A rhumbline is a direct heading to a point. On a map it's a straight line. It looks like the perfect way to get where you're going. On a globe, though, it may be the long way around. For example, New York and Madrid are about the same latitude. On a map, a course due east from New York is the shortest distance to Madrid. On the round face of the earth, though, a curved path (called the great circle route) passing over Greenland and the northern Atlantic is shorter. Try it with a string and a globe if you don't believe it. That's probably what a lot of the comments on this blog will be like. Random? Disconnected? Circular? Probably. But maybe they will lead to a point eventually.



Tuesday, October 11, 2011

Nobel Prize in Economics

I was reading today about the guys who won the Nobel Prize in Economics.  One made his chops with "rational expectation" theory.  The theory says that people's behavior is governed by what they expect to happen in the future, not what is happening now.  If someone expects to have a good job in the future, they spend now even if they don't make much money now.  If they aren't sure of their future income, they don't spend even if they have the money now. 

That explains a lot about the last couple of years.  No matter how much money the government throws at the economy nothing is going to get better until folks have confidence in the future.  Could it be that "austerity" could actually boost the economy more than stimulus spending?
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