Sunday, December 21, 2008

Dear Kate: Why don't you tell us everything we want to know?

Dear Kate,

I was chatting with Dumbfounded Psychologist @ Oz the other day, casually trying to reveal the secret behind beautiful girls, where the best place to find them, and other great mysteries of life, when we stumbled upon two curious facts about economists (it goes without saying that we like gossiping about you guys - of course, we see you guys as our evil twins):

  1. Economists schmooze a lot, like celebrities (our metric is straightforward: There are more facebook profiles of economists than other academics).
  2. While you can wittily explain why doughnuts are generally safe, how to divide tasks among baby sitters, and why public toilet lids are dirty, you have (almost) nothing to say about things that pertain to the recent credit and financial turmoil (except some snippets from the media/blogs posts) -- the latter of which we thought is (or should be?) their main cup of tea; where are questions such as what is money?, how do credits create money?, can we have an economy without credits?, what does economic growth really mean?, what is the relationship between production  and financial economics?, what is the fundamental source of financial instability?, are asset-price bubbles real?, why do we have (need) inflation? how does a bank run happen?, is globalization always good, how about the globalization of risks? why do we borrow, spend and save? and what is the underlying belief/morality for these three actions?

Please tell us what's going on?

Looking forward to some economic insights, as always,
Belligerent Sociologist @ NYC (also on behalf of Dumbfounded @ Oz who is happily holidaying)

Dear Belligerent Sociologist @ NYC,

The answer is easy. We don't know.




  1. Oh Kate you are really disappointing :(

  2. Rizki, do you go to cafe to study serious stuff? We don't. We hang out here to release tension from work, to relax. We gossip, we chat. We like to talk nonsense. If you want to learn econ seriously, learn it the heard way. Not relying just from a damn cafe. Sorry to disappoint you. But if you really want to know the answers to questions like those above, go read the barristas' academic papers, come to their seminars, take their classes. Remember, they have life, too, outside this cafe.

  3. of course i meant "the hard way"

  4. Ah Kate, you and your fellow economists won't win, will you?

    Concentrate on the traditional economics topics; you will be conceded as dismal scientists with no link to the other disciplines.

    Try to deal with non-traditional topics, then the universe will call you econ-imperialists with no real competence in talking about those topics.

    Desperate housewife @ Wysteria Lane

  5. Wow. How did we come to this? Territorial bickering.. I thought we're over it.

    And about "try to deal with non-traditional topics...with no real competence in talking about those topics"... the thing that came to my mind was : those who live in glass houses etc etc and so on...

    I was going to say "Freudian slip" but DP in Down Under will knock me on the head for that.

    I guess I'll just have a decaf today.

    I missed the affogato days.

  6. kate - c'mon, this is our indonesian bloomsbury, right? we should talk about everything. nothing is too serious.

    i know that this is a cafe. so i think we can talk and speculate about meaning (not causality) and reflection (not analysis). we don't want to read your papers, but we want to read your (reflective) thoughts on these stuff.

    my brother complained to me that he doesn't understand the world: he works as hard as ever but then suddenly being "forced" to become poor: rupiah is declining, price is rising, stocks are plummeting.

    he - and most of us - are angry, confused, and scared seeing this abstract force coming on us again (first in 1997 and now). help us making sense the world that we are living in now. we don't want or can't study economics "the hard way", but we know that economics is too important for us to ignore. (we all know too well that we can't depend on Kompas for economic insights).

    my then-girlfriend asked me this question in our first date:"so tell me whether the universe is expanding or not." since then i believe that we can talk about anything anywhere anytime.

    ps: to be fair, some relevant policy issues are discussed here and at exegesis. they are useful and important, but I feel discussions about deep fundamental issues (e.g., the belief/morality underlying credit system) would be helpful for us non-specialists.

    Belligerent Sociologist @ NYC

  7. ah, my dear friend, colleague, and senior in high school ujang. how are you mate? long time no see.

    on the one hand, you have a valid point, territorial bickering is always useless. but on the other hand, i think 'healthy mocking' is beneficial, for it often tells us that we are more similar than we thought we were. also, i view it as a very efficient method to diagnose the key gaps between our ways of looking at the world -- all while having fun and learning from one another at the same time.

    and of a tangential note, of course you can say 'freudian slip' anytime you want. just beware of the psychoanalysts out there. we psychologists fear them too.

    until our next affogato day,
    dfp @ the bus to sydney (the one we took 2 years back)

  8. My good friend DfP, I have to admit that I do enjoy territorial bickering as much as the other regulars in this Cafe. In fact, if I have to make a list of the top ten cups of coffee I enjoyed the most in this Cafe this year, yours on New Year resolutions will be in it. That has the honest playful banter of interdisciplinary mocking without any hint of true scorn in it.

    When it's done correctly, it's like pouring hot, thick, full-bodied espresso on top of a sweet and creamy gelato, creating that perfect sensation. You know, just like that good affogato you introduced me to, many months ago.

    When it's done with scorn, it will just be like pouring bitter, burned, over-extracted espresso on top of a plain Campina Vanilla.

    I miss my affogato.

    *)ah, the Canberra-Sydney bus trips, with the view one can die for..(or... die of?)

  9. ujang - i dont' see it as a territorial bickering at all.

    lately i spent hours reading, talking, writing and thinking about money, interest rates, credits, globalization etc. i just fascinated by how world economy works. it's not only about pencil anymore; but no single person knows completely how to make a honda crv, a boeing 747 or a sub-prime derivative. no single person has control of them either. the scary part: we all - directly or inderecly - depend on them.

    my wife and DfP have been good listeners so far, but I think having discussions with you guys would be helpful.

    I wrote some silly notes in facebook as an effort in trying to make sense of what's going on and hoping you guys would jump in and correct me and so we can learn.

    so i'm not scorning at all. it's the opposite: i think you guys have a lot of useful things to say about this.

    as a matter of fact, i would scorn behavioral economists or psychologists in this matter, because it's not about what's going on in one's mind but about system-level mechanisms.

    however, i'm belligerent in nature and i just love being rude to people. so i apologize for it.

    BSoc @ NYC

  10. BSoc @ NYC -- no, you don't want to scorn psychologists for at least two reasons.

    one, many system-level problems are highly related to biological quirks in the individual brain. consider mass stampede accidents, which are caused by a very simple cognitive mechanism of herd-mimicry: when you see others panicking, rushing, and fleeing, you should be panicking, rushing, and fleeing too. this script has been firmly installed by evolution since the savanna age (back then the script worked well, since there were almost no small, accident-prone spaces like now).

    i'd say this understanding is as important as knowing how many people were there, and the structure of the place in which the accident took place -- the latter two of which are among your favourite variables.

    the second reason you don't want to scorn us is that you might need us. you seem to be getting more and more belligerent, so perhaps some therapy is in order :D

    still in down under,