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Gibbon
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Fortunately the Chinese Commies don't care what the American Junkers think.
Toggle Commented 4 days ago on Links for 11-19-14 at Economist's View
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Because when you admit that humans with their scuzzy heuristic logic preforms better than the magic hand the house of cards blows up. Think about it, these guys think you can come up with closed form solutions to economic problems. And these closed form solutions would be dead nuts accurate if and only if we could measure what the economy is doing closely enough to calibrate our models with the correct coefficients.
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I'll give you my answer. Before WWII it was okay for a science to be verbose, descriptive, and a bit mushy. After WWII when the physicists figured out how to convert a few grams of Plutonium into raw energy, hard science was all the rage. So in comes Prescott and what not with their equations and rigor and they muscled out everyone else. Though from someone (me) with a passing understanding of computer science. I look at their models and I see what amounts to the claim that the market can solve an NP problem instantaneously. http://en.wikipedia.org/wiki/NP-hard Thus I'm left with two options. A couple of mathematically illiterate economists discovered something that eludes real mathematicians to this day. Or they are fools.
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My point is if California goes single payer the insurance industry probably loses 20% of it's national revenue. And California is large enough to negotiate drug prices in absence of federal control. This is adverse selection on the state level. Instead of healthier people forgoing insurance, you have healthier wealthier states forgoing insurance in mass. Take of single payer in California was headed off by the ACA and the post 2008 budget crisis. The budget crisis is over for California. If the ACA goes down, then it's back on the table again.
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Mark Field said... >I think you're way too optimistic when it comes to single-payer. 30 years would be a better bet. I'm think if the Supreme court derails the ACA then California goes to single payer within 6 months.
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>Meanwhile in Spain we had the (IMHO) substantially less motivated and substantially crueler crusade against the Jews, with all the civl liberties (hah) of the Spanish Inquisition... A long time ago I used to play Civilization. Recently I became disappointed that they don't at some point in the game have a little Rabbi character appear on the frontier. If you ignore him he'll move in and build a synagogue and your technological progress magically increases by 10%. Also more seriously, you look at Bolivia they had honest to goodness apartheid up until 1949. And still for a lot of people in Bolivia Spanish is/was a second language. Mexico had serious limits on foreign investment as well. Personally I tend to think, limits on foreign investment is usually bad. Far as I understand the US never put any restrictions on foreign investment or property ownership (now watch me get slapped silly) Secondary, high rates of immigration probably boosted the US economy. Consider other countries care for and feed some son of dirt farmer till they reach young adulthood and they then up and move to 'America'
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> Well, it's all about the size of the dose... One of the big lies used by the nuclear/nuclear weapons industry is to treat environmental exposure to radio-isotopes the same as an 'x-ray. Go ahead, inhale a small particle of plutonium.
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I tend now to think of what a central bank does as 'control' and there are different algorithms. Seems post war the algorithm was simple, slamming the gas or the brake depending on unemployment and inflation/ The more nuanced algorithm 1970ish to the present seems to trade price stability for lower long term growth and declining median prosperity. Hmmm....
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>The larger point seems to be that there is something in some human psychologies, a form of fundamentalism, that insists the solution to all problems can be found if we revert to the ways of our forefathers. One of the better short bits I've read this year was a history major commenting along the line of "If there is something that religious leaders and moralists of an age held up as the sine qua non of an upstanding person, you can bet it was something that was in practice completely and universally ignored"
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Cause unlike your dog, Hayek came up with it he didn't just wolf it down again. Also, Maynard Handley said... >It is worth pointing out that this is NOT a universally held belief Clayton Christensen, for example, has a very different analysis. > His analysis, essentially, blames finance completely for the problem. I believe this, when I read economists and other talking about efficient use of capital, I roll my eyes, since the amount of money spent on primary growth enabling technologies and infrastructure is pitiful. Finance is mostly blowing asset bubbles and using rents to force the middle class to eat their own seed corn.
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"I'm not sure you need further explanation. The CEO's interests are not the same as the stockholders' interests. I think it's clear that the CEO often get the most money by engaging in stock manipulation rather than running a company." Criticism of mine about the various Supreme Court rulings about corporate campaign contributions which is, they ignore inherent conflict of interest between CEO's and the stockholders.
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And if the 1% incomes receive more than all the economic growth? That is median incomes decline by say 1% a year? I'm assuming, over 25 years then the median share is (1-0.01)^25 = .777, a drop of 22.3% Considering median income is down by 10% in ten years, seems we're already on the backside of the curve. Wealth extraction from the middle and lower class exceeds productivity growth.
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My take on 'multiple companies developing the same products is wasteful' is this; parallelism and specialization. One thing I've learned from developing products is that each stage of the game from concept, proposal, design + qa, production design, to manufacturing is probably 10X each. meaning each step requires ten times the resources as the next. So I suspect that the total amount of duplicated effort is less than assumed.
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What I find when I've made that sort of argument with conservative is they tend to find the actual mechanism repulsive and thus they reject it on moral grounds. And the fall back on the human tendency when confronted by things the way they don't like to simply pretend the way they want them to be is the way it is. I find the people in certain soft occupations, opinion is reality. These guys are trying ti push an opinion thinking it will be the reality, but macro doesn't work like that.
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No talk about total money supply, not just the feds first order contribution to it. In particular private credit in the form of credit chains which are anchored via various forms of paper. In a crisis the value of private credit can collapse, and the amounts are staggering. Which means just to compensate the Fed has to extend vast amounts of credit.
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>If you get absolution from a pedophile did it work? If the same guy consecrates....????? My understanding of the faith comes from St Carlin. (Okay George Carlin isn't yet a Saint) Anyway what is important is belief and intent tend to be more important to Catholics than Protestants. Doing the right thing for base reasons is bad, mkay. Doing bad things when well meaning is excusable.
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Lets time shift 1960 to 2014 and then look back at it. So first off, in 1999 the Red Army fought their way into Berlin. And the Red Army and US Army have been staring each other down for the last fifteen years in Europe. In the rest of the world the US and Soviet union are trying to gain leverage over each other. In the world of 1960 the US elites are willing to cut the US working man a better deal cause they are terrified of losing the economic and propaganda war against the Commies. My take is that the propaganda war was won by the West in about 1980, the de facto end of the cold war*. After that the elites the war against the working class was on. By 2000 the elites were winning and the working class politically divided and in disarray. * De facto and of the cold war. Meaning it was obvious to anyone paying attention that the Communist economies were lagging behind the west and that Soviet tanks weren't going to go rolling into West Germany at all ever. If you disagree with this point, you were one of the people mesmerized by the propaganda of the time. And one might disagree but sorry that is the truth.
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Reminded me, someone once mentioned to me some scuttlebutt floating around the crappy industrial part of town where they had their business. A large corporation had put out feelers to develop a collection of parcels into a office park for themselves. Deal feel though because the crooks working for the city council member representing the district demanded that the negotiators for the company pay a bribe, as in shopping bag full of cash bribe. Really thuggish and stupid. Since if the deal had gone through the increase in local property values would have been far in excess of the number of $20 bills one can stuff into a shopping bag. The guys at the Chicago School with their rational agent models can kiss my furry monkey butt.
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I'm always surprised when I see corruption that involves 'cash' changing hands. It means the people involved seriously lack vision. That disturbs me more than the corruption.
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"no one with big piles of capital cares about productivity, only returns, and not only is productivity expensive, there are better, or at least much faster, ways to get returns" Yeah, returns are better by mining the assets and wages from the middle class, and working the dollar carry trade between the fed and the treasury*. * Long time ago a farm boy who grew up to be an engineer commented to me while holding up one of my companies products. See this here? We make $500 on this board. Back where I come from, they make the same amount per acre planting corn. But it takes them an entire year of planting, weeding, and harvesting to do so. We get these boards back in a month, test them, and ship them out, to earn our $500. Thinking, Wall Street guys, maybe working the deferential between what the fed loans at, and what the treasury pays, so you only earn a few points on your trades, but it only takes a couple of hours.
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I have one comment, the 0.1% don't do macro. They do wealth accumulation. Use social engineering to grab a hold of a revenue stream. Then use that to leverage control of other revenue streams. These guys don't have a big picture. All they really know is balance sheet economics. Money comes in, money goes out. You can borrow money, but that is usually bad news unless you're using it to lever up your position. Or if you can leave a sucker holding the bag. From your other article, Cochrane: every dollar of increased government spending must correspond to one less dollar of private spending. Jobs created by stimulus spending are offset by jobs lost from the decline in private spending. This is a pure corporate balance sheet understanding of economics. No wonder salt water macro sounds strange and alien to them. In macro money is merely chips used for accounting. Cochrane thinks money is a fundamental. I think another difference is Cochrane and all those guys think the goal of the economic system is to amass large stashes of money. (I'm rich I'm rich! I'm a happy miser). Full employment? What the f*ck is that and why should anyone care. In this case increases in GDP means, our stashes of money are getting bigger. Not the over all resources and living standards of society are increasing. No wonder they thing you are an unwashed Hippie. Ya Hippie.
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David Kotok: Deflation Fears: "The burden of turning global economies around now falls on governments and their fiscal policies – policies that encourage growth, policies that diminish taxation, policies that expand trade, policies that address rising geopolitical risks that interfere with the expansion of trading." Kotok doesn't get it, none of the mess is about taxation. Making superstitious offerings to the gods won't bring back the confidence fairy. The problem is Kotok has an assumption that government taxation, spending, and regulations inhibit economic growth. What we have instead is a problem best summarized by Yogi Berra problem "If people don't want to come out to the ballpark, how are you going to stop them" If businesses see low demand growth, and low interest rate spreads, they respond simply by hoarding cash or cash like securities. if the papers be believed large corporations are sitting in huge stockpiles of cash. That money just sits idle in non economically preforming paper 'assets' instead of being invested in real things or disbursed as dividends.
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So, yes, if demand growth is low, then robots be eating your jobs.
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I can see a couple of parameters that influence that. Thinking more, you have demand growth and productivity growth. Probably due to concentration of power at the top, we have a 'management oligopoly' that has enough of a monopoly power to keep a lid on wages. (I'm going to defend this by pointing out the Silicon Valley no poaching agreement between Apple etc). Low wage growth ==> low demand growth. (I'll point out, you can't have sustained demand growth via consumer borrowing*) But productivity continues to increase. * I think if consumers borrow money in order to raise a large pack of children, then it's sustainable in a way. More children, more demand, due to higher population growth, later increased household formation. However in a low population growth scenario like today's middle class, borrowing just pulls demand forward a few years, followed by collapse.
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