Thursday, November 19, 2009
  Black boxes and optimization




When trying to optimize or tune up a system (a car, a program, a national economy) you have to start by asking "Who is this for?" Is the car driven by a young buck or a safety-minded family? Is the program a game or an accounting app?

The answer to that question tells you which output variable to measure while you're tuning. For the young buck's car you want to tune for acceleration; for the family you tune for economy. For the computer game you work toward flash and speed; for the accounting app you aim for zero errors regardless of speed.

Now let's ask the same questions about a national economy. Who is this for? Which variable should we put the scope on? Different politicians give us very different answers, which implies different variables to watch. The establishment types, Bush, McCain, Obama, all give the same answer: the economy is for Wall Street, and the goal is to maximize the Dow and minimize interest rates.

But there is an alternate answer, voiced by union heads like Richard Trumka, politicians like Marcy Kaptur, commentators like Thom Hartmann, and historical figures like Mohammed. Who's the economy for? They say "Ordinary working people and their families." And what should you maximize? Production and wages.

This answer agrees with Polistra's guiding lights (Henry Ford and FDR); it agrees with modern Catholic economics and also with the moral populism found at Front Porch Republic. Though the unions certainly aren't starting from theology, they end up in the same place as Benedict.

= = = = =

Wall Street steals jobs and cash, sends the jobs to China and the cash to Goldman Sachs, and returns nothing to American producers and laborers.

Manufacturing turns labor into value and returns a significant part of the value to the laborer.

Historically, America has bubbled and failed when stocks and property were the target variables. America has stabilized and succeeded when production was the target.
 


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Polistra was named after the original townsite of Manhattan (the one in Kansas). When I was growing up in Manhattan, I spent a lot of time exploring by foot, bike, and car. I discovered the ruins of an old mill along Wildcat Creek, and decided (inaccurately) that it was the remains of the original site of Polistra. Accurate or not, I've always liked the name, with its echoes of Poland (an under-appreciated friend of freedom) and stars. ==== The title icon is explained here. ==== Switchover: This 2007 entry marks a sharp change in worldview from neocon to pure populist. ===== The long illustrated story of Polistra's Dream is a time-travel fable, attempting to answer the dangerous revision of New Deal history propagated by Amity Shlaes. The Dream has 8 episodes, linked in a chain from the first. This entry explains the Shlaes connection.

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