Archive for the ‘Economy’ Category

Calculus Cartoon

December 15, 2009 1 comment

Ted Rall’s latest cartoon (above) is the rare political cartoon with an embedded calculus lesson. We might well wonder, as Rall does, why we are so excited by the news that unemployment continues to increase, only at a slower rate.

Rates of change are exactly what calculus allows us to discuss precisely. Rather than being some forbidden subject, calculus is simply the language to quantify and discuss such matters. But even without studying (or remembering) calculus, we all understand the basic issues, at least qualitatively.

Given a quantity we wish to measure, like the number of people unemployed, or how far we have traveled from home, the derivative tells us how quickly this quantity is changing (increase or decrease in unemployment figures per month; increase or decrease in distance from home per hour, otherwise known as velocity). And the second derivative, which is what has been in the news lately with regard to unemployment figures, measures how quickly that first rate of change is changing. This is indeed a subtle notion, but one we talk about all the time. In the unemployment example, it is the rate at which the change in unemployment is going up or down. Thus, unemployment may still be increasing this month, but perhaps it is increasing more slowly than it has increased in recent months. That slower rate of increase is measured by the second derivative, and its slowing means the second derivative is negative. In the example of leaving home, we might be driving away, but the velocity at which we are driving is decreasing — perhaps we braked but haven’t yet come to a stop. This means the second derivative of the distance from home is negative. And we have a familiar name for that second derivative. Acceleration. So acceleration is negative when the velocity is going down, even though the velocity may still be large and we may still be moving rapidly away from home. Just less rapidly.

So that’s that. Simple enough ideas, but fundamental.

By the way, let’s say I desperately wanted to get home for dinner, but I had taken a wrong turn and found myself entering the freeway in the wrong direction, taking me farther away from home. I had no choice but to drive to the next exit, another five miles away. Alas, a couple of miles down the road, traffic slowed because of a car stuck on the side of the road. I would have to brake gently and begin to drive 20 mph rather than 55 mph. Thus, the rate at which my distance from home is increasing would have begun to decrease. I would continue to get farther from home, that’s for sure, but at a slower speed. Is this good news?

Categories: Cartoons, Economy, Math

Caritas in Veritate

July 13, 2009 Leave a comment
Signing the encyclical at the Vatican

Signing the encyclical at the Vatican

Last Tuesday, Pope Benedict XVI came out with his third encyclical since assuming the papacy in 2005. The first was on Christian love; the second on Christian hope. The latest is on integral human development in charity and truth.

I don’t generally make it a habit to read papal writings, but I have read a little bit of Pope Benedict’s, and I have found them to be intelligent and well reasoned. Of course, I start from different hypotheses, and I am likely to reach different conclusions, but I still have an appreciation for Benedict. You may recall that his lecture at the University of Regensburg in September 2006 led to a controversy about his mis-characterizing Islam. But you probably haven’t read the lecture itself. You might find it of interest. Have a look.

On many issues, the Pope is what we would call conservative. But to identify his views with those of conservatives as the term is generally understood in the US would be to simplify his thinking vastly. His latest encyclical makes this evident. Indeed, as E.J. Dionne (yet another of my college classmates) pointed out in his Washington Post column last Wednesday, “While American conservatives, including most Catholics in their ranks, see capitalism in an almost entirely positive light, Benedict — following a long tradition of church teaching — is more skeptical of a system rooted in materialist values. In that sense, he is to the left of his American flock.”

Ross Douthat makes a similar point in his NYT column today: “The pope is not a Democrat or a Republican, and his vision doesn’t fit the normal categories of American politics. … It represents a kind of left-right fusionism with little traction in American politics.”

I have read only part of the encyclical so far, but I plan to keep reading. To give you a taste, I quote below the very long paragraph that forms Section 21 and the second of the two paragraphs that form Section 25.
Read more…

Categories: Economy, Politics, Religion, Society

Nantucket Slump

July 12, 2009 Leave a comment


The NYT had a feature article on the front page last Wednesday with the headline, “In Summer Hideaway for the Rich, Slump Is Visiting, Too.” I instinctively knew the article to follow was about Nantucket. Where else? The Hamptons, maybe, but they wouldn’t be described as a hideaway. Given our interest in, and attachment to, Nantucket, I jumped to the text. (See also the accompanying slide show, from which the above photo is taken.)

I wrote about Nantucket on the second day of this blog’s existence. We were just back from our third annual Labor Day visit. Still under its spell, I was in the midst of my annual fantasy about moving there full time. Well, that’s not going to happen, but if we were ever serious, the article makes clear that this would be a good time to buy our Nantucket home.

We’re planning to visit again in September, arriving as usual on Labor Day. The past three years, the timing of our arrival was connected to Joel’s annual move into new housing in Boston, just before school started. But this year he won’t be in Boston. So we could go any time. Or not at all. We intend to stick to our usual schedule, though. Our sense is that Labor Day week is a perfect time. The summer residents depart as we arrive, but the restaurants and stores aren’t shut down yet, so everything is open and the island is relatively quiet. Plus, the weather is good. Or at least we’ve been lucky that it has been for the past three years.

One thing about Nantucket — in contrast to nearby Martha’s Vineyard, which has its share of wealthy people, but from a diverse range of professions — the Nantucket housing boom in recent years has been closely associated with people in finance, hedge funds, and so on. It’s less accessible by ferry than the Vineyard, but easily reached by private jet from New York. And its airport, at least until recently, was the second busiest in Massachusetts after Logan, thanks largely to that private airplane traffic. The NYT article touches on this. It’s not obvious that we’re meant to be at such a place. And maybe we’re not. But we love it.

Then again, maybe the tide is changing. The lead headline at the NYT website tonight, from tomorrow’s paper, is a report that Goldman Sachs is expected to announce on Tuesday a profit of more than $2 billion for the last quarter. Things could be picking up.

Categories: Economy, Travel

Olive Garden Again

April 5, 2009 Leave a comment
Applebee's, Times Square, New York

Applebee's, Times Square, New York

In a post in late January, I commented on a WSJ article by their restaurant writer Raymond Sokolov in which he compared Olive Garden to the famed Chicago Italian restaurant Spiaggia. As I noted in the earlier post, Olive Garden is one of the six national chains owned by Darden Restaurants, along with Red Lobster, Longhorn Steakhouse, Bahama Breeze, The Capital Grille, and Seasons 52. It remains a mystery to me why Olive Garden and Red Lobster, the two we know best, are so successful. I’m happy enough to eat at them, but I’m probably happier elsewhere.

With this as background, I turn to the topic at hand, which is an article by Andrew Martin on the front page of yesterday’s NYT business section on the difficulty facing restaurant chains now due to the combination of overbuilding and the recession. He writes:

During a decade of easy credit and loose spending, American businesses built too many cars, houses, stores and factories. It turns out the country built too many restaurants, too.

Now consumers are cutting back, and dining out is among the casualties. Finer restaurant chains have been hit hard, and so have the casual sit-down places that flooded suburban shopping centers and tourist districts across the country, aimed straight at middle American tastes.

A few chains have boarded up already. Many others are going into survival mode, trying to renegotiate their loans, cutting staff, offering bargains to customers and closing less profitable restaurants. Analysts predict thousands more restaurants could close in the next year or two.

The very next part of the article is what got my attention:

The pain is evident even amid the neon glitz of Times Square, which draws big crowds of tourists used to eating at places like Red Lobster and Applebee’s.

Zane Tankel opened an Applebee’s franchise there eight years ago. At the time, he said his nearest real competition, an Olive Garden, was about six blocks away.

Now, Mr. Tankel could sit in his restaurant and throw rocks through the windows of a half-dozen competitors, including ESPN Zone, Dave & Buster’s, Chevys and Dallas BBQ.

“We’ll see some weeding out,” he said one recent lunch hour, sitting in a near-empty Applebee’s dining room overlooking 42nd Street. Noting a restaurant above him and another across the street, he said, “One of the three of us is not going to be here.”

So in midtown Manhattan, national chain restaurants have sprouted to meet the needs of “tourists used to eating at places like Red Lobster and Applebee’s.” Can this really be true, that tourists come to Manhattan and seek out Red Lobster for dinner? I can understand the point. I must admit that I have eaten more than once at McDonald’s in Paris. (For good reason, of course.) I appreciate predictability and reliability as much as the next person. But really, with the dizzying array of Italian restaurants in the city, I just can’t imagine why one would go to an Olive Garden.

By the way, later in the article, we learn: “Of course, there are some exceptions to the industry’s malaise, even in the casual dining sector. Darden Restaurants, which owns Olive Garden and Red Lobster, recently announced a better-than-expected outlook for the coming year. In the most recent quarter, same-store sales dropped 3 percent, compared with a 6 percent decline for the rest of the casual dining industry.”

Categories: Economy, Restaurants