Things I Wish Everyone Understood About Macroeconomics

Given some recent nonsense I have seen bandied about I thought I would do a quick write up of what I think is important for normal people to know about macro.

-More spending is not some magic expand the economy juice. More money does not equal more significantly more production under normal conditions, or else Zimbabwe would have become a paradise. More spending is really only useful if the economy is demand constrained which occurs when current prices are too high for the amount of money circulating. This leads to many resources(like labor) going unused, so the extra spending instead of diverting resources instead brings unused resources back on line. If all the resources are currently being employed than extra spending can only divert resources from some uses towards others.

-Price level is determined in long run by the money to stuff ratio, that is how much money is circulating next to how many real things are produced.

-Monetary policy should be judged by its output (inflation or NGDP growth take your pick) if these numbers don’t change enough, monetary policy is being too tight, if these numbers are changing too much change and it is being too loose period. Monetary policy is functionally infinite in power, unless your country has a fixed exchange rate or an incompetent central bank anything else that might affect the amount of spending doesn’t really matter. If your central bank is incompetent it probably also won’t matter what else you do anyway. Standard monetary policy runs out of steam when interest rates hit zero(liquidity trap), but there are many many other non standard tools that look scary and are hard for a layman to comprehend. Keep calm and look at projected inflation/NGDP growth.

-The typical nominal recession is a dumb thing which is really just an artifact of the fact we use money and prices are sticky, not some great judgment from above to repent for our sinful ways. The solution is to try to bring spending back to what will allow for full employment of resources. Recessions that occur for structural reasons are a different story. But your typical recession is best understood with the following story, you go to the grocery store with $100 picture the basket of goods you could buy, now go back to the same store with roughly the same prices but only $80, it is impossible to buy the same basket. It is impossible to buy the same output with similar prices and less spending. Since wages are especially hard to lower in nominal terms, labor tends to be hit disproportionality hard. But it doesn’t really matter what your price level is, only that the amount of spending can facilitate full employment of resources at whatever the current price level.

-All government spending is the result of a tax, current taxes are obvious, borrowing and spending is a tax on the future, printing money and spending is an inflationary tax on money holders, defaulting on the debt is a tax on holders of the debt(also an insane idea). Government spending is important, but it isn’t magic, those resources need to come from somewhere so they are going to come from other uses of those resources. Treat anyone who claims otherwise as someone who claims to actually be a wizard.

About Diet

So I follow a pretty crazy diet that moves between low carb, keto, and extended fasting, would I recommend it to others? No I follow the diet because I have found that it works the best for me given my various medical problems, but it is unlikely that it is the right diet for most other people. The diet world seems full of all or nothing thinking, as well as a fundamental supposition that is just untrue which is that we are all the same and there is a “best diet”. Now there are probably diets that are universally not the best, ones with lots of fat mixed with processed carbs and sugars in a delicious and convenient package. (What do Bill Clinton, Bill Gates, Warren Buffet, and Donald Trump have in common? A genuine love of McDonalds, let’s not pretend the food doesn’t taste good to most when some of the richest men in the world still eat it, plus it is easy and cheap).
So while there are some near universals(not everyone eating a “bad diet” will face negative health consequences) the truth about diet science is that it is very very complicated and very very over simplified.

-Individual Variations

Genetically we are all pretty similar, but we are far from the same. There are all kinds of differences in how our leptin (a hormone that has much to do with fat and hunger, mice bred without leptin will be fat, if you underfeed them they will be fat with underdeveloped organs) glucose metabolism, and well everything else that relates to food and diet. So it stands to reason that even though some advice might be universal (sugar is, at best, probably not great for you) the best diet should vary by person.  So long as it is safe, try out a diet measure your results see how you feel (blood work is a plus) and if you find success good for you, but remember the same might not be true of everyone else so there is no need to become an evangelist. If it doesn’t work, keep looking.

-Calories in calories out

To lose weight you need to take in fewer calories than you expend, to gain it you must take in more calories than you expend. This is just thermodynamically true, but that doesn’t necessarily make it useful when discussing diet. If you eat less then you expend you will lose weight, you breath in oxygen you breath out CO2 that carbon came from the stuff you ate, don’t eat stuff and bam by definition you have to be exhaling carbon that came from you. So if I fast for 10 days I might lose 15 lbs (I exercise a lot when I do long fasts) but within a month of unrestricted eating I will be right to my steady state weight with my current diet which is about 150lbs. My steady state weight back when I could eat anything, and anything turned out to largely consist of pasta my steady state weight was around 185 lbs. It makes much more sense to look at things from the perspective of why someone is taking in more or less calories then they are expending, and seems to have a lot to do with the composition not just caloric quantity of the diet.


Lets also try to not moralize so much about weight and fat. People who are skinny are very unlikely to be exerting intense willpower everyday to maintain a state of hunger, that isn’t how it works, that isn’t how anything works. People have a much easier time staying skinny usually when they are younger, is it that as you get older you lose willpower? Not to say that no willpower is ever involved as avoiding the stuff you really want to eat isn’t always easy, and some have more cravings than others. But in all likelihood fatter people probably exert more willpower and feel more hunger when it comes to attempts at caloric restriction than do thin people.

-Low Carb/Keto

Low carb works for a lot of people, certainly if you have problems with glucose regulation (or you know don’t produce insulin and have to rely on slow external insulin) it might be a really good idea to try to see if it works for you to help you regulate blood sugars. It can also help many lose weight. But I highly doubt given ancestral diets and all the different variations there exist in glucose metabolism that it is the best for everyone.

I promise you that if you went on an all you can eat potato diet you would most likely lose weight despite your diet being almost all fairly rapid carbs. Just plain potatoes mind you, no salt, no pepper, no butter, just boiled. By the end of a week or two your brain will be so utterly bored of food that you will naturally eat less. That is what a good diet really needs to do at the end of the day, nourish you while at the same time naturally making you want to eat around the right amount of calories for your body. Insulin spikes certainly can play a role in this, as can many other factors.

Diet and human metabolism are complex. Simple solutions sell but they never tell the whole picture. The obesity crisis is quite recent, carbs are essentially what has been the foundation of the human diet for the last ten thousand or so years.

The goal is finding a diet where you can
A. Stick to it
B. Feel good
C. Naturally have the desire to eat calories consistent with a healthy weight for you (please know in terms of healthy weight, being underweight is actually worse than being overweight!)

Five Ways to Be More Productive

  1. First one! (Disclaimer many of these are not easy and none of us are perfect me included, the goal is to just try to be better)

-Don’t do work around your cell phone. Humans are awful multitaskers, all of us. The research is really clear on this (I used to think I was great at it…). When you work around your cell phone your brain is constantly going “ohh did I get a message, did people like my post ohh… let me just check” turn it off and preferably have it away from you(I lock mine in a drawer in another room and put the key in hard to reach area of another room, or just work outside and not bring it).  Just try it for one hour, put yourself into a minimalist workspace without any distractions and see how much work you get done.

2. Don’t wallow in guilt if you mess up. Often wallowing in guilt is a very self indulgent thing, you torture yourself which in a twisted way is easier than what you should do. But while you are feeling guilty you are not doing something productive, and since you don’t want to feel guilt, this often leads you to actively avoiding the thing that made you feel guilty, which is very likely to make things worse. Acknowledge your failures, but don’t think it means you are terrible if you don’t meet your expectations or miss a deadline. I know it isn’t easy, I know better than most about the temptation to take the easy way out that just makes things worse in the long run. But do your best to fight against it.

Don’t give yourself excuses either, it is a lie that you are in total control of your situation, but since it is far too easy to always find excuses for yourself it is a dangerous road. So my best advice is approach life with the idea you are in control of your fate, knowing it isn’t actually always true. Don’t excuse yourself, don’t guilt yourself, instead try to be better every day, try to do better every day, the question you should always ask is, “how can I avoid making the same mistakes in the future”. You are human, you will make mistakes, try to improve from them rather than get sucked into a vicious cycle of guilt and procrastination.


3. Take breaks, make sure it is a break you can do in short spurts, like take a walk(I mostly play violin). While it might sound like a good idea to play a game or watch a video, these too often turn from short breaks to… very long ones. When you relax try to relax efficiently, try to block off plenty of time to do something you genuinely enjoy. If you try to just work every day your productivity will fall overtime, and you will likely seek little guilty enjoyments that don’t actually leave you feeling very relaxed. The key to being productive is efficient work, efficient play.

Empirical work on the matter is very surprising, overwork and sleep deprivation actually cause working too much to have negative marginal returns in the long run. This is sometimes hard because in the short run they usually have positive returns, but doing it over and over makes the total amount you produce less. One experiment in construction found that over the course of a long time frame crews that worked 40 hours a week out produced their 50 and 60 hour counterparts. This is because working 25% extra hours a week doesn’t add if the per hour productivity falls by 33%. The reason Henry Ford started the 5 day forty hour workweek was not because he was “nice” but instead internal experimentation showed that in the long run it led to the highest per week output, it should be noted that taking other jobs was strictly forbidden. Software firms that put their employees under permanent crunch usually fair badly, as any gain in work is destroyed by lower per hour productivity and more mistakes. Other research shows many people take too few breaks to maximize their total productivity. I am guilty of violating this all the time, but just keep it in mind.

4. Focus on efficiency. How often have you waited until the last minute, wasting your time beforehand for hours or even days trying to avoid the anxiety of not doing your work, only to bang it out quickly the night before? Guess what that means? You could have saved yourself all that anxiety and focused on things you really wanted to do. Try to do this a few times and then try to remember just how much better it feels next time you are stuck in the cycle. Alternatively you can also just be honest with yourself about what you will realistically do and create a plan from that so you can keep the project in the back of your mind and genuinely enjoy your downtime.

Be honest! How many times have you told yourself I am going to do *insert giant list* and everyday do *big list* and then maybe you do a little and give up? Be honest with yourselves! It is the only path to freedom. Making lofty goals that you can’t actually complete just makes things worse, try chunking things into small manageable tasks instead of standing at the foot of a giant task mountain. (If I really want to do something hard, I write myself binding contracts, but since I treat these so seriously I will only write hard but possible things, if I created one I could not fulfill it would make these contracts lose their power). Spending time “working” when you are not accomplishing something is pointless, always try to work on keep your per hour efficiency in mind.

5. Don’t compare yourself to others, compare yourself to who you were yesterday. You are not in control of other people, you are not other people, all you have control over is you, don’t worry about being the best, there is one spot for that, but every single person can make significant improvements. Taking this at heart and always trying to improve and always trying to be your best will allow you to be a much better version of yourself than if you just constantly compare yourself to others. The students I have that do the best aren’t even the ones that act with the goal of trying to be the best, but instead the ones that are genuinely interested.

Another reason why you shouldn’t compare yourself with others is that we are not the same. Each person has their own unique combination of strengths and weaknesses. Many of our differences can be changed to some extent and others can’t. The trick is working on the parts of yourself you can change and finding ways of dealing with the problems that stem from those things that you cannot (for instance I am very forgetful so I build a lot of redundancy into my life). The other trick is figuring out what you really want, just keep in mind you don’t have to want to the same things as everyone else, try to set goals and aim for things that work well with your talents and special preferences.

Country vs People

Would people in Germany today be better off if the Nazis won?
Would people in Japan be better off if Imperial Japan had won?
In both cases I think it very unlikely.
It is an easy mental shorthand to think of what a country “wants” by the actions of their government, or what is good for the country as being what the will of the current government is. But it is important to keep the people seperate from the country, of course the government has a large part to play in the lives of the people, but the desires of the elite in control are not the same thing as what makes life for the average citizen good, and certainly not the will of all of the people in a country.
What people anywhere need to flourish is safety and freedom, there are cultural differences, group differences, differences of all kinds, but in the end we are so much more the same than we are different.

Some Thoughts on Teaching

The longer I have taught, the more I agree with the sentiments of Socrates, that it is impossible to truly teach. If by teaching, one means the direct transference of knowledge from one person to another, it is an endeavor that is at best fruitless.

Knowledge cannot be transferred for two reasons. First, true learning comes from the inside. It must occur within the minds of the students themselves, as they gradually learn to make connections and wield theories in appropriate contexts, driven not just by extrinsic incentives but, more importantly, by curiosity. Second, true learning does not occur by plain duplication. If students memorize the definition of what a chair is, it does not allow them to understand the concept of the chair right away. Instead, to truly learn what a chair is, they have to see a thousand chairs in different shapes and forms, touch them, and then sit on them. The reasoning appears obvious for a chair example, but it works the same for all subjects. Direct transference of knowledge through memorization of facts and definitions may work well in the short term for exams, but only true learning benefits students for their whole lives.

Guiding true learning versus transferring knowledge is like training a chef versus a cook. A chef knows all the taste profiles of various ingredients, how to balance tastes, can improvise, can invent, can explain why they make the decisions they make. A cook follows recipes and orders, doesn’t understand the reason behind them, can under familiar circumstances produce good results, but if things change would be at a loss. A chef can always create no matter what situation they are in, while with powerful search engines and advancements in robotics and AI, a cook can be easily replaced.

It is of educators’ job to promote the chef-way of learning among students, although this is not nearly as easy as it seems. A common mistake is to interpret good test results as being good results for learning. To illustrate the difference, there is a thought experiment in computer science called the Chinese Room I start the school year with. In the experiment, a monolingual English speaker is placed in a room full of Chinese and English translation guidelines, Chinese writing is then slipped under his door to translate. Theoretically, with the help of the instructions, the English speaker would make the Chinese person believe him as a native Chinese speaker, while only algorithmically following instructions with no real understanding of the language. In the same way, it is possible on many assessments for students to get do well following simple memorized heuristics with close to zero actual understanding.

So what recipe have I found to try to make my students more like chefs than cooks? A combination of novelty, difficulty, iteration, and feedback.

Can you feel your teeth? Research shows that humans actively tune out things that remain the same for too long, which is the exact reason why you didn’t feel your teeth until it was brought up. We ignore things that don’t change, things that are boring to us, so a class design needs to have frequent novelty to keep the students engaged and intrinsically curious.

From novelty, difficulty naturally stems, but it is also essential in order to change the way students approach learning. Students are like water–they tend to follow whatever path that has the least resistance. In a game, you can build all the fancy systems you want, but players will never realize any of them if simple, familiar strategies can lead to success. At a school, if students can easily pass all tests with their strategy of memorization, most of them will just keep repeating it, no matter how hard you say “understanding is important.” It is not up to what educators say that change students’ behaviors, but to what methods of evaluation are designed. To encourage real understanding, educators need to create assessments that are difficult for students who use the default study mode. Only when students feel enough resistance using their old method, they may switch to a new one.

Difficulties, however, can be frustrating. In fact, the transition from old to the new way of learning is often tough for my students, and it is very tempting just to give up. One key to helping them is to let them understand that you do not wish to torture them arbitrarily, but instead, want them to improve and to reach their best potential. The best way of doing this is to care for the students genuinely, and your attitude will show through your actions. Another key is to provide enough resources for your students. This often means making yourself available to students, there is no short cut, training chefs is hard work for both the educator and the students. Despite the hardship of the process, I have found that any of those who try can become successful, and they almost universally look back at the experience as positive and transformative. Former students who visit me years later consistently surprise me with the degree to which they still understand.

Not just difficult, learning is also a long and slow process. It takes place with direction, trial, and error. No matter it is to learn painting, cooking, writing, coding, or anything else, there are general theories as a guide, but no one can read a book or hear a lecture and become a master. Instead, what is required is many trials and errors, where each time you get a little bit better, even if in the end you cannot explain why. Feedback during this process is critical because otherwise, you won’t learn from practice and just reinforce mistakes.

While a teacher can be a fount of knowledge, an educator can be more like a guide: illuminating the path, encouraging weary travelers to continue on, and perhaps most importantly, keeping them from the shortcuts that seem expedient, but ultimately rob the journey of its usefulness.

Why I Live in China

Things I’ve gotten used to living in China that make it hard to leave

-My students are an incredible cohort, many of them are deeply intellectually interested, they are honest, real, and they are very bright (my advanced class has an average SAT of 1510), I feel as if my teaching methods have largely developed to work well with the clay I have now and I am always afraid it wouldn’t port well to different clay…

-I can get anything I want, like anything off Taobao. Is Taobao better than Amazon? Let me put it this way, I bought a book once on Taobao, it came in Amazon packaging turns out it was from Amazon’s taobao store…

-I can bike anywhere and feel pretty safe (well so long as the air isn’t poison on that day, which is less and less often!), but taking a taxi across town through an app is extremely fast and cheap, going to my friend’s place 22km away is usually about 10 dollars or less. I have had countless days of just totally randomly exploring the cities and the nearby mountains without ever having to concern about my safety (other than the whole avoid cars thing which since there are so many people on bikes here is easier than most places).

-I can get any groceries delivered to me in 30 minutes, vegetables are so much cheaper, and groceries in general are much cheaper than they would be in most countries.
-My phone is all the money I ever need, carrying cash or cards just feels… like an unnecessary hindrance at this point.

-Medical costs are unfathomably lower than in the USA

-China’s free trade agreement with Australia means I get to be knee deep in delicious Australian meat!

-One problem I had in Japan and Korea is they are so very polite, but it doesn’t come off overly genuine… I have met countless warm genuine people in China, maybe not always so polite or orderly, but warm and real. I have more Chinese friends than foreign at this point though… (I don’t have many friends)

-It is very hard for me to stand for any significant period of time due to medical problems, I also can’t eat outside because… different medical problems! So I have a lot of dishes that need cleaning but that would require a lot of standing to clean. Luckily I can have a really nice person handle all my deliveries and clean my dishes and do my laundry for me who has worked with me for seven years and whom I have  a genuine friendship with(for instance once when I was sick and she thought I was sleeping(I felt too miserable to try to speak Chinese), she tucked me in).

-This is a small thing but I don’t have to wear a seatbelt, I know that is unsafe, I have even read some studies on the matter but… it isn’t in my nature to prioritize safety, and I always feel really resentful when I am forced to do things “for my own good” not saying this won’t eventually change but in general, not having to worry about “health and safety” regulations is a thing I do appreciate though I could understand how many others would be horrified.
-Of course there are a bunch of annoyances and downsides of living in China in general and Beijing in particular. But while they might be the focus of western media, to be honest they don’t effect day to day life all that much, some just require small adjustments don’t publicly discuss politics, stay inside with air filters on bad air days etc. Others you just deal with, the fact it is 30c indoors during the winter probably bugs me the most, oh and the umm internet intranet, the occasional cultural difference, having to deal with the odd flare up of nationalism. No place is perfect but for me the scales tip heavily in favor of living in China. I recognize that is partially my privilege in being who I am in China, but this isn’t a list of why it is great to be a random person in China, instead it is a list of why I find it so hard to leave even after this being my 8th year here.