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Sunday, 11 February 2018

EPL 5 : Tottenham 1 - 0 Arsenal

I actually watched this game.

I'm not sure what people are on about. That game was exciting in both halves. Although I didn't really like watching the second half.

I think this game is probably a classic example of "home team" advantage. While I'm not sure how many of the record attendance were home fans, obviously there were a lot.

The general theory is that teams which press a lot run out of steam towards the end. Tottenham did not. I think this can be attributed to the energising support and belief of the home support.

Alternative explanations for the sustained and unopposed press include:

  • the half time talk (it was a very even game in the first half and suddenly, woosh).
  • the timing of the substitutions helping recharge in exactly the right places.
  • they really didn't have to do as much as usual... Arsenal had absolutely no solutions to the press.
  • poor passing from Mkhitaryan and poor passing/focus by Iwobi and Lacazette when they came on making the press look better than it was.
The press was so good that Spurs could easily have absolutely thumped Arsenal. I'm not sure if 5-0 would be enough goals. It was absurd. But some people on the BBC live feed were saying this game was evidence that Cech was past it. Maybe he is, but this game didn't show that.

So, Spurs were playing very, very well. But what was going on with Arsenal? Were they awful?

Arsenal were plagued by offsides. Two of those were dubious. I think maybe the linesmen were over-correcting for Aubameyang having been offside for his goal against Everton because Lamela was offside but allowed to run at goal... and the non-Aubameyang offsides were offsidey. My commentators thought that Lacazette's headspace was wrong, but his very obvious offside absolutely broke up one of the few moments where Arsenal managed to get by the pressing. It should be considered disastrous. Giving the ball away was the problem created by Sanchez running no-where. Players being offside is the same thing, just done differently.

I've already mentioned that Mkhitaryan and Iwobi may have been making the press look better than it was. In the first half there were a couple of great opportunities where Dortmund would probably have gone on and done something. The problem was Mkihitaryan's passes went out. And when he was replaced by Iwobi, it seemed that Wenger had managed to substitute in two players who weren't quite up to speed. Now, I like Welbeck so that may come into it, but maybe he should have come on in the double sub instead of either Iwobi or Lacazette.

But let's be real here... the reason this game was a Spurs victory (vs draw) was also the same reason why this game wasn't a complete thumping. Missed chances and good goalkeeping.

Wilshere's saved shot was a thing of beauty by Lloris. Only save he had to make, I think. But right at the end?! Lacazette should have scored. Whether that was the standing/volley shot (echoing Son's miss at the other end) or the run (echoing Lamela's miss at the other end, but that chance was worse) one of those should have gone in. I'm not sure, but squaring the ball may have been an option as well... although perhaps the other guy (Aubameyang?) was a bit far away.

Another way of looking at this game is as a classic example of why Giroud scored so many goals as a substitute. Arsenal aren't as fit as Spurs (or even Liverpool) so pressing isn't something that can work for them. And if a press does get through their defensive efforts (as in the second half), really all Arsenal can do is throw on some more versions of the same speedy striker archetype. When Giroud was around, you could lump the ball up and then bring it into the middle. You could try and put it on Giroud's head (which Arsenal weren't that great at even though Giroud puts headers away like nobody's business) or you could rely on Giroud to create short sharp exchanges to put someone else in. Plan B today was Plan A, except this time on the wings rather than through the middle. And it only worked right at the end when suddenly Arsenal were getting through the press.

As a final thought... poor Hector Bellerin. Did nothing wrong and seemed to be one of the best players on the pitch. But he's probably going to get pilloried for having managed a quality performance in the face of constant pressure on his side. And, yes, the goal did come from his side but it didn't fall on Bellerin's head.

Sunday, 4 February 2018

Trickle Down Economics?

What is Trickle-Down Economics?

Trickle-Down Economics is a term used to describe a political philosophy based on the validity, general applicability and desirability of the trickle-down effect. It also believes the effect is a necessary feature of the financial and economic activities of the wealth classes.

What is the Trickle-Down Effect?

Since trickle down has nothing to do with economics and everything to do with politics it's pretty much what it says on the tin. Trickle Down is a metaphor. And what it tries to evoke is the idea wealth will trickle-down to the under-privileged. It's not just me saying this, here's a quote from a reading set in Economics 343 (East Asian Growth and Trade):
Concerns are arising that South Korea’s potential for economic growth is plummeting. These concerns are followed by arguments that policies that emphasised growth were, in reality, focused on the benefits of the few and the wealthy, and therefore resulted in polarisation and widened income inequality. A fundamental doubt has been cast upon the so-called trickle-down effect; no longer will the increased incomes of large corporations and high-income earners raise the incomes of small and medium enterprises (SMEs) and medium-to-low income earners and, eventually, positively influence the overall growth of the economy. [Chung, Chul, “Why Doesn’t the Trickle-Down Effect apply to Korea?” EAF Policy Debates №33, 1 September 2015]
The thing is, Chung then goes on to say that the Trick Down Effect doesn't appear to exist in general and  proposes policies designed to get it working. Is he a trickle down economist? Is he evidence that trickle down economics is a real school in economics?

On Economic "Schools"

It doesn't take much thought to describe why Chung isn't evidence that Trickle Down is a school of economics. The reason is that the schools you might hear about (e.g. Austrian. Keynesian economics) don't actually mean anything. They are all inventions convenient to armchair economics and politics (which might be described as the profession dedicated to implementing the "insights" or armchair economics).

To a certain extent, the schools so beloved of the armchair represent stages of development in economic thought. It's a bit like how we might talk about the Medieval or Elizabethan eras except no-one who describes themselves as a Medievalist advocates using only the insights of Medieval thinkers. The very idea of that probably strikes you as being absurd. And this is probably the reason why these "schools" don't come up in textbooks, in classrooms or even in lectures except as footnotes. Economics is a discipline and just as how physics has synthesised the work of Newton, Maxwell and Planck Economics as a field today is product of all the work before it.

In this sense, Trickle Down Economics is exactly like all the other schools because none of them are part of the discipline.

Assessing Trickle Down Economics

In my definition, I did two things. Firstly, I gave the political philosophy three critical parts. Secondly, I said its adherents hold that the Trickle Down Effect is a necessary feature of the activities of the wealthy. That's in there because it's what I think characterises the position. Really it's the same thing as "generally applicable" but I distinguish the two on the basis that the three parts are what I perceive to the be fundamental reasoning underlying Trickle Down policies. Yes, adherents think all activities have it anyway, but when they advance policies they're saying that policy isn't going to change that. If there's some new stuff that happens as a result of the policy, the trickle down effect will be seen there too. That kind of idea. Hence, to assess the philosophy we'll look at the three critical parts. They're the functional parts.

(Also, "generally applicable" is a lower burden so I feel if I am able to demonstrate that there's a problem with it, I am being fairer to the adherents, who are few and far between, so discredited is their ideology.)

Is the Trickle Down Effect Desirable?

Obviously, yes.

If it really was true that the financial successes of the privilege caused improvements in the material and emotional wellbeing of the under-privileged it would definitely be a good thing. It would likewise be true that I'd happily stab myself with needles nine times daily if it could be shown this would certainly benefit the downtrodden. Wait, what?

While that last statement seems ridiculous it's actually quite important. Would I kill myself if it would for sure help everyone else out? What kind of harms are sufferable in the name of achieving the benefits? I have no great fear of needles. It would not be too much hassle, I think. Eventually I'd figure out a pain minimising method. The way I wrote it, I wouldn't even need to pierce the skin actually. But I wouldn't kill myself. And nor should I be expected to. The point is, while the trickle down effect might be desirable, that fact alone doesn't help us decide what to do.

Is the Trickle Down Effect Generally Applicable? Is it Valid?

In the simple sense, general applicability asks... can we use the idea of the trickle down effect to motivate actual policy? And can we do that in general circumstances? Or does the trickle down effect apply only in specific situations?

Answering those questions, I feel, is impossible without wondering about the Effect's validity. Hence, is seeking to create the trickle down effect an appropriate idea in general? And it has to be in general, because believers in "Trickle Down Economics" (the political philosophy) apply their beliefs in general.

Obviously, Chung thinks that the trickle down effect can be generated out of policy settings. I find his language in the conclusion somewhat confusing. To me, it seems that he's talking about extracting trickle down benefits from Small and Medium Enterprises (SMEs). That's not really what trickle down economics is about because it's really just trying to solve inequality problems by making policy for the middle/comfortable classes (e.g. fees free tertiary education, extended paid parental leave). Trickle Down is all about targeting interventions for the wealth classes: the tip top.
Following the 2008 global financial crisis, countries throughout the world are placing a priority on solving the problems of job creation and income inequality. In particular, there is emphasis on the importance of SMEs, which create the majority of jobs. this type of action, however, seems to dispute the idea that the trickle-down effect is no longer valid.
When we think about applying trickle down we need to think about the causal pathways... how the process results in benefits lower down. It may, in fact, be possible to do this.

However, let's think about how the world works for a second. While it is true that long term ("tomorrow's") growth relies on investment, it is also true that investment decisions reflect actions and circumstances today. If economics tells us these two things, what it is necessarily telling us is that any interventions targeted at the underprivileged which act through the wealth classes will have a delayed impact. Investment is about growth potential and insofar as it's normally related to technology private investment will not directly involve the less educated. Due to the correspondence of education level and income this means we'll side step the people we're trying to help foremost. So, yeah, the short term impacts of private investment spending probably don't represent the trickle down effect in action.

I'm also part of the camp which argues that inequality in and of itself suppresses sustainable growth. Of course, I am also a school of thought which believes one of the motivations of post-industrial imperialism ("new imperialism") was market seeking. If we want to argue that ISDS is about creating conditions of trust in which business can operate, the Victorians had a much simpler idea: let's take over and then obviously the laws will be the ones we know we can sell under. The point is that massive expansion of what is possible (through investment) ultimately requires consumers. This is the problem with inequality in a nutshell. And today there are no more new groups of consumers to find. For investment to be worth it, there has to be a market.  In this sense, we need to be careful about the length of the delay.

(The "in concert" influences of different spending profiles (crudely, rich, poor and middle class expenditure themes) are also recognised as being important.)

Common sense suggests that aiming left when you want to throw right is a bad idea. Economic reasoning suggests that eventually the ball will end up on the right side of the court. But it also suggests we have to be careful about how long it takes to do that. In this sense, the trickle down effect is not generally applicable because it is only in specific situations where it's an appropriate solution to the problems, i.e. inequality, poverty and underprivilege. In the general case, the logic suggests that seeking the trickle down effect is self-neutralising or worse. It might pull some people up but it also pushes everyone above them further away.

Further Thoughts on the Validity Angle

This could spend a lot of time talking about how the empirical evidence says the Trickle Down effect is not generally observed. We could do that. But we won't. It's obvious and there's not much to say. It's also what we expected from the above. We're more interested in the question of whether or not it's valid to seek the trickle down effect in the specific situations where we think it can work. The way to do that is through opportunity cost. The next best opportunity foregone. Firstly, why think via opportunity cost? Secondly, what does it tell us?

To the first question, governments don't have unlimited resources. Certainly, they do have enough resources in the developed world that it's extremely pedantic to criticise discussions calling for more absolute funding of, say, the police or healthcare or education as not taking into account the tradeoffs the government has to make. Factoring every budget line into every discussion is inhibiting. And it's downright unhelpful when there is enough budget to treat discussions as being about realignments of priorities. It's not a poor man being asked to spend more money on bread when he already spends everything on, say, his weekly sack of potatoes. But the tradeoffs are there, which means we have to ask the question: what works best for the objectives of the government?

How to engage with this question is exactly why I decided to write this post. A while ago now I was talking to this dude where I happened to say something very similar to this statement I accidentally came across by someone on Reddit:
It's not subjective at all, it's generally trivial to consider if a piece of legislation is objectively good or bad as long as there is an agreed framework for objectives.
Obviously you'll notice this is a kind of subjectivity in that there are lots of different frameworks that we can choose to use, but once you're in a framework then, as our Reddit friend put it, it's often trivial. And we've already seen that from the perspective of inequality, seeking the trickle down effect generally is not a great plan. But I really have to wonder if it's even the best option in the situations where we think it might work (whatever those are).

This seems like a complicated question to answer. It's probably the sort of thing Treasury, the Reserve Bank, government ministries, local government, academics and even think tanks spend a lot of time on. But I feel like we're going to have a better potato harvest if actually sow potato seeds instead of tulip bulbs, don't you?

Conclusions? 

If you see anyone seriously advancing "Trickle Down Economics" laugh at them.

The Trickle Down Effect is hard to find, hard to reach and probably not worth the effort. Scepticism of everything is a useful maxim, but any policy which suggests the way out of inequality is through creating or stimulating the trickle down effect* deserves a particularly sceptical reception.





*Which is to be distinguished from advocating Trickle Down Economics in the sense people who believe in that believe the trickle down effect to always follow.

Saturday, 3 February 2018

Citizen Thiel

Peter Thiel's citizenship is back in the news again. In case you forgot, the basic idea is this:

  • Peter Thiel got rich.
  • Peter Thiel applied for citizenship on the basis of important contributions to society at large (through both investment and philanthropy) and the prospect of more (include promotional benefits).
  • Peter Thiel was reliant on the legislation's allowing the Minister discretion.
  • Peter Thiel met with several big wigs in the previous government, including John Key and Bill English (the big boss and his deputy).
  • Citizen Thiel was created.
  • Citizen Thiel was discovered.
  • Citizen Thiel turns out to have been in the country for less than a year in total, and probably less than 5 months.

I don't really think Thiel works as generalisable example. His story seems extraordinarily specific. Some of the reasons why he's controversial relate to things he does politically. We need to make sure we don't go anywhere near that rabbit hole. Luckily we spend far more on a single narrative, "Billionaires Buying Citizenship".

When you look at what Thiel actually did is there a case for his citizenship? Was what he was doing really that impressive? Did he do things that should make the Minister think, "Ah, I have this discretionary power?" Probably not, no.

But what if he did more?

Citizenship is weird. A lot of people seem to treat it as some sort of hallowed and sacred Thing. I'm not sure it is.

Citizenship strikes me as two things:

  1. A legal relationship identifying a person as having rights and responsibilities towards a legal entity. This relationship comes from a number of different sources.
  2. A legal recognition of an emotional relationship.
It doesn't cost me anything to know that people I completely despise are NZ citizens. Based on his support for Trump's immigration bans, Citizen Thiel is definitely not my favourite person. But I feel much more disappointed when I read things by, say, Andrew Little or Winston Peters or Margaret Mutu espousing similarly (but far from identical) anti-immigration sentiments. Indeed, Peters is such a laughing stock in this regard that I give him a bit of a mental pass... but that's my problem, I remember a New Zealand where saying the things that Little's Labour did made you a laughing stock. That's the country I grew up in and that is what feels betrayed.

Legally there is no real difference between Citizens Little, Peters, Mutu and Thiel but Thiel was born in Germany and is very American. What he says is never going to feel like a betrayal. It can't. He doesn't come from NZ's cultural milieu he just subtly modifies it by his membership. I both come from it and modify it. And that sense of betrayal means nothing. And it shouldn't. All it represents is a motivation to contest these narratives I loathe. That's it. 

We can grant citizenship of New Zealand to as many people as we like. It doesn't really cost us anything. I mean, sure, if we suddenly decided to pay the dole out to 7 billion people we'd have problems but no-one's talking about these kinds of numbers or that type of policy. And anyway both New Zealand and Ireland already have hundreds of thousands (or even more) citizens who don't live in their respective countries.* No worries. Just having citizenship doesn't mean anything fiscally.

Looking at Thiel this way suggests that maybe the government should have extorted some more stuff out of him. I mean, what's the rational case against negotiating citizenship? If our representatives can decide to spend billions of dollars on roads no worries, surely our government is also able to be our agent in deciding whether or not a grant of citizenship is advantageous for us? Right? That's what it's meant to do. Act in our best interest on the available information.

And the emotional case? That mutually beneficial grants of citizenship somehow cheapens our citizenship? I mean, if your sense of self is really challenged by this, why are you okay with my having NZ citizenship? I mean, it's a complete fluke that I was born in NZ to parents who have NZ citizenship. I did nothing for it. I have you nothing for it. It just suddenly obtained it. Doesn't make your citizenship any less meaningful does it? How can it? It's a personal quality that depends on your person. If that's challenged by someone else, it's not the system that requires introspection but you. I'm called Harry. Other people are called Harry too. That's life.

What if we argued that countries have an emotional investment in their citizens? I mean, there are treason laws, right? People being given citizenship without any intangible connection to New Zealand is problematic in this light. The country itself has a brand to protect.

I'm not sure negotiated citizenship betrays that. It's just a different manifestation of the brand. It's not the human face directly. It's not embracing the loyal, the honest, the believers or the home-callers. It's saying, "This person has acted in our interests. We reward that." A half decent rebuttal to what is, at best, a half decent argument, I think. There are many kinds of emotional relationship.

Citizen Thiel represent a problem. Citizen Thiel is an outcome of mishandled negotiations. But the idea of Citizen Thiel is something I'm comfortable with. 

I'd absolutely prefer we give citizenship to people who call NZ home. I would. But if we can make those people who do better off with the odd negotiated grant? I'm going to say we shouldn't take that option off the table. Who does that benefit? Not us.




* I have no issue with Ireland's citizenship laws. Me and them? We have a simpatico relationship. In fact, I very nearly qualify for Irish citizenship. As far as I can tell, if my grandmother had obtained it a few years earlier, I would. Possibly my mother would have had to claim it also, but it's been a while since I looked at this and I've forgotten what I decided the exact issue was. (For reference, citizenship rules are terribly complicated, especially British citizenship.)

Friday, 2 February 2018

EPL Four... Hundred and Thirty Million Pounds

I remember watching a game where Arsenal were, I think, losing. They sent Olivier Giroud on. He duly scores the equaliser (winner?). My remark? He does not get enough respect.

Giroud spent several years being slammed from all quarters. By pundits. By fans. By anyone who had the time write an opinion. The main objection was that, "He's not good enough to make you win the League." Sometimes you'd get extra commentary like, "Too slow" or "You need a twenty a season man, he's not a twenty a season striker". Often Giroud would be linked to Arsenal's qualities, "Not enough ambition."

For reference Giroud scored at least 15 goals every season he was at Arsenal until this last one. Having played 26 games (45.4 the average he played in five full seasons) he managed 7 goals. I believe most of those were from the bench. A large number of Giroud's goals came from his head. It is my firm belief that if you put the ball on his head, Giroud will draw a save or put it in the back of the net. Arsenal tended to not do this in the last two seasons.

One game last season was particularly mental. Giroud got two assists and a goal. He pulled Arsenal up from 3-1 down to 3-3, scoring in added time. Do you know what they said? "What's he celebrating for? There's a minute left. Go win the game." Absurd. Well, that's what they said then, anyway. Last month Alexis Sanchez was suddenly the hero of that match. Nonsense.

Yep. Giroud definitely didn't get enough respect.

Arsenal just sold Giroud to Chelsea.

I like Giroud and loathe Chelsea, so I guess the appropriate comment here is that Giroud still doesn't get enough respect. But, in some ways, I suppose this was a sign of deep respect for him. Giroud needs game time and he wasn't getting it at Arsenal. He could've moved elsewhere but his family (apparently) wanted to stay in London. Giroud gets to move to a sizeable club where he won't be asked to be the guy, but will get to be an important cog in the machine. And it's probably better money than moving to, say, Crystal Palace or West Ham.

To be honest, I'm surprised Chelsea didn't want a loan deal. I would have preferred that. Surely it would be better for Arsenal too? As I said in EPL Take One...
[Olivier Giroud] is the only Arsenal player at the moment who actually changes the machine. [...] Losing Giroud would be a big problem for Arsenal. Losing Sanchez would require using probably worse, but not bad, alternatives to him that are already in the team.
I'm disappointed to see that Giroud is gone. I am not sure it was such a good idea to get rid of your Plan B and bring in a new version of your Plan A... Alexandre Lacazette and Pierre-Emerick Aubameyang. This seems to be the common thread... although most people saying this are ex-Giroud sceptics who are suddenly his biggest fan. Funny that. It's like the Sanchez game hero thing all over again.

People have been scratching their heads at what exactly Arsenal's plan here is. I guess I fall on the side of the fence which says there isn't a plan.

Lacazette is not as bad as people suddenly want him to be. He does his job. The problem is that his job was threefold. Firstly, score goals. Secondly, fall in deeper to get the ball to bring it up to the strike (never mind that the striker isn't anywhere to be found on account of how Lacazette is the striker himself). Thirdly, what he does at point two but this time he's doing it specifically because Sanchez lost the ball. People are judging Lacazette on that first task. And, hey, he was brought in for that. The problem is that Lacazette was not brought on to do either of the other two things.

If you look at Lacazette this way what might be happening is that Aubameyang is going to be Lacazette, Lacazette is going to be Sanchez, Oezil will be Oezil and Henrikh Mkhitaryan will slot in somewhere. That kind of makes sense? It doesn't explain what Mkhitaryan is meant to do but you can see why they might want Aubameyang and Lacazette now.

Another idea is that Aubameyang is being brought in to replace Lacazette. Well, Aubameyang is probably better but he's from a different league and a team which, well, I described them relative to Arsenal before:
`When Arsenal don't play Giroud they play in three ways. They kick balls into the air for no-one to head, they run around and create space and win comfortably or they run around and make you wonder how Bayern and Dortmund never seem to run out of space.
A third idea is that they're being brought in to play as a front two. Apparently Wenger's never done that before so probably not, eh? Could make for a possible Plan B, though. Use substitutions to play a different formation but with similar players. But, yeah, bottom of the barrel thinking that.

When we look at Arsenal's season thus far it's clear something has gone wrong. Personally, I think some of it was Sanchez. I personally don't think it is a coincidence that Oezil suddenly signs a new contract basically as soon as Sanchez was gone. Aubameyang is reckoned to be somewhat in the same vein. If so, history suggests the way he'll lose the ball is in missed shots. That could be better. But there's no way we can lay the away game form at Sanchez's door exclusively or even majorly. There's something very wrong there and I don't know what it is. Yes, getting a defensive midfielder would help but Arsenal's needed one for a long time. Maybe Xhaka's form is the issue...

I've done predictions the other times I've been here but I'm not sure I see the point this time. Manchester City will win. Manchester United are up and down but ultimately more consistent than Chelsea, Tottenham and Liverpool. Arsenal are able to go toe to toe with the big boys, but otherwise look like a relegation team... reliant on home form. If things go their way with the inconsistency of the three teams above them, they can make the top four... but only if their "six pointer" results go their way. The table is most likely going to retain its present character at the top, hence:

City
United
Chelsea/Liverpool
Liverpool/Chelsea
Spurs
Arsenal

I could say something about the money that's being spent but what's there to say? The revenues of these clubs are in some cases pretty good but in other respects they show the same market discipline problems associated with zombie firms. They might be zombie firms. But I think the bigger issue is that the transfer market is seen as the way to resolve issues. Here's a novel idea: why don't you try and make do with what you've got? Better thyself. And trade-up if you have to. And, no, one bad game by some player isn't having to.