Pictures versus Words

We regularly emphasise to our research students the importance of expressing ideas in visual terms, rather than just relying on text-based explanations. David McWilliams has produced an excellent example here.

37 thoughts on “Pictures versus Words”

  1. That’s absolutely brilliant from McWilliams & an accurate depiction of the underlying politics. (Emphasis on the ‘lying’.)

    Timely thread Philip because I’ve got a superb audio-visual explainer for you all describing how the macro economy of a fiat currency system works. It uses the US as an example, but with a few minor tweeks on the ‘government’ sector description, is applicable to any fiat system, including the Euro & indeed describes operationally how things already happen in most respects.

    As McWilliams implies, the Eurozone needs to decide if we’re going to have a true partnership or carry on with the ‘game theory’ mercantilist race to the bottom.

    The AV presentation (in 3 parts) also describes the MMT Job Guarantee which could be funded by a re-mandated ECB at no ‘cost’ or ‘debt’ to anyone to restore growth & prosperity in a matter of years not decades.

    http://econviz.org/how-the-economy-works-visual-tutorial/

  2. I think we are looking at a failed Industrial strategy withen Germany in particular – much of its exports simply don’t work in a world of $100+ oil.

    Because Germany is not sovergin either it must burn / reduce consumption withen other Euro countries so as to maintain a low cost for its failed capital / export endeavours and hope Asia begins to buy its goods.

    The fact there is no French style Nuclear policey to slow down its coal depletion means it will slowly destroy all wealth withen Europe to maintain a impossible dream of mercantilism.
    Poland is also travelling towards coal importation withen a few decades which will have dramatic results.

    The modern market state produces zero or negative sum economics –
    Its a pointless gerbil wheel of running to stand still but eventually even Gerbils get tired.

  3. An now – aw roight now – no way are doze punks real north dub punks … dat lot never crossed the Liffey in dere lives … bunch a bleed1n upper middle klas garlic-schewin south dubs ….. lookit da kut o dem … dere a disgrase to the name o punk … eKonomicks bunch o pozzers …

  4. It brings to mind Edward Tufte’s warning that “Powerpoint Makes You Stupid”. If powerpoint makes one stupid, what can modern video techniques and a good cartoon artist manage? I think that the quality of presentation in this video is enough to make even poorly thought-out, superficially appealing economic analysis appear highly plausible. The video certainly provides good entertainment value and the cartoonist is clever and talented.

  5. @ Gregory Connor

    Would you bother to enlighten us on the specific flawes in DmcW’s ‘poorly thought out, superficially appealing analysis’?

  6. I don’t think there’s going to be a bubble in EZ equities. The market will just need more ECB junk after a while. It’s hard to see any growth independent of central bank QE. Same in the US. The CBs will prop up the stock markets for as long as it takes and that could be until Limerick win the hurling all Ireland again.

    DMc has a real Dublin accent as well. Not Europeen.

  7. @Gregory Connor
    Your post comes across as snide and mean-spirited. Seems like you can’t find anything substantial to criticise so you criticise the form obliquely. Guilt by association. DMW for all his faults went ahead and created something. Are you just going to cavil from the sidelines or make something of your own?

    PS: Important to acknowledge David Harvey and RSA Animate because that is undoubtedly where DMW got the idea.

  8. I was just saying that it COULD make that kind of analysis plausible I did not say that it DID make that kind of analysis plausible. Just that, like overdone powerpoint, it can be treacherous to replace careful analysis with colourful fast-moving presentation consisting of cute cartoons. It is risky in terms of what it MIGHT make plausible.

  9. @ All

    I noted at the outset the careful formulation of the covering commentary to this thread. The animation was first class, the voice over excellent and the content up to DMW’s usual standard.

  10. @ Gregory C

    ‘I was just saying that it COULD make that kind of analysis plausible I did not say that it DID make that kind of analysis plausible.’

    I am not in the slightest being picky here Gregory but what are you trying to say without actually saying it? Plausable or Inplausable

    My son was shown this as an example of capital flows in demand/supply study during his Year 11 Economics class – this the target audience for this genre/medium/form he has choosen to present his analysis.

    Is your point that you cannot inform an audience if you happen to stimulate them at the same time?

    Surely, regardless of the form of the presentation it is the audiences abilty to critically analyse the information laid before them, as it relates to them, interrogate the presenter (or the ideas presented) if, as mentioned above in an educational environment they have the opportunity to.

    A lot more entertaining than a powerpoint and dynamically informing – questions/comments to the presenter afterwards is about the only difference.

    PPPs so 1990’s 🙂

  11. Good work!

    Some or maybe many here are familiar with Hans Rosling, a professor of international health at the Karolinska Institutet, the renowned medical university in Stockholm.

    In 2005, the Gapminder Foundation was founded by Hans Rosling  and his two children and they developed the Trendalyzer software that unveils the beauty of statistical time series by converting boring numbers into enjoyable, animated and interactive graphics.

    It was acquired by Google in 2007.

    200 Countries, 200 Years, 4 Minutes: Instead of studying history one year at the university, you can watch this video for less than five minutes. It involved plotting 120,000 numbers:

    http://youtu.be/jbkSRLYSojo

    – – Downloaded over 5m times.

  12. The Hans Rosling video is inspiring. If you close your eyes and listen to the text, it still makes good sense and the arguments seem well-founded. The David McWilliams video is also clever and fun and really enjoyable to watch. However, if you close your eyes while listening to it, the arguments seem pretty weak and not well-supported. So that is a difference. If Einstein had used powerpoint, he would still be a genius, but fancy powerpoint (and video even more so) can seem pretty weak arguments appear better than they really are on careful reflection.

  13. @ Gregory Connor

    Don’t mean to troll here but could you be any more specific?

    8.13am sounds prejudiced without any actual evidence to back the statement you make of DmcW’s weaknesss of arguement up.

  14. @Ordinary Man

    Sorry I do not have time for that this morning but it is a well-founded question. Here is one — the Draghi LTRO policy is a good idea which has helped a lot to prevent an even worse outcome, the video depicts it as a pile of garbage designed to pour taxpayer money into the pockets of rich bankers. But clever pictures of banks as a overweight, over-dressed man with a tophat, and Italian, Spanish sovereign bonds as piles of stinking garbage. So if you like that kind of depiction it does raise a laugh for a minute. I tend to prefer thinking deeply about the policy problem as opposed to quick emotional responses.

  15. @Gregory Connor
    “The Hans Rosling video is inspiring. If you close your eyes and listen to the text, it still makes good sense and the arguments seem well-founded. The David McWilliams video is also clever and fun and really enjoyable to watch. However, if you close your eyes while listening to it, the arguments seem pretty weak and not well-supported.”

    Funny I thought the opposite while I watched it – because Hans Rosling clip was based on facts and figures which I have doubts existed to that extent in 1810 – maybe I’m wrong I just feel it is more speculative. Then accepting the figures it doesn’t really need complex animation to visualise. The conclusions are obvious!
    DMWs on the other hand clarifies complex interactions and adds a plausible narrative to present European economic power games.

    I don’t often understand, let alone agree with Dorks argumants but I found this comment on some thread – rather like the DMW piece raised some disturbing echoes, and primeval fears of machiavellian manipulations:
    Dork: “..this is a political coup d’etat using the mechanism of the euros flaws as a battering ram against once semi sovergin units.”

    It worries me that I think I understand something Dork says

  16. I agree 100% with Gregory O’Connor, though I did find the video compelling. I knew to begin with though that I was not going to be informed but rather polemically provoked.

    DMcW has groomed his celebrity status by appealing to soft caricatures of Germans, Greeks etc. and of course Bankers.

    It may indeed be that LTRO is designed to prop up banks and governments. As an ordinary citizen/taxpayer I want banks and governments to survive and prosper.

    It is clear that the whole situation is very complex and therefore lends itself to celebrity economists portraying it almost any way they wish to twist the story. Others talk of tearing up promo notes or burning money.

    For me the continuing fairly robust performance of the Euro is evidence that the whole edifice is not the optical illusion and conspiracy that DMcW thrives on promoting, or maybe its just that all the other currency paradigms are an equal charade, possibly that would be the Dork line.

  17. A little bit of further study easily reveals another DMcW nonsense.

    He portrays LTRO as a massive taxpayer subsidy of the banks, around €100000000000000000000000 or something like that, anyway way back to cave times at €1M a day.

    This does not bear any sort of scrutiny. LTRO is simply replacing the normal short term refinancing by the ECB with a more long term arrangement so as to avoid liquidity problems as banks face significant repayments of their own debt in the next while (source Wiki). All those noughts are with us all the time as part of a modern functioning monetary system, it’s just that a lot of it has now been put on a long term footing.

    Okay the interest rate is low but it has been low on the short term facility for some time and is likely to remain low for the foreseeable future, no obvious incremental taxpayer subsidy here.

    But the real sleight of hand is that DMcW portrays the greedy banks as using this cheap money to snap up 6% sovereign debt. Goddammit, does he not understand the secondary market? One bank’s purchase of a sovereign bond is another bank’s sale! No taxpayer subsidy whatsoever.

    Au contraire, by supporting the secondary market with this injection of long term liquidity governments get a much easier ride when they go to fund their deficits and roll-overs in the primary market.

  18. Hi Phillip

    Glad that you enjoyed Punk Economics 1&2. Over 170,000 others have viewed them on YouTube in the past few weeks which is flattering and shows that there is an appetite for telling the story in different ways as you suggested. Although, the success of the visuals, doesn’t mean we should stop writing books, articles and documentaries particularly if the still huge demand for these also reflects people’s yearning to understand economics more.

    Thanks for drawing your readers’ attention to them. Maybe one or two of your readers might like to co-operate with me in the future which may allow them to get some of their own ideas out to a wider audience.

    All the best,
    David

  19. I like the way DMcW completely ignored the personal bitching – perfect riposte – exactly what it deserves

  20. @ Amac
    It was his only available riposte, so I suppose perfect in that sense. No way can he explain away his false assertion that the taxpayer is subsidising all those noughts.

  21. @BWII
    “No way can he explain away his false assertion that the taxpayer is subsidising all those noughts”

    Is it the number of noughts you have a problem with – you’re not suggesting that the taxpayer is not subsidising the banks? What is your figure?

  22. @ Amac

    How stupid is that? Did you watch the video? He said that lots of noughts worth of LTRO was borrowed at 1% and invested at 6% all at the taxpayer expense. I thought I had explained how this is a nonsense, I suggest that you are not ready yet for this blog.

  23. Paddy Hirsch of PBS has been making informative and entertaining videos on economics and financial topics for a long time. High production values and artist level graphics are nice-to-have, but not needed. I’ve always thought there was lots of scope for Ireland-based economists to do the same. There is certainly no shortage of topics that in the end “would leave everyone, very badly, needing a drink” as his catchphrase goes.

  24. @ Amac

    Hans Rosling clip was based on facts and figures which I have doubts existed to that extent in 1810…

    Two centuries back is not that long.

    The US carried out its first comprehensive census in the former 13 colonies in 1791 following the enactment of the Constitution; England held a national census in 1801 and in 1821 in Ireland.

    Imperial China had an advanced administrative system over a 1,000 years. Besides, historical demographers and renowned economic historians such as Angus Maddison have left a legacy of credible research.

    Alan Greenspan gave an interesting lecture in 2005 in Kirkcaldy, the birthplace of Adam Smith, and highlighted how static economic development was for centuries.

    http://www.federalreserve.gov/boarddocs/speeches/2005/20050206/default.htm

    The industrial revolution ushered in grim work conditions but also big advances in urban public health with improved water supply and waste disposal systems.

    Thomas Malthus’ grim outlook was understandable. He didn’t account for the huge rises in crop yields.

    Professor M.S. Swaminathan, president, National Academy of Agricultural Sciences of India, said at a Congressional Medal of Honor award ceremony in July 2007 for Dr. Norman Borlaug: “The impact of the Borlaug-led Green Revolution symphony will be clear from the fact that during 1964-68, Indian farmers increased wheat production in four years by an order greater than that achieved during the preceding 4,000 years.”

  25. The punk economics series has been a massive hit with friends of mine with no economic knowledge (or interest). This type of communication is the way forward. Very creative. Congrats to David McWilliams.

  26. The RSA (Royal Society for the Arts) produced some excellent animations including one “Drive:the surprising truth about what motivates us” which is both very entertaining and relevant for economics. The style is similar to DMcW’s

  27. @BW2
    A bit late back into this – you certainly have an endearing manner of making your point – pearhaps that’s why KW deleted some of your posts!
    “How stupid is that? Did you watch the video? He said that lots of noughts worth of LTRO was borrowed at 1% and invested at 6% all at the taxpayer expense. I thought I had explained how this is a nonsense, I suggest that you are not ready yet for this blog.”

    Ok I’ll let the abuse go – but the assertion above still makes no sense:
    “One bank’s purchase of a sovereign bond is another bank’s sale!”

    I looked through the video again and I din;t notice him mention the secondary market. I’m no expert on this but there are still some countries issuing bonds at 6%.and greater
    His point is still valid even if it is the secondary market. Why should insolvent banks get ECB money at 1%. Why not sovs?

  28. @ Amac

    Sorry. I was not really attacking you. But DMcW really really really really gets up my nose. The cartoon was clever and very entertaining, what a pity it was not informative.

    He drew silly pictures of a trillion euro, as if this were something new. A trillion euro is part and parcel of our monetary system. He then stated that this was borrowed by banks at 1% and reinvested at 6% making noughts and noughts of profits. Who pays? Why you and me the sucker taxpayer. That is just pure b*llshit.

    Even if it was correct, who owns Irish banks? U got it, u and me the taxpayer, so if there is some massive noughty scam to subsidize banks, we should cheer it to the rafters.

    He is an entertainer. He has learnt that you can say almost anything in economics and not get firmly refuted. So he specialises in gross caricatures, most of which are plain wrong.

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