## Discussing Unemployment in 1913

Pigou A C. “Unemployment”, pages 29-35. Published 1913 by William and Norgate, London. Lots of really good stuff in this book–lessons any person in the developed world can see and understand, many of which have been better quantified by recent research. You can get the whole thing on The Internet Archive.

Pigou points out the long term effects of even relatively short durations of unemployment on individuals beginning halfway down page 32. The same effects are being rediscovered (and measured) today.

## Breathless Eternity — A Love Song

The half-grown moon spends a night

ensconced in Sagitartian arms, then flees

While Niagara advances ever back

beneath ceaseless, racing tendrils

Till fervor and temerity burn softly away

to estuary and peace

When the sun assaults the horizon

we’ll lie on shifting, painted sands

Ear to heart and fingers entwined

while vapors upon untrammeled froth

Convey by sweet and violent wind

till finally, they land

Entropy, Infinity deface and replace

plutons weeping themselves to clay

and fissures rifting in obscurity

But on pebbled banks in autumn rain

lovers’ yearning eyes enlace

where brine and beauty meet

*—-V1: October 26, 2009*

## Solve If You Are A Genius — Of Ambiguity

The sun also ariseth, and the sun goeth down, and hasteth to his place where he arose. The wind goeth toward the south, and turneth about unto the north; it whirleth about continually, and the wind returneth again according to his circuits. All the rivers run into the sea; yet the sea is not full; unto the place from whence the rivers come, thither they return again. All things are full of labour; man cannot utter it: the eye is not satisfied with seeing, nor the ear filled with hearing.—Ecclesiastes 1:5-9^{9}The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.

Among other things, Ecclesiastes deals with ambiguity, assumptions, and the ways we react emotionally when our assumptions turn out to be inaccurate. Anyone who does the social media/blogosphere thing has seen at least one “Solve If You Are a Genius” meme. They’re great discussion starters, really good for getting folks to take a position on something that shouldn’t be controversial. I found the one I’m about to discuss on LinkedIn. It generated 51 answers, many of them with reasoned explanations, and some folks prompting others to justify their responses.

As far as I can tell, these memes are good at creating discussion for three reasons:

- They appear mathematical. It’s close enough to get everyone thinking mathematically, or at least arithmetically. The notation isn’t quite right, but it’s enough to get our brains to infer that something mathematical is going on.
- There’s just enough information to make the numbers look like they have a linear pattern, and it’s good enough for just about everyone to be able to discern one. Actually, it activates the human instinct to seek patterns, even in random noise. Bud Light’s football season commercials satirize the same tendency.
- Presentation—the words at the beginning take advantage of the math classes of our early school years, when most of us learned that math problems have only one solution.

The story on this meme, however, is that there are many reasonable answers—an infinite number, in fact. But in order to choose an answer, our brain has to make at least one assumption. Some assumptions may be more reasonable or easily explained than others. I’ll run two cases right quick and state my assumptions to show how they impact response to the meme.

**Case One**

**Assumptions:** ***Values on the left side produce the values on the right side via arithmetic operations. ***Not all strategic statements, x…. –> y, are included on the list.

**Corollary:** Completing the list is imperative to answering the question

**Strategy: ** Rewrite the list with gaps included. Number the statements. Relate the right and left sides arithmetic operations. Use the algorithm to fill in the gaps.

At this point, it outta be easy to fill in all the gaps, right? Sure: we can just accept our prior assumptions, input the results, and walk away confident that we got the right answer. Except maybe not: even if the presence of row 3 is reasonable, can the same be said about row 1? And if row 1 doesn’t exist, how do we deal with the non-existent value of 2 on the left side of the equation? Probably the best thing is to treat it as a 0—but maybe 1 is a better choice. On the other hand, maybe we just say it’s undefined. Now there are four reasonable possibilities:

Using the set of assumptions selected in Case One, the solution set is {0, 3, 6, DNE}. Here’s another way to look at it:

** Case Two**

**Assumptions: ** Values on the left side and right side appear correlated, but they are not

**Strategy: ** Fill in the value in question following the pattern on the right side only

By working through these two cases five possible answers have been found—all based on arithmetic patterns and reasonable assumptions. There are probably more answers to be found by following these same lines of reasoning, but for now I’d like to abandon it. I’d like to engage instead in some polynomial interpolation and extrapolate from there. In short, I will cheat the data. (Yes, I really said that!) In this case we just use it to cram together a non-singular matrix using an equation of the form:

p_{n}(x) = α_{n}x^{n} + α_{n-1}x^{n-1} … + α_{0}x^{0 }

For this exercise y = p(x) = right hand values, X = left hand values taken to the appropriate exponent, α-values will be represented by letters, and n starts at the top and ends at the bottom. Therefore the equation will take the form:

p(x) = ax^{3} + bx^{2} + cx + d and p(8) = 56, p(7) = 42, p(6) =30, p(5) = 20 . These assignments yield the following matrix:

This gives a value of p(3) = 6. The same answer pops up when p(x) = ax^{4} + bx^{3} + cx^{2} + dx. Using a standard, perfectly sensible linear interpolation, we find the pattern to be p(x) = x^{2} – x. But if p instead takes the form:

p(x) = ap^{n} + bp^{n-1} + cp^{n-2} + dp^{n-3} where n > 4

values of p(3) other than 6 begin to show up. For example, when n = 5, p(3) = 6.214285714285708…, and when n = 6, p(3) = 1.993112244897960…

Based on this we can safely say that there are many, many answers to the “Solve If You Are a Genius” meme. The set is almost as big as the set of polynomial functions, which just happens to be infinity. But this answer brings in two new questions:

1. How are the real answers bound for different polynomial forms?

2. Are answers limited to real numbers?

I’m not sure how to prove the first one analytically, but I will attempt to address it numerically in a future post. With the second question, my instinct is that under some conditions they are. When I solved the polynomial equation, I assumed the constants a, b, c, and d had only real parts. But it’s not difficult to imagine they take the complex form of q = y + zi. My sense is that under an even set of knowns consisting only of real numbers it is possible to have a set of z-constants that sum to zero for each known in the set. That is to say, the imaginary component is trapped within the null space. When the unknown gives the set an odd number of equations, then I think it’s possible for the imaginary component to show up in the answer. However, if it is an odd set of known consisting only of real numbers, the unknown must be a real number also. Confused yet? Me, too!

Anyway, that’s enough for this post. What do you think of the meme?

**Update (12/15/2013)**

I spent about a week chewing over my last paragraph and another week considering the best format to answer the questions I posed at the end. Here’s a couple comments addressing them….

- First Question–How are real answers bound for different polynomial forms: It’s not necessary to address this numerically because it can be shown analytically that they can be any real number. With polynomial interpolation it was possible to produce four independent equations with which to solve for the four independent variables–a, b, c, and d. I chose to unbind the highest order exponent as a variable j. The rest of the exponents were set to j-1, j-2, and j-3. In doing this, I actually was creating a fifth independent equation. In doing this, the system becomes specifiable to five values in the right hand column. By having five independent equations, any desired value can be specified for 3 = ?. There’s also no rule that says the exponent-values must be bound to the pattern j, j-1, j-2,….j-n. If exponents can be selected at will, then a total of 8 independent equations can be fabricated, allowing one to solve a system of eight question marks from the four known relations.
- Second Question–Is the range of reasonable answers bound only to real numbers:

The answer is no, answers can be real or complex. The imaginary components in the four known relations can be designated as b1 = b2 = b3 = b4 = 0. But if there are five independent equations, b5 is not constrained to zero. The same principle above applies, and it can be any positive or negative number.

The number of ways to consider the Solve If You Are Genius meme are as boundless as imagination, but there’s one more method I want to address here. Using the same polynomial interpolation p(x) can take the form:

p(x) = ap^{n} + bp^{n-1} + cp^{n-2} + dp^{n-3 }+…+ e

In this case the unknown can take the value of any number. What’s really happening is the unknown is being constrained to a one-dimensional line in R^{n}. Personally, I’d rather have a plane. But a line can be just as good. Cheers!

## About Those Exploding SS Disability Benefits

There’s lots of fretting and frowning over the number of folks getting disability payments in the US these days. It seems like everybody’s in on it–established magazines, conservative pundits, educated economists have good theories to explain it, NPR (with a pretty engaging piece), and even WonkBlog has gotten in an explanation (demographics + tough job market, in case you were wondering).

My piece on long-term unemployment got me to wondering–how many long term unemployed, marginally attached, and discouraged workers are leaving the workforce permanently and winding up on disability insurance? In my own work life I’ve known people who really could have qualified for a disability award. But in a solid labor market they were able to find employers who were willing/able to accommodate some special needs. When times are tougher, accommodation above ADA requirements often goes away. So a working person who is technically disabled is pushed out of the workforce by market changes. If I’ve witnessed it myself it can’t be too uncommon. This led me to ask how much it’s going on, and if it’s higher now than in the past.

Fortunately, the Social Security Administration makes figures on disability awards easily available. They also publish the month-to-month number of disability beneficiaries back to 1985, which I copied into Excel and graphed:

I was able to discern four trends in monthly awards in the data:

- An average rate of about 4800 awards per month in the late 1980’s
- That rate to almost 20,000 per month in the early 1990’s
- The rate declined slightly in the mid- and late- nineties and then slightly rose in the aughts
- The average monthly awards fell by 38% to about 12000 awards per month in April of 2012 to present

I attribute the increase in awards in 1990 to a cultural change–Americans began to be more aware and more accepting of individuals with disabilities. Disability accommodation came to be seen as a Civil Rights issue, culminating in the first President Bush signing the ADA. It makes sense that Americans would be more willing to apply for disability benefits, and that the government would be more willing to award them.

Bottom line, folks are bringing up the “explosion” in disability benefits 23 years too late. The rate increase was in 1990. And for the last 15 months, the rate of new awards being added is down, and down by a lot. Sometimes it feels good to go against the conventional wisdom, and this is one of those times.

A piece of Jessica’s art: