Sunday, January 09, 2011

Wrath of Khan

Bob Frank takes the death of Al Kahn as an occasion to launch into bizarre attacks on macro theory and airline deregulation.


Apparently Al once said "if you can't explain what you are doing in plain English, you're probably doing something wrong", which I guess means the general theory of relativity is pure bullcrap.

Bob riffs off this to "If you can’t describe what your model says in plain English without provoking derisive laughter, it probably doesn’t say anything of value”, and says Macroeconomists should take heed.


I must say though, that I've never thought it was hard to say what DSGE models were saying in plain English without getting laughs. I did find it so hard to say what textbook Keynesian models were doing with a straight face that I had to quit teaching intermediate macro.

Bob then returns to his main theme, an appreciation of all things Kahn:

"Many disgruntled air travelers remember him unfavorably as the chief architect of commercial airline industry deregulation. But as he was quick to remind critics, planes now fly with many fewer empty seats than they used to, resulting in much lower average fares, after adjusting for the sharp increases in operating costs that have occurred in the interim."


Um, I'm pretty sure there was a lot more to airline deregulation than decreasing the number of empty seats on flights. There was entry, there were new routes, there was the opening of air travel to the middle class. In short the industry was transformed in a way that massively benefitted consumers.

I'm not sure why Bob is so conflicted that here in his homage to Al, he feels the need to take shots at Al's crowning achievement.

Bob then ends with a heartwarming story about how kind and beloved Al was:

"A story circulating at the time described an English professor’s complaint to him about the high salaries of economics professors. “Perhaps you should consider starting an English consulting firm,” he is said to have responded."

If I didn't know better, I'd think Bob didn't actually like Al very much.


Anonymous said...

This is not fair criticism. The only person Bob Frank likes is Bob Frank. By Frank's standards of logic, evidence, and ethics, this piece is very positive.

But then Frank has devoted his life to the intellectual equivalent of standing up with his pants still down and shrieking, "Mommy! Mommy! Look at the poopies I made!"

Anonymous said...

How about a link to the article?

Bill said...

The "English consulting firm" story is terrific! My friends in the humanities are sure to hear it!

Angus said...

Link in the first sentence has been corrected. It is now a link to the article. Thanks for the heads up.

Tom said...

General Relativity

Lock a scientist in a small room and pose a question: you are experiencing weight because either (a) this room is on the surface of a large planet or (b) this room is being uniformly accelerated by a rocket; which?

The scientist can devise no experiment that will resolve the question. Therefore there is NO difference in the two situations; gravity IS uniform acceleration. We shall investigate how space and time must be curved in order for this truth to hold.

There are many more details, of course, but that is the essence of the General Theory in plain English.

Anonymous said...

Tom = Badass