Sunday, November 9, 2014

Plaid butterflies and other political visions

Like all good liberals I’ve been in mourning for the last few days.  I thought I was recovering, but I guess not.   So even though I generally try to stay largely rantless, I’ll allow myself this one rant as therapy.   

“Still in mourning” may not be quite right; it’s more that I’m still very concerned about what may happen in the next few years.  In fact I’m uncomfortable about some of the early things we’re already hearing from the new majority in the Senate---Mitch McConnell saying, for example, that if Obama uses his legal authority as President to do anything sensible about immigration that would be like “waving a red flag in front of a bull” to the newly elected Senators.   I’m shaking my head in utter flabbergastion, if that’s a word: Senator McConnell, what, exactly, has not been a red flag to Republicans over the last 6 years?  Your entire careers have been built on purple-faced rage, spittle-filled bellows and gnashing teeth.  If Obama bent over and kissed your---um, feet---that would be a red flag to you.  Why is it, Mr. McConnell, that Obama always has to please you, whether you win the election in 2010 or 2014, or lose it in 2008 or 2012?  Why do you never have to worry about waving red flags in front of the rest of us, which you do constantly? 

And there was a letter to the editor in the Washington Post yesterday, wondering if this election would mean we could come to some kind of “compromise” on the Keystone XL Pipeline.  What did this letter writer have in mind?  This is basically a binary decision, yes or no.  Build it or don’t.  What does a binary “compromise” look like? Is he suggesting that we build half of the pipeline?   Perhaps we should build segments in alternating states---maybe build the segments through Montana, Nebraska and Oklahoma, and leave out the segments through Texas, Kansas and South Dakota?  Or maybe he’s thinking the Republicans will offer something the Democrats want in return for building the full pipeline.  What is he thinking the Republicans are likely to offer?  My guess is: nothing.  To Republicans, nothing but complete collapse from the other side is acceptable, and real compromise is not an option they will consider. 

Frankly, I do expect the pipeline to be approved.  Obama has been waffling on it for years, which means that he won’t fight against approval when Congress sends that bill to his desk.  So the Post’s letter-writer will get his way: Obama will accept a Republican-style one-sided “compromise” on the pipeline, and get nothing in return.  

Of course what bothers me most is my expectations about what a Congress dominated by modern Republicans will do to the economy, and to government.  I expect them to decimate both.  Their economic beliefs seem to me to be so wrong-headed, so blind, that they will almost inevitably blunder us into a new recession.  The Fed is looking forward to raising interest rates next year, because they expect that we are finally returning to what they think of as a normal, fully employed economy.  I think that would be a little optimistic even if we did not have this group of budget-slashers about to take control of the Senate.  The next round of sequester budget cuts are to be enforced in January, and I expect the Republicans to insist on them---except, of course, for defense spending, where they will want sequester relief.   I expect Obama to accept this “compromise” as well, since his inner heart has always tended toward fiscal hawk, and that dose of austerity will slow what looks like a still meager recovery.   And of course we will face a new round of debt-ceiling negotiations somewhere around next March.  So my hazy expectation is that by the end of next year the steady fall in the unemployment rate may have stalled.   The numbers will still be much better than they were two years ago, so it won’t cause panic.  But by the middle of 2016, after the full impact of a new Republican budget, we may be where Europe is now: stalled completely and facing a possible new recession.   The Fed’s hopes for a “normal” economy, where they can once again use a positive interest rate to restrain corporate investment exuberance in excess of our potential production limits, may be gone.

That’s what I expect, to be honest.  But I may be wrong.  I hope I am.   In 2008 a large number of conservative economists made terrible predictions about what would happen if the Fed continued with monetary stimulus too long, or if we tried a fiscal stimulus.  They predicted soaring interest rates and inflation.  They were wrong, or at least they have been wrong so far, but I believe they were sincere in their beliefs.  Like Yogi Berra said, “predictions are tough, especially about the future.”    And these expectations I have are really no more than mood right now; I haven’t even done so much as a back-of-the-envelope calculation.  We don’t yet know what the Republican budget will really be, so we have no basis for a calculation even as rough as that.

So maybe, hopefully, my predictions are wrong too.  Maybe the recovery is stronger than it seems.  Maybe it’s truly robust, a surging tide that can’t be stopped.  Maybe the new Republican Senate will want real compromise, rather than one-sided collapse from Democrats. Maybe their budget cutting zeal has been sated, at least a little, by sequester and all the rest, and they will pass budgets that actually get things done.  Maybe the whole capital will soar into the blue, blue sky carried by a flock of paisley butterflies.

But it will be entertaining to watch the Senate struggling with the inevitable Ted Cruz bill to repeal Obamacare.  In order to pass it they need 60 votes, unless they eliminate the need for cloture---in effect, eliminate the filibuster in the Senate, by some parliamentary maneuver, for this bill.  But if it’s possible for this majority to do that for this bill, it’s possible for any majority in the future to do it for any bill.  McConnell is not so blind that he can’t see the danger for himself, and for his own party, in that.  At least maybe he’s not.  And maybe he can control Ted Cruz and the rest of the Senate Republicans.

Maybe the butterflies will be plaid.

Sunday, November 2, 2014

Malala Cakeonomics

So.  This is supposed to be an economics blog, so I promised to turn yesterday's cake into economics somehow.  What on earth are the economics of cake?  Well, let’s see.  Actually, there are a lot of directions I could go with this, but I think I’ll write about a topic that I’ve been meaning to talk about anyway: the problems with GDP as a measure of economic production.  These are all well known, but they get buried in the political fluff that passes for front-page news these days, and even economists generally just dismiss them and continue to uncritically treat GDP as the whole truth in discussions.  I do it too.  And GDP is the best measure we have.  But it’s wrong, or at least incomplete.  So how do we get to that from cake?

To start with, we need to notice that the cake we’re talking about is not just cake, but cake made from scratch at home.  That gives us an excuse to get into the issue household non-market production  by observing that rather than buy a cake ready-made, I produced a cake from raw materials that I bought from a relevant input supply vendor---that is, from a grocery store.  We could notice that a huge fraction of the production of any nation takes place like this, by households buying raw materials and performing the final production tasks themselves, and that production inside the household, which is really the basics of everyday life, never shows up in the GDP.  How much this matters is hard to measure; here’s a Bureau of Economic Analysis (BEA) study on it that reports on a number of different attempted measures of household production in the United States, and finds that the estimated value of that household production is somewhere between 12% and 58% as high as the measured value of market based GDP (see section 8, particularly the top of p.9).  That's a lot:  GDP is around $17.5 trillion this year.  The lower figure is what we get if work in the house is valued at the minimum wage; the higher figure is what we get if household work is valued at the average hourly wage of professionals doing the same kind of work---in the case of my cake, for example, chefs or professional bakers.  But in either case, that means that the measured GDP that’s reported in the newspapers is actually pretty far off from the real total product of our nation.  And having observed that fact, we could take one more step and observe that not only GDP but also measures of economic growth are impacted by this, because some measured economic growth might result from simply moving existing production from households into the market economy: the same amount of production takes place, but what used to be invisible is suddenly revealed to the National Income and Product Accounts.  That’s what would have happened if I had gone out to buy a cake on the market instead of making one at home. 

The proportion of total production that takes place within households, rather than in the market, varies widely across cultures and countries, which is one reason you might want to take strange statements like “the average Ziltonian peasant lives on $3 a year”, or whatever, with a very, very big grain---maybe a boulder---of salt.  What it really means is that the average Ziltonian peasant lives almost entirely outside the market economy: he hunts, farms, gathers, builds, makes his own tools, cooks and so on without buying much of anything from a store.

And that’s just the economics of what did happen.  But here’s something that could have happened but, in my house in this instance, didn’t.   As an inexperienced cake maker, I could have made some horrible mistake.  I could have gotten my tie tangled in the egg beater, and in the resulting chaos of physics ended up with an injury that induced a trip to the emergency room.  Or I could have forgotten the cake until my smoke alarm alerted the local fire department, and caused them to send fire trucks to my house.  Or I could have actually started a fire that burned down my house with all that’s in it.  In every one of these cases the GDP would record the response from the market---my treatment at the emergency room, the construction of a new house, the cost of sending a fire truck and all manner of emergency responders to my house---as a positive thing, an increase in the GDP.  They are all things the market did, products the market provided.  But none of the losses would have shown up in the GDP at all.  Think about that a bit: wherever there is destruction, the GDP records the replacement of whatever was lost, but does not deduct the loss itself.  A hurricane, a volcano, even an accident on the highway, all add to the GDP.  But they aren’t the kind of thing we think of as an improvement in our lives.

I have a book to recommend on this if you’re interested in the topic: Mis-Measuring our Lives, edited by Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi, with a introduction by Nicolas Sarkozy---yep, that’s right, the former President of France.  Here’s a quote from that introduction:

“We have wound up mistaking our representations of wealth for the wealth itself, and our representations of reality for the reality itself…We have built a cult of data, and are now enclosed within.”

It’s a little overstated, perhaps, but he’s a politician and should be forgiven for drama.  It’s basically true.  And it’s good to constantly keep in mind not just that our data misrepresents reality, but how: that among other flaws with the GDP is the flaw that omits our “leisure” time (the time we spend pursuing our own goals, or with friends or family), our household work, our hobbies; these are simply not counted, but they are important parts of our real economic product.  And the repair of our disasters are counted as adding to economic good, rather than simply restoring what was lost.  And finally, a corollary of the last point, is that damage that is done and never repaired---like environmental damage from smokestacks or car exhaust---are never subtracted from the value of the market processes that produce them. 

Ok.  Finally, I can’t ignore this.  I know this recipe is not just homemade cake, it’s homemade Malala cake, and the issue she’s known for is not the household production function, but women’s right to education. So in keeping, perhaps, with Ms. Yousafzai’s focus on women, I should point out that a very big fraction of household production is performed by women---how big varies across countries and cultures and is just as hard to measure, and for the same reasons, as the total amount of household production, but at least in the United States two-thirds seems like a reasonable first rough guess from Table 2 of the BEA study linked above.

On the issue of women’s education, or more generally, gender differences in education around the world---that would take a book to explore, not a blog post, and it’s not a topic on which I have any expertise at all.  I’ll leave the explanation of that topic to Malala.  But here’s a starter book: the UNESCO Atlas of Gender Equality in Education.  This is a very accessible book, mostly graphics showing various comparisons, and the problems it depicts are not always those faced by young women: some are problems faced by young men.  From the book:

“An important theme is that although girls are still disadvantaged in terms of access to education in many countries and regions, they tend to persist and perform at higher rates than boys once they do make it into the education system. Another theme is that all countries face gender equality issues of some sort, including situations where boys are disadvantaged in one way or another.”

Why is this education issue in an economics blog?  Well, because it’s my blog and I can put whatever I want in it.  But it shouldn’t take a lot of thought to realize that any nation that simply refuses to educate a significant part of its population, or mis-educates them, or damages their ability to learn by pushing them into classrooms that don’t suit their natures or capabilities, or educates them and then under-employs that education---any nation that does those things is seriously hampering its prospects for economic growth. 

But that’s a blog post for another day.

Saturday, November 1, 2014

Malala Cake

Ok, so this is the agenda for this post: A) Cake excuses, B) a recipe for Malala cake so far, such as it is, and C) Cake economics.  

Yep, you read that right.  Malala cake.  That’s my story, and I’m sticking to it.

Cake excuses:

The 2014 Nobel Peace Prize was shared by Malala Yousafzai and Kalish Satyarthi.  I had never heard of Mr. Satyarthi, but I knew about Malala, and I was so charmed and so uplifted by the fact that she won the Nobel Peace Prize at the age of 17 that I pulled over to the side of the road---I was on my way to work in the morning---and sat there for a few minutes smiling.  I called my wife to share the good feeling. 

Malala herself says that she doesn’t deserve the prize, but if other people in the world had a reaction anything like mine it may not matter whether she deserved it: the fact that she was awarded it brought a lot of gladness into the world, and that may be enough justification.  And while I understand her reluctance to accept a prize before she’s succeeded in achieving her goal, I don’t agree with her on this: she does deserve it.  She is a startling example of why those of us who have become older, and in the process have become jaded, tired, and bruised by life, need in the end to pass the torch to others who are still young, still eager, and filled with hope for the future of the world. 

So I decided to make a cake for Malala. 

That’s really a pretty odd response for me. I don’t usually like cakes very much.  I rarely eat them, and I have no particular skill in making them.  I generally find the cake part too clingy and the frosting too sweet.   

Celebrations are generally cake-events, though, so I was stuck.  I had to bake a cake.  But I have a problem here: since I don’t generally make cakes, I don’t have a go-to cake recipe to pull out for special occasions.  I can never follow recipes anyway.  I mean, I guess I could follow recipes if I really had to, but usually if I’m going to spend time in a kitchen I figure I might as well spice up my time with at least a little bit of adventure.

So by deciding to make a cake, I had sort of decided to invent a cake. 

I had to do some research on cakes, but I know where to start any research project: Google.  I looked up a lot of cake recipes, took a bit from here and a bit from there, and added some flavors that seemed to me in my cake ignorance to be very distantly appropriate, and invented my cake.  It didn’t occur to me until much later that maybe I should put it out here on my blog, partly to see if anyone has suggestions, and partly as an invitation to my friends to come over and try some while it lasts.  I wanted to wait until it was perfect but---well, that would have been a long time, I think.  

And then I read that Malala had donated all of her prize money to rebuild schools in Gaza. 

I can’t wait for perfection.  That much youthful altruism has to be celebrated now.

The recipe is below giving you all the extremely small benefit of what little cake expertise I’ve managed so far. 

The cake:

I’ve made this cake three times now, with slightly different methods each time.  Every time the cake fell after it got out of the oven---not drastically, but it did fall.  It still tasted great, and the texture was acceptable, but it didn’t manage the lightness I had intended.  So, back to the web to figure that out.  After some effort and research I discovered that flourless, egg-risen cakes like this one are kind of thermally monogamous; their instinct is to mate for life with whatever temperature they’re with at any moment.  It’s not that they can’t change.  But they become attached to their temperature of the moment and are reluctant to abandon the relationship even when they know it’s not good for them in the long run.  Unless they are treated gently they’re not at all comfortable moving to something thermally new to them.  For example, when the cake is done baking in a hot oven, don’t just yank it out and put it someplace cool: it’s guaranteed to sulk about that.  The cake knows that if it remains in that high oven heat it will eventually become charcoal, but it still has to be gently coaxed to leave.  Turn the oven off and leave the oven door ajar for a few minutes to let it get used to the idea of moving on.  Then open the oven door wider, and leave the cake for another few minutes.  Then, when you think it’s ready, take it from the oven and put it on top of the stove where it’s warm from the air released from the oven below it, and let it cool there for a while before moving the whole thing to a wire rack.   Your kitchen might be arranged differently, but you get the idea: slowly cajole the cake, one step at a time, to accept the new temperature. 

In a way, this starts even before you even start mixing the batter: take the eggs and butter out of the refrigerator half an hour ahead of time, so that they are warmish when you start.

Here’s what I did, which I guess I should call a recipe. 

(your name here)’s Malala Cake:

So I called mine Stuart’s Malala Cake because it’s a cake and I’m Stuart and I made the cake, but I don’t feel all that possessive about it; if you are like me and can’t stop tinkering around with things, come up with a variation and call it your own Malala cake.   You could put flaked almonds on top.  Or you could use marmalade instead of apricot jam, then you could call it marmalade Malala cake, which is not only charmingly alliterative, it actually sounds pretty tasty…I may have to try that.  But here’s my version, so far. 


5 eggs, separated
2 Tbsp lemon zest
1 Tbsp lemon juice
1/2 teaspoon ground cardamom
1/8 teaspoon ground coriander
pinch cinnamon
¼  cup raw cane sugar (because I like it better---it has a hint of molasses flavor),
¼ cup refined sugar (for the egg whites---dissolves better)
¾  cup almond flour   
¾ cup almond meal
1 teaspoon baking powder
2 teaspoon vanilla
1 teaspoon almond extract
Pinch of salt


Separate eggs into yolks and whites. 

Preheat the oven to 350°F.  

Place a round of parchment paper on the bottom of a 9-inch springform pan, and grease it and the sides of the pan with butter.

In a large bowl, beat together the egg yolks, lemon zest, and 1/4 cup raw cane sugar and the vanilla and almond extract until good and thick.

In a separate bowl, whisk together the nut flour, nut meal, spices, baking powder and salt.  

Beat the egg whites to fairly stiff peaks, but don’t keep beating beyond that.  As the egg whites begin to increase in volume, gradually sprinkle in the ¼ cup of refined sugar and the 1 Tbsp of lemon juice into them.  This last, lemon juice, is experimental; I read on the internet (here) that an acid like vinegar, lemon juice or cream of tartar helps maintain the loft of beaten egg whites.  It’s worth a try.


Add the nut flour mixture to the egg yolk mixture and beat until smooth. 

Fold the beaten egg whites into the almond mixture a third or so a time.  The first third can be mixed pretty vigorously; it’s basic purpose is to make the batter more liquid so that it’s easier to fold the rest of the egg whites into it.  Be a bit more gentle with the second third, trying to make the result pretty fluffy and light.  The last third should be folded in quite gently, just until incorporated and no more, to blend but to still preserve the lightness and airiness of the beaten egg whites as much as possible.

Gently pour the batter into the prepared springform pan and place in the oven. Bake for 40-50 minutes.  It will be dark on top, don't let that scare you.

Remove from the oven gradually (see above) and let it mostly cool. If necessary---it probably won’t be, because the cake will probably retract slightly from the side of the pan on its own---but if necessary, run a sharp knife around the edge of the cake to help separate it from the side of the pan.

Release the springform pan side, and gently move the cake (on parchment) to a serving plate.

For the soaking liquid or glaze:

Put ½ cup of really good apricot jam into a pan, and heat together with ¼ cup Cointreau, if desired.  If you’re really trying to make it for a 17 year old Muslim girl, you might want to use something non-alcoholic instead (maybe orange juice). That’s it.  Heat until it dissolves.  While it’s warm it should be pretty liquid.  Let the hot dissipate from everything, both cake and glaze, and pour the slightly warm glaze over the slightly warm cake.  Brush some of the glaze around the sides of the cake too, just to make it shiny.

That’s the cake I made.  As I said, I’m not an accomplished cake maker, and this cake tends to fall a bit.  If any bakers out there reading this, anyone who is actually good at cakes and wants to explain how I should have done it in the first place, I would honestly appreciate that.  Just go to the bottom of the blog post and click on the tiny print that says “comments”, or if you’re the first one here it will say “no comments”.  Or alternatively, you can go to the very top, to the title of this post, where it says “Malala Cake”, click on that, and then scroll down to the bottom and there should be a place for you to enter any suggestions you have.  I’d like to get this right.

Cake economics:

Naahhh…I’ll do that tomorrow.  Instead of economics, I’ll use this space to ask any of you out there who know Malala, or who have the chance to meet her somewhere, to thank her for me for inspiring me to make a cake.  It turned out pretty well, to my nearly unbounded surprise. 

And tell her also that she does deserve the prize. Alfred Nobel’s will says the prize should go to “the person who shall have done the most or the best work for fraternity between nations, the abolition or reduction of standing armies and for the holding and promotion of peace congresses.”  It doesn’t’ say the winner has to have actually achieved peace forever.  The purpose of this prize is not just to celebrate already accomplished goals: it’s to inspire the world toward peace, and to celebrate people who are pressing the world toward peace instead of conflict. 

I said something at the top of this post about the older among us being wounded by life, and the young being eager and hopeful.  I don’t really know whether that’s always true; there are counterexamples.  Ghandi, who never did win the Peace Prize because he was killed the year they were probably going to award it to him, and Mandela, and Mother Theresa.  They all managed to save some hope well into old age, and all of them were plentifully bruised by life.  And there are some young people who are filled with other things than hope: bitterness, or anger.  But Malala, in spite of living through a terrible assault, is not bitter, and not angry.  She was young, and strong, and would not allow bitterness to deflect her.  So I don't know.  But there’s any truth to the idea that the young are more resiliently idealistic than the rest of us, please tell Malala that I hope she stays eager, stays hopeful, and stays young forever.