. This is particularly so in regard to the Keynesian belief in helping the economy through temporary stimulus spending, and events showing markets can be grossly inefficient for long periods of time. In fact, in my post back on Feb. 10 I had voiced strong misgivings about the statements of some prominent Chicago professors who opposed the fiscal stimulus plans.

However, Krugman is still a little unfair to the Chicago school by painting them as largely unified against Keynesian beliefs, firmly believing in efficient markets, and lumping them all as "freshwater" economists. Krugman did acknowledge that the danger of a financial market meltdown was first pointed out by another Chicago economist, Raghuram Rajan. But Krugman didn't mention that a leading academic of the theory of "behavioral economics" (rival to efficient markets theory) also belongs to the Chicago school. That professor is Richard Thaler who is at least as well known as the other proponent of behavioral economics, Robert Shiller, whom Krugman repeatedly mentioned.

In fact, during my time there I had found it great about Chicago that rival theories could be freely and vigorously debated in the weekly finance workshops and other academic forums. I remember how Eugene Fama (dubbed "the father of the efficient market theory") in his highly popular fnance class had included Thaler's papers as required reading. And though a lot of friendly riffs about opposing beliefs were exchanged, Thaler used to be invited to Chicago's finance workshops to discuss his papers even when he taught at MIT or Cornell. Then about 10 years ago he was welcomed into Chicago as a tenured professor.

But apart from setting the record straight about Chicago and other other schools (about their not having monolithic, misplaced beliefs) I really like and commend Krugman's article.

The Graduate(s)

Yesterday my parents, Anita and I attended our younger daughter Rubina's graduation from the Columbia School of Journalism. Amidst the fun and revelry I found almost all of Rubina's classmates that we met to be remarkably pleasant and friendly. They were bright as I expected of Columbia students, and (from all the hugs enthusiastic hugs exchanged) had warm family ties.

Columbia may have done a good job profiling and selecting the right people into the program but is there also a self-selection dynamic at work here? Journalism is typically a tough career with lousy pay. So it may attract people for whom money is less important, and have a sense of idealism or a passion for sharing their news and views. So could such profession/schools attract more of the "nicer" types? This is analogous to the Anita's belief that school teachers tend to be nice people. Not that all journalists or media are ethical or objective by a long shot. Think Fox News. While in public service in India I saw a couple from The Indian Express (one of whom's now a bureau chief) who concocted news to make sensational headlines and try extorting favors.

So I do have some concerns about the type and nature of media coverage. But at least these graduating students show that many people of good caliber and outlook are entering and sustaining the profession in the US and abroad.

Here are some pictures of the graduation and related events (click left for more.) I'm glad my parents could attend this graduation ceremony - their first in the US. Rubina's in most of them, with a couple of our family (sans Sheena who is in Austin.)
http://www.divshare.com/download/667819-c3b

See No Bullying, Hear No Bullying

Today I saw a post on the blog of my good friend, schoolmate and best selling author David about how and why there was no bullying in our own elementary-to-high school in Darjeeling:
http://david-mcmahon.blogspot.com/2007/05/no-bully-beef.html#links

I want to set the record straight from my first hand experience. But let me first say that David is an extraordinarily amiable and popular person so that's why he was neither the bully nor the victim. He also sees the bright side of everything and bullying often occurs covertly so he could miss seeing it. Finally he was two years behind me in school so his cohort may have had very different experiences, though somehow I doubt it.

Through my six years in this school I saw plenty of bullying. For me personally it worsened from the sixth grade till the tenth and then plateaued almost till I graduated. Segregating the students into three "divisions" as David mentions (the "primary", "lower" and "upper" divisions) doesn't really help much because bullying also occurs among peers. Plus, a 9th grader can still be targeted by an 11th grader, or a 6th grader by an 8th grader, and so on. Most US schools as well as those in other places are split completely into elementary, middle and high schools that mirror the divisions we had within our school. That hasn't stopped bullying here.

The boys in our school closely followed an "honor" code against "sneaking" and social ostracism followed for anyone breaking it. "Sneaking" (akin to snitching) meant reporting to the authorities (teachers or our "father" priests) anything improper done by a fellow student, whether it was breaking rules, or harming another student, including by bullying. I now see press coverage of a similar taboo against reporting anything to the police among large swathes of the US African American community, which exacerbates black on black crimes.

Anyway, this anti-"sneaking" code made it very easy for bullies to thrive without detection by our well-intentioned authorities. I was a good target because I was (a) thin and nerdy, so not good at defending myself, (b) tall, so a bully did not seem to be picking on someone smaller, and (c) neither very submissive, nor pleasant like David. The "headboys" or "prefects" had no punitive role. They'd at most stop something happening under their noses so bullies simply operated elsewhere.

Bullies came in various shades and stripes. In my 10th class a particular classmate came almost every day to step on my toes and grind his heels into them, daring me to retaliate. He also took pleasure in bending my fingers back from the knuckles till they were injured enough to make it hard for me to write - for days. Others sometimes noticed what was happening but didn't want to get involved since he was a "tough" guy. The couple of times I tried to fight back ended in disaster (picture the comic character Sad Sack getting pounded by the Sarge.)

Two years after high school I finally hit my post-pubertic stride, gained 50lbs and became a "big ape" in classmate (now wife) Anita's words. (Why didn't that happen 4 years earlier?) But my past experiences affected my attitude to this day. As a college upper-classman I opposed the then-brutal practice of physical "ragging" or "hazing" of incoming freshmen. In my days as a law enforcer in the IAS I had the local "gundas" or tough guys booked or "processed" by the police with an intensity that surprised those around me. I saw them as extensions of our own school bullies. I'm still apt to look for bullying behavior and counter it if I can.

I recounted my experiences to a couple of ex-schoolmates recently and half-jokingly referred to my school tormentor of yore as "Biff" from "Back To The Future." Happily though, when this person and I re-established contact some years ago, my notions of getting even with him vanished (slowly!) and we maintain friendly contact.

We NorthPointers have a wonderful school that we're very proud and happy to be part of. I have a lasting bond with it and fellow alumni. But bullying is widespread and no place is immune from it. It can occur close to us without our being aware of it. And here I haven't even talked of bullying through mental abuse (like in "Mean Girls") that is even more pervasive. All of us should be looking out for it and preventing it (yes, including the current authorities at our school.)