I’m still not interested in the debt ceiling debate. Congress should raise the debt ceiling,already. Everything else is political posturing and it’s bipartisan posturing.

As I think I’ve mentioned before I like television. I have never known a world without television. My dad went out and bought a TV (one of the great, big boxes with a little, tiny round screen) just a few weeks before I was born. We watched everything and I remember it all: the Friday night fights, Captain Video, I Married Joan, huge numbers of variety shows (I loved Jimmy Durante and, on Your Show of Shows Imogene Coca), The Ed Sullivan Show, great drama anthologies like Playhouse 90, You Are There, Omnibus, and on and on. I still watch television.

I have never been able to get into reality programs. What a misnomer! Decades ago I had seen clips from various Japanese game shows that seemed to have the purpose of embarrassing the contestants. Not like Beat the Clock or The Gong Show did. Really embarrassing them. Provoking outbursts. Reality shows look like the direct lineal descendants of those programs.

I’ve tried, occasionally. I’d seen Ted Mack’s Original Amateur Hour (I didn’t much care for it) so American Idol doesn’t do much for me. I tried watching The Bacherlorette with my niece, Claire, when she was living with us last summer. Fifteen minutes was about all I could take. I left her to watch it by herself. My later reaction to her was that it was like professional wrestling except with walks on the beach at sunset instead of throwing chairs at each other.

One of the things I’ve noticed is that many of the “reality” shows follow the format of Stalag 17. Constrained environment. Artificial rules. Guards. Heroes. Villains. The guy you love to hate. Traitors. I’d rather watch Stalag 17.

I’m not claiming the high ground on this. I see it more as a character flaw in myself. I’m out of the mainstream on this (as in so many things). Since they’re relatively cheap, profitable, and quick to produce I expect we’ll have reality shows around for a long time to come. I can always watch reruns of NCIS.

Maybe it’s just nostalgia on my part. I don’t think so. Things don’t seem to work quite as well as they used to. Not all that long along—just the closing years of the 20th century—improvements in life were still coming down the pike almost on a daily basis. The transition from dial-up to broadband at the home level had made an enormous difference: things that were blindingly frustrating became pleasant. Online shopping brought buyers and sellers together more efficiently than ever before. I didn’t need to hop in the car to buy what I needed: they were just a few keypresses and mouseclicks away. Being attacked by malware was avoidable. I’d had the same credit card numbers for decades.

Technical support was available and frequently good. Dell had made a name for itself with good technical support (those were the days!). My cellphone was hefty by today’s standards but its reception was excellent and I charged its battery perhaps once a week.

I had identified, perhaps, one bank error in my life. Now they come with tedious regularity. You’ve got to watch your accounts like a hawk.

All of my neighbors were employed, in some cases over-employed. Now by comparison the building contractor across the street is not nearly as busy as he used to be, sometimes for days or weeks on end. The lady next to him is retired. The two houses just north of me belong to retirees. The man who lives in the house south of me is employed; his wife has, apparently, turned the loss of her job at one of our major newspapers into permanent stay-at-home-mom-itude.

The U. S. hadn’t experienced a major foreign attack on its soil since the War of 1812. The federal budget was in surplus. Household incomes were rising for the first time in decades. We definitely weren’t at peace but we weren’t exactly at war, either.

This is what it must have been like to live in Rome in the 5th century. I don’t mean by this remark to imply some sort of permanent decline. Of that I have no idea. My optimistic side tells me that the best is yet to be.

But things certainly don’t seem to me to be working quite as well as they did just a few years ago.

Yes, dogs really are good for you:

In the first part of the research, 217 people answered detailed questionnaires online designed to determine whether pet owners tend to be different from people who do not own pets. The survey assessed variables such as depression, loneliness, self-esteem, illness, activity level and their relationships with other people. The researchers found that, in fact, there were lots of differences, with pet owners faring much better overall. For example, pet owners tended to be less lonely, have higher self-esteem, get more exercise, be more extroverted and were less fearful about getting close to other people.

In the second part of the research, the researchers studied 56 dog owners. In addition to filling out the same questionnaire used in the first part of the study, the researchers also gathered detailed information about how they related to their dogs, and to other people. The owners tended to get the most benefit from having a canine companion when their dogs “complemented rather than competed” with humans in their lives, the researchers found.

“In fact … we repeatedly observed evidence that people who enjoyed greater benefits from their pets also were closer to other important people in their lives and received more support from them, not less,” the researchers wrote.

An article over at TNR touts as new an explanation for the continuing slowness in the economy that appears to me to have been prevailing wisdom since Richard Koo began calling this a “balance sheet recession”. Here’s the beginning of the concluding paragraph of the article:

I wonder what would happen if the financial wizards whose innovations helped crater the world economy turned their attention to devising a plan for reducing household debt to healthier levels without destabilizing systemically important lenders.

Perhaps it’s more than coincidence bit a little quick googling revealed a flurry of discussion of something I haven’t seen for nearly two years: a “debt jubilee”. If you’re not familiar with the term, this should give you the general idea (it’s from Luke 16:1-13):

1 And he was also saying toward his disciples: There was a certain rich man who had a steward, and he was charged to him as squandering his possessions. 2 And he summoned him and said to him: What is this I hear concerning you? Give back a word of your stewardship, for you can no longer be steward. 3 But the steward said within himself: What shall I do, since my lord is taking the stewardship away from me? I am not strong enough to dig; I am too ashamed to beg. 4 I know what I will do, so that when I am removed from the stewardship they might accept me into their houses. 5 And he called to himself each one of the debtors of his lord and said to the first: How much do you owe my lord? 6 And he said: A hundred baths of oil. And he said to him: Take your letter of debt and sit down quickly and write fifty. 7 Then he said to another: And you, how much do you owe? And he said: A hundred cors of wheat. He says to him: Take your letter of debt and write eighty. 8 And the lord praised the steward of injustice that he had done shrewdly, since the sons of this age are more shrewd to their own generation than the sons of light. 9 And I say to you, make friends for yourselves from the mammon of injustice, so that when it gives way they might receive you into the eternal tents. 10 He who is faithful in very little is also faithful in much, and the one who is unjust in very little is also unjust in much. 11 If, therefore, you have not been faithful in the unjust mammon, who will entrust the true to you? 12 And, if you have not been faithful in that which belongs to another, who will give you that which is yours? 13 No houseservant can serve two lords; for either he will hate the one and love the other or he will be loyal to the one and despise the other. You cannot serve God and mammon.

Now that’s radical. As you can see it consists of a one time forgiveness of all or part of a debt. Sounds like enough to strike fear into the hearts of creditors everywhere.

Since I think that the “systemically important lenders” should have been broken up a decade ago, I’m not as concerned about them as William Galston, author of the TNR article is but I’ve got to admit that the moral hazard of this concerns me. And then there’s the little matter of the Takings Clause of the Fifth Amendment to the Constitution.

It’s going to be difficult to make heads or tails out of this post without reading my prior post on patterns of growth first. The graph above is of the longterm growth in real U. S. per capita GDP. It has increased with remarkable regularity at the rate of 1.8% per year. The logarithmic scale of the graph makes it look as though this is linear but it’s exponential.

The graph above illustrates the growth of U. S. population from 1790 to the present (and beyond). Numbers prior to 2000 are actual, beyond that are estimated but the estimation up to 2010 is good enough that it illustrates the point I’m trying to make. U. S. population has grown exponentially.

I won’t bother showing a graph of U. S. GDP growth. It’s approximately the same as the growth in population compounded at 1.8% annually, i.e. it’s exponential, too. Now some more or less random observations.

This behavior of the U. S. economy appears to be distinctive. Other large, developed economies do not show the stable per capita GDP growth of the U. S. and, indeed, many developed economies have seen actual declines in the per capita GDP growth rate.

Assertions of real per capita GDP growth in the U. S. in excess of 3% over the long term are nonsense. Perhaps it will continue at 1.8%. It may decline as it has in other developed economies.

Linear growth, exponential growth, and logistic growth all appear the same for some period. Growth continues until it doesn’t.

Malthus was right to the extent that population increases exponentially until it exceeds the carrying capacity of the environment. He did not anticipate that technological progress would alter the carrying capacity.

A significant proportion of U. S. population growth is due to immigration.

Demographic patterns in Latin American and the Caribbean strongly suggest that emigration to the U. S. will slow.

62% of immigration to the U. S. is from Mexico. The rate of immigration from Mexico has slow substantially in recent years for a variety of reasons including the U. S. economic downturn, improvements in the Mexican economy, and demographic patterns in Mexico.

Now some questions.

1. Is there some good theoretical explanation other than historic experience for the 1.8% U. S. rate?
2. Are there reasons to believe that the economy will grow exponentially and that will be sustainable?
3. What is the carrying capacity of the U. S.?
4. The world?
5. Is technological advancement showing linear growth, exponential growth, or logistic growth?

This post serves largely as background for a post I expect to write later today. This post is about different patterns of growth.

We say that something increases linearly when, over the same period of time, it increases by the same number of units. Here’s a graph of linear growth:

For a fixed run there is a fixed rise. Linear growth is commonplace, particularly in mechanical systems. Your printer, for example, may print 30 pages per minute (excluding things like warmup time, downtime, time to renew consumables, etc.). That’s how fast the gearing system advances the paper and how fast the printing mechanism prints.

We say that something increases exponentially when the rise (increase in units) is proportional to the run (elapsed time). Here’s a graph of exponential growth:

Exponential growth is also commonplace in all sorts of systems. Compound interest at a constant interest rate provides exponential growth of the capital. Ponzi schemes growth exponentially until they run out of new “investors”. The number of microorganisms in a culture medium will grow exponentially until an essential nutrient is exhausted.

Logistic growth is growth in an “S-shaped” curve. In logistical growth growth approximates exponential growth but over time saturation occurs, growth declines, and, eventually, stops. Here’s a graph of a logistic function:

Many real world systems exhibit logistic growth including the microorganisms mentioned above. Populations, tumor growth, the diffusion of innovation are all said to show logistic growth. A key concept in systems that exhibit logistic growth is that of carrying capacity. The system grows until it reaches the carrying capacity of the environment and then stops.

Mickey Kaus notes that in Paul Krugman we have two economists for the price of one. In 2009 he said:

Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high.

whereas now he’s saying:

So what happened to the stimulus? Much of it consisted of tax cuts, not spending. Most of the rest consisted either of aid to distressed families or aid to hard-pressed state and local governments. This aid may have mitigated the slump, but it wasn’t the kind of job-creation program we could and should have had

You may observe that the latter is what I’ve been saying for quite some time. Something else is also worth mentioning: in some instances state and local governments strategized their projects, deferring already approved projects in anticipation of the 2009 stimulus package. In other cases state and local borrowing was replaced by federal borrowing. You don’t get additional stimulus by moving money from one balance sheet to another.

Via Cullen Roche there’s an article from the San Francisco Federal Reserve that’s worth taking a gander at. The graph above is just one of the very interesting illustrations of what’s happened to the U. S. economy over the last several years Here’s the observation associated with that graph:

Economic theory assumes that consumption is a key determinant of personal well-being. Many households became accustomed to the consumption trend established before the recession and expected it to continue. From that perspective, the amount of foregone consumption might be viewed as a measure of the recession’s cost for the average person. However, the pre-recession consumption trend was almost surely not sustainable because much of the household debt that helped finance that spending was collateralized by bubble-inflated housing values. Consumption was bound to slow sooner or later. Indeed, the average annual compound growth rate of real consumption per person since the recession ended in June 2009 is 1.15%, well below the 2% rate before the recession.

Moreover, it is unclear whether continuing the pre-recession consumption trend was economically desirable. Many households might have continued saving too little for retirement while becoming more burdened with debt. When the housing bubble was expanding, former Fed Chairman Paul Volcker (2005) noted several “disturbing trends,” including that “personal savings in the United States have practically disappeared,” and that “home ownership has become a vehicle for borrowing.” He called for federal policies to “forcibly increase” the saving rate as a way to address the growing imbalance between domestic spending and production.

Particularly notable is the discrepancy between nominal personal consumption expenditures and real personal consumption expenditures. People tend not to be paid in real dollars but in nominal ones and that has been very much the case during and since the Great Recession. Just look at the household income statistics.

Wasn’t the result we’re seeing one of the foreseeable consequences of quantitative easing? Assets, including many of the things you buy on a daily basis like food, have gone up in price?