Economist brains

Taleb spotting!  Is late, obviously, Baruch is famously behind the curve on these meme things. HT alert Felix commenter Alan , (Felix is it OK to borrow one of your readers?  I don’t know the bloggiquette, and reason if you haven’t put it up yet you won’t at all). An entertaining “fireside” chat between Taleb and that Robert Shiller bloke at the New Yorker gabfest early last month.

It’s entertaining to watch Taleb steal the show with his uncompromising animosity for economists, central bankers and regulators. It’s a reminder why we like him so much. Shiller ends up in the shade a bit; he is relatively more traditionalist, a bit of a trimmer. It is a shame, for if we are going to move to a more redundant, less optimised, global trading system, in a real, concrete way, we probably need more Shillers than we do Talebs. Reforming the system from within, it strikes me, is more likely to make progress than arguments of those determined to be, in bien pensant opinion, “flakes”.

I don’t think Taleb is a flake; he is right in his key point, that we are more and more susceptible to tail events. The next one will likely be much, much worse, as our defences will be lower, our treasure will be spent. Then we may finally have the political will to remove or limit leverage in our system, pace Taleb. The danger is of course that by then it may not matter so much.

As things start to return to “normal”, and equity and debt markets recover, the ability to do anything radical disappears. More importantly, the banks are returning to “profit” (note inverted commas) and the moment for breaking their stranglehold on the US Treasury and financial reform seems to be passing. That said, it may still be possible to do some of the things we need to do; I wouldn’t want the perfect to become the enemy of the good.

Another favourite moment: Taleb’s metaphor for monetary policy as ketchup, and the risk that expansionary policies suddenly gain traction at the wrong moment. Baruch is reminded of the childhood rhyme “when you shake the ketchup bottle, none’ll come; then the lot’ll”

As an extra bonus, here Baruch’s favourite economist joke:

A shipwreck victim washes up on an unknown South Seas island, one with a surprisingly developed economic system, if based on cannibalism. Wandering penniless through the local meat market, he notices the stall selling human brains in many appetizing forms has an interesting pricing scheme; the sign over 3 glistening, bloody buckets of brains reads:

Accountant brains: 15 cowrie shells/kilo

Lawyer brains: 25 shells/kilo

Economist brains: 50 shells/kilo.

“Hey,” says the traveller, “I guess those economist brains must be pretty special. What is it, do they like, taste better?”

“No way dude,” says the brains butcher. “You know how many economists you have to kill to get a kilo of brains?!”

18 responses to “Economist brains

  1. In the same vein …

    His companion, an eminent investment banker (to which the author of the joke had heretofore failed to give notice) asked the brain butcher whether he had any investment banker brains for sale.

    “Naw, man, we don’t sell those here,” he said, disgustedly.

    “Why not,” asked the banker with a smile, “too rare and expensive?”

    “Nope,” he replied. “My brother Nabboo sells them down the way, at the fertilizer stall. He claims they’re almost as good as goat shit.”

  2. Okay. I can’t resist sharing this economist joke. It seems so appropriate these days.
    A man in a balloon gondola lands in the middle of a field. he asks a passerby, “where am I?” The man responds: “You are standing in a gondola in the middle of a field.”
    “you must be an economist,” the man says.
    “yes, how did you know?”
    “Everything you said is true and irrelevant.”
    And, I might add, everything the economist said was completely rational.

  3. OK then, if my orginal and trenchant commentary is going to be ignored, and my site become nothing more than a repository of slightly old “hated profession” jokes, so be it.

    What’s black and brown and looks good on a hedge fund manager?

    A rottweiler.

  4. Oh, dear, I appear to have offended your trenchant and original sensibilities. I guess I am having neither a trenchant nor original day. But I’m not surprised by your affinity for Taleb. Similar temperaments.

  5. No, Nancy, I was joking; *you* haven’t offended me at all. You seem like a quality blogger; please stick around. It’s that Epicurean Dealmaker. Sometimes I think he just doesn’t takes me seriously at all. I think he has Dead Philosopher Envy. He’s regretting picking Epicurus and wants to be “The Spinozan Dealmaker”. So he has to get rid of me. I think he’s trying to psych me out.

    Anyway I can’t complain, I started it with my brains joke. And certainly one way I am like Taleb is I like the attention. As long I’m somehow the centre of it all I’m happy.

    Do you really think I am “trenchant”?

    Feel free to share more economist jokes, by the way. Not the can opener one, though, everyone knows that one.

  6. Forget trenchant and original. Bring on the jokes!

    Q: What do you call 10,000 [fill in your favorite hated profession here] chained together at the bottom of the sea?

    A: A good start.

    I think this could be a good source of secondary income for you, Baruch. Think about it.

  7. See what I mean, Nancy?!

    What’s the difference between an econo-blogger lying dead in the road, and the dead roadkill skunk a few miles further on?

    There are skidmarks in front of the dead skunk.

  8. Baruch,
    To tell you the truth, I’m not sure I know what trenchant means. But I know when I have been completely outclassed.

    Fortunately, I have run out of economist jokes. To continue the funfest, I would need to resort to Jane and Tarzan jokes. And I really don’t want to go there. Fat tails are a safer topic.

    For the record, I rather like the Epicurean Dealmaker. And I am pleased to make your acquaintance. But we should all steer clear of the green-eyed monster. As Lewis Carroll so trenchantly said: “Beware the Jujub bird and shun the frumious Bandersnatch!”

  9. I always heard that one as:

    A man in a balloon gondola lands in the middle of a field. he asks a passerby, “where am I?” The man responds: “You are standing in a gondola in the middle of a field.”
    “you must be an economist,” the man says.
    “yes, how did you know?”
    “Everything you said is true and irrelevant.”

    … and then the economist replies

    “and you must be a policy maker”
    “yes”, the man says “how did you know?”
    “well, you’ve been drifting along with no idea of where you’re going and no coherent plan for how to get there. Now you’re exactly in the same situation you were before, but somehow you now believe it’s my fault”.

  10. See, Baruch? I think this new development has real promise for you.

    Of course, I would never corrupt a pristine and highly-trafficked blogsite such as mine with such off-topic balderdash, but then I am me.

    By the way, I have conclusive evidence that Epicurus could beat Spinoza in arm wrestling with six premises and two theorems tied behind his back. Just sayin’.

    • Fricking Epicurus wouldn’t know an axiom if it kicked him up the arse. My philosopher would totally have yours. He’d cough on him.

      The popularity of the “off topic balderdash” is galling, you are right. My closely reasoned piece on epistemological error on the part of Buttonwood gets no readers, while my stupid economist joke gets literally 10 million eyeballs or 5 million readers, give or take the odd pirate (how many do you get? maybe you should think about lightening your site up a bit, like mine).

  11. Ah. I thought the punchline was going to be
    “Why are the economist brains so expensive?”
    “They’re in perfect condition, they’ve never been used”

  12. Joshua M Brown

    Baruch, the bookers from the Laugh Factory are holding on line 2…

    LOL

    TRB

  13. Barcuh,
    Panem et circenses — that’s what most readers want and, notably, that’s what Abnormal Returns highlighted in his Monday linkfest to your post.

    But, please, don’t be so hard on your feeble-minded readers. Perhaps some, like myself, came for a little diversion after wading through a stack of regulatory filings. A slog, and I fear corrosive to the brain. We really do need a new word to characterize the prose of policymakers.

    So now that a little piffle has brought you some new readers, don’t carp. Make good use of it — as you did by referring to your Buttonwood critique. Some nice points in it about the countercyclical nature of the equity deals markets. But I’m afraid you would label me a perma-bear as well. I’m with James Grant when he says: “Deflation is the fact. Inflation is the forecast.” And it won’t be pretty for equities and so-called safe haven Treasurys.

  14. Alan Murdock

    Cheers Baruch, feel free to borrow me any time as long as you include an economist joke and invite TED to the party.

    As for Taleb and his influence, I suspect we’re likely to see it earlier and stronger in national security than finance. He’s mentioned in the past how impressed he is with US military’s approach to evaluating and managing risk. I think James Kwak is onto something in this post about why his influence may not take hold in finance until we experience greater catastrophe.

    http://baselinescenario.com/2009/06/02/the-view-from-the-top/

    Taleb’s situation reminds me of John Robb, in that both are empiricists first and thus express themselves in terms of the realm they know best — in Robb’s case, military and tech.

    http://globalguerrillas.typepad.com/

  15. Nancy, I take your point and am happy you had a look at the Buttonwood post.

    I used to be a deflationista myself, which would by default make me an equity bear. Now, especially after the move in yields, I just don’t know what I am. “Waiting for more data” is probably my current setting. But I would associate a deflation with a severe and sustained rally in government bonds as in Japan, not its opposite.

    Would I be wrong there?

    Alan, thanks, it was a good link. Funny what you say about national security. Taleb claims he was the author of Rumsfeld’s famous “known unknowns” riff. He has clearly had an influence on the language.

    Yes, as I say in the post (though you might have missed it if you scrolled down to the joke), I worry that partly due to his personal style Taleb’s moment for materially impacting the debate is passing. Another jolt of fear and loathing would certainly help.

  16. “I worry that partly due to his personal style “Taleb’s moment for materially impacting the debate is passing. Another jolt of fear and loathing would certainly help.”

    could not agree more!

    From this recent Accrued Interest post
    http://bit.ly/kdL76 (look at the last chart!)

    it would seem deflation will be reigning champion, which in my mind will not create a “jolt” of any sort, just a slow painful death.

    To take the other side, if Hugh Hendry is still running with this thesis, his P&L must look scary.

  17. Alan Murdock

    Baruch, I assumed with the personal style thing you were riffing on my Stones/Beatles take on the “fireside” chat of Taleb and Shiller. And I enjoyed what I presumed was your expansion on that.

    Shiller’s personal style could not be more different than Taleb’s (as far as I can see, in terms of public persona), but it seems his ideas about continuous work-out mortgages and a futures market for hedging real estate risk will also be passed over until we experience greater catastrophe.

    I’m glad you found the links worthwhile. When I read Kwak’s piece I was thrown back 25 years to my first reading of “Discipline and Punish” for an anthro class. Foucault made the individual and particular human body not only relevant but essential for discussing the most elevated and abstract of social constructs.

    John Robb, like Bruce Stirling, is one of the voices I’ve come across that are absolutely indispensable for future-proofing. I don’t know how anyone could possibly think they have true bearings in this world without reading “Brave New War” or having at least a glancing familiarity with Mechanist v Shapers.

    Stirling’s blog:
    http://www.wired.com/beyond_the_beyond/

    A classic indispensable John Robb post:
    http://globalguerrillas.typepad.com/globalguerrillas/2008/02/henry-okah.html

    John also blogs at:
    http://globalguerrillas.typepad.com/johnrobb/

    I try to keep up with Taleb, but I guess I missed him claiming firsties on the only thing Rumsfeld ever said that made sense as far as I’m aware.

    When I referred to the military and Taleb, I was thinking more about the sort of very smart, highly educated both institutionally and through personal initiative, open-minded, and very likely-to-be-passed-over-for-promotion commissioned officers who somehow made colonel and, say, would’ve volunteered to train future leaders of the Afghan National Army in 2004. Pure conjecture.