Economists Do It With Models

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Dear Government: You Are Making Me (Vicariously) Turn To Meth…

October 2nd, 2013 · 1 Comment
Just For Fun

I feel Planet Money’s pain here:

I get what is going on, but it’s still more than a little disconcerting to see that. Even FRED has a warning that not all data is being updated due to the shutdown, and past data such as the census is being held hostage. It’s fine, it’s not like I have students working on research papers or anything…

Perhaps I should take the time that I would have spent poring over economic data binge-watching Breaking Bad, since the more I read about it, the more I am aware that there are lessons that resonate with me. For example, I am told that there is a theme of morals and moral consequences throughout the story line…

Fun fact: My dad was a high-school teacher, and Bryan Cranston looks far more like him in that picture than I am comfortable with. (Sorry Dad.) And yes, I get that this was not the literal moral of the story, but there are in fact convincing economic arguments for offering teachers more money in order to attract better teachers and incentive performance when appropriate. That said, while it’d be nice from a moral standpoint for teachers to be better compensated than meth entrepreneurs (like what I did there?), market forces are unlikely to allow that to be the case in any sort of economic steady state. How come? The economic concept of compensating differentials implies that jobs that are unpleasant, risky, etc. end up offering higher wages in order to offset the non-pecuniary downsides, and if you believe that cooking meth is significantly more unpleasant than being a high school teacher (though I would argue that this is debatable), then you shouldn’t expect teacher wages to reach parity unless it’s far more difficult to become a teacher than a meth entrepreneur.

The Economist also thinks I should watch the show:

The first lesson from “Breaking Bad” is that high-growth businesses come from unexpected places. Mr White uses his skills as a chemist to revolutionise the slapdash meth industry (he was a researcher before becoming a teacher). He is not alone. William Thorndike of Harvard Business School (HBS) studied eight bosses whose firms outperformed the S&P 500 index more than 20-fold over their business careers. He found that they were all outsiders who brought fresh perspectives on their industries. Clayton Christensen, also at HBS, argues that great entrepreneurs look at the world through a “marginal lens”. It so happens that Bill Gates, a university drop-out working in a then marginal bit of the computer industry, started Microsoft in Mr White’s home-town, Albuquerque, before moving to Seattle.

This is totally convincing me that a TV binge would be more productive than refreshing the Census web page every 30 seconds just hoping in vain that my nerd outlet will comeback.

Update: Apparently my parents read my blog, so I ended up on the receiving end of a frighteningly accurate parody picture, which I will do the world a favor and not post here. I guess I’m just happy that my father is finding ways to entertain himself during retirement. In related news, I think I can finally make a convincing argument for people not being allowed to own guns. =P

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