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September 2006

Report on World Bank/IMF meeting

The London Times reports on the recent joint annual meetings of the World Bank and the IMF:

The world economy is expanding, inflation and interest rates are stable, employment and incomes are rising — and almost wherever we look around the world, even in sub-Saharan Africa, these healthy trends seem set to continue in the year ahead. Moreover, when the IMF’s researchers consider the familiar long-term risks to the global outlook — the trade deficits in America (and to a lesser extent in Britain), the risks of a boom-bust cycle in house prices and mortgage borrowing, the danger from soaring energy prices, the threats to financial stability from speculators and hedge funds — they now conclude that all these trends are far less troubling than they seemed even a year ago. 

It's all Bush's fault.

Gene Weingarten wants everybody to stop wasting his time.

As you can probably surmise, because I remain alive, the screaming was all in my head. I do this all the time. My profound impatience about small matters of everyday living is both a curse and an embarrassment. At these times I enter my own personal space, in which I become something that rhymes with "glass bowl." This is my Glass Bowl Mode.

Glass Bowl Mode is wordless but, sadly, not entirely interior and private. I roll my eyes. I fidget. I take long, deep, sighs. That is why, when I finally make it to the front of the line and the anxiety ebbs, I am filled with remorse and self-loathing and become overly cordial to the point of obsequiousness. It is hell being me.

Barry Schwartz tries to use economics and gets it half right

Swarthmore psychology professor Barry Schwartz tries to make a point using economics and gets it half right.

He quotes President Bush and ex-president Clinton to the effect that U.S. troops should stay in Iraq until the job is finished because we need to honor our dead. Professor Schwartz correctly notes that since the dead are unchangeably dead, they are a sunk cost. And economists teach that sunk costs should be ignored in making decisions.

But this just points up another thing economists teach: people are often imprecise when they talk. What Bush and Clinton mean is not that we should take account of the sunk cost of the current dead, but that we should consider the consequences of abandoning the mission on future behavior. We will almost certainly ask military personnel again to risk death. If we don't keep faith now, we will be dishonoring future deaths, with grave consequences. And that's not a sunk cost.