Copy/improve/paste, part 3

It's only the third installment of my series about great songs with even better covers, and I'm already about to break my own rules. In this case, I don't really think the cover is better than the original--but it is just as good, which is an accomplishment in its own right. I'm talking about Dolly Parton's I Will Always Love You, remade by Whitney Houston. It's funny how much both versions differ in mood: Dolly Parton's song is intimate and heartbreaking, Whitney Houston's is epic and magnificent. And then there's Houston's voice, holy shit.

The clash of two anthems

In just over six months, my hometown will be hosting the national soccer teams of Italy and Spain as part of the 2012 UEFA European Football Championship. I'm always very excited when those two national teams play each other, not only because they're both chock-full of players who are legends of the trade, but also because those countries' national anthems are my favorite ones of them all (of those two I like the Italian one better). Both songs are energetic and melancholy at the same time. I'm looking forward to hearing them in close succession on June 10, 2012. Below the fold, you can take a quick listen yourself.

Way to complicate something that isn't

A New York City video store called Kim's categorizes its movie collection alphabetically by director's last name. Great idea, right? You can't just walk in and locate, say, "Blue Valentine" on the shelf; instead, you have to ask a staff member who directed "Blue Valentine," and then wait for said staff member to look it up on their computer (because, most of the time, they don't know who directed the damn movie either. I'm not criticizing them; no one in their right mind would expect anyone to know off the top of their head who directed every movie in the store. Oh wait...) and point you to "US Directors, Derek Cianfrance." That's right: just when you thought it couldn't get any stupider, you're in for a surprise: movies are also categorized geographically according to the nationality of the director. Let's say you're looking for "Dangerous Liaisons." In order to locate it without having to waste time asking people and waiting for them to ask their computers, not only do you have to know it was directed by Stephen Frears, but also that Stephen Frears happens to be British, which means that the damn thing is filed under "UK Directors." Even though it's a Hollywood movie, made in America, funded by American producers, with American cast.

A big, happy family. Maybe not that happy, but really huge

Speaking of arguments against Polish central bank lending 5 billion euros to the IMF, here's an additional piece of hilarity. In an essay titled Don't Touch Our Currency Reserves, one Tadeusz Swiechowicz goes through the reasons why it's a bad idea for Poland to do this. Here's one of the reasons he lists:

Italians are capable of paying down their government debts themselves. The average household income in Italy is equivalent to 2 million PLN annually. [PLN is code for zloty, the unit of Polish currency--przemek]

A mind-boggling figure indeed, as made up figures tend to be. CIA World Factbook tells me that GDP per capita in Italy is currently around $30,000. Right now, 1 USD buys 3.4 PLN, which means Italian GDP per capita expressed in PLN is 102,000. So apparently, Mr. Swiechowicz believes that the average household size in Italy is almost 20 people.

Consider knowing what you're talking about

This is yet another post in which I decry the depressing stupidity of public debate in Poland, especially when it comes to matters of economics and finance. The recent EU summit, aside from making a large (though rather back-door) policy breakthrough with respect to bailing out illiquid governments, has also proposed that the central banks of EU countries guarantee a loan to the IMF, with the aggregate value of some 200 billion euros. The funds are presumably going to be set aside in order to be used to help eurozone governments facing liquidity problems.

Poland's share in that guarantee is supposed to be somewhere in between 5 and 10 billion euros, and it's going to be funded through Polish central bank's currency reserves (which really means foreign government bonds held by the bank). At any rate, what prompted this note was an argument I've heard from a politician of the opposition party, debating against Poland's participation in this loan: namely, that even though on the face of it we're lending to the IMF, "everyone knows" we'll really be lending to Greece and Italy in order to save the euro, and it is a violation of the constitution to use the central bank of Poland to defend a non-Polish currency.

This was said with a straight face, by someone who used to be a Foreign Minister, about a loan to the IMF. Whose main (and at the time of its birth, only) function is pooling funds from central banks of many countries in order to provide their participants insurance against speculative attacks on their currencies.

Let me rephrase that again: the argument is that we can't be lending this money to the IMF because everyone knows they will use it to protect a foreign currency from speculative attack.

Not one existing and one perceived

We begin with an example. While walking, I see a stone by the road and kick it. (...) Years after the event, I remember the scene of my kicking the stone. 

Two features of this example are relevant. In the first place, there is the fact that I kick, imagine, see the same stone. In the second place, when I remember the stone I kicked, my evidence for remembering the same stone is beyond question. (...) I may recall at will the event of my kicking the stone, and the stone remains the same every time I recall it. (...) Anything I see, anything I think, anything I deal with carries the possibility of being seen, thought or dealt with again. (...) With each and every act of seeing I presentify an item. In every presentification, the item maintains its identity. The stone I remember is the same stone I kicked. (...) It is a mistake to believe that what I kick is a material stone. If the stone were a material object, then I could not remember "it," because there are no stones in my brain. Nor does it make sense to assert that after kicking "the" stone, I retain an "image" of the stone. Such an image would have to relate to the stone I kicked, and in order to account for this relationship we are forced into infinite regression. The radical realism of phenomenology consists in admitting that the stone I kick is the very same stone I remember. It is neither a material object nor an imprint in my brain. It is an item that has an identity.

--Gian-Carlo Rota

The world is given to me only once, not one existing and one perceived. Subject and object are only one. The barrier between them cannot be said to have broken down as a result of recent experience in the physical sciences, for this barrier does not exist.

--Erwin Schrödinger

To-morrow, and to-morrow, and to-morrow

The illusion of the passage of time arises from the confusing of the given with the real. Passage of time arises because we think of occupying different realities. In fact, we occupy different givens. There is only one reality.

--Kurt Gödel, quoted by Rudy Rucker

God's name

I contend that the sum total of individual consciousness is the bare feeling of existence, expressed by the primal utterance, I am. Anything else is either hardware or software, and can be changed or dispensed with. Only the single thought I am ties me to the person I was twenty years ago. 

The curious thing is that you must express your individual consciousness in the same words that I use: I am. I am me. I exist. (...) What conclusion might one draw from the fact that your essential consciousness and my essential consciousness are expressed in the same words? Perhaps it is reasonable to suppose that there is really only one consciousness, that individual humans are simply disparate faces of what the classic mystic tradition calls the One.

--Rudy Rucker, Infinity and the Mind

When does poverty look like poverty

Not too long ago a friend of mine traveled to Ecuador and Cambodia in a span of just a few months. She said Ecuador looked to her like a much poorer place than Cambodia. It's interesting because, according to GDP per capita statistics, Ecuador is almost four times richer than Cambodia (regardless of whether you're looking at official exchange rate or purchasing power parity). So why does it appear the other way around? I can think of three possible explanations (which are not mutually exclusive):

• Biased sample. Perhaps she just saw the poorer parts of Ecuador and richer parts of Cambodia.


• Appearances can be deceiving. Urban poverty, for example, generally looks much more desperate and miserable than rural poverty, and Cambodia is mostly rural. If you visit Czech countryside first and then the West Side of Baltimore City, you may very well walk away with an impression that Czech Republic is richer than the US.


• GDP statistics get the story wrong. Perhaps Cambodia's "shadow economy" is very large.


• Suggestion from a comment by Funding Your Analyst: Cultural differences. For example, Ecuador is a former Spanish colony whereas Cambodia is a former French colony. I'd be very surprised if that played no role in this case--and it's just one possibly relevant cultural difference.

If you have other ideas, please share them. 

And no one there seems to have anything to say

A new deal is in the works in order to save the eurozone. Judging by rumors, it's not a very good one. No mention of a possibility of establishing the ECB as lender of last resort; no mention of the possibility of eurobonds; plans of establishing credible commitment mechanisms to keeping budget deficits below 3% of GDP; some sort of risk-sharing agreement in the form of an overall debt guarantee; and - last but not least - plans of some sort of credible commitment to not force private sector bondholders to take any losses on any future eurozone bailouts. Now how is a market supposed to work if lenders are sheltered from experiencing negative consequences of bad lending decisions? (The question is rhetorical.) Also, how is the debt guarantee supposed to work? The eurozone doesn't have enough funds to guarantee the debt of, say, Italy without that debt having gone some serious restructuring; and a restructuring of Italian debt under the assumption that private creditors must get 100 eurocents on the euro is economically and politically impossible--the necessary austerity measures would be so severe that it would make much more sense for Italy to simply suffer the consequences of defaulting and leaving the eurozone unilaterally.

So, the Polish government supports the deal unreservedly. On the domestic front, the arguments it offers in favor of it are nothing short of inane. The inanity of them, however, will have to wait until another post. What irks me even more at this moment is the fact that the opposition's response to those shallow arguments are arguments that are generally much, much stupider than what they're criticizing. Here's a small sample.

In a TV interview, the leader of the largest opposition party argued that concerns about the devastating effects a severe recession in the eurozone would have on Polish economy are much exaggerated because "Poland's exports aren't large in relation to its GDP". (The ratio is about 35%, in case you're wondering. And this was said by a guy who was at one point a prime minister, for Pete's sake. Also, below the fold you can find a chart that shows where that 35% locates Poland among OECD countries.)

In another interview, that same guy said that the government's plans of increasing the retirement age for women to 67 years is a terrible idea because Germany is doing the same thing and being Germany's copycats shows our government's "psychological dependence" on our neighbors. How's that for a policy rule: The Germans are doing it, so we can't.

Or how about this: the main economic writer in Poland's largest opposition media outlet begins his essay about the eurozone crisis with the following:

Germany's annual trade surplus of 130 billion euros has to come from somewhere. It comes at the expense of deficits, debt, and eventual bankruptcy of Greece, Portugal, Ireland, Spain and Italy.

In other words, he reveals that he doesn't know what trade surplus is, and can't tell the difference between current account deficit and public debt (hey, genius: how come Germany is in debt to about 84% of its GDP even though it's running all these surpluses?).

These arguments aren't just misguided. They're laughably ignorant.

And then another annoying one: we can't have a fiscal union because that would mean member countries would lose some of their sovereignty. True enough, but then again, countries give up some of their sovereignty left and right, lots of times voluntarily and to their own benefit. Entering a free trade agreement means losing a bit of your sovereignty (namely, sovereignty to set tariffs to whatever you damn well please). And losing that bit of your sovereignty happens to make you better off. I also find it interesting that those same politicians who decry the loss of independence that comes with a voluntary contractual agreement, never seem to have a problem with any type of policy that increases public debt (at least in Poland they don't). Hey, genius: when you take out a loan, what do you think happens to your sovereignty?

Anyway, rant's over for now. The chart I was talking about is below the fold.

Suboptimal equilibrium

Let's not kid ourselves: the software most widely used for statistics is Excel.

--Brian D. Ripley (one of the developers of R)

Speaking of euphemisms

I know it's nowhere near in the same league of euphemisms, but Herman Cain's announcement that he's "suspending" his presidential campaign "because of the continued distractions" made me think of that famous quote from Emperor Hirohito's Imperial Rescript on the Termination of War (August 15, 1945): "The war situation has developed not necessarily to Japan's advantage".

Elevator pet peeves

If you live or work in Manhattan where there's no way to build but up, chances are that crowded elevators are a big part of your life. Chances are also that your routinely encounter some extremely annoying elevator-related behavior. Here's some that I've encountered:

• Getting in an elevator in order to travel not just one single floor, but one floor down. Come on!


• Pushing one's way inside without even stopping to look whether anyone wants to get off, then bumping into you with a shocked expression that says 'What!? You mean people come out of elevators too?'


• Getting into an extremely crowded car full of people leaving work at 5:02 pm and then immediately pushing towards the control panel to make sure you press the button for first floor. Do you really think the thought of doing that hadn't occurred to anyone who got in before you?