Mar 162005

Why can’t we understand Alan Greenspan well

Viplav Reddy wrote:
> Mr Greenspan wrote/spoke something like this (on market economies and
> rule of law):
> “A tension has always existed between a desired continuity in the laws
> and regulations governing trade and business practices, and the
> necessary updating that is required to keep pace with a growing and,
> hence, changing economy. Uncertainties that stem from the arbitrary
> enforcement of the body of prevailing rules are reflected in higher
> risk and cost of capital which, in turn, inhibit economic growth.”
> (April, 2003 before FRB)

I agree with the general gist of your posting, even though it is poor quotation that you chose.

[An aside: let me count the ways it is bad.

  1. tension is between the desired continuity in the laws and regulations? or XX and necessary updating … by the time you forget the first part you are contrasting.
  2. Why “growing and hence changing”? Why does growth imply change? Why
    not simply say “changing”?
  3. “body of prevailing rules”? Why such metaphor? Enforcing a body?
  4. Uncertainities stem from? A poetically challenged metaphor.
  5. Next, higher risk and cost of capital? Does “higher” apply to cost of capital too?
  6. It is logical that uncertainities increase risk, but why state cost of capital? Risk increases the cost of capital; that is true. Exactly what is the point here — is enumeration of all the effects of uncertainities?

In short, if I turned in a passage like this, (and believe me, I did),my editor and advisor would flog me mercilessly (and believe me, he did).]

First of all, the “goodness” of the writing depends on the readership. Surprising is that people write normally, until they start learning.

If you say economics is inherently tough subject, let me bring up at least two authors that do a good job explaining matters:

  1. Robert Heilbroner: His english so clear and lucid, my advisor gave his books as examples to emulate while I was writing my thesis.
  2. Paul Krugman: Agree with his neo-keynsian approach or not, you gotta love his straight talk and great explanations.

I am not well read in Economics as some of our colleagues here, so any other examples, welcome, I do [in yoda speech]. Anyway, I have a devil of a time expressing some of the telugu poems in English. Those that developed the subjects have the natural advantage in being able to appeal to the history of the words, I suppose.

Ramarao Kanneganti

[Original here]

 Posted by at 8:55 pm