Category Archive

 What Wordle Taught Me

By Shlomo Maital  

    Wordle is a web-based word game created and developed by Welsh software engineer Josh Wardle and owned and published by the New York Times Company since 2022.  Players have six attempts to guess a five-letter word, with feedback given for each guess in the form of colored tiles indicating when letters match or occupy the correct position.

   T hanks, wordle!  You taught me some valuable life lessons.  And that’s not trivial, for one who is 80 years old and knows it all.

    Today I got “flirt” on my second guess, after opening with “adieu”.  A plurality of wordle players always starts with “adieu”, usually one in 12) because it has four vowels, even though the wordle genie usually explains it is not the best choice. 

    Wordle kindly informs me that I have played 158 times, guessed right 87% of the time, currently have a streak of three in a row, and that my longest streak is 24 correct guesses.  I love this.  Former New York City mayor Ed Koch used to stand at Metro stops and ask passers-by,  how am I doing?  It’s crucial for elected officials, and for all of us, to know how we are doing. Wordle tells me daily.  I admit, I was furious when my streak of 24 right answers was broken. But that is part of the fun.  Love it, hate it – enjoy it.

    Wordle exercises my brain.  For years I taught my MBA students that the brain is a muscle; exercise it regularly, practice creative thinking.  Wordle is push-ups for my neurons.  It is fun, challenging, painful when you fail, exhilarating when you succeed.  On balance, pleasant.  This will keep you at it every day.  It’s addictive.  Like fun exercise.

    Wordle teaches you persistence.  I failed to guess “maize” in six tries.  That irritates me.  Failure is a great motivator.  You learn from it.  Wordle loves to slip in “y” and “z” and even “x” – letters a bit uncommon in words.  I learned from maize not to ignore “z”.  And I learned not to accept failure.  Five guesses, one more to go —  persist!  Go through the possibilities one by one, until you get it. 

    Focus.  Lots of distractions in the morning, when the New York Times appears on my smartphone.  Coffee machine. Cable news.  My spouse.  The dog wanting to walk.  Focus!  Zero in on wordle.  For 15 minutes, nothing else exists in the world, but wordle.

     Wordle gives you instant feedback.  If you wish.  Like, “you might have chosen ‘stare’, two vowels and three very common consonants. That would have narrowed the range of possible solutions.”   Most of us are stubborn. People continue to go with ‘adieu’, despite wordle’s sage advice.  Lately, I have repented.  I do not always go with adieu.  It pays off.  Live and learn – even at age 80.

   So, thanks wordle.  You’re not just a word game.  In a word — you’re a lifestyle coach. 

Netanyahu Is Destroying Israeli Democracy

By Shlomo Maital

   Our perennial Prime Minister Benjamin Netanyahu continues to state a bald faced lie – that the elimination of judicial review of legislation and political appointment of judges will strengthen Israeli democracy. 

    Let’s ask an expert.  In his 2019 book, Checks and Balances, the Override Clause and Its Effect on the Three Branches of Govt.,  Prof. Amichai Cohen notes that true democracy has several key structural checks on political power.   If Israel introduces the Override Clause (enabling the legislature to override judicial review), it will be the only country out of 67 [democracies] reviewed in the book that has none of the six common structural restrictions, along with judicial review.  It will be Israel without checks or balances.

   The ONLY country. 

    The six structural checks and balances are:  a bicameral legislature (e.g. House and Senate); a President with executive powers; a federal government; regional elections; membership in a supra-governmental organization; and acceptance of the International Court of Justice’s authority.

    Only five other countries along with Israel lack a written constitution:  Britain, New Zealand, Libya, Oman, Saudi Arabia.  Britain and New Zealand each have huge bodies of common law that serve as a constitution.  Libya, Oman, Saudi Arabia?  ‘nuf said. 

    As of now, Israel is barely a democracy.  When the Netanyahu coalition tosses judicial review out the window, and politicizes appointment of judges, no reasonable person will call us a democracy, with a straight face.

    Except Netanyahu. 

    In a democracy, power is widely distributed.  In Israel political power is concentrated in the hands of a very few people,  most of whom are fanatical and extreme. 

     It will be fixed.  But not before massive damage is done. 

• Based on Michael Starr, “Israel already at minimum checks and balances”. Jerusalem Post, Jan. 30, 2023, p. 3.  

The Age of the Grandparent

By Shlomo Maital

   My wife and I are blessed with 17 grandchildren (and one great-granddaughter, Halel).  The oldest grandchild will be 29 in April; the youngest will be three in May.  No words can describe how each of these beautiful faces brings sunshine to our lives. 

    In its latest issue, The Economist announces, “the age of the grandparent has arrived.”  China, the US and India, countries that together have about 38% of the world’s population, have between 24% and 30% of their populations who are grandparents.

    Here are some of The Economist’s observations.

     First, the numbers:  “First, people are living longer. Global life expectancy has risen from 51 to 72 since 1960. Second, families are shrinking. Over the same period, the number of babies a woman can expect to have in her lifetime has fallen by half, from 5 to 2.4. That means the ratio of living grandparents to children is steadily rising.”

     “We found that there are 1.5bn grandparents in the world, up from 0.5bn in 1960 (though the further back one goes, the fuzzier the estimates become). As a share of the population they have risen from 17% to 20%. And the ratio of grandparents to children under 15 has vaulted from 0.46 in 1960 to 0.8 today.   By 2050 we project that there will be 2.1bn grandparents (making up 22% of humanity), and slightly more grandparents than under-15s. That will have profound consequences.”

     What are these consequences?

    “The evidence suggests children do better with grandparental help—which usually, in practice, means from grandmothers. And it will help drive another unfinished social revolution—the movement of women into paid work.   Rich countries generally provide services that help women juggle child-care and work. But many parents seek extra help from grandparents nonetheless. Old-age pensions help, by allowing grandparents to give up work. According to one survey, 50% of very young children, 35% of primary-school-aged children and 20% of teens in America spend time with their grandparent in a typical week.  This can make a big difference. Janice Compton of the University of Manitoba and Robert Pollak of Washington University crunched American census data and found that living within 25 miles of a grandmother raised the labour-force participation rate for married women with small children by 4-10 percentage points.”

     “Overall,” The Economist continues, “looking after kids appears to be good for grandparents. Those who spend time with their grandchildren report lower levels of depression and loneliness. But one can have too much of a good thing. Youngsters can be exhausting, frustrating and objectionable. A study in Singapore, with mainly ethnically Chinese families, found that many looked after their grandchildren more out of duty than because they relished it. Many find it harder as they age. Some are squeezed in the “grandsandwich generation”—relied upon to help both their grandchildren and their own ailing parents. Some hanker for a more relaxing retirement.”

       In many countries, a high proportion of grandparents say they regularly look after their grandchildren:  62% in Belgium, 56% in France, and 52% in Israel.

       From my perspective as an economist, father of four, I believe children are ‘investment’ and grandchildren are ‘consumption’ (i.e. pure pleasure).

     I welcome the Age of Grandparents, and assure readers who will soon join the club, or already have:  Nothing else comes close.   

Mazzucato: Government is the Solution, Not the Problem

By Shlomo Maital

Mariana Mazzucato

   Private sector entrepreneurs foster innovation and wealth.  Governments then try to redistribute that wealth – but fail.

    This is the prevailing conventional wisdom. But it’s wrong, according to Economist Mariana Mazzucato. She wants liberals to talk less about the redistribution of wealth and more about its creation.  Politicians around the world are listening, according to Kay Lederer, who wrote about Mazzucato in the New York Times in 2019.

    Lederer noted:  “In two books of modern political economic theory — “The Entrepreneurial State” (2013) and “The Value of Everything” (2018) — Dr. Mazzucato argues against the long-accepted binary of an agile private sector and a lumbering, inefficient state. Citing markets and technologies like the internet, the iPhone and clean energy — all of which were funded at crucial stages by public dollars — she says the state has been an underappreciated driver of growth and innovation.

    “Personally, I think the left is losing around the world,” she said in an interview, “because they focus too much on redistribution and not enough on the creation of wealth.”

     Consider Elon Musk’s government subsidies.  According to an analysis by Grid, a tech website, “Tesla and SpaceX have received more than $7 billion in government contracts alone and billions more in tax breaks, loans and other subsidies.   … In recent years, Tesla has sold at least $6 billion worth of government-backed electric vehicle credits, Grid found. These sales have twice in recent years made the difference between the company posting a profit instead of a loss, according to an analysis by Trefis, a financial data firm”
    According to Lederer,  “Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory taught in most academic departments: its assumption that the forces of supply and demand lead to market equilibrium, its equation of price with value and — perhaps most of all — its relegation of the state to the investor of last resort, tasked with fixing market failure. She has originated and popularized the description of the state as an “investor of first resort,” envisioning new markets and providing long-term, or “patient,” capital at early stages of development.

    “She has written that governments and state-backed investment entities should “socialize both the risks and rewards.” She has suggested the state obtain a return on public investments through royalties or equity stakes, or by including conditions on reinvestment — for example, a mandate to limit share buybacks.” 

    Had the State of California asked Musk and Tesla for shares instead of loan payback, the state coffers would have swelled with billions of dollars, for example.

    Israel is an example.  Israel formed a government VC company, Yozma, to attract foreign VC money.  It helped foster a large VC industry in Israel, largely with foreign VC money.   

    Her latest book is Mission Economy: A moonshot guide to changing capitalism. (2022).  “Taking her inspiration from the ‘moonshot’ programs which successfully coordinated public and private sectors on a massive scale, Mariana Mazzucato calls for the same level of boldness and experimentation to be applied to the biggest problems of our time.”

    “Mission Economy looks at the grand challenges facing us in a radically new way, arguing that we must rethink the capacities and role of government within the economy and society, and above all recover a sense of public purpose.   To solve the massive crises facing us, we must be innovative — we must use collaborative, mission-oriented thinking”.

    In the US,  fanatical Republicans hold President Biden hostage, refusing to raise the debt ceiling unless he cuts spending (but they refuse to say WHAT spending – social security? Medicare? Infrastructure?).  With crumbling bridges, a mental health crisis, unproductive industry – the US needs more spending to boost innovation, not less.  If Mazzucato is right, and she is, it was government spending that led to the COVID mRNA vaccine, electric cars, Internet, and Space X rockets, among others.   Do you wonder about politicians mouthing patriotism, who are trying to burn down their own house?  

Workism!

By Shlomo Maital

   New York Times columnist Ross Douthat reports on a new Pew Research Center study of parenting attitudes among Americans. 

     Here are the main results:

  * “…lower-income parents are more worried — sometimes much more worried — about their kids than upper-income parents. …. ask American parents whether they find parenting “rewarding” and “enjoyable,”  … lower-income parents who are more stressed by potential dangers are also more likely to report that they enjoy and appreciate being mothers and fathers all the time, while upper-income parents are more likely to qualify their appreciation. (Notably, there’s a parallel pattern along racial lines, with African American and Hispanic parents reporting more enjoyment than white parents, and substantially more than Asian American parents.)”

   * “ According to Pew, 88 percent of American parents rate financial success and professional happiness as either “extremely” or “very” important for their kids. Only about 20 percent give the same rating to eventual marriage and children.”

  *  “Only 35 percent of respondents say that shared religious beliefs are “extremely” or “very” important —  … only 16 percent say it’s important for their kids to inherit similar political beliefs”.

       Some conclusions.  “Workism” (priority above all to financial and professional success) is alive and well; the higher the income, the higher the degree of workism.  Couples who don’t enjoy kids, or believe they won’t, are unlikely to have more, or any at all;  China’s effort to throw money at couples for more children is futile.   There is something wrong with society when parents cannot enjoy their kids; government-sponsored quality child care would go a long way to help, especially low-income parents who struggle to afford child care.

“We Need Pleasure to Survive…”

By Shlomo Maital  

Enjoy!

    Today’s New York Times has an Op-Ed by Jessica Grose, titled “We need pleasure to survive.”   Here is her main point:

      “…does the joy we get from two glasses of wine over dinner with friends offset the physiological drawbacks in any way?…Does the pleasure from a rich meal…nourish your soul even if it raises your cholesterol?”

     Yes!

     My own theory:  If it makes you happy, go for it, within reasonable bounds of moderation.  Why?  Because the worst thing for your health is not cholesterol but —  unhappiness and depression.  The latter will kill you faster than cholesterol. 

     And even if it doesn’t —   if you abstain from everything you enjoy, just so you live longer,  you will probably not live longer, but it will SEEM like forever.  I have witnessed this first hand.

    So why do it? 

    I believe that in living, quality overcomes quantity.  Enjoy life.  I believe you will live longer.  And even if you don’t – it was worth it. 

Debt Ceiling Insanity

By Shlomo Maital

   OK – another blog about Republican insanity/fanaticism/obstructionism.  Skip it, if you wish.

   The US govt. debt ceiling is now $31 trillion. About 1.5 times GDP.   The actual debt has reached that amount. An act of Congress is needed to raise it.  A small junta of crackpot Republicans is blocking that act.  This threatens an unthinkable result:  the US government defaults on its debt (i.e. cannot pay its bills).

    Who is responsible for the mountain of debt?  A journalist reporting on the NY Times podcast The Daily, led by Michael Babaro, reports this:  Since George Bush (2000), $12.7 tr. of the debt came from Republican Administrations (mainly defense spending and tax cuts for the wealthy, especially under Trump),  and $13 tr. comes from Democrat Administrations (e.g. expanded health care insurance).  50/50.

     So why are Republicans blocking raising the debt ceiling, threatening global financial markets, and virtual suicide for their own country (patriots all?)…. When they are equally responsible for the debt,  most lately the unfunded Trump tax cuts?  When was the last balanced budget?  In 2000, under Clinton, a Democrat,  just before Bush took over. 

      Ask Marjorie Taylor Greene, the whacko Congresswoman.  She will doubtless have a brilliant analysis of why it is wise to blow up global financial markets.

The T(Predictable) ragedy of the Darien Gap

By Shlomo Maital

Darien Gap

    My Ph.D. thesis, written 55 years ago, showed how the hordes of baby boomers, born 1947-65, moved through the age cohorts like a deer through a python, totally predictable – yet at each stage, public officials were surprised.  Result: Crowded kindergartens, schools, universities, and now —  pressure on social security as they retire.  Surprise!  Yet predictable with 100% certainty.

    Same goes for the hordes of migrants now pushing across the Rio Grande.  In 1944 at Bretton Woods, NH, the US and allies created a marvelous global trading system that generated massive wealth – for some.  For countries able to capitalize, like China, Korea, Singapore.  And for the already wealthy.  For countries with corrupt governments, their citizens were left out, left behind.  Massive misery.  In South and Central America and Africa.  Result:  Huge waves of migrants, seeking a better life, or even life itself.

     Predictable?  You bet.  Just as negatively charged particles are drawn to positively charged ones,  so are the poor drawn toward the wealthy.  Sure as shooting.  It is not rocket science.

    Yet the world chose to ignore the problem.  And the result:  For example, the many thousands who cross the Darien Gap on foot,  66 miles of hostile steamy jungle between Colombia and Panama.  Including small children.  And many die doing it.

       On the New York Times’ podcast The Daily, journalist Julie Turkewitz recounts how she made the trek herself, to research it, and recounts her journey.  She notes, “Almost three years after a deadly pandemic began ravaging the world, a devastating combination of pandemic fallout, climate change, growing conflict and rising inflation exacerbated by the war in Ukraine is creating a seismic shift in global migration, sending millions of people from their homes.  The United Nations says there are now at least 103 million forcibly displaced people around the world, a record number that is only expected to grow.”

    It is hard to grasp big numbers like 103 million. But easy to grasp the story of Sarah, six years old, who crossed the Darien Gap with her mom.  “At least 33,000 of the people who’ve made the journey this year are children,” Turkewitz notes. “Some migrants come from desperately poor families. But many, like Sarah and her mother, Dayry Alexandra Cuauro, were once middle class, and now, thrust into desperation by their homeland’s (Venezuela) financial ruin, have decided to risk their lives in the jungle.”

     The Pan American Highway stretches from Alaska down through South America. But there is a 66 mile stretch, the Darien Gap, so impassable that engineers tried and failed to build a road to cross it. So it has to be crossed on foot.  Dayry, a lawyer, could not make a living in Venezuela, tried in Chile, failed, and in desperation, took her little girl and set out for the US border.   In the trek through Darien, which takes between  6 and 10 days, her feet swelled and she was unable to walk.  She handed her little daughter to a stranger, named Angel, and asked him to care for her on the trek.  She tried to follow later.  The desperation of a mother, entrusting her little daughter to a stranger, is unimaginable. 

     Julie Turkewitz helped reunite mother and daughter.  But only for them to learn that the Biden Administration had revoked the special terms Venezuelan migrants were offered at the border.  They wait in Mexico, as thousands are turned away. 

       Centuries ago, China built a huge wall to keep out the nomads.  It did not always work.  Today, the wealthy nations of the West are essentially trying to do the same.  It is immoral and futile.  Desperate people, like Dayry and her little girl, will keep coming. 

       It is sad, infuriating, unacceptable, that the wealth machine built in 1944, creating huge intolerable gaps between rich and poor, did not have a repairman working to mitigate the terrible inequality.  If you let large countries sink into abysmal poverty, their people will come to your border. 

        My fellow economists, me among them, should have done more to warn what lay ahead.  And what about the Christian evangelical Republicans in the US?  How do they support the xenophobic wall-builders like Trump?  With $65,000 GDP per capita, can Americans not afford to help those who live on less than a tenth of that?  Where are the Christian values?  Simple humanity?!

     Well done, Julie!  If you can, read her account or listen to the Daily podcast.

Scientific Innovation is Slowing Down!

By Shlomo Maital

         Disruptive innovation is a kind of innovation that displaces established market-leading firms, products, and alliances. It was first developed by Prof. Clayton Christensen, Harvard Business School in 1995. 

         Science research, too, can be disruptive.  For example, mRNA technology for vaccines has disrupted conventional dead-virus vaccine approaches (except in China). 

         New research, that covered a mind-boggling six decades, 45 million papers and 3.9 million patents, published in NATURE, now shows that “progress is slowing in several major fields.”  *   Meaningful scientific innovation is slowing, despite massive investment of resources.  Disruptive scientific research is measured in this paper by a new measure, CD index, measures whether research is ‘consolidating’ (building on what exists) or ‘disruptive’ (charting brand new directions, contrary to what exists, breaking sharply with past knowledge).  The authors claim this reflects “a fundamental shift in the nature of science and technology”. 

       Gene splicing, for instance, was a disruptive breakthrough.  It has generated a huge new field of research.

        As someone who spent 40 years publishing research, albeit in economics, I have a hunch why breakthrough research is in decline.  The incentives are all wrong.

     Tenure involves often counting published papers.  Papers building on what is acceptable have a higher rate of success than papers that clash with conventional wisdom.  What reviewer wants to OK a paper that makes his or her own research irrelevant?

      Scientists spend vast amounts of time writing grant proposals.  Proposals that build on the knowledge created by those reviewing their request stand a better chance of approval.

      Newton said that scientists ‘stand on the shoulders of giants’.  True.  But sometimes, they have to climb the tree all by themselves, without help,  while the neighbors yell at them to get down at once. 

       Fewer scientists seem willing or able to do so.   

*  Park, M., Leahey, E., & Funk, R. J. (2023). Papers and patents are becoming less disruptive over time. Nature, 613(7942), 138-144.   

Hope & Despair: An Economic Perspective

By Shlomo Maital  

Abhuit Banerjee & Esther Duflo

    Years ago, I lost hope for my profession, Economics.  For more than a century, from 1870 to 1979, Economics was a branch of applied math.  Virtuosity in math was essential for success.  My wife, a psychologist, and I began trying to research people rather than Greek letters, early on, in 1972/3 and wrote and published papers and two books.  But nobody was listening. 

     And then along came two Israelis,  Kahneman and Tversky, and their 1979 Econometrica paper, which persuaded economists of the importance of studying actual behavior (psychologists, not economists; Kahneman is still active and a Nobel laureate, Tversky died of cancer in 1995).  They did so, by shaping a mathematical behavioral model of behavior toward risk – speaking the language of economists, but preaching behavior!  Their model was tested empirically and showed major deviations from purely rational behavior.

      Today, behavioral economics dominates.   I was born too soon.

       Enter Esther Duflo and Abhuit Banerjee.   Banerjee shared the 2019 Nobel Memorial Prize in Economic Sciences with Esther Duflo and Michael Kremer “for their experimental approach to alleviating global poverty”. He and Esther Duflo, who are married, are the sixth married couple to jointly win a Nobel Prize.

     Esther Duflo is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics in the Department of Economics at MIT. They met when Banerjee was her PhD supervisor at MIT in 1999, married in 2015, and have two children together.

    Their breakthrough?  Study policy alternatives by small-scale experiments, in the field, rather than by proving mathematical theorems.  A powerful idea.  See how policy drives behavior, in the real world, and test it.  A revolution.

     The couple has written a lovely New York Times Op-Ed, “Hope and despair in turbulent times”.  Few or no economists of my generation would or could write such a piece.   Here is their opening paragraph:

    “History offers many lessons, but the big picture is always a tangled skein of multicolored wool.  Where it leads says a lot about the particular strand that we choose to follow – the optimist always finds a threat that the pessimist will carefully avoid.”

     Find the strand of hope, they counsel.  There always is at least one.

     Israel’s 37^th government was sworn in on Thursday, Dec. 29.  It is far right, homophobic, fanatically ultra-Orthodox, and largely incompetent, with leading ministers having served jail terms or convictions.  But as Duflo and Banerjee counsel, there is hope.  We are a country with incredibly creative young people who continue to launch amazing startups that change the world.  That force is inexorable. Like Niagara Falls, it cannot be shut off.

     Special thanks to Duflo and Banerjee. 

     Economics is back.